Diehl v. Barker

• Decision Date: 08 April 1933
• Docket Number: 30820.
• Citation: 137 Kan. 255,20 P.2d 534
• Parties: DIEHL et al. v. BARKER. [*]
• Court: Kansas Supreme Court

20 P.2d 534

137 Kan. 255

DIEHL et al. v. BARKER. ^[*]

No. 30820.

Supreme Court of Kansas

April 8, 1933

Syllabus by the Court.

Assignees of account for merchandise held in no better position to maintain action thereon than seller, where buyer defended on ground of fraud.

Evidence sustained finding that salesman negotiating sale of merchandise was authorized agent of seller.

Seller held responsible for dereliction of salesman in failing to forward memorandum agreement entered into with buyer at time order for merchandise was obtained.

Whether buyer was induced to execute contract for purchase of merchandise by fraud on part of seller's agent held for jury.

Memorandum agreement, whereby seller's agent agreed to furnish salesman to distribute sewing machines purchased and order for machines executed practically at same time, held to constitute single contract.

Failure of seller to comply with contract to furnish buyer with salesman to distribute sewing machines purchased, justified buyer's rescission.

In an action by the assignees of an account for merchandise claimed to have been sold, under the facts stated in the opinion it is held: (1) That the assignees are in no better position to maintain the action than the seller; (2) that the salesman was the agent of the seller in the negotiations and the seller is responsible for any dereliction on his part; (3) that the trial court did not err in submitting to the jury instructions and special questions pertaining to fraud which induced the execution of the order; (4) that the contract of the parties was embodied in the two instruments executed; (5) that defendant, under the facts stated, was justified in rescinding the contract; and (6) there was no material error in the introduction of evidence, or in the instructions given.

Appeal from District Court, Sedgwick County, Division No. 3; Grover Pierpont, Judge.

Action by W. H. Diehl and another, copartners, doing business under the firm name and style of the Merchants' Securities Company, against O. P. Barker, doing business under the trade-name and style of Barker Hardware & Furniture Company. Judgment for defendant, and plaintiffs appeal.

Arnold C. Todd, James G. Norton, Carl O. Bauman, and Julian E Ralston, all of Wichita, for appellants.

Burt Comer and Paul MacCaskill, both of Wichita, for appellee.

HARVEY Justice.

This is an action for a sum claimed to be due for merchandise sold. The jury answered special questions and returned a verdict for defendant. Plaintiffs have appealed.

The facts disclosed by the record are not seriously in dispute and may be stated as follows: The defendant, O. P. Barker, is a retail merchant at Wichita doing business under the name of the Barker Hardware & Furniture Company. The New Home Sewing Machine Company of Rockford, Ill., and the Free Sewing Machine Company are subsidiaries of Consolidated Industries Inc. The plaintiff W. H. Diehl is comptroller of Consolidated Industries, Inc., and the plaintiff W. E. Stauffer is auditor of the Free Sewing Machine Company. They devote practically all business hours to their positions of comptroller and auditor, respectively. The two individuals constitute a partnership known as Merchants' Securities Company purchasing accounts and securities, and are plaintiffs in this action. About May 23, 1930, one R. D. Banks went to defendant's store and represented to him that he was state supervisor and general salesman for the New Home Sewing Machine Company and talked about selling sewing machines. As a result of his talk with defendant, two instruments in writing were executed practically at the same time, one a few minutes before the other. We set them out in the order of their execution:

"Memorandum Agreement.

"City Wichita State Kansas

"Date 5--24--30

"This is to certify that the undersigned dealer has purchased of the New Home Sewing Machine Company 10 New Home sewing machines upon their regular terms, 2% discount in 30 days, 6 mo. net with the understanding that the state Supervisor will furnish one (1) or more salesmen to assist the undersigned dealer in selling machines under the following conditions:

"1. The new retail price and maximum old machine allowance are to be arranged and agreed upon by the dealer and the State Supervisor. Net Retail $175.00 Old Machine $25.00.

"2. The dealer is to pay the retail salesman 20% commission on the net retail price received after the old machine allowance given has been taken off. $7.00 from each sale held in reserve.

"3. If for any reason the salesman makes a greater allowance for an old machine than the maximum old machine allowance agreed upon by the dealer, the excess allowance is to be charged against the retail salesman's commission by the dealer, and is to be deducted at time of settlement. It is further agreed that the old machines at all times are to be the property of the salesman.

