American Button Co. v. Weishaar

• Decision Date: 07 April 1943
• Docket Number: No. 26086.,26086.
• Parties: AMERICAN BUTTON CO. v. WEISHAAR.
• Court: Missouri Court of Appeals

170 S.W.2d 147

AMERICAN BUTTON CO. v. WEISHAAR.

No. 26086.

St. Louis Court of Appeals. Missouri.

April 7, 1943.

Appeal from Circuit Court, St. Louis County; John J. Wolfe, Judge.

"Not to be reported in State Reports."

Action by American Button Company, a corporation, against Fred F. Weishaar for an accounting under a contract of employment. From a decree for defendant, dismissing plaintiff's petition for want of equity, and an order denying motion for new trial, plaintiff appeals.

Affirmed.

Richard S. Bull and Carter, Bull & Garstang, all of St. Louis, for appellant.

Henry S. Janon, of St. Louis, for respondent.

BENNICK, Commissioner.

This is a suit for an accounting and for a money judgment for the amount, if any, determined to be due.

The plaintiff is American Button Company, a New York corporation, with its principal office in Rochester, New York; and it brings this suit upon the theory of a breach by defendant, Fred F. Weishaar, of an alleged contract of employment whereby defendant, as local agent and sales representative, had agreed to give his exclusive time and attention to the sale of the products of plaintiff and its affiliated companies in a prescribed territory in and around the City of St. Louis.

The general nature of plaintiff's complaint is that defendant, prior to the termination of his contract of employment on August 1, 1939, and in violation of its terms and provisions, had sold merchandise in his prescribed territory for competitors of plaintiff, and had failed and refused to account to plaintiff for the profits, commissions, or salary paid him by such competitors for the sales in question, notwithstanding the fact that at the time the sales were made plaintiff was paying defendant his agreed salary and commissions, as well as certain of his expenses in maintaining an office and in traveling about his territory.

As a matter of fact, the case involves the question of defendant's relationship, not only with American Button Company, the plaintiff in the suit, but also with Art in Buttons, Inc., a further New York corporation, which for the last several years has been closely affiliated with American Button Company in the transaction of the business of the two concerns. Both companies at present share common office space in a building in Rochester which is owned by Art in Buttons, Inc., the parent corporation; of late years the sales organization, with only minor exceptions, has represented both companies; the management is largely identical; and to some extent at least there is a common ownership. There is, however, a distinction between the types of buttons that the two companies put upon the market, the distinction being that generally speaking, Art in Buttons, Inc., manufactures and sells a better grade of buttons than does American Button Company, which manufactures no buttons on its own account, but buys them from other organizations and sells them direct to the garment trade.

Defendant's first connection with either of the two companies came in 1923, when he was employed by Art in Buttons, Inc., under a two-year written contract to serve as its sales agent in the City of Chicago. This was before the affiliation of the two companies, and at that time they maintained separate offices in Chicago and competed with each other for the business of the garment manufacturers in the Chicago territory.

In 1925 defendant was transferred to St. Louis under another two-year written contract with Art in Buttons, Inc. It was agreed in the contract that during its term, defendant would give his exclusive time and attention to the business of Art in Buttons, Inc., the only exception being that he would be permitted to handle the line of American Button Company within the same territory. It would thus appear that by the time of the execution of such second contract, the business affiliation of the two companies had been effected; and as a matter of fact, the name of American Button Company was the only one to appear on the door of the office which defendant opened up in the Board of Education Building. This was seemingly for the reason that while American Button Company was duly authorized to transact business in Missouri, Art in Buttons, Inc., had received no such authority, in view of which it was no doubt deemed expedient by the management to have the business conducted locally in the name of American Button Company.

