Howland v. Iron Fireman Mfg. Co.

• Decision Date: 13 December 1949
• Citation: 188 Or. 230,213 P.2d 177
• Parties: HOWLAND v. IRON FIREMAN MFG. CO.
• Court: Oregon Supreme Court

213 P.2d 177

188 Or. 230

HOWLAND v. IRON FIREMAN MFG. CO.

Supreme Court of Oregon.

December 13, 1949

[Copyrighted Material Omitted] [Copyrighted Material Omitted]

Manley B. Strayer, of Portland, argued the cause for appellant, on the brief Hugh L. Biggs, G. H. Fraser, and Hart, Spencer, McCulloch & Rockwood, all of Portland.

Marvin S.W. Swire, of Portland, argued the cause for respondent, on the brief Ralph A. Coan, and Coan & Rosenberg, all of Portland.

Before LUSK, C. J and BRAND, BAILEY, HAY and PAGE, JJ.

BRAND, Justice.

The defendant is a corporation engaged in the business of manufacturing automatic coal burners and automatic oil burners. Under date of 24 April 1944 plaintiff and defendant entered into an agreement in writing, under the terms of which plaintiff was appointed defendant's dealer in Multnomah County, Oregon with the exclusive right to sell and deal in defendant's No. 4 and smaller sizes of defendant's automatic coal burners. Said written contract is set forth as an exhibit to the defendant's answer and was received in evidence without objection. After alleging the business of the defendant corporation and the execution of the contract, the complaint alleges that at the time of the execution thereof, the No. 4 and smaller sizes of defendant's automatic coal burner constituted defendant's entire line of heating equipment available for sale within said territory. It is alleged that under the terms of the contrary in accordance with the defendant's policy and requirements: '* * * Plaintiff was required to aggressively pursue, within his said territory, the merchandising of said home heating equipment, the employment of adequate facilities to survey the premises wherein such equipment would be installed, the installation of said equipment, to render adequate and satisfactory service to purchasers thereof and Plaintiff was also required to promote and energetically pursue the sales of such equipment in his said territory.'

We shall refer to defendant's home heating equipment, to wit, No. 4 and smaller sizes of defendant's automatic coal burners, for brevity, as the 'coal burners' or 'stokers'. The plaintiff alleges and the defendant denies that plaintiff continued to be the exclusive dealer in defendant's coal burners up to the 4th day of June, 1946. The plaintiff alleges that on or about 1 July 1945 the defendant commenced the active manufacture of oil burning equipment for home heating and 'requested Plaintiff to act as its exclusive dealer in Multnomah County, Oregon, for the sale of its said oil burners to the end that Plaintiff would be in a position to sell to all customers in his territory such home heating equipment as such customers might require, either coal burners or oil burners', and that 'Plaintiff thereupon accepted said agency and was at all times thereafter prepared to sell Defendant's oil burners in his said territory of Multnomah County Oregon.'

The complaint further alleges: 'That in the summer and fall of the year 1945, Defendant began to manufacture oil burners in sufficient quantities so that the same could be sold to customers and Defendant announced to all of its dealers selling Defendant's home heating equipment, and particularly to Plaintiff, two new additions to Defendant's line of automatic home heating equipment, to-wit: the Iron Fireman's Luminous Vortex Oil Burner, and the Iron Fireman's Standard Pressure Type Oil Burner. That said oil burners were competitive to Defendant's No. 4 and smaller size automatic coal burners and Defendant represented to its dealers, and particularly to the Plaintiff, that its said oil burners would be supplied to said dealers, including Plaintiff, * * * so that * * * Plaintiff, would be in a position to sell to the public either coal burners or oil burners, whichever was preferred by a prospective purchaser.' and that, 'To induce Defendant's dealers to aggressively market and sell said oil burners, Defendant represented that the dealers holding exclusive coal burner franchises, including Plaintiff, would also be exclusive dealers for the sale of Defendant's oil burners in their respective territories and Defendant urged and solicited their said dealers, and particularly the Plaintiff, to employ their full efforts to obtain the maximum sales of oil burners.'

