Liberty Wall Paper Co. v. Stoner Wall Paper Manufacturing Co.

Headnote

Contract for the exclusive sale of paper hangings in a specified district—it is not personal and may he assigned—parol assignment.

The Liberty Wall Paper Company made a contract with one Stoner, by which it agreed to sell to Stoner, and Stoner agreed to purchase from it, paper hangings to the amount of between §25,000 and §50,000. The contract provided that Stoner should have the exclusive right to sell paper hangings, manufactured by the Liberty Wall Paper Company, in the States of Iowa and Nebraska, except at points thereafter to be agreed upon.

Meld, that the contract was not a personal one in the sense that Stoner was bound to perform it in person, but that if he assigned the contract without the consent of the Liberty Wall Paper Company, and his assignee failed to perform the contract, the Liberty Wall Paper Company might have resort to Stoner;

That a parol assignment of the contract (under which the property and the contract itself were delivered to the assignee) was sufficient to transfer the contract.

JLellogg, J., dissented.

Appeal by the plaintiff, the Liberty Wall Paper Company, from •so much of a judgment of the Supreme Court in favor of the defendant, entered in the office of the clerk of the county of Saratoga on the 3d day of May, 1900, upon the verdict of a jury, as directs the payment of costs by the plaintiff, and also from an order entered in ¡said clerk’s office on the 12th day of June, 1900, denying the plaintiff’s motion for a new trial made upon the minutes.

Also appeal by the defendant, the Stoner Wall Paper Manufacturing Company, from so much of said judgment as directs that said -defendant be nonsuited on the counterclaim set up in the defendant’s .answer, and that such counterclaim be dismissed, on the ground that it does not appear that the defendant was the owner of such counterclaim at the time of the commencement of the action.

The Liberty Wall Paper Company is a corporation which was -organized under the laws of the State of New York in October, 1898, and it has its plant and principal office for the transaction of ¡business in the county of Saratoga, N. Y. The Stoner Wall Paper Manufacturing Company is a corporation which was organized under

I the laws of the State of Iowa in July or August, 1899. On the I 2Sth day of April, 1899, a contract in writing was entered into by land between the plaintiff and one Thomas 1. Stoner, by which con- ^ tract the plaintiff agreed to sell, make and deliver to said Stoner1' paper hangings to the amount of between $25,000 and $50,000,.and.- ( the said Stoner agreed to purchase of the plaintiff not less than , $25,000 nor more than $50,000 net in paper hangings. The-details of the purchase were provided for in the contract. The j price of said paper hangings was to be ten per cent less than the - net cost of the same as sold by the Continental or National Wall I Paper Company to their largest jobbers: It was provided by said. L contract that Stoner should settle all bills within thirty days of the - date of shipment. The contract also contained a provision as follows : “ It is further agreed that these articles of agreement give to-the party of the second part the exclusive sale of paper hangings manufactured by the party of the first part in States of Iowa. . and Nebraska, excepting points hereinafter to be agreed upon by the parties Of this contract.” About the time of the formation-of' the defendant company, and on the 24th day of July, 1899, a written agreement was entered into by and between said Stoner and others, in and by which agreement it was provided that a corporation should be • organized under the laws of the State of Iowa by the name of Stoner Wall Paper Maiiufactnring Company, and that as soon as such organization was completed such company should enter into a contract with the said Stoner, which contract should be in the form provided by said agreement. The agreement so-to be entered into provided that the defendant company should purchase and said Stoner should sell to said company the stock of wall paper, paints, oils and decorations, including the entire? stock now owned and kept by said Stoner, specifying the same in detail, and also specifying certain leases and contracts, including the? following: “ And the contract between said Stoner and the Liberty Wall Paper Company, dated April 28,1899, for the year beginning-July 1,1899, and the said company agrees to assume all obligations and liabilities of said Stoner under said leases and contracts.” In the-agreement so to be executed there was also a provision as follows t ' “In the event of the Liberty Wall Paper Company refusing to consent to the assignment by said Stoner of his contract with it above?

referred to, said contract shall be carried out by said Stoner, who hereby agrees to sell to the Company, which is a party hereto, at its net cost to him, including all discounts, all paper and other merchandise purchased by said Stoner from said Liberty Wall Paper Company under his contract with it.” It is conceded that the contract so to be executed by the defendant and Stoner was never executed in writing, and that the assignment of the contract with the plaintiff so to be executed by said Stoner was not executed m writing before the commencement of this action, but the considera, tion for said contract, including the consideration for said assignment, was actually paid by the defendant to the said Stoner before the commencement of this action, and the defendant took possession of the property in said contract described, including the written contract executed by and between the plaintiff company and said Stoner on the 28th day of April, 1899. Three or four days prior to the time when Stoner was sworn as a witness on the trial of this action there was written on the contract of April twenty-eighth an assignment as follows : “ All my interest in the within is hereby assigned to the Stoner Wall Paper Manufacturing Company,” and the same was signed by Thomas I. Stoner. After the incorporation of defendant and about the middle of August, said Stoner came to the office of the plaintiff and purchased of the plaintiff for the defendant three sets of blocks for the manufacture of wall paper, the purchase price of which was paid by the defendant. Stoner then requested the plaintiff to make for the defendant samples from said three sets of blocks. An agreement was thereupon made for the making of such samples, and the samples were in fact made and delivered to the defendant. The agreement in regard to. making samples for the defendant was in connection with an agreement to give a further order for wall paper at prices mentioned in the agreement of April twenty-eighth, the details of which agreement are matters of dispute between the parties hereto. During the month of September and up to September nineteenth, Stoner had frequent interviews with officers of the plaintiff and the matter of plaintiff’s contract with Stoner, and with the defendant, and also the matter of plaintiff and defendant entering into an agreement with the Continental Wall Paper Company was discussed. Stoner told officers of the plaintiff during that time that he had formed the defendant

