Barnebey v. Barron G. Collier, Inc.

• Decision Date: 26 June 1933
• Docket Number: No. 9651,9677.,9651
• Citation: 65 F.2d 864
• Parties: BARNEBEY et al. v. BARRON G. COLLIER, Inc. BARRON G. COLLIER, Inc., v. BARNEBEY et al.
• Court: U.S. Court of Appeals — Eighth Circuit

65 F.2d 864 (1933)

BARNEBEY et al. v. BARRON G. COLLIER, Inc.^*

BARRON G. COLLIER, Inc., v. BARNEBEY et al.

Nos. 9651, 9677.

Circuit Court of Appeals, Eighth Circuit.

June 26, 1933.

Fred S. White of Omaha, Neb. (S. J. Leon, of Omaha, Neb., on the brief), for Walker H. and Oscar L. Barnebey and Middle States Creamery Co.

Howard Saxton, of Omaha, Neb. (John E. Eidam, of Omaha, Neb., on the brief), for Barron G. Collier, Inc.

Before GARDNER, SANBORN, and BOOTH, Circuit Judges.

GARDNER, Circuit Judge.

Barron G. Collier, Inc., brought this action at law against Walker H. Barnebey and Oscar L. Barnebey, partners doing business under the name of Middle States Creamery Company, to recover damages growing out of an alleged contract for the sale of street car advertising to be furnished by plaintiff to defendants. Both parties have appealed, and to avoid confusion the parties will be referred to as they appeared in the lower court.

It is alleged in the petition of plaintiff that it is engaged in the business of furnishing advertising in the street cars in the city of Omaha; that defendants are engaged in business in Omaha under the firm name and style of Middle States Creamery Company; that plaintiff is the lessee of advertising space in the street cars in operation in the city of Omaha, Neb., and permitted to sublet portions of the space to advertisers; that on the 31st day of July, 1929, plaintiff and defendants entered into a contract in writing for the furnishing of car advertising in one-fourth of the street cars of the Omaha and Council Bluffs Street Railway Company and of the Omaha & Southern Interurban Railway Company, for a term of thirty-six months, commencing February 1, 1930, for which defendants agreed to pay plaintiff the sum of $92.50 per month at the end of each month during the term of the contract. The petition is in two counts or causes of action. The first cause of action is to recover the contract price for the advertising furnished from February 1, 1930, to February 24, 1931, in the sum of $1,189.20. The second cause of action is to recover damages for the alleged breach of the contract, which breach it is alleged occurred on February 24, 1931; it being alleged that plaintiff suffered damages on account of said breach in the sum of $2,140.80.

The contract, a copy of which is attached to and made a part of the petition, recites certain terms and conditions of service, and provides, among other things, that the contract shall not be binding until accepted by plaintiff, and that upon acceptance plaintiff agrees to furnish the service on the terms stated therein, and that the contract contains all the agreements and representations of the parties, and that no representation or promise not set forth therein shall affect the obligations of either party.

The answer admits the copartnership, and denies every other allegation contained in the petition. As an affirmative defense, it alleges that plaintiff by and through its agent and representative, in order to induce defendants to make an offer and proposal for the street car advertising referred to in the contract, wrongfully, falsely, and fraudulently represented to defendants in substance (1) that the street car advertising rates would be materially increased more than 50 per cent. within a few weeks, but that, if defendants would sign the proposal as indicated by the contract, they might have the benefit of the then existing lower rates; and (2) that, if defendants would sign the contract, it would be retained and held in the offices of plaintiff's agent in Omaha, and it would not be sent to the home office of the company until it was definitely accepted, ratified, and approved by defendants, and that the contract would be regarded as a conditional offer which defendants could accept or cancel before February 1, 1930, by notifying plaintiff's agent in Omaha, and that, if advertising rates did not go up at least 50 per cent. within a few weeks thereafter, there would be no contract. It is then alleged that the contract was signed and delivered to the agent of plaintiff in reliance upon these representations and promises; that the statements and representations were false and fraudulent, and made by plaintiff's agent without any intention on the part of plaintiff to keep and perform the same, but for the fraudulent purpose of inducing defendants to sign the contract; that they were relied upon by defendants and believed to be true.

