Grimm v. Baumgart
| Decision Date | 05 March 1951 |
| Docket Number | No. 18083,18083 |
| Citation | 121 Ind.App. 626,96 N.E.2d 915 |
| Parties | GRIMM et al. v. BAUMGART. |
| Court | Indiana Appellate Court |
Brubaker, Rockhill & Lee, Warsaw, Ortmeyer, Bamborger, Ortmeyer & Foreman, Evansville, for appellants.
Newman & Salm, Evansville, Waldo Hendrickson, Boonville, for appellee.
The facts out of which this litigation arose, as disclosed by the record, may be summarized as follows:
For about fifteen months prior to September 19, 1946 one Ellsworth Meyers was the munufacturer's agent of appellants. Under the terms of their contract said Meyers was to purchase certain chemicals and merchandise from appellants and he was to be their sole and exclusive distributor in certain disignated territory.
On or about September 1, 1946 appellee entered into negotiations with said Meyers for the purchase of his contract with appellants. In the course of these negotiations appellee had several conversations with one of the appellants. He was assured the business was a paying business. He says he was informed by happellant the business was worth the price asked by Meyers. Appellee and his wife made a visit to the plant of appellants in Warsaw, Indiana. He had previously examined Meyers' books and the records of the business. He verified those records while in Warsaw. He purchased the business from Meyers for $5800.00. He acquired by this purchase in tangible property a 1937 Chevrolet panel truck worth about $600, approximately $1000 worth of merchandise and some office equipment. At about the time he consummated the purchase from Meyers he entered into a contract with appellants. This contract was in writing and dated September 19, 1946. The pertinent provisions of this contract are as follows:
'1. Party of the second part hereby agrees to furnish to party of the first part merchandise which party of the first part will sell under his manufacture agency including all chemicals and merchandise manufactured and produced by the Warsaw Chemical Company of Warsaw, Indiana. Which said merchandise party of the first part agrees to purchase through party of the second part.
'2. Party of the first part hereby agrees to vigorously push the sale within said territory of the merchandise herein stipulated.
'3. Party of the first part is hereby given the exclusive right as the distributor for the sale of the merchandise herein specified.
'4. All sales made by first party shall be purchased at wholesale prices and sold at prices suggested by the manufacturer. The difference between the wholesale price and the selling price constitutes the agent's profit.
'5. First party hereby agrees to sell said merchandise in keeping with the established business principles.
'6. Party of the first part shall be given a complete list of all wholesale prices and suggested retail prices and shall be kept advised as to any changes which may be made or required from time to time.
'7. Party of the first part hereby agrees that all purchases will be made through party of the second part, cash with order.
'8. Party of the first part agrees to pay for his own transportation, meals, advertising, telephone, stationery, and all other expense items connected with the sale of the merchandise herein specified, and receives no allowance from party of the second part, or reimbursements for any expenses.
'9. Party of the first part agrees, however, to fulfill a reasonable quota of sales and obligates himself not to become interested in any competitive industry.
'10. Party of the first part agrees to deal honestly with, and to make no false statements of misrepresentations, and to pay for all sample equipment furnished to him.
'11. Party of the first part agrees to use a prescribed form and receipt in completing a sale, indicating the name of the produce, name of the customer and a correct statement of the terms of the sale.
'12. It is further understood and agreed in case of the termination of the contract, the agent will return promptly to the Company all text books, price lists or confidential information belonging to party of the second part.
* * *
* * *
'This constitutes exclusive Distributor and Broker rights in the following territory:
Indiana and Illinois from U.S. Highway #40, excluding Indianapolis and Terre Haute, Indiana, and including East St. Louis, Illinois, South. All of Kentucky, Tennessee and Arkansas.
'The party of the first part retains the right to approve or disapprove of all salesmen or distributors in the above mentioned territory.'
At the time he took over the business there were three salesmen working in the territory. Appellee had difficulty in procuring salesmen. In December of 1946 appellee says appellants began to show dissatisfaction with the business he was doing. About October, 1947 appellee wrote appellants and asked permission to sell his business. On or about November 4, 1947 appellants wrote appellee that because he had not produced sufficient business they were going to put another representative in the territory. Sometime prior to this appellee had sold the truck he acquired by the purchase of Meyers' business to one Elwood Newman. The record discloses appellee's purchases for the fourteen-month period from September, 1946 to the cancellation of his contract in November, 1947, amounted to approximately $4000.00. In the fifteen-month period preceding September, 1946, while Meyers had the contract his purchases amounted to approximately $10,000.
On or about November 8, 1947 one of appellants called Meyers by telephone and arranged to meet him at the Columbia Club in Indianapolis the next day. On November 20, 1947, appellants entered into a contract with Meyers for this territory. During the period appellee's contract was in force one of appellants had, while in Evansville, visited Evyers and his wife several times in their home there. He said he did not discuss their business in these conversations.
Subsequently, appellee brought this action in the Vanderburgh Superior Court against appellants and Meyers. Before the...
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