White Co. v. W.P. Farley & Co.

• Decision Date: 18 March 1927
• Citation: 292 S.W. 472,219 Ky. 66
• Parties: WHITE CO. v. W. P. FARLEY & CO.
• Court: Kentucky Court of Appeals

292 S.W. 472

219 Ky. 66

WHITE CO. v. W. P. FARLEY & CO.

Court of Appeals of Kentucky.

March 18, 1927

Appeal from Circuit Court, Mason County.

Action by W. P. Farley & Co. against the White Company. Judgment for plaintiff, and defendant appeals. Affirmed.

Allan D. Cole, of Maysville, for appellant.

M. J Hennessey, of Augusta, for appellee.

TURNER C.

Appellant is a manufacturer at Cleveland, Ohio, of auto trucks, while appellee is a business man of Maysville, Ky.

On the 1st of October, 1924, the parties entered into a contract of sales agency for the period of one year, whereby appellee became the sales agent of appellant in a designated territory embracing Mason county.

The contract refers to the manufacturer as "seller" and to the appellee as "purchaser," and provides that the seller shall furnish to the purchaser for sale in the designated territory certain kinds and descriptions of trucks manufactured by it at fixed prices, and provides that the purchaser shall be allowed for his compensation 20 per cent discount from such prices. Among the trucks so enumerated in the contract was one the list price of which was $4,200, and appellee and his agents and employees interested the firm of Kirk & Key in the purchase of such a truck. Kirk & Key desired to get a rebate from the list price, and sought to make the purchase through another firm or corporation in Maysville to that end, but appellee informed them he could not sell the truck to them in that way. But, upon being informed that it was to be a cash transaction, he informed Key of Kirk & Key that he would give them the customary cash discount to be later arranged. These transactions appear to have occurred throughout the late fall and winter of 1924 and 1925, and the last interview took place about the 6th of March, 1925.

A short time thereafter Key went to Cincinnati, and there sought an interview with appellant's manager at that place, which office controlled the Maysville territory. After such interview, the manager called up appellee at Maysville, and asked him why he did not sell Kirk & Key a truck, and was informed by appellee that he thought that the matter would be closed up as soon as he could see Mr. Key. Thereupon the manager told him Key was then in his office, and claimed appellee had refused to sell him a truck, but was told by appellee there was some mistake. The manager then asked him if he was willing to close the sale to Kirk & Key on an 85 per cent. basis, and appellee asked him if he meant that he should give up three-fourths of his commission, and, being informed by the manager that that was what he meant, appellee declined to do so; and the manager said, "Then we will have to handle it from this end of the line;" but, when informed by appellee they could not do so under his contract the manager informed him that he would cancel his contract, and that he would hear from him tomorrow. On the next day he received a letter from the manager dated March 23, 1925, wherein he advised appellee it was deemed necessary to cancel the contract; but in doing so did not place the right to cancellation upon the ground referred to in the conversation referred to over the phone, but upon two other grounds, as follows:

"I have had my salesman try to impress upon you the necessity of turning in your daily report cards on prospects, but you have failed to come anywhere near keeping up your quota. This is a direct violation of your contract. It has also been brought to my attention that you are also a dealer for at least one other truck company, and this is also another violation of the contract."

Thereafter appellant sold the same truck to Kirk & Key on the 7th of May, 1925, and prior thereto had entered into a sales agency contract with Kirk & Key whereby they succeeded appellee as appellant's agent.

Proceeding upon the theory that there had been no good faith cancellation by appellant of the sales agency contract, and that the attempted cancellation had been made for the purpose of making the sale to Kirk & Key directly by appellant, whereby he would be deprived of his contract commission, he instituted this action against appellant for his 20 per cent. commission on the sale of the $4,200 truck in his territory during the existence of his contract.

The answer denied many of the material allegations in the petition, and affirmatively alleged that the sale by appellant to Kirk & Key had been made after the cancellation of plaintiff's contract. The reply denied the cancellation of the contract, and alleged that, if the sale made by appellant to Kirk & Key was deferred until after such cancellation, it was done for the purpose of defrauding plaintiff of his commission under the terms of the contract. The affirmative allegations in the reply were controverted, and upon the issues so made the trial was had.

The court only gave two instructions. In the first he authorized a verdict for the plaintiff, if the jury should believe that, while plaintiff was the dealer-agent of defendant, negotiations were pending between him as such dealer and Kirk & Key for the sale to the latter of the $4,200 truck, and that defendant company, on refusal of plaintiff to rebate a part of his contract commission as an inducement to such sale, intervened and canceled its contract with plaintiff for the purpose of making such sale directly by the company to Kirk & Key, and subsequently did consummate such sale.

This instruction presented accurately the only issue of fact in the case, for, if the cancellation was made for the purpose of depriving the plaintiff of his contract commission, and the sale was thereafter made by the company in the territory set apart to plaintiff, the attempted cancellation was a fraud upon his rights, and did not have the effect to deprive him of such rights, even though it was ostensibly made for other reasons.

The second instruction only told the jury, if they found for the plaintiff, to find $840 the full amount of his contract commission. The jury found for the plaintiff the $840, the full 20 per cent. contract commission on the sale of the truck listed at $4,200, and from a judgment on...