Gilmore & Co. v. Samuels & Co.

• Decision Date: 08 December 1909
• Citation: 135 Ky. 706
• Parties: Gilmore & Co. v. Samuels & Co.
• Court: Kentucky Court of Appeals

Page 706

135 Ky. 706

Gilmore & Co. v. Samuels & Co.

Court of Appeals of Kentucky.

December 8, 1909.

Appeal from Nelson Circuit Court.

SAMUEL E. JONES, Circuit Judge.

Judgment for defendant, plaintiff appeals. — Reversed.

JOHN S. KELLEY, JOHN A. FULTON AND R. C. CHERRY, for appellant.

NAT W. HALSTEAD, D. A. McCANDLESS AND E. E. McKAY for appellee.

OPINION OF THE COURT BY JUDGE LASSING — Reversing.

This litigation grows out of an attempt on the part of T. M. Gilmore & Co. to recover of W. B. Samuels & Co. brokerage fees for the sale of 3,266 barrels of whisky at 50 cents per barrel. The plaintiff, T. M. Gilmore & Co., is a corporation engaged in the whisky brokerage business in the city of Louisville. The defendant, W. B. Samuels & Co., is a corporation owning and operating a distillery in Nelson county, Ky. On the 29th day of November, 1906, T. M. Gilmore & Co. procured from W. B. Samuels & Co. the following writing: "Samuels, Ky., Nov. 29, 1906. This writing witnesseth that W. B. Samuels & Co., incorporated, of Nelson Co., state of Kentucky, have this day employed and do hereby employ, constitute and authorize T. M. Gilmore & Co., incorporated, of Louisville, Ky., to make a contract for and on its behalf for the sale of its distillery property at Samuels Depot, in Nelson county, Kentucky, and twelve hundred and sixty-six barrels of whisky in its bonded warehouses of the manufacture of fall 1905 and spring 1906 and the future product of said distillery on the following terms and conditions, namely:

The said twelve hundred and sixty-six barrels of whisky at the price of thirty cents per proof gallon, original gauge; the purchaser to take and pay for same not less than two hundred barrels each and every two months from the date of sale, and the cost of carriage additional after the date of sale to be added to the price. To sell two thousand barrels to be manufactured during each and every distillery season from this date, with an option to the purchaser to take and require to be made for him one thousand barrels additional each season if he required or any proportion thereof, for a period of five years from this date and the purchaser to have the privilege of renewing this contract and extending same for an additional period of five years, provided he gives notice of his intention to renew the contract on or before the first day of July next preceding the date of expiration of the first five-year period. The price of said whisky to be hereafter manufactured to be twenty-five (25c) cents per proof gallon based on corn at 45 cents per bushel in Louisville as shown by bills for same, or in the event that the price of corn should advance the price of the whisky to be increased ¼ of a cent per gallon for each cent advanced per bushel in corn above 45 cents and if corn declines the price of the whisky to be reduced ¼ of a cent per gallon for each cent decline in the price of corn below 45 cents. The whisky manufactured hereafter to contain 30 per cent. of small grain and to be sound and merchantable.

If, during any season the price of corn should exceed 75 cents, then no whisky is to be made except at option of purchaser, but the full amount shall be produced during the life of this contract in such amount each season as the distiller can produce, but not exceeding 3,000 barrels per season except at distillers' option. Cooperage to be first class 8 or 10 hoop barrels, and the distiller to deliver the whisky as required f. o. b. cars at Samuels, Ky. Outs to be guaranteed not to exceed one gallon over and above the government allowance on each barrel separately. Storage to begin first of each month following month of inspection and to be at the rate of 5 cents per barrel per month. Goods to be paid for on the 10th of each month succeeding the month of manufacture or delivery of warehouse receipts. Buyers to have option of having a portion of each crop made in such name or names as he may designate other than W. B. Samuels & Co., and buyer is to have the brand of W. B. Samuels placed on any or all of the whisky made under this contract, at his option.

