Babbitt Bros. Trading Co. v. New Home Sewing Mach. Co.

• Decision Date: 12 December 1932
• Docket Number: No. 6781.,6781.
• Citation: 62 F.2d 530
• Parties: BABBITT BROS. TRADING CO. v. NEW HOME SEWING MACH. CO.
• Court: U.S. Court of Appeals — Ninth Circuit

62 F.2d 530 (1932)

BABBITT BROS. TRADING CO. v. NEW HOME SEWING MACH. CO.

No. 6781.

Circuit Court of Appeals, Ninth Circuit.

December 12, 1932.

C. B. Wilson, Orinn C. Compton, and James E. Babbitt, all of Flagstaff, Ariz., for appellant.

Francis D. Crable, Howard Cornick, and Cornick & Crable, all of Prescott, Ariz., for appellee.

Before WILBUR and SAWTELLE, Circuit Judges, and NORCROSS, District Judge.

SAWTELLE, Circuit Judge.

This case comes before us on appeal from a judgment rendered in an action at law brought on three trade acceptances, aggregating $9,096.60, drawn by the appellee, plaintiff below, on the defendant-appellant, and accepted by the latter.

A jury was waived by the parties, the written waiver stipulating "that the findings of the court upon the facts, which may be either general or special, shall have the same effect as the verdict of a jury."

The New Home Sewing Machine Company, the appellee, is a corporation duly organized under the laws of Massachusetts, of which it is a citizen, and the Babbitt Brothers Trading Company, the appellant, is organized under the laws of Arizona, and is a citizen of that state.

The three drafts in question were each dated September 18, 1928, and the respective acceptances were each dated October 9, 1928. They specified that, "The obligation of the acceptor hereof arises out of the purchase of goods from the drawer."

On March 18, 1929, Trade Acceptance No. 1 was presented by the appellee to the appellant in accordance with the terms of said acceptance, and demand was made for the payment thereof; said appellant then refused and has ever since refused to pay the same or any part thereof. On June 18, 1929, Trade Acceptance No. 2 was presented, and payment likewise refused, as stated above. On September 18, 1929, Trade Acceptance No. 3 was similarly presented and payment thereof refused.

The foregoing facts are admitted in the pleadings. In its answer and cross-complaint, however, the appellant denied that it had unconditionally promised to pay the sums due on the said trade acceptances, but that its promise to pay was wholly dependent and conditional upon the performance by the appellee of the terms of a certain contract in writing between appellee and appellant, dated August 14, 1928, together with an order made simultaneously therewith, pursuant thereto and as a part thereof, dated August 13, 1928. The appellant further alleged that the appellee has wholly failed to carry out the terms and conditions of said contract and order, and that by reason of said default on the part of the appellee the consideration for the acceptances sued upon has wholly failed. The appellant denies that there is due and owing from it to the appellee any sum whatever.

Further answering the complaint, the appellant alleged that on or about August 13, 1928, the appellee, through its agent and sales manager for Arizona and New Mexico, Nick T. Dockery, solicited the appellant at its principal place of business at Flagstaff, Ariz., for the sale to it of a certain number of sewing machines for resale at and distribution from its several stores and places of business in the northern part of Arizona. The appellant advised the appellee that it was not equipped to put on a campaign for the sale of sewing machines and was not interested in the appellee's proposal unless the appellee would furnish experienced salesmen for the sale of such machines as might be ordered and would guarantee the sale thereof within a reasonable time, according to the appellant's answer and cross-complaint.

In its pleadings, the appellant further alleges that thereafter, on August 14, 1928, the appellee proposed to sell to the appellant a carload of the former's machines for $9,656.50, less freight to be paid by the appellant and deducted from the first installment of the purchase price, to be paid in three equal installments, six, nine, and twelve months from the date of the arrival of the shipment, upon further terms and conditions, as follows:

1. The appellee was to furnish the appellant with one or more salesmen to sell the machines at retail as long as the appellant might have any of such machines in stock; said salesman or salesmen to be under the supervision of appellant, and were to make collections of all delinquent accounts for the said machines and repair them free of charge to the appellant.