The complaint further alleges that defendant represented to plaintiff 'that he was and would continue to be Defendant's exclusive dealer for the sale of said oil burners in his said territory', that plaintiff believed the representations and in reliance thereon expended approximately $5,000 in employing and training service men and salesmen, in increasing office facilities, securing warehouse space, the equipment and trucks, and that the defendant by its conduct treated the plaintiff as its exclusive dealer for oil burners. Paragraph VIII of the complaint is as follows: 'That Plaintiff solicited as Defendant's exclusive dealer in Multnomah County, Oregon, oil burner customers and entered into contracts with such purchasers for the sale of Defendant's oil burners. Plaintiff thereupon placed orders with the Defendant for such oil burners to be furnished his said customers. That due to the shortage of oil burners upon the market and the great demand therefor, Plaintiff was in a position to take unlimited number of orders for Defendant's oil burners, but refrained from so doing and instead thereof counseled almost daily with Defendant as to the number of orders and sales of such oil burners which Plaintiff should accept and the number of oil burners which Defendant could and would supply to Plaintiff, and Plaintiff at all times accepted only such orders for oil burners as the Defendant promised and assured Plaintiff that the Defendant could and would supply to Plaintiff for his such customers within a reasonable time.'

Complaint alleges that the plaintiff in reliance upon defendant's representations and promises 'continued to accept orders and, as fast as oil burners were supplied by Defendant, to install the same until on or about the middle of January, 1946' and received deposits from customers and paid salesmen commissions. Paragraph X of the complaint is as follows: 'That on or about the 15th day of January, 1946, the Defendant herein ceased to fill Plaintiff's orders for oil burners, although Defendant had on hand in Portland, Oregon, ready for sale and installation a large number of oil burners sufficient in number to fill Plaintiff's orders and supply Plaintiff's customers, and said action on the part of the Defendant continued until on or about the 15th day of February, 1946, at which time Defendant notified Plaintiff that it would not deliver to Plaintiff the oil burners necessary to fill the orders that Plaintiff had taken from customers, all with the knowledge and acquiescence of the Defendant.'

The complaint alleges that as a result plaintiff was compelled to cancel certain orders and refund deposits. Attached to the complaint is Exhibit A, an itemized list containing the data concerning 82 oil burners contracted by plaintiff to be sold to his customers, and which contracts he was required to cancel. It is alleged that the plaintiff lost profits which he would have made on said contract and thereby suffered damage in the sum of $9,926.78. It is further alleged that in an attempt to carry out his contracts with purchasers, the plaintiff fabricated twelve oil burners not included in Exhibit A and thereby incurred expense in the sum of $358.12 in excess of the price which he would have been required to pay under his dealer's contract.

For his second cause of action the plaintiff incorporates by reference the allegations of the first cause, except paragraph 8, quoted supra, and except the remaining paragraphs 9 to 15 which we have summarized immediately following the quoted text of paragraph 8, and he alleges that the defendant, between the 18th day of October, 1945 and the 4th day of June, 1946, in violation of plaintiff's rights as exclusive dealer, sold a large number of oil burners direct to purchasers without accounting to the plaintiff as to said sales. It is alleged that by reason of the direct sales by the defendant within the plaintiff's exclusive territory the plaintiff lost profits 'that he would have made had said oil burners been sold through plaintiff', and that plaintiff has been damaged thereby in the sum of $27,624.85. Plaintiff acknowledges indebtedness to the defendant on open account in the sum of $8,851.13 and prays for judgment in the sum of $9,926.78 plus $358.12 on the first cause of action and $27,624.85 on the second cause of action, less the $8,882.75 owing from plaintiff to defendant.

In its answer the defendant admits the execution of the written contract concerning coal burners but denies that plaintiff continued to be the exclusive dealer up to the 4th day of June, 1946. The defendant denies that it agreed to constitute the plaintiff its exclusive dealer for the sale of oil burners and alleges: 'that it actively resumed the manufacture of oil burner equipment for home heating during the fall of 1945, and until on or about the 5th day of December, 1945, defendant permitted plaintiff to sell said equipment at retail in limited quantities to be supplied to plaintiff in accordance with defendant's announced plan and policy of equitably distributing its limited supply of oil burners among its numerous retail outlets.'

Defendant denies that it was to furnish oil burners so that plaintiff could sell to all customers such home heating equipment as they might require. The answer alleges that after commencing the manufacture of oil burners in 1945: 'it * * * announced to its automatic coal burner dealers, including plaintiff two new additions to ...