Royall v. Chicago Streamlite Corporation

• Decision Date: 04 January 1950
• Docket Number: No. 9878.,9878.
• Citation: 178 F.2d 81
• Parties: ROYALL v. CHICAGO STREAMLITE CORPORATION.
• Court: U.S. Court of Appeals — Seventh Circuit

178 F.2d 81 (1949)

ROYALL v. CHICAGO STREAMLITE CORPORATION.

No. 9878.

United States Court of Appeals Seventh Circuit.

December 5, 1949.

Rehearing Denied January 4, 1950.

Victor E. La Rue, Chicago, Ill., Leo S. Samuels, Chicago, Ill. (William B. Goodstein and Ruth L. Leffler, Chicago, Ill., of counsel), for appellant.

Nathan Engelstein, Chicago, Ill., Albert L. Verb, Chicago, Ill. (Earl Freeman, Chicago, Ill., of counsel), for appellee.

Before KERNER, FINNEGAN, and LINDLEY, Circuit Judges.

KERNER, Circuit Judge.

This appeal is from a judgment for plaintiff in a suit to recover commissions alleged to be due on the fleet sale by defendant of forty trailers in territory in which plaintiff claimed to be exclusive authorized dealer for defendant.

The facts. Plaintiff started in business handling new and used trailers in October, 1946. In December, 1946, he wrote to defendant to inquire about a franchise to handle its line. In response, defendant on January 7, 1947, wrote the following letter which, as modified by subsequent dealings, is relied upon to establish the contract here in suit:

"Thank you for your recent communication, regarding dealership for Raleigh, North Carolina, County of Wake. We, herewith, enclose dealer's discount sheets which show wholesale and retail prices of the Shoreland Tandem and Princeton, now in present production, and also cost of freight.

"Territory: An authorized Streamlite dealer has exclusive territorial arrangements, and no other dealer will be authorized by us to set up a sales display anywhere in the county allocated to the dealer. Any inquiries emanating from the territory, whether wholesale or retail, will be referred to the dealer. An authorized dealer may set up a subdealership in his county with our permission.

"Resale Price: The delivered price of the 1947 Shoreland Tandem and Princeton is clearly stated on each Bill of Sale. This list price is public information to retail inquiries and may be stated from time to time in our National Advertising Program.

"Original Purchase: To establish an authorized dealership an original order of three (3) trailer coaches is required. A deposit of one thousand dollars * * * on each trailer coach is to accompany the original order. Deliveries will be made, one in January, one in February, and one in March, 1947.

"Terms of Sales: The balance of each trailer coach is to be paid by cashier's or certified check at the factory before shipment is made. We will notify you approximately one week prior to the date of shipment so you will have ample time to mail your check.

"Future Purchases: In order to insure the continuity of your franchise purchases are to be made during each quarter of the year. If you wish to obtain a Streamlite Franchise please act promptly, as we are only franchising a limited number, and they will be issued on a `first come, first served' basis."

Plaintiff did nothing further at that time. In October, 1947, one Powers, a salesman employed by defendant, called on plaintiff. According to plaintiff, he inquired why he had not ordered any trailers and remarked that plaintiff had not replied to any letters and he wondered why he had not signed any contract. When plaintiff told him the deposit requirement was too much, Powers told him they had a better proposition, that if plaintiff purchased one model outright, paying for it in full, and gave a $400 deposit on two more, he could obtain the franchise. Plaintiff thereupon arranged for financing such purchase and gave Powers two checks dated October 13, 1947, payable to defendant. One was for $1,803.70 in full payment for one Sun model trailer, and the other, for $400 as a deposit on two other trailers. He later received a letter, dated October 21, acknowledging receipt of the checks and stating, "We are setting you up as our established dealer at Raleigh, North Carolina, Wake County."

Plaintiff further testified that he had sold defendant's "line of trailers" after October 13, and that he had also handled other lines during the period, and that "we received 25 per cent, that was our payment" for the trailers sold.

In November, 1947, the State of North Carolina advertised for bids for the purchase of forty trailers having certain specifications. The day before the bids were due and to be opened the Palace Corporation whose franchise plaintiff held telephoned him from Michigan to ask that he find out about bids, whereupon he went to the Purchasing Department and obtained information as to procedure in putting in bids and about the price range. He obtained a copy of the specifications and submitted a bid for Zimmer trailers, another line he was handling, a competitor of defendant. He made no effort to notify defendant of the request for bids. However, on the morning of the day the bids were to be opened he went to the Capitol and there saw Powers who told him that defendant had been notified of the impending bids by the Manufacturers' Association and he was there to put in a bid, and that he understood that no dealers could put in bids, that it was strictly manufacturers' bids, and if he had known dealers could bid he would have wired plaintiff to take care of it and he could have got a commission.

The contract for the forty trailers was awarded to defendant on its bid of $1,646 apiece, or a total of $64,266. Relying on the provision in the January 7 letter, "Any inquiry emanating from the territory, whether wholesale or retail, will be referred to the dealer," plaintiff put in his claim for 25% of the total contract price of the trailers, although on the hearing he stated, "I would only claim 25 per cent of the f. o. b." and again, that he did not claim any commission on the freight. The record shows that defendant's bid was for $1,656 f. o. b. Raleigh, or $1,495 f. o. b. its plant in Chicago.

Plaintiff based his demand for 25% commission on the fact that he always received 25 per cent and that Powers told him that was the discount, and he had copies of the price lists showing the discounts — "in...