The answer further alleges that the representations as to the increase in the price of advertising were false, fraudulent, and untrue; that plaintiff knew they were untrue, that advertising rates were not increased to the extent of 50 per cent., nor materially increased before February 1, 1930; that on and before February 1, 1930, plaintiff and its agent were notified that the advertising service was not desired; that defendants had decided not to exercise their option contemplated by the agreement, and that defendants notified plaintiff to discontinue the then existing advertising in the street cars by withdrawing defendants' then existing advertisements, effective January 31, 1930; that the contract was never accepted by plaintiff company, and that notice of acceptance was not given to defendants, and that defendants canceled the agreement before plaintiff directly or indirectly indicated its acceptance of the agreement. In answer to the second cause of action, defendants, in addition to the allegations stated in their answer to the first cause of action, allege that the action is prematurely brought.

At the close of all the evidence, plaintiff moved for a directed verdict in its favor on each cause of action. The court sustained the motion on the first cause of action, and on the second cause of action sustained the same for the part of the contract price which had accrued up to the first day of the term of court. The court refused to submit to the jury any issue as to whether or not the contract was obtained by false and fraudulent representations, and also refused to submit the question as to whether or not the contract was conditional. From the judgment entered on the directed verdict, each party has appealed, the defendants appealing from the entire judgment, and the plaintiff appealing from that part of the judgment which failed to sustain its motion for a directed verdict for the full amount prayed for on both causes of action, and in directing a verdict for only $2,579.51 and costs, instead of for the full amount prayed for.

The evidence on behalf of the defendants tended to show the following facts: That some time prior to February 1, 1929, a Mr. Fitch solicited defendant Walker H. Barnebey to enter into a contract for street car advertising for the term of one year, advising him that he was representing plaintiff. Such a contract was entered into, and, while it was in force, and during the month of July, 1929, Mr. Fitch rushed into defendants' place of business in an excited manner, and talked to Walker H. Barnebey about an increase in advertising rates, telling him that, if he did not sign a new contract to begin February 1, 1930, the date of the expiration of the then existing contract between the parties, the rates would be increased. Barnebey stated that he did not know that he would want advertising six months from that date, but Fitch persisted, and stated that the proposed contract would be held in abeyance until he heard further from defendants, and that the contract would not be binding until defendants gave him further sanction on the agreement. Fitch told Barnebey that there would be a 50 per cent. or greater increase in advertising rates in the next few days, and that he was anxious to get the agreement signed then; that increased rates would go into effect within the next two or three days, and not to exceed two or three weeks; that, if the rates were not increased before February 1, 1930, the agreement would be null and void; that the contract would be held up; and that Fitch would await defendants' sanction before he sent it in to the home office. About the middle of December, 1929, Walter H. Barnebey told Fitch that he did not desire the advertising; that he had notice that there had been no increase or change in the rates, but Fitch again stated that he thought the rates would go up at any time, and finally in December, 1930, Barnebey called Fitch and told him that he absolutely wanted no advertising under the new contract, and directed him to withdraw the advertising cards displayed in the street cars on or before February 1, 1930. On January 16th Barnebey wrote a letter to plaintiff, advising that the advertising was not desired. He received no acknowledgment or communication prior to February 1, 1930, acknowledging the receipt and acceptance of the contract. Defendants did not furnish any advertising cards to plaintiff during 1930, and such of defendants' cards as were displayed during 1930 were old ones. The rates did not go up before February 1, 1930, and there was but a 3 per cent. increase in April, 1930. It may be noted in passing, though not material to the issues, that Mr. Fitch denied having made the representations with reference to the proposed raise in advertising rates, and likewise denied having made any agreement to hold the contract, or that its delivery was conditional.

On their appeal defendants urge that the court erred in directing a verdict for the plaintiff because (1) there was evidence that the contract was delivered conditionally; (2) there was evidence that the agent of plaintiff made false and fraudulent statements to defendants, on which they relied; (3) the court erred in holding that the agent could not bind the plaintiff by representations other than those contained in the contract; (4) the contract price was not the measure of recovery; and (5) the court should have submitted to the jury the question of whether or not the contract was accepted by p...