"4. It is further agreed that Stands and Portable Machines may be sold on terms as low as $5.00 down and $5.00 per month, if salesman is compelled to do so. On the Console Electric Machines terms are not to be less than $10.00 down and $10.00 per month.

"5. The undersigned dealer agrees to pay the retail salesman each Saturday night his commission in full on all machines sold during the week.

"6. Sales at all times are made subject to the approval of the undersigned dealer.

"Signed Barker Hdwe. & Furn.

"Dealer O. P. Barker.

"Signed R. E. Banks,

"State Supervisor.

"E. H. Wodd, Salesman.

"Will take up all machines in the original crate in 60 days unsold and give credit for same at invoice prices.

"R. E. Banks."

"New Home Sewing Machine Co.

"1902-60 Eleventh St., Rockford, Ill.

"Dated 5--24--30

"Ship to Barker Hdw. & Fur. Co.,

"Town, Wichita State Kans.

"Ship by Freight Via.

"Ship F. O. B. Orange, Mass, or Rockford, Ill.

New Home Electrics Price Quan.

Machine

per

Quan. Style Round Bobbin Finish

8 K40M Colonial Desk with light Sit Walnut Only $66.85 $534.80

Straight

2 K54M Windsor Consolette light Sit Walnut Only 74.00 148.00

Straight

2 K112M Portable with light Walnut Only 51.00 102.00

"Terms: Net 60 days; 2% for cash in 30 days from date of invoice F. O. B. shipping point.

"If further time is desired we (or I) agree to give note or notes with accompanying order, or upon receipt of invoice. (With interest at 6% per annum, 60 days from date of shipment.)

"Due Six months net.

"It is understood that no conditions agreed to by any solicitor or agent and not embodied herein will be in any way 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 solicitor or agent. "Salesman Banks

"[Signed] Barker Hdwe. & Furn.

"O. P. Barker."

These appear to have been executed in duplicate and one each left with the defendant. Banks stated he would send the others to the New Home Sewing Machine Company. On May 29, 1930, the New Home Sewing Machine Company shipped the sewing machines to defendant. He received them and paid the freight on them, amounting to $22.43. On June 2, 1930, the New Home Sewing Machine Company made up a statement of its account with defendant and assigned the same to plaintiffs for a consideration of $753.40, which plaintiffs paid by check. On June 5 the New Home Sewing Machine Company wrote defendant advising him that his account represented by the invoice of May 29 had been discounted with the Merchants' Securities Company, 505 Manufacturers' National Bank Building, Rockford, Ill., and when the invoices matured for payment please to remit direct to the Merchants' Securities Company. Under date of June 7, 1930, the Merchants' Securities Company wrote defendant: "Under date of June 2nd your account with The New Home Sewing Machine Company for $784.80 was purchased by us. This covers the New Home Sewing Machine Company invoice dated May 29th, 1930. *** In accordance with the wording of the contract we are enclosing a note ready for your signature. Please sign and return promptly."

Under date of June 9, 1930, defendant's attorney wrote the New Home Sewing Machine Company: "On the 24th day of May, 1930, your State Supervisor and agent, R. E. Bank, made and entered into an agreement with Barker Hardware & Furniture Company, with which said agreement you are familiar. The covenants and stipulations in said agreement contained have been violated, particularly with reference to furnishing a salesman to distribute said sewing machines. You are hereby notified and will take notice that the Barker Hardware & Furniture Company and/ or O. P. Barker rescinds said contract and will treat same as a nullity in the future. We are holding the machines *** subject to orders from you. *** This letter will also serve as an answer to your letter of June 5th, 1930, advising you had discounted this account with the Merchants Securities Company of Rockford, Illinois. Although you are no doubt familiar with this fact, you are advised that under date of June 7th, 1930, the last mentioned company forwarded a promissory note for the signature of Mr. Barker advising that they were now the owner of said account. We suggest that if these machines are now the property of the Merchants Securities Company that you adjust the matter with them immediately."

Under date of June 17 the New Home Sewing Machine Company wrote defendant's attorney: "Replying to your letter of June 9th, please advise immediately what agreement is referred to in your first paragraph. Do you mean to state that a separate written agreement was entered into in addition to the purchase contract? If so,...