H. W. Kastor & Sons Advertising Co. v. Elders

• Decision Date: 21 April 1913
• Citation: 170 Mo. App. 490,156 S.W. 737
• Court: Missouri Court of Appeals
• Parties: H. W. KASTOR & SONS ADVERTISING CO. v. ELDERS.

156 S.W. 737

170 Mo. App. 490

H. W. KASTOR & SONS ADVERTISING CO. v. ELDERS.

Kansas City Court of Appeals. Missouri.

April 21, 1913.

Rehearing Denied May 19, 1913.

1. PLEADING (§§ 418, 426) — RULINGS ON DEMURRER AND MOTIONS — WAIVER.

A defendant who files an answer after the overruling of a demurrer to a petition stating a cause of action and the denial of motions to make the petition more definite and certain and to compel plaintiff to elect thereby waives the objections to the petition and to the rulings on the motions.

2. CONTRACTS (§ 229) — ADVERTISING CONTRACTS — CONSTRUCTION — EVIDENCE.

Defendant authorized plaintiff, an advertising agent, to place advertising for a specified period, plaintiff to obtain the lowest rate quoted for the space used and to receive his compensation from the publications. Publications had fixed rates for all advertisers, and advertising agents obtained a commission from them for procuring advertisements. Held, that the lowest rate meant the best advertising rate obtainable by advertisers, including a commission allowed agents securing advertisements.

3. CONTRACTS (§ 170) — CONSTRUCTION — CONSTRUCTION BY PARTIES.

The construction placed on an ambiguous contract by the parties will be adopted by the courts.

4. INTEREST (§ 10) — ALLOWANCE.

An advertising agent, recovering on an account for money paid for advertising in publications under a contract to advertise for defendant, is properly allowed interest.

Appeal from Circuit Court, Buchanan County; W. D. Rusk, Judge.

Action by the H. W. Kastor & Sons Advertising Company against H. W. Elders. From a judgment for plaintiff, defendant appeals. Affirmed.

W. B. Dickinson, of Kansas City, and C. Dubach, of St. Joseph, for appellant. Culver & Phillip, of St. Joseph, for respondent.

ELLISON, J.

Plaintiff's action is on an account for money paid for advertising and advertising space in various newspapers, periodicals, and magazines throughout the country, under a contract to advertise defendant's cure of the tobacco habit. The total amount of the account was $30,142.22, with credits of $27,621.13, leaving a balance of $2,501.09. Defendant filed a counterclaim and insisted that he did not owe plaintiff, but on the contrary plaintiff owed him more than $3,000. The case was referred by the trial court to B. J. Casteel, a member of the Buchanan county bar, as referee, who found against the counterclaim, and in plaintiff's favor, in the sum of $1,593.75. This finding was approved by the court, and judgment entered for that sum.

It will aid to a full understanding of the case to set forth the following, taken from the findings of fact of the referee: "It appears that weekly and monthly magazines and daily and weekly newspapers have fixed charges or rates for advertising. These rates are quoted from time to time by the publications, and constitute what is termed the card rate. They are based on the amount of space used and the position given the advertisement in the columns of the publication. These rates are subject to change from time to time by the publications, but all advertisers are charged alike, no rebates or favors being shown by any particular advertiser, so that any advertiser may deal direct with the publications, in which case he is charged one uniform rate of the particular publication for the kind and character of the advertisement inserted, or what is termed the card rate. The evidence shows that in the growth and development of the advertisement business to its present large proportions there has come to be what may be termed a middleman, or go-between, known as an advertising agent or agency. This man, or agency, deals with the advertiser on the one hand, advising and assisting him in the selection of publications to be used and having put in type and preparing advertising matter or copy; making or having made drawings, electrotypes, stereotypes; preparing letters, circulars, pamphlets, and literature generally for circulation through the mails and otherwise; and generally conducting what is termed an advertising campaign — while on the other hand, the agent deals with the publications used, placing all orders for advertisements and adjusting all charges and settlements with them, and paying all amounts due them. In fact, in such cases the publications deal with the agent only. The agent orders the space; the same is charged to him by the publication at the card rate, less the agency commission or the agency rate, and he pays therefor, and the advertiser has no dealings with the publication whatever. In such case, however, the charge to the agent for the space used is lower than the card rate by from 5 to 15 per cent., each publication fixing its own rate or charge. This is what is variously designated in the testimony as `the agency rate,' `the lowest rate,' `the rate with the commission deducted,' etc. It is given uniformly to all agents or agencies who are recognized by the publications as trustworthy, and to whom the publications are willing to extend credit. It is allowed by the publication with the expectation (and it is required by a few publications) that the agent or agency retain as his or its commission the difference between the card rate and the rate charged the agent. It appears that the agent sometimes gives his advertising patrons the benefit of a part of the agent's commission, but this is a matter of contract in each instance, and is determined by the nature of the account, the kind and extent of service required of the agent, competition, etc. So that, strictly speaking, the charge to the agent is not an advertising rate, there being but one rate, and that the card rate charged all advertisers alike; the commission allowed off this rate to agents being intended by the publishers for the advertising agent as remuneration for his services as such. These advertising agencies are established, or have offices, in the leading cities of the country, and transact a large volume of business. The evidence discloses that plaintiff has about 75 regular employés, many of them experts in advertising, some of whom receive salaries as high as $90 per...