Ballard v. Tingue Mills, Civ. No. 3741.

• Decision Date: 09 December 1954
• Docket Number: Civ. No. 3741.
• Court: U.S. District Court — District of Connecticut
• Parties: Walter M. BALLARD v. The TINGUE MILLS, Inc.

128 F. Supp. 683

Walter M. BALLARD v. The TINGUE MILLS, Inc.

Civ. No. 3741.

United States District Court, D. Connecticut.

December 9, 1954.

Charles Weingarten, Bridgeport, Conn., for plaintiff.

Pouzzner, Hadden, Kopkind & Hadden, William L. Hadden, New Haven, Conn., Joseph N. Perelmutter, Seymour, Conn., for defendant.

HINCKS, Circuit Judge.

The Parties

1. The defendant is a Connecticut Corporation which, from about 1940 to the present, has been operating a textile mill at Seymour, Connecticut, and a sales office in New York City. From 1940 until the present time Floyd del Brown has been the President and Director of defendant corporation.

2. The plaintiff, Walter M. Ballard, for many years prior to 1948 had maintained an agency in Washington, D. C., which has represented some private commercial firms with respect to obtaining contracts with the United States Government.

3. In the early part of 1948, Victor Chenea was hired by the defendant to help obtain business for the defendant. Chenea was elected Vice-President of the defendant corporation and was made sales manager. His compensation was 25% of the net profit of any business obtained by him with a drawing account of $200 weekly, not to exceed $8,500 per annum, against said commission. In December 1948, Chenea became plant superintendent of the defendant corporation at a weekly salary of $200. Chenea is not now and has never been a stockholder or director of the defendant corporation. Chenea left the employ of the defendant corporation in August, 1950. His deposition for purposes of the instant action was taken on December 22, 1952, in Miami, Florida. At that time he had no interest whatever in the defendant corporation.

4. On April 22, 1948, the defendant corporation was doing very little, if any, business. It was practically shut down. On that date, with the knowledge and consent of Brown, Chenea visited the plaintiff's offices in Washington, D. C. Chenea wanted to know if the plaintiff and his organization could aid the defendant corporation in obtaining Government contracts. The plaintiff told him that he thought that favorable results could be obtained with the Government.

The Contract.

5. At this meeting of April 22, 1948, Chenea repeatedly informed the plaintiff that he did not have the authority to enter into a final agreement with the plaintiff. He said that a written contract was necessary. He stated that he would carry any proposal back to Mr. Brown for his approval. The proposal, or tentative agreement, orally made by the plaintiff and relayed by Chenea to Brown included the following: that the plaintiff was to be the exclusive representative of the defendant to obtain Government contracts, and a non-exclusive representative of the defendant to obtain contracts with commercial or private parties and that the plaintiff should receive commissions of 5% on the purchase price of sales received by the defendant on all such contracts as should be made through the plaintiff's aid. This tentative agreement was to be terminable at will by either party on notice, but the "aid" which the plaintiff was to provide was not at all specified. The testimony is very unclear as to whether the tentative agreement as formulated in the April meeting was to include (1) Government contracts obtained through competitive bidding as well as negotiated contracts with the Government, and (2) Government contracts emanating from procurement agencies outside of Washington, D. C. However, the evidence as a whole and particularly the evidence as to the subsequent conduct of the parties warrants an inference in favor of the plaintiff as to these two points. I find, therefore, that the tentative agreement was of such scope as to include Government contracts, from whatever procurement agency they emanated, including such contracts as should be awarded on competitive bids.

6. Before Chenea left the April 22, 1948 meeting with the plaintiff he gave the plaintiff samples from the defendant's mill. He also left the plaintiff with certain letterheads of the defendant corporation and promised to send the plaintiff, after receiving the approval of Brown, a facility report of the defendant's mill. Chenea also requested that the plaintiff begin work immediately which the plaintiff did. Mr. Chenea, upon his return from Washington, fully informed Mr. Brown of the proposal as stated above. Mr. Brown said that he would handle the matter.

7. On May 3, 1948, Chenea, with the knowledge and consent of Brown, sent a facility report to the plaintiff. Subsequently, he sent certain alpaca lining samples to the plaintiff.

