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

Headnote

1. Contracts—Pabol Assignment—Validity.

Plaintiff contracted to sell S. wall paper of the value of at least §25,000. Defendant corporation was organized by S. and others, and S. agreed to assign his contract with plaintiff to defendant; and defendant took possession of the contract, though no written assignment was made until just a few .days before trial. Subsequent to the making of the contract with S. plaintiff made an agreement with C. that plaintiff would, sell all

its wall paper to C., and would not sell to any other firm, and plaintiff failed to fill orders from defendant previously entered. Plaintiff brings this action to recover for samples-manufactured for defendant in connection with the orders not filled. Helé, that the assignment of the contract by S. to the defendant was valid, the contract not being a personal' one incapable of fulfillment by others, and hence it was error to dismiss defendant’s counterclaim for damages for the nonfulfillment of the orders.

2. Trial—Taking Questions prom Jury—Counterclaim Improperly Dismissed.

Where a contract had been'assigned by parol, and was not fulfilled by one of the parties, in an action to recover for work done in connection with, but not under, the contract, it was error to dismiss a counterclaim founded on the nonfulfillment of the contract, on plaintiff’s motion, on the ground of the alleged invalid assignment; the questions of the assignment of the contract and plaintiff’s assent thereto being for the jury.

3. Appeal—Jury Determination not Disturbed.

Where questions of fact are put in issue by the pleadings, and submitted to the jury under a proper charge, and no exception is taken thereto, the determination of the jury will not be disturbed by the appellate division of the supreme court on appeal.

Kellogg, J., dissenting.

Appeal from trial term, Saratoga county.

Action by the Liberty Wall-Paper Company against the Stoner Wall-Paper Manufacturing Company on a. contract. Prom a judgment in favor of the défendant, and from an order denying an application for a new trial on the minutes, plaintiff appeals, and from that part of the judgment dismissing the defendant’s counterclaim defendant appeals.

Modified, and new trial granted.

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 the laws of the state of Iowa in July or August, 1899. On the 28th day of April, 1899, a contract in writing was entered into by and between the plaintiff and one Thomas I. Stoner, by which contract the plaintiff agreed to sell, make, and deliver to'.said Stoner paper hangings to the amount of between $25,000 and $50,000, and the said ¡atoner 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 price of said paper hangings was to be 10 per cent, less than the net cost of the same as sold by the Continental or National Wall-Paper Company to their largest jobbers. It was provided by said contract that Stoner should settle all bills within 30 days of the date of shipment. The com tract 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 to 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 Manufacturing 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, includ

ing 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 said company agrees to assume all obligations and liabilities of said Stoner under said contract.” In the agreement so to be executed there was also a provision as follows: “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 in writing before the commencement of this action, but the consideration 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 28th 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 28th, the details of which agreement are a matter of dispute between the parties hereto. During the month of. September, and up to September 19th, 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 28th to the defendant Between September 6th and 16th 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 26th, and provided that the goods ordered should be sent to Stoner WallPaper 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 10 per cent, mentioned in the contract of April 28th, was 813,612.05. 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 26th. 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 28th. 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 tlie 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 canceled.” 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 nonfulfillment 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 plaintiff replied, denying that the contract of April 28, 1899, was made by any one authorized to act in its behalf, and further alleging that said contract of April 28, 1899, had been canceled by agreement of the parties. The case was tried before the court and a jury. 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 on the issues joined on the complaint and answer thereto, and the jury found a verdict for the defendant.