-corporation and that he was acting for it, and that he had assigned the contract of April twenty-eighth to the defendant. Between September sixth and sixteenth Stoner selected in the name of the defendant wall paper from the samples that had been prepared by the plaintiff, and a memorandum of these selections was taken by the vice-president of the plaintiff, in the presence of Stoner, and written on an order blank of the plaintiff. It. was dated August twenty-sixth, and provided that the goods ordered should' be sent to Stoner Wall Paper Company as soon as made and that no countermand would be accepted. The net amount of the goods thus selected, not taking into account the special discount of ten per cent mentioned in the contract of April twenty-eighth, was $13,612.05. The defendant insists that this was an absolute order for the goods described in it, while the plaintiff insists that it was a memorandum order only, not binding upon the defendant. On the 6th day of September, 1899, a further memorandum of Wall paper was made on order blanks the same as those used for the order dated August twenty-sixth. This order was in the name of the defendant and was delivered to the plaintiff and covered a large quantity of wall paper to be delivered as claimed by the defendant under the contract of April twenty-eighth. The plaintiff also insists that this was a memorandum order only, not binding upon the defendant. On the 19th day of September, 1899, the plaintiff entered into a contract with the Continental Wall Paper Company in and by which, contract the plaintiff agreed to sell to the Continental Company and the Continental Company agreed to purchase of the plaintiff the entire product of wall paper manufactured by the plaintiff on the 1st day of July, 1899, to and including the 1st day of July, 1900, and this contract provides that no merchandise shall be sold by the plaintiff to any individual, firm or corporation during the term of the agreement, without the express sanction of the Continental Company except to persons, firms and corporations named in the agreement, but this exception does not affect the matter here in controversy. The contract also expressly provides that the plaintiff can carry out its contracts with certain specified persons, which, as the contract was drafted, included said Stoner, but the name of said Stoner was stricken therefrom before it was actually executed, and a- provision was inserted in said contract as follows: “ The company further

agrees that it will enter into an agreement with' the Stoner Wall Paper Manufacturing Company of Des Moines, Iowa, which shall be in the form hereto annexed, marked Schedule ‘ D,’ provided said Stoner Wall Paper Manufacturing Company shall likewise execute such agreement.” Schedule “ D,” referred to .and attached to the contract between the plaintiff and the Continental Wall Paper Company, does not in terms refer to the contract between the plaintiff and the said Stoner of April 28, 1899, but such proposed contract mentioned as Schedule D was based upon a proposition that had been discussed between the officers of the plaintiff and defendant, a memorandum of which had been made in writing on the 18th day of September, 1899, in which memorandum is a statement as follows: “ Contract of April 28, 1899, between Liberty Wall Paper Company and Thomas I. Stoner to be cancelled.” The plaintiff claims that this agreement was assented to by the defendant, and that it entered into the contract with the Continental Wall Paper Company in reliance upon such-assent. The defendant denies that it ever assented to the arrangement mentioned in such memorandum. The defendant never signed the contract with the Continental Wall Paper Company mentioned as Schedule “ D.”

In October, 1899, plaintiff brought this action against the defendant to recover $1,200, the alleged value of manufacturing said samples from the blocks purchased by the defendant of the plaintiff. The defendant in its answer denies the allegations of the complaint relating to the manufacture of such samples. As a second defense it alleges that in the month of August, 1899, plaintiff and defendant entered into a parol agreement whereby plaintiff agreed to manufacture and deliver to defendant paper hangings to the amount of about $15,000 to be printed from blocks theretofore purchased by the defendant from plaintiff, and that as a part of said contract and order plaintiff agreed to print and ship to the defendant the samples of said paper hangings, free of expense to the defendant. As a third defense and as a .counterclaim defendant claims damages to the amount of $30,000 by reason of the alleged non-fulfillment by plaintiff of the agreement made by plaintiff with said Stoner April 28, 1899. It further alleges that said agreement was transferred to the defendant before the commencement of this action. To the counterclaim the plain

tiff replied, denying that the contract of April 28, 1899, was made by any one authorized to act in its behalf, and further alleged that said contract of April 28, 1899, had been canceled by agreement of the parties. The case was tried before the court and a j ury. At the close of the trial the plaintiff made a motion that the' court direct a verdict for the plaintiff as to the counterclaim, which motion was granted. The court then submitted to the jury the questions arising oh the issues joined on the complaint and answer thereto, and the jury found a verdict for the defendant.