Hood v. Sioux Steel Co.

• Decision Date: 02 November 1939
• Docket Number: No. 8255.,8255.
• Citation: 67 S.D. 1,287 N.W. 636
• Parties: HOOD v. SIOUX STEEL CO.
• Court: South Dakota Supreme Court

67 S.D. 1

287 N.W. 636

HOOD

v.SIOUX STEEL CO.

No. 8255.

Supreme Court of South Dakota.

October 3, 1939.

Rehearing Denied November 2, 1939.

Appeal from Circuit Court, Minnehaha County; John T. Medin, Judge.

Action by Donald L. Hood against Sioux Steel Company to recover salesman's commissions. From a judgment for the plaintiff, the defendant appeals.

Reversed.Danforth & Danforth, of Sioux Falls, for appellant.

Bailey, Voorhees, Woods & Bottum, of Sioux Falls, for respondent.

RUDOLPH, Judge.

The plaintiff in this action seeks to recover certain commissions which he alleges are due him from the defendant. The material facts are undisputed and are, as follows: Plaintiff commenced his work for the defendant during the year 1934. In 1935 the parties entered into a written contract. Under this contract it was agreed that plaintiff should act as a salesman for the defendant and spend his entire time at such work. Plaintiff was working upon a commission basis. The contract provides in Paragraph Two: “In consideration of the entire time of the Party of the First Part (plaintiff) being spent exclusively in selling merchandise manufactured and jobbed by Party of the Second Part (defendant), Party of the Second Part shall credit the Commission Account of the Party of the First Part for all merchandise sold to dealers called on within a period of thirty days before order was received.” A similar contract containing this same paragraph two was entered into between the parties in 1936 and again in 1937. For reasons immaterial here, the relationship existing between the defendant and the plaintiff was terminated on October 27th, 1937. The contracts referred to contained certain provisions whereby one-half of all long distance calls or collect telegrams made from the plaintiff's territory should be charged to his commission account; and the further provisions, “All losses because of failure to pay on the part of the customer shall be charged to the Commission Account of the Party of the First Part to the extent of the amount of commission credited to that Commission Account.” There were other provisions of the contracts relating to the deduction of freight allowances in figuring plaintiff's commission; and also the provision, “Commissions do not become due until merchandise applying has been paid for in full.” The evidence further discloses that at the beginning of the relationship between plaintiff and defendant, plaintiff would examine the company's books and ascertain the amount of commissions due him under the contract. Thereafter and sometime in 1935, the defendant established in its business a system whereby it rendered to the plaintiff monthly statements. These monthly accounts would show the amount of commissions with which defendant had credited plaintiff during the month covered by the account. In addition, certain chargebacks against plaintiff because of the different provisions of the contract, would be shown on the account. At the end of the year 1934, the account between the parties was settled and paid. On December 31st, 1935, an account was rendered by the defendant to the plaintiff showing that plaintiff's commission account had a credit at that time in the amount of $1,028.08. During the month of January and February, 1936, plaintiff received two checks, one for $717.63, and the other for $310.45, the sum of which equaled the amount of the credit existing in favor of the plaintiff as disclosed by the account rendered him at the end of the year 1935. At the end of the year 1936, plaintiff received from the defendant a statement of his commission account showing at that time plaintiff had a credit in that account in the sum of $759.75. The evidence discloses that in January and February 1937, plaintiff received two checks totaling $740.76, and in addition there was a correction in his account of $1.18, and a $14.17 charge-back against his December account, which payments and items totaled within a few cents the amount as shown by the statement furnished at the end of 1936 as being credited to the commission account of the plaintiff. During all of this time no charge-back against the commission account of the plaintiff as rendered by the defendant was made because of the failure of the plaintiff to call upon customers within thirty days of the time the order was received, nor was there any such charge-back made during 1937 prior to the time plaintiff was discharged. However, following the discharge of the plaintiff, the defendant charged the commission account of the plaintiff in each instance during the year 1936 and 1937 where plaintiff was credited with a commission and it was shown plaintiff had not called upon the customer within thirty days of the time the order was received. Plaintiff makes no contention here nor did he before the trial court that he called upon these customers within thirty days of the time the order was received and thereby had earned his commissions within the meaning of paragraph two of the contract above set out, but contends, first, that by its actions the defendant had waived the provisions of paragraph two of the contracts and, second, the defendant is bound by the statements rendered to plaintiff to pay the amount shown as credited to plaintiff's commission account. The trial court sustained plaintiff's contentions and held that the provision of the contract requiring plaintiff to call upon customers within thirty days before the receipt of the order by the defendant has been waived by defendant, and, second, that the monthly statements furnished by defendant to plaintiff constituted an account stated between the parties, and the defendant was bound thereby.

[1][2][3] To constitute an account stated the transaction must be understood by the parties as a final adjustment of the respective demand between them and the amount due. The binding force of an account stated will not be given to the mere furnishing of an account which was not with a view of establishing a balance due, or finally adjusting the matters of account between the parties. 1 C.J.S., Account Stated, p. 704. § 25; 1 Am.Jur., Accounts and Accounting, § 16. This court in the early case of D. M. Osborne & Co. v. Stringham, 1 S.D. 406, 47 N.W. 408, 410, said: “To make an account stated, there must be a mutual agreement between the parties as to the allowance or disallowance of their respective claims, and to establish such an accounting so as to preclude a party from impeaching it, save for...