Hooper v. William P. Laytham & Sons Co., Inc.

• Decision Date: 11 May 1938
• Docket Number: No. 208.,208.
• Citation: 199 A. 51,123 N.J.Eq. 596
• Parties: HOOPER et al. v. WILLIAM P. LAYTHAM & SONS CO., Inc.
• Court: New Jersey Supreme Court

199 A. 51

123 N.J.Eq. 596

HOOPER et al.

v. WILLIAM P. LAYTHAM & SONS CO., Inc.

No. 208.

Court of Errors and Appeals of New Jersey.

May 11, 1938.

Syllabus by the Court.

1. When one party makes to another a promise which constitutes an offer and it is contemplated by the parties that the acceptance of the offer is to be by performance, and performance ensues, effected before revocation, induced by the promise, and carrying a benefit to the promisor, there is a lawful contract binding upon the promisor to the extent of making compensation in accordance with the terms of the promise for the performance.

2. The promisor may not, after acceptance by performance, revoke such an offer against that performance.

3. Where chancery makes allowances which in reason ought not to have been made or are excessive, the Court of Errors and Appeals will make correction.

Appeal from Court of Chancery.

Suit by Henry Y. Hooper and Robert E. Byrne, partners trading as Hooper Byrne Company, against William Laytham & Sons Company, Incorporated, to recover commissions allegedly earned under contract with the defendant, wherein the defendant filed a counterclaim. From a decree in favor of the complainants, the defendant appeals.

Decree affirmed, with modifications as to allowances for counsel and master.

Harry H. Weinberger and Minturn & Weinberger, all of Newark, for appellant. Bernard Freedman and Koehler, Augenblick & Freedman, all of Newark, for respondents.

CASE, Justice.

The bill of complaint alleged that the defendant, a foundryman engaged in the business of casting iron and iron products, entered into an agreement with the complainants whereunder the latter procured customers for, and effected sales of, defendant's products and became entitled to commissions thereon, the true amount of which might not be ascertained without an audit of defendant's books; that defendant had refused to pay the earned commissions or to render an account thereof or to permit an audit of the defendant's books, wherefore complainants prayed a discovery, an accounting, an audit, and a decree for the payment of such moneys as should appear to be due. Defendant answered alleging fraud, and by counterclaim sought discovery of the business done by the complainants and by Roselle Foundry Company, a corporation formed by complainants, to which, it was said, defendant's business had been fraudulently diverted, and an affirmative decree for defendant was asked on that account, When the matter came on to hearing, Vice Chancellor Bigelow found that there was a contract, that complainants had rendered services compensable thereunder, and that no defense had been proved. A decree was then entered dismissing the counterclaim and making reference to a master to ascertain and report the amount of commissions payable to complainants on the business accepted by the defendant from the date of the contract to the date of the order. On the incoming of the report and the hearing of exceptions thereto, a decree was entered determining that there was due from defendant to complainants for commissions, with interest thereon, $18,024.24 as of July 21, 1936, and that defendant should pay to complainants a counsel fee of $6,500, to the master an allowance of $2,500 and to other persons certain enumerated charges. Defendant appeals.

The first point raised is that the alleged contract is unilateral, lacks mutuality, and was without consideration, and that therefore it is not a legal contract. The paper writing relied upon by complainants to show the terms of the contract was in form a letter written by defendant to complainants. An adequate understanding of the argument may be had without reproducing the entire writing. In part it said: "We will pay to you a commission of five percent (5%) of all business received in the past and future from your customers. The acceptance by us of an order from, or payment of commission to you on any business received from any customer, is proof that such customer was and is yours and we will pay to you this commission on all business received from such customers and we agree that no other commission representative, agent, broker or factor has or shall have the right to sell any of our products to any of your customers or prospective customers. * * * You are authorized to solicit business from any prospective customer that is not already an active customer of ours. We agree to pay to you a commission of five per cent (5%) on any business received from prospective customers that you have been soliciting. It is agreed that...