As for compensation, Art in Buttons, Inc., guaranteed to defendant that his combined total weekly earnings from both it and American Button Company for each of the two years mentioned in the agreement should not be less than $75 a week. In other words, in the practical performance of the contract, his earnings were to be measured by the total commissions due him upon the aggregate of his sales, but subject always to a guaranteed minimum of $75 a week as provided by the contract. Payment was made at the end of each month, when the amounts earned from the respective companies would be separately computed, and a check for the total amount due would be sent him by American Button Company, which likewise paid the office rent, as well as the incidental office and traveling expenses. Subsequent adjustments as between themselves would be made on the books of the companies as suited their convenience.

The two contracts mentioned were the only formal written contracts that defendant ever had; and near the end of the term of the second contract, one Noyes, the then general manager of both companies, wrote defendant, calling attention to the fact that the contract was about to expire, and suggesting that all the terms and provisions of such second contract should continue, and that the contract should thereafter be considered as automatically renewing itself from year to year except as either of the parties thereto might give the other adequate notice in advance. Defendant replied, advising that it was agreeable to him to have the contract renewed as Noyes had suggested; and so the relationship continued until August 1, 1939, when defendant terminated his employment following written notice of his resignation under date of June 21, 1939. Such letter was written on a letterhead of American Button Company, that being the only stationery which was supplied to the St. Louis office, and it was addressed to the "Board of Directors", without specific designation of the particular company whose board of directors was meant. The reason given for the resignation was the poor delivery of orders sent in, which circumstance, according to defendant, had brought about a condition in the local territory making it necessary that he make other arrangements for the future.

During the whole time of his St. Louis employment, defendant continued to send in orders to both companies, with the question of which company received an order depending upon the type of order or the character of the merchandise which was desired. In fact, according to his own testimony, his commissions earned, even during the last three months of his employment, invariably equaled or exceeded the minimum guarantee of $75 a week.

The plaintiff, American Button Company, began its petition by charging that defendant had been employed by it for certain services, in the performance of which he had agreed to devote his entire time, attention, and best energies to the sale of products of Amrican Button Company in the territory assigned to him.

It was then alleged that by contract in writing between defendant and Art in Buttons, Inc., an affiliate of plaintiff, which said contract was thereafter continued in force between plaintiff and defendant by the exchange of letters and by acting thereunder, defendant had agreed, during the term of his employment, to give his exclusive time and attention to the business of American Button Company and its affiliated companies in his prescribed territory.

It was further alleged that during the period of defendant's employment by plaintiff, and until August 1, 1939, when he severed his relationship with plaintiff, defendant drew, and plaintiff paid, a salary and commissions, in addition to which plaintiff paid miscellaneous office and traveling expenses of defendant.

Plaintiff then alleged that for some period of time before August 1, 1939 (the exact period of time being unknown to plaintiff), defendant, although employed by plaintiff as theretofore alleged, and while purporting to devote his exclusive time and attention to the business of and the performance of services for plaintiff, had, outside the scope of his authority, and without the knowledge or consent of plaintiff, sold the merchandise of Warsaw Button Company and other competitors of plaintiff and its affiliated companies to customers of plaintiff in his prescribed territory, all to plaintiff's detriment and damage, and all resulting in the loss of profits and prestige by plaintiff.

It was alleged that plaintiff was not informed, and had no knowledge or means of obtaining information, in regard to the amount or volume of the business conducted by defendant for Warsaw Button Company and the other competitors of plaintiff.

It was then stated that defendant had not paid or offered to pay plaintiff for the profits, commissions, or salary paid him by Warsaw Button Company and the other competitors of plaintiff, while defendant was purportedly operating exclusively for and at the expense of plaintiff; that plaintiff had not been reimbursed for office rent and office and traveling expenses which plaintiff had paid defendant during the period that defendant, while purportedly acting exclusively for plaintiff, had sold the products of Warsaw Button Company and other competitors of plaintiff; and that defendant had refused to render an accounting and to exhibit his books and records to plaintiff for examination in order to determine the profits made by defendant on business for others, and to ascertain the volume of business for said...