Kimball Elevator Co. v. Elevator Supplies Co., 8066

• Decision Date: 21 July 1954
• Docket Number: No. 8066,8066
• Citation: 2 Utah 2d 289,272 P.2d 583
• Parties: d 289 KIMBALL ELEVATOR CO., Inc., v. ELEVATOR SUPPLIES CO., Inc.
• Court: Utah Supreme Court

Page 583

272 P.2d 583

2 Utah 2d 289

KIMBALL ELEVATOR CO., Inc., v. ELEVATOR SUPPLIES CO., Inc.

No. 8066.

Supreme Court of Utah.

July 21, 1954.

Paul E. Reimann, Salt Lake City, Howard J. Cantus, New York City, for appellant.

Andrew John Brennan, Salt Lake City, for respondent.

CROCKETT, Justice.

The defendant, Elevator Supplies Company, was the successful bidder on a contract to modernize and install elevators in the Hotel Utah. The plaintiff, Kimball Elevator Company, an unsuccessful bidder on the job, brought this action for breach of contract, claimang the defendant had agreed that it would not compete in the bidding.

From a jury verdict and judgment thereon awarding plaintiff $17,085 damages, defendant appeals, contending:

1. That the evidence does not support a finding of an agreement not to compete with the plaintiff, and

2. Even if there were sufficient evidence, such a contract would be void as against public policy because it would be an agreement to perpetrate a fraud upon the Hotel Utah.

Kimball concedes that it does not have an express contract, but relies solely upon the proposition that ty virtue of the dealings and conduct of the parties, there was an implied agreement on the part of Elevator Supplies that it would not compete with Kimball in bidding for the Hotel Utah job.

Both Kimball and Elevator Supplies have been in the elevator business for many years, plaintiff with headquarters in Salt Lake City; defendant operating in San Francisco. Over a period of 23 years, Kimball has been the original contractor on seven elevator modernization projects in connection with which it sub-contracted part of the work with respect to the installation of controls to Elevator Supplies. On such jobs, Kimball would base its total bid partly on the price quoted to it by Elevator Supplies for that portion of the contract; and with respect to the latter, it did not ask for quotations from other competing companies, but accepted Elevator Supplies' price.

In November, 1947, Mr. Connole, Kimball's manager, wrote to Elevator Supplies, saying that the Hotel Utah wanted a bid on the renovation of its elevators. As usual, Kimball asked no one else for bids on the control equipment. Elevator Supplies forwarded a quotation on it. Many months later on August 16, 1950, plaintiff submitted its bid to the Hotel Utah. Shortly thereafter, the Hotel engineer, Mr. Jerry Smith, asked plaintiff's Mr. Connole if he had any suggestions as to other companies which might desire to bid and particularly inquired if Elevator Supplies would make a bid on the total job. Mr. Connole stated that such a bid would be on identical equipment and that the Hotel Utah could use it as an estimate to see if the Kimball bid was in line. He then called Roy Smith, manager of Elevator Supplies in San Francisco, and advised him that the Hotel Utah would like a bid on the over-all job to verify the plaintiff's price. It is plaintiff's position that these circumstances show that the bid was to be simply what it calls a 'check bid' for the purpose of getting a comparison on the general range of Kimball's price, but that it was not to be competitive to plaintiff's quotation. However, the next day the Hotel Utah called Elevator Supplies and asked for a bid on the entire job, in response to which the defendant submitted a firm bid, which was accepted.

When plaintiff failed to get the job, it first claimed a commission from the defendant, which claim was rejected. This action was then commenced, based not upon such claim for a commission, but grounded upon the contention that the defendant Elevator Supplies agreed not to compete with plaintiff, and that it breached such agreement by doing so, which caused plaintiff to lose the job and the profits thereon, and to suffer certain other damages for loss of the value of advertising which would have accrued from having their name plates on the elevators in the Hotel Utah.

As will be seen from the foregoing, the basis upon which Kimball seeks to make out a promise on the part of Elevator Supplies not to submit a competitive bid is nebulous indeed. It may be that because of the prior dealings between the parties over a period of twenty-three years, and the confidence and trust built upon between them, Kimball did not expect Elevator Supplies to bid against it in such a manner as to take the job away. From Kimball's evidence, it seems to have assumed that any bid submitted by Elevator Supplies would be so much higher than Kimball's that the job would be awarded to Kimball. However, Elevator Supplies made no direct promise not to submit a competitive bid and the only basis in the evidence from which any assent on its part not to do so could even be inferred is found in the testimony of Mr. Henker, of Pacific Elevator and Electric Equipment Company, concerning a conversation with Roy Smith of Elevator Supplies Company, in part: 'I think we...