John Deere Plow Co. of Moline v. Silver Mfg. Co.

Decision Date11 May 1926
Citation245 P. 1083,118 Or. 62
PartiesJOHN DEERE PLOW CO. OF MOLINE v. SILVER MFG. CO.
CourtOregon Supreme Court

Department 2.

Appeal from Circuit Court, Multnomah County; Walter H. Evans, Judge.

Action by the John Deere Plow Company of Moline against the Silver Manufacturing Company. Judgment for plaintiff, and defendant appeals. Affirmed.

See also, 216 P. 743.

Jno. W. Shuler, of Portland (Teal, Winfree, Johnson &amp McCulloch, of Portland, on the brief), for appellant.

L. A Liljeqvist, of Portland (Cake & Cake, of Portland, on the brief), for respondent.

BELT J.

Plaintiff corporation is engaged in the business of selling farm implements and machinery throughout the Pacific Northwest. Defendant corporation is a manufacturer of ensilage cutters and shredders for the purpose of resale throughout the United States. On December 21, 1916, the parties hereto entered into a written contract wherein defendant agreed to supply plaintiff, as its sole agent, its products as above mentioned, to be sold in certain designated territory. This contract was renewed for a period of three years from January 1, 1920, to and including December 31, 1922. Among other things it was provided:

"First party (Silver Manufacturing Company) agrees to carry in stock with the second party (John Deere Plow Company) a complete assortment of repairs with which to supply the trade, such stock to consist of extra parts as may be required, but not to include knives or shredder blades; such consigned repairs to be carried are not to exceed in net value an amount equal to 10 per cent. of the net purchases of the second party during the current year. The minimum amount of repairs to be carried in stock by the first party are in no event to be less than five hundred dollars ($500.00) in net value.
"The second party is to render to the first party an inventory of repairs on hand December 1st of each year, and to make payment for all repairs sold up to that time in accordance with the list prices of the first party's repair list, less such discounts as are provided in the price schedule hereto attached and marked Exhibit A.
"In the event of this agreement being terminated, it is mutually agreed that the party of the second part will deliver at its warehouses, free of freight charges, consigned repairs and extra parts on hand, on the order of the first party."

On August 7, 1920, plaintiff gave due notice to defendant that it would discontinue the sale of its ensilage cutters and shredders on December 31, 1920, and that it desired to terminate the contract as of such date.

It is alleged that at the time of the termination of the contract plaintiff had on hand repair parts consigned to it upon which was due from defendant the sum of $3,569.57, after having credited defendant for the amount which plaintiff owed for goods purchased under the terms of the contract. Plaintiff claims it was the duty of defendant, upon the termination of the contract, to credit it for the net price of all repair parts consigned and which it had on hand at that time. Defendant asserts that plaintiff is obliged to pay for all repair parts, excepting an amount equal in value to 10 per cent. of the net purchases during the current year. Plaintiff says the repair parts in question were consigned to it on account, and that, upon termination of the contract, it was only obliged to pay for such repair parts as it had sold to the trade. Defendant, however, says that the repair parts supplied by it to plaintiff should be considered as a sale, with the exception of the amount which it agreed to keep in stock under the 10 per cent. clause. There is no material dispute in the facts. The decision of the controversy hinges upon the construction to be given to the written contract of the parties. If plaintiff's theory is correct, the trial court was right in directing the jury to return a verdict in its favor for $3,569.57. If defendant has placed the proper construction upon the agreement, then the court erred in refusing to allow its motion for a directed verdict for the amount alleged to be due it.

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