Keokuk Steel Casting Co. v. Lawrence, 3951.

• Decision Date: 29 December 1949
• Docket Number: No. 3951.,3951.
• Citation: 178 F.2d 788
• Parties: KEOKUK STEEL CASTING CO. v. LAWRENCE.
• Court: U.S. Court of Appeals — Tenth Circuit

178 F.2d 788 (1949)

KEOKUK STEEL CASTING CO. v. LAWRENCE.

No. 3951.

United States Court of Appeals Tenth Circuit.

December 29, 1949.

G. C. Spillers, Jr., and G. C. Spillers, Tulsa, Okl. (J. O. Boyd, Keokuk, Iowa, on the briefs), for appellant.

Robert D. Hudson, Tulsa, Okl., for appellee.

Before PHILLIPS, Chief Judge, and HUXMAN and MURRAH, Circuit Judges.

PHILLIPS, Chief Judge.

This case was before us on a former appeal. Lawrence v. Keokuk Steel Company,¹ 10 Cir., 162 F.2d 929, 934. We there stated the facts reflected by the record on the former appeal and will not again state them in detail.

On December 28, 1939, Lawrence entered into a written contract² with Keokuk whereby he agreed to act as the agent of Keokuk in the sale of its products in certain designated territory. For his service, Keokuk agreed to pay Lawrence a commission of five per cent on all of its products sold in such territory. The contract, by its terms, was not transferable and was subject to cancellation by either party on 30 days' notice.

Lawrence was a graduate of the United States Naval Academy. Realizing that Lawrence might be called for naval service, a representative of Keokuk and Lawrence discussed the matter of servicing the territory, should Lawrence be called for naval service, during his absence in such service.

Lawrence was notified to report for active duty in the Navy on September 2, 1941. He continued to perform his part of the contract personally until September 1, 1941.

On August 23, 1941, Lawrence mailed a letter to K. G. Jansson, vice-president of Keokuk, the material portions of which read:

"I was advised that my orders will be mailed on August 25th directing me to report for active duty on September 2d.

"I of course have not lost sight of the fact that you told me you and Mr. Brown had discussed the possibilities of this thing happening about a year ago and that you would carry on with me and service this part of the territory. This was of course a most generous offer on your part and was certainly appreciated by me, however, this would not have been entirely fair to you and with this in mind some time ago I made arrangements to continue my office and business as in the past. This situation is a temporary one of course and when I am returned to civilian life I will naturally have to have a place to light, therefore the following is the case.

"Mr. James F. Lawrence is going to be the active head of my office and business and of course, Mrs. Murray will continue as in the past and in addition, I have Mr. B. E. Gray who will be in the office contacting and servicing the accounts."

On August 27, 1941, Jansson mailed a letter to Lawrence reading in part as follows:

"Dear Bob: I wish to acknowledge receipt of your letter of August 23rd as well as confirm my conversation with you Monday.

"Needless to say, we are sorry that you have to give up your present contact with our customers. However, we are sure that the set-up outlined in your letter will take care of the servicing of our customers satisfactorily. Please advise your office that they may call on me at any time if they need any special service in connection with any requests that they may have from our customers."

After negotiations between Keokuk and Lawrence relative to reducing the rate of commission to two and a half per cent had not resulted in agreement, Keokuk, on May 2, 1942, wrote a letter to Lawrence in which it tendered him a new contract to be entered into with a person to be designated by Lawrence, identical with the original agency contract, except the commission rate was reduced to two and a half per cent. Lawrence, in part, replied:

"Based upon your agreement to the effect that our original contract should remain in effect during the duration of the War, I entered the service of the United States Navy. You must understand that my entry into the Service altered all of the affairs of my entire life.

"I shall therefore expect you to perform the agreement which you have already made with me and which you have been carrying out for the past several months."

On May 19, 1942, Keokuk notified Lawrence in writing that the agency contract would be canceled, effective 30 days from the receipt of the notice. The notice was received by Lawrence, May 29, 1942. In the meantime, Lawrence had continued to perform the agency contract in accordance with his letter of August 23, 1941.

On June 11, 1942, Lawrence brought this action against Keokuk to recover damages for breach of contract.

The trial court sustained Keokuk's motion for a summary judgment.

In our opinion on the former appeal, we said:

"* * * we are of the opinion that such letters constituted a modification of the agency contract. Clearly, the agency contract contemplated the personal services of Lawrence. In response to the proposal of Lawrence, the Keokuk Company agreed that the services should be performed by James F....