8. The proposed agreement was never reduced to writing. Mr. Brown and Mr. Ballard have been friends for a long period of time and were at the time here involved business associates in another venture. All correspondence between the plaintiff and the defendant was directed to Mr. Chenea. The plaintiff never directly called Mr. Brown's attention to the matter though they were frequently in each other's company. The plaintiff in several instances informed Mr. Chenea that the Government had requirements for products such as the defendant could manufacture for which defendant could submit bids. This information was brought to Mr. Brown's attention by Mr. Chenea. Though Brown knew of the plaintiff's activities in his behalf, he never expressly approved or disapproved of the tentative agreement which emerged from the April 22, 1948 meeting until October 17, 1951, when he refused to pay the plaintiff any commissions on the two contracts described in Finding 9 which the defendant corporation had received from the United States Government between 1948 and 1951.

9. There are two contracts in issue in this case. The defendant corporation on July 6, 1948 submitted a bid at the Army Quartermaster's Office in New York City for a contract to supply pile cloth material. As a result of this bid the defendant was awarded a contract to supply the Army with 200,000 yards of said material at $5.55 a yard. This contract was completed by delivery by the defendant of 197,000 yards, for which it received by April, 1949, the purchase price of about $1,093,350. On August 24, 1950, the defendant corporation was awarded, after submitting a bid, a contract for 225,000 yards of pile fabric at $5.60 per yard, at an aggregate price of $1,318,518. This contract also was made with the Army Quartermaster's Office in New York City. This contract was completed and the purchase price was received by the defendant by December, 1950. Each of the above contracts were awarded on the basis of competitive bidding open to the public. The aggregate commissions computed on these payments amounted to about $120,593.40.

10. On May 18, 1948, the plaintiff wrote a letter to Mr. Chenea informing the latter that within 60 to 90 days the Army Quartermaster's Office in New York City would send invitations to bid for contracts to supply material which the defendant corporation was equipped to produce. The letter included the name of the Army Officer in Charge and where his office was located. On May 20, 1948, Chenea sent a letter to the plaintiff saying that "you are very much on the job" and "I appreciate the prompt and efficient way you are handling these things * * *." On June 19, 1948, the plaintiff wrote Mr. Chenea and stated the following:

"Certainly hope you will be able to put in the successful bid on the 375,000 yards, 54" pile wool cloth, Proposal Invitation No. 18, opening on July 6th in the New York Quartermaster Purchasing Office about which we also talked on the phone and please be sure to have your office send us a copy of this bid which we understand will include a 5% sales commission for this office as per our discussion."

Mr. Brown was aware of this correspondence, but the defendant corporation did not answer the plaintiff as to the 5% commission until December 27, 1948, when Chenea, in a letter to the plaintiff, indicated that the defendant did not believe that the plaintiff was entitled to any compensation in relation to the first contract referred to in Finding 9, saying:

"As you probably know, Floyd Brown contacted some of his old friends in the Quartermaster's Division at 16th Street and through them has succeeded in getting this present order we are now working on. Apparently his connection is very good and they are keeping us posted on everything coming out and I believe we can, without much trouble, get sufficient orders to keep our plant going for the next year or so."

To this the plaintiff replied by letter dated January 28, 1949,

"* * * We are certainly glad to hear that you anticipate a volume of business in the Quartermaster's Division * * * in New York City and quite naturally we are pleased to know that our letter of last May 18th contained information which opened up this source of business."

The above quoted letter from the defendant in no way referred to plaintiff's letter of May 18.

11. The letter of May 18, 1948, and the letter of June 19, 1948, referred to in Finding No. 10, and certain telephone calls to Chenea covered in the letters, constituted the plaintiff's sole claimed contribution to the award of the first contract. The plaintiff in no way aided in the preparation or presentation of the bid for said contract. Nor did the letter of May 18 supply the defendant with information as to specifications or the amount of fabric that would be required.

12. The defendant subscribed to a daily trade paper in the textile business which contained the market price of materials, and information concerning contracts which were being advertised for bid. On June 8, 1948, Brown read a Government notice relating to bids for the first contract (see Finding 9) in said journal which gave him the same information as is contained in defendant's letter of June 19 referred to in Finding No. 10.

13. On March 1, 1949, the plaintiff sent the following letter to Mr. Chenea:

"Confirming telephone

...