Kitzmiller v. Pacific Coast & Norway Packing Co.

• Decision Date: 24 March 1916
• Docket Number: 13043.
• Citation: 156 P. 17,90 Wash. 357
• Court: Washington Supreme Court
• Parties: KITZMILLER et al. v. PACIFIC COAST & NORWAY PACKING CO. et al.

156 P. 17

90 Wash. 357

KITZMILLER et al. v. PACIFIC COAST & NORWAY PACKING CO. et al.

No. 13043.

Supreme Court of Washington

March 24, 1916

Department 2. Appeal from Superior Court, King County; Everett Smith Judge.

Action by E. A. Kitzmiller and another, copartners doing business as P. Duff & Sons, against the Pacific Coast & Norway Packing Company and others. Judgment for the plaintiffs, and defendants appeal. Affirmed.

Winfield R. Smith, of Seattle, for appellants.

Bronson Robinson & Jones, of Seattle, for respondents.

HOLCOMB J.

Respondents sued and recovered upon a broker's commission for services performed in selling 10,000 cases of canned salmon upon a contract made with defendant corporation through its general manager, Joseph Kildall. The salmon was never delivered. Appellants' claims of error are grounded upon two general propositions, viz.: (1) Kildall had no express or implied authority; (2) the contract was unusual in its terms and without precedent. The arguments are elaborate, but the facts are plain and the issues are simple.

The Pacific Coast & Norway Packing Company for several years prior to January, 1914, was a corporation engaged in catching, canning, and selling salmon in Alaska. Its producing plants were located at two places in Alaska, and it had a general office on Seattle, and apparently had some corporate office in Minneapolis, Minn. In January, 1914, at a meeting of the company held in Minneapolis, Joseph Kildall was elected general manager of the company. He was also secretary of the company, and had previously been designated as Seattle manager in charge of the company's office at Seattle. He had been associated with the company for a long period of years, having had the management of the Seattle office as far back as 1901. His authority as general manager was not specifically limited by any instructions given at the time of his election or otherwise shown. He was also one of the directors of the company. Apparently all matters of general management of the company's business were left to him. In February, 1914, Kildall went to Pittsburgh for the purpose of securing tin plate with which to manufacture the cans to contain the ensuing season's pack of salmon, and also to borrow money to finance the year's business. He negotiated with the Phillips Sheet & Tin Plate Company of Weirton, W. Va., to purchase the tin plate, and proposed to it that, if it would furnish the tin, his company would arrange to meet the payments on it by shipping the first 10,000 cases of the coming season's pack of early fish to be ready in the latter part of July and the early part of August, on orders of P. Duff & Sons, with instructions to the latter to pay the proceeds of the 10,000 cases as they came in directly to the tin plate company. Respondents were not buyers, but were merely brokers making sales for commissions. The arrangement proposed by Kildall to the tin plate company was first approved by the general sales manager, and in pursuance thereof Kildall gave the company its order for its tin plate requirements by a letter executed in triplicate on February 11, 1914, and accepted by the tin plate company. One of the provisions was that the arrangement was made upon the understanding that Kildall's company would ship large quantities of salmon to the respondents, and would instruct them to meet the payments therefor out of proceeds of the first shipments. Shipments were to be made the latter part of July and the early part of August, which would be before the naming of the opening prices of salmon by the Alaska Packers' Association. The opening prices of salmon were generally fixed about August 20th to 25th of each year. The terms of the sale of the salmon were not then agreed upon, as Mr. Kildall desired to go on to New York to investigate the market prospects. On February 12th respondents wrote Kildall's company at Seattle as follows:

'We had the pleasure of having your Mr. Kildall here for the past three days, and while here he made purchase of approximately 7,000 boxes of tin plate, according to the specifications handed Mr. Watson of the Phillips Sheet & Tin Plate Company, with the understanding that you are to ship to us, on our orders, sufficient salmon to cover the amount of the purchase, as detailed in a copy of letter we have today written to the Phillips Sheet & Tin Plate Co., Weirton, W.Va. No doubt Mr. Kildall has advised you of this.'

The latter of February 12th to the tin plate company referred to set out the understanding of respondents substantially as above detailed, stating, further, that they understood that Kildall would issue notes of the Pacific Coast & Norway Packing Company with his own personal indorsement to cover the value of the tin plate, and would ship to them on their orders sufficient salmon to cover the amount of these notes the proceeds to be sent direct to the tin plate company. The tin plate company, without notice to respondents, immediately opened negotiations with Balfour, Guthrie & Co., their Pacific Coast agents, to have the latter guarantee the tin plate account, as the tin plate company was not in the business of financing matters of this kind. Balfour, Guthrie & Co. at first refused to do so, because the appellants owed them a balance of about $7,000 on the previous year, and therefore on February 27th the tin plate company notified Kildall, then in Boston, that as their Pacific Coast agents, Balfour, Guthrie & Co., would not guarantee the account, he would have to make further arrangements before they would fill his order for the tin. The tin plate company did not send any notice to the respondents of its procedure. Kildall while in New York succeeded in borrowing the sum of $25,000, out of which he arranged to pay the account due Balfour, Guthrie & Co., and after this arrangement was communicated to the latter it wrote the tin plate company on March 25th, saying that, on condition the account was paid in ten days, they would guarantee payment on the part of the packing company of the tin plate contract of February 11th. Later, on April 13, Balfour, Guthrie & Co. made their guaranty absolute. The tin plate company's concern was for fear the packing company would not make the shipments of salmon agreed upon, and it was to guard against loss from this source that it required the guaranty. Kildall remained in the East several weeks after his first visit to respondents at Pittsburgh, investigating the situation as to prospects of the salmon market and market prices in the East. On the very day when negotiations by the tin plate company with Balfour, Guthrie & Co. resulted in the guaranty by the latter, a further conference was held between Kildall and Mr. Watson, of the tin plate company, and respondents, and Mr. Watson made the point that his company could not know that plaintiffs could sell the salmon unless there was some fixed price named. In order to have the matter go through Mr. Kildall agreed to ship the first 10,000 cases of salmon upon the fixed price of 65 cents per dozen cans, which would net approximately the full amount of the tin plate. The fish was to be packed and shipped from the early pack in July prior to the fixing of the opening prices by the association. Respondents were to take orders for 5,000 cases first, and then notify Kildall and receive additional authority before disposing of the other 5,000 cases, and this they did. Respondents at all times refused to guarantee the tin plate company's account, although agreeing to remit the proceeds from the sales of the salmon direct to the tin plate company to meet the...