Said W. B. Samuels & Co. is to establish and maintain a bottling room suitable for bottling in bond, suitable to meet the requirements of purchaser in bottling the whiskies of said distillery, and said bottling house must be established without delay so as to take care of any orders buyer may give for the bottling of any whiskies now in the W. B. Samuels & Co. warehouses which buyer may purchase on the market. Purchaser is to furnish, for bottling in bond, at Samuels, Ky., all cases, bottles, corks, labels etc., without cost to W. B. Samuels & Co., and W. B. Samuels & Co. is to furnish labor in bottling said goods and charge for same as follows: Half pints 60 cents per case. Pints 40 cents per case. Fives 25 cents per case. Fours 25 cents per case. Also to sell the distillery plant and lands containing about 14 acres more or less at Samuels Depot, in Nelson county, Ky., being all the lands owned by said W. B. Samuels & Co., together with the distillery warehouses and all other improvements, buildings, fixtures, and machinery thereon, also all brands, good will etc., for a consideration of $25,000.00, excluding, however, accrued storage up to time of transfer of said property, and personal property consisting of barrels, barrel material, grain, coal, etc.

The purchaser of the whisky under any contract which may be made by said T. M. Gilmore & Co., to have the option to purchase said distillery at the end of the said first five-year period, or, if contract is extended for an additional five years, then the purchaser to have the option to purchase said distillery plant and premises, at said price at end of second five-year period. Said W. B. Samuels & Co. agrees to make a deed of general warranty to the purchaser except as to the lien in favor of the United States government. Said W. B. Samuels & Co. agree to pay in the event of this sale to T. M. Gilmore & Co. a commission of fifty (50) cents per barrel on each and every barrel of whisky taken by purchaser under this contract, said commission to be paid as goods are delivered and paid for, and in the event that the purchaser in the exercise of his option takes the distillery, it is to pay a commission to T. M. Gilmore & Co. of (5) five per cent., when deed is made and notes are given or cash paid. In case distillery is destroyed W. B. Samuels & Co. is not to be required to fulfill this contract, but in the event it should rebuild the distillery then it shall perform the contract for the remaining portion of the term. Said W. B. Samuels & Co. further agrees that in the event of the making of a contract by T. M. Gilmore & Co. as hereinbefore authorized to keep and perform said contract with the successors or assigns of person with whom same may be made. This option limited to five days from date of this paper. W. B. Samuels & Co., by M. A. Samuels, Prest."

Acting on the authority given under this contract, T. M. Gilmore & Co., within the time limited, closed a deal with R. H. Edelen & Co., by the terms of which they purchased all the whisky and the output of the distillery with a right to buy the distillery property as set out in the authority or contract under which Gilmore & Co. was acting. W. B. Samuels & Co. was notified that this sale had been consummated, and it at once, through its president, wrote a letter to R. H. Edelen & Co., in which it refused to ratify the sale made by Gilmore & Co. on the ground that the authority for making same had not been properly executed by the W. B. Samuels Company, and that the writing signed by its president had not been approved by the board of directors. R. H. Edelen & Co. thereupon brought suit in the Nelson circuit court to compel the specific performance of the contract. A demurrer was filed to this petition, and, being sustained, plaintiff declined to plead further, and its suit was dismissed. Upon appeal here the judgment of the circuit court was affirmed, on the ground that the court would not compel the specific performance of a contract of that nature. Thereafter T. M. Gilmore & Co. filed a suit in the Nelson circuit court, wherein it sought to recover its brokerage fees for the sale of 1,266 barrels of whisky, which were on hand at the time the sale was entered into, and the 2,000 barrels which had been manufactured by said company between the date of the execution of the contract and the filing of this suit.

W. B. Samuels & Co. answered, and, in addition to traversing the allegations of the petition, interposed the following defenses: (1) That the writing sued on was not the act and deed of W. B. Samuels & Co., and that the company was not bound by the unauthorized act of its president; (2) that at the time of the execution of this writing M. A. Samuels was not competent to contract; (3) that she was over-reached and deceived in its execution by T. M. Gilmore; and (4) that it was without consideration. In its reply, the affirmative matter in each of these several defenses set up in the answer was traversed, and plaintiff also set up the business relations theretofore existing between it and defendant, its previous employment to sell this same property, the organization of defendant and its mode of conducting business, and the circumstances under which the contract sued on was made and entered into. This affirmative matter in the reply was traversed of record, and on the issues thus made the case proceeded to trial. At the conclusion of all the testimony, the court peremptorily instructed the jury to find for the defendant, which was done, and the plaintiff's petition was dismissed. From that ruling and judgment this appeal is prosecuted.

The record discloses the following state of facts, about which there is practically no dispute: The defendant company was organized many years ago for the manufacture and sale of whisky, and W. B. Samuels, for whom it...