Henderson v. Bardahl Intern. Corp., 38795

• Decision Date: 21 September 1967
• Docket Number: No. 38795,38795
• Citation: 431 P.2d 961,72 Wn.2d 109
• Parties: J. A. HENDERSON, Appellant, v. BARDAHL INTERNATIONAL CORPORATION, a Washington corporation, Respondent.
• Court: Washington Supreme Court

Page 109

72 Wn.2d 109

431 P.2d 961

J. A. HENDERSON, Appellant, v. BARDAHL INTERNATIONAL CORPORATION, a Washington corporation Respondent.

No. 38795.

Supreme Court of Washington, En Banc.

Sept. 21, 1967.

Helsell, Paul, Fetterman, Todd & Hokanson, Russell V. Hokanson, Allen D. Loucks, Seattle, for appellant.

Beresford & Booth, Robert O. Beresford, Donald P. Lehne, Seattle, for respondent.

HILL, Judge.

This is an action to recover commissions alleged to be owing to the plaintiff, J. A. Henderson, by the defendant, Bardahl International Corporation.

The plaintiff was originally a distributor of Bardahl products in eastern Canada and, subsequently, in specifically designated countries throughout the world. He appointed Giorgio Geddes as a subdistributor for Italy. Later, the defendant made Geddes its exclusive distributor in certain areas which had originally been the plaintiff's territory. (We shall throughout this opinion refer to the plaintiff as Henderson, the defendant as Bardahl, and Geddes, as Geddes, except as the circumstances require specific reference or recognition of various corporate entities.) To make definite the rights and interest of Henderson in sales made by Geddes as the exclusive distributor for Bardahl, Henderson and Bardahl executed an agreement dated January 22, 1959, whereby Bardahl agreed to pay Henderson

(A) sum equal to $1.10 per gallon for each and every gallon of Bardahl concentrate ¹ ordered and paid for from Bardahl International Corporation by Geddes, or any person acting by, through or under Geddes, or any sub-distributor of Geddes, for the period beginning June 1, 1957, and ending May 31, 1962, or for so long as Geddes shall remain a distributor of Bardahl, whichever period shall be the shorter.

At the time this agreement was executed Geddes had become the exclusive distributor of 'Bardahl Concentrate' under contracts of indefinite duration in the following territories, among others: Argentina, Austria, Brazil, Casa Blanca and Morocco, France, Germany, Italy and South Africa.

At that time also there was in the process of negotiation between Geddes and Bardahl a five-year-distributorship contract. However, differences between them culminated in a notice to the attorneys for Geddes on or about the 26th day of May, 1959, advising that the proposed five-year contract would not be executed by Bardahl and that the Geddes distributorship would be terminated. Thereafter, by letter received on or about the 28th day of July, 1959, in Florence, Italy, Bardahl notified Geddes that his distributorship was terminated 'effective immediately.'

In September, 1960, Geddes brought an action in King County against Bardahl, making five claims aggregating $1,637,121.76. A supplemental complaint filed on February 16, 1962, added two claims aggregating $26,899.55.

The case came on for trial on May 14, 1963, and continued through July 19, 1963. The trial court found that the distributorship contract between Bardahl and Geddes 'was a contract of indefinite duration, since no termination date was mentioned in any of the correspondence which evidences said contract.' The findings, with reference to the termination of the distributorship, were that Geddes had been notified through his attorney on May 26, 1959, that the proposed five-year-distributorship contract would not be signed, and that all his rights would be terminated; and that on or about the 28th day of July, 1959, he was 'given written notice of cancellation of the distributorship contract, effective immediately.'

That a reasonable time to have given notice to Bardahl Florence (Geddes) prior to the termination of the existing contract between the parties would have been ninety days, instead of the sixty-day notice ² given by defendants (Bardahl). (Finding No. 11)

Geddes recovered a judgment of $55,498.30. We regard the division of those damages as highly significant.

$19,849.97 represented profits Geddes should have made on sales Prior to the termination of the contract. ³ At this point it is clear that the trial court in the Geddes case regarded the Geddes contract as terminated by the letter received in Florence July 28, 1959. This is further confirmed by the next item of damage.