2. The appellee was to guarantee the sale of all the said machines within twelve months from the date of their arrival, and all machines not sold at the end of the twelve months' period were to be taken off the appellant's hands by the appellee, and cash refund was to be made by the appellee to the appellant for such machines so taken.

3. The appellee was to furnish and ship to the appellant advertising matter sufficient for five stores, including mats for newspaper advertising and window signs and folders for mail.

4. The appellant was to pay the salesmen so furnished 20 per cent. on the net sale of each machine sold, less a deduction of 20 per cent. of such commissions to take care of reverts; such payments to be made Saturday night of each week on sales made and accepted up to and including the Friday night previous. All old machines taken in trade were to belong to the salesmen.

5. All sales made by such salesmen were to be accepted by the appellant's credit department and verified by the appellant's local manager, and no contracts for the sale of such machines were to be made in which payments were to extend beyond eighteen months from the date of sale.

The appellant further alleged that the proposal above set forth was accepted by the appellant in writing on August 14, 1928; that pursuant thereto and as a part of the said contract between the appellee and the appellant, there was executed by the parties an order form of the appellee company for the sewing machines above referred to; that the said contract and the said order form were executed in duplicate simultaneously, and a copy of each was "attached and retained by each of the parties thereto as the completed contract of said parties."

The appellant further alleged that the sewing machines were shipped on or about September 18, 1928, and that on the following day the appellee forwarded to the appellant the trade acceptances, which, after deducting certain items, "deductible under the terms of said contract," were accepted by the appellant and returned to the appellee "as an accommodation" to the appellee.

It was also alleged by the appellant that, upon receipt of the shipment by the appellant, the appellee, at the appellant's request, "and pursuant to said contract," furnished the salesmen agreed upon, which salesmen continued to carry on a sales campaign up to about December 10, 1928, when they discontinued their work; that on December 13, 1928, the appellant notified the appellee of such discontinuance; and that on December 18, 1928, the appellee disavowed and repudiated said contract.

In its cross-complaint, the appellant asks for certain sums representing printing expenses, freight, taxes, storage, and other items.

The appellee's reply to the appellant's answer and the appellee's answer to the appellant's cross-complaint denied that it entered into or ratified the alleged agreement of August 14, 1928; denied that Dockery had authority on behalf of the appellee to make such alleged agreement; declared that the order of August 13, 1928, was accepted by the appellee subsequently to August 13, 1928, and that at the time of such acceptance there was not attached thereto the said purported agreement of August 14, 1928; and alleged further that at the time of accepting the order the appellee had no knowledge of the existence of the purported contract of August 14, 1928, and never at any time received either the original or a duplicate copy of such purported contract.

The appellee also pleaded the fact that the appellant was put upon notice of the limitation of Dockery's power to represent the appellee from the following sentence appearing in the order "directly above the signature of" the appellant's representative: "It is understood that no conditions agreed to by any salesman or agent and not embodied herein will be binding on The New Home Sewing Machine Company, and it is understood and agreed that The New Home Sewing Machine Company shall not be in any way liable under any separate or collateral agreement made between the undersigned and its salesman."

The appellee further alleged that long after the sale and delivery of the said machines and personal property to the appellant by the appellee, and long after the receipt by the appellee from the appellant of the trade acceptances duly accepted by the appellant — namely, on or about January 7, 1929 — the appellee for the first time learned of the existence of the purported contract of August 14, 1928, when the appellant, in a letter to the appellee, purported to set out the purported contents of said contract; that upon receipt of the said letter the appellee immediately disclaimed the said contract as its own; and that the order of August 13, 1928, "constituted the only contract for the sale of said machines and personal property ever existing between" the appellee and the appellant.

As a further reply to and as a separate defense against the appellant's answer and cross-complaint, the appellee denied that Dockery was the appellee's agent for the purpose alleged, namely, to make the alleged contract of August 14, 1928; and that Dockery had any authority whatsoever, other than to solicit and obtain orders for the appellee, subject to its acceptance and approval, upon a certain form or order blank provided for that purpose, and to submit said order to the appellee for its approval and acceptance; and that Dockery had no power or authority to bind the appellee "by any contract in any manner or way."

In its rejoinder, the appellant denies the allegations with reference to...