Builders' Duntile Co. v. W.E. Dunn Mfg. Co.

• Decision Date: 21 May 1929
• Citation: 17 S.W.2d 715,229 Ky. 569
• Parties: BUILDERS' DUNTILE CO. v. W. E. DUNN MFG. CO.
• Court: Kentucky Court of Appeals

17 S.W.2d 715

229 Ky. 569

BUILDERS' DUNTILE CO. v. W. E. DUNN MFG. CO.

Court of Appeals of Kentucky

May 21, 1929

Appeal from Circuit Court, McCracken County.

Action by the Builders' Duntile Company against the W. E. Dunn Manufacturing Company. Judgment for defendant, and plaintiff appeals. Reversed and remanded.

Wheeler & Hughes, of Paducah, for appellant.

Eaton &amp Boyd, of Paducah, for appellee.

HOBSON C.

The W E. Dunn Manufacturing Company manufactures machinery for making duntile, which is a hollow building tile. B. H Samuels, of Paducah, received some of its advertising showing that its duntiles were fireproof, moisture proof, and sold at a cost below that of other construction material of equal qualities. After some correspondence the company sent its agent, Mr. Gaston, to Paducah in April, 1925. Samuels told Gaston that he was organizing a company to manufacture these duntiles. He and Gaston went to see one or two of the other promoters of the proposed corporation, and also went to see a banker from whom they expected to get some money. One of the other promoters was out of the city. Samuels preferred to organize the corporation and then make the contract for the machinery. Gaston wished him to order the machinery then, and go ahead with the corporation afterwards. After talking it over with the other promoters who were in the city, Samuels signed a contract, in the usual form, ordering the machinery on April 23. The contract contained this provision: "W E. Dunn Manufacturing Company agrees to furnish, free of charge, an experienced service man for a period of five days to insure proper installation and instruct your force." The order, signed by Samuels, was accepted by the company. The machinery was shipped and reached Paducah on June 6.

On June 16, the experienced man provided in the contract, Mr. Aaron, reached Paducah and began setting up the machinery. On June 20, the articles of incorporation of the Builders' Duntile Company were filed by Samuels and his associates. The capital stock was fixed at $10,000. Samuels had paid out or assumed to pay $5,100, for the machinery and other expenses, and stock for this amount was ordered issued to him, and other amounts to the other promoters of the corporation. After Aaron had set up the machinery and instructed the men how to operate it, he commenced making duntiles, and remained there in all about five days to get the thing going. After he left it turned out that the blocks so made were inferior in quality and practically valueless for building purposes. The Builders' Duntile Company wrote to the manufacturer. Some correspondence followed, and some two months later the manufacturer sent another man to the plant, Mr. Terrell, who found that the machinery had not been put up right by Aaron, and that Aaron had given the wrong formula as to the mixing of the ingredients. After Terrell had properly set up the machinery and properly mixed the material, the machinery produced good results. This action was brought by the Builders' Duntile Company against the W. E. Dunn Manufacturing Company to recover on the written contract made on April 23 by Samuels. The court peremptorily instructed the jury to find for the defendant. The plaintiff appeals.

The case turns on the right of a corporation to sue upon a contract made on its behalf by...