$12,821.00 represented the Additional profit Geddes would have made had there been a ninety-day notice of termination instead of a sixty-day notice. ⁴

It seems apparent to us that the trial court in the Geddes case recognized that the distributorship was terminated on July 28, 1959, but took the position that the notification of intent to terminate the distributorship--which was given May 26, 1959, a little more than 60 days before the actual termination on July 28--was not reasonable and that Geddes was entitled to a 90-day notice. Consequently, he was permitted to recover the profits he would have made on sales between the termination on July 28 and August 24, 1959--the latter date being 90 days after the notice of intent to terminate given on May 26, 1959. ⁵

$13,851.00 represented '$1.00 per gallon for all concentrate manufactured and sold in Brazil during the period of Bardahl Florence's (Geddes) contract with defendants (Bardahl).' ⁶

The foregoing three items--together with two items of $4,416.50 and $4,559.83 which are not here material--make up the judgment of $55,498.30 secured by Geddes in his action. ⁷

Why the trial court, in the Geddes case, in computing damages did not divide the amounts Geddes should have received on the Brazilian sales on the basis of sales made before the termination of his contract on July 28, 1959, and those he would have made had there been a ninety-day notice of termination instead of a sixty-day notice of termination, as it did in the other distributorship areas, is not explained. ⁸

The trial court in the present case made that division: It found that of the 13,851 gallons of Bardahl concentrate sold in Brazil, 3,788 gallons were sold prior to July 28, 1959, through Geddes' subdistributors; and that the plaintiff Henderson was therefore entitled, under his contract, to $1.10 per gallon thereon or $4,166.80, which was included in the $8,583.30 awarded to him. The trial court refused to allow Henderson any commission on the other 10,063 gallons sold in Brazil subsequent to July 28, 1959. This is readily understandable, because the undisputed testimony was that there was no concentrate manufactured and sold in Brazil after the 3,788 gallons in March or April, 1959, until during or after September, 1959, subsequent, of course, to August 24, 1959, which Henderson claims was the termination date of the Geddes contract. Henderson does not endeavor to meet this testimony, but takes the position that it should not have been admitted because the parties were bound by the findings in the Geddes case: that 13,851 gallons of concentrate was sold in Brazil 'during the period covered by plaintiff's (Geddes) contract.'

Henderson's claim on this appeal is that he should have had a judgment for $20,681.10. The difference between that amount and the judgment of $8,583.30, which he has recovered, is $12,097.80. This is made up of sales in three countries all subsequent to July 28, 1959; and with the Brazil sales subsequent to August 24, 1959. The computation is as follows at $1.10 a gallon:

                10,063  gallons in Brazil ... $ 11,069.30
                   715  gallons in Morocco ....... 786.50
                   220  gallons in Germany ....... 242.00
                                              -----------
                                              $ 12,097.80
                

It will be remembered that the contract between Henderson and Bardahl (quoted in the second paragraph of this opinion) provided that Henderson should receive $1.10 on every gallon of Bardahl concentrate sold by Geddes until

May 31, 1962, or for so long as Geddes shall remain a distributor of Bardahl, whichever period shall be the shorter.

The pivotal question in this case becomes: When did Geddes cease to be a distributor for Bardahl?

The trial court in the instant case held that Geddes' distributorship terminated July 28, 1959, when he was notified that his distributorship was terminated 'effective immediately.' ⁹ A judgment was therefore entered which allowed Henderson his $1.10 on each gallon of Bardahl concentrate sold by or through Geddes or his subdistributors prior to July 28, 1959, and not previously accounted for. This included 3,788 gallons sold in Brazil which had been ordered in March or April, 1959. The trial court, holding that Geddes ceased to be a distributor of Bardahl on July 28, 1959, refused to give judgment for the additional $12,097.80 which Henderson claimed as his commission on the sales of Bardahl concentrate subsequent to that date. Actually, as heretofore indicated, there were no sales in Brazil subsequent to the 3,788 gallons until September, 1959 or later (probably November, 1959).

Henderson urges that in the Geddes case the trial court found that Geddes continued as a distributor for Bardahl until August 24, 1959, and that Bardahl is now estopped by that finding from asserting in this case that the distributorship terminated on July 28, 1959.

The purpose of collateral estoppel by judgment is to preclude parties or their privies from relitigating an issue that has been finally determined by a court of competent jurisdiction after the party against whom the estoppel is claimed has had the opportunity to fairly and fully present his case. We have recently discussed the philosophy and the purpose of collateral estoppel by judgment in Bordeaux v. Ingersoll Rand Co., 71 Wash.Dec.2d 383, 429 P.2d 207 (1967). See also Walsh v. Wolff, 32 Wash.2d 285, 201 P.2d 215 (1949); Moore's Federal Practice (2d ed.) Vol. 1B, § 0.441(2), p. 3779.

Henderson places great reliance on the landmark case of Bernhard v. Bank of America National Trust & Savings Ass'n., 19 Cal.2d 807, 122 P.2d 892 (1942), in which Chief Justice Traynor in dealing with the requirement of mutuality as applied to res judicata 'laid it to...