Lloyd v. Thomas

• Decision Date: 28 April 1952
• Docket Number: No. 10428.,10428.
• Citation: 195 F.2d 486
• Parties: LLOYD v. THOMAS et al.
• Court: U.S. Court of Appeals — Seventh Circuit

195 F.2d 486 (1952)

LLOYD v. THOMAS et al.

No. 10428.

United States Court of Appeals Seventh Circuit.

March 17, 1952.

Rehearing Denied April 28, 1952.

Smiley N. Chambers, Indianapolis, Ind., William Catlin Whitehead, Anderson, Ind., for appellants.

David M. Cook, William F. Welch, Indianapolis, Ind. (McHale, Patrick, Cook & Welch, Indianapolis, Ind., of counsel), for appellee.

Before MAJOR, Chief Judge, and DUFFY and FINNEGAN, Circuit Judges.

FINNEGAN, Circuit Judge.

The appellants, William S. and George B. Thomas, who were defendants below, seek to reverse a judgment entered against them in the United States District Court for the Southern District of Indiana, Indianapolis Division. The judgment is based on the verdict of a jury in an action brought by Walter J. H. Lloyd, in which he sought compensation alleged to be due him as commissions under a contract with the defendants by the terms of which they employed him to promote the sale of Southern Comfort liqueur in the State of Pennsylvania. Federal jurisdiction is based on diversity of citizenship.

The complaint as amended alleges that in February 1940, the plaintiff was employed by the defendants to act as their sales representative in the State of Pennsylvania, to promote in that state the sale of a liqueur known as Southern Comfort. It charges that, at that time and throughout the time of plaintiff's employment by them, the defendants were the general sales agents of Southern Comfort liqueur in Pennsylvania, and in several other so-called "monopoly" states. It alleges that said employment contract provided that the defendants should pay to the plaintiff the sum of $2 per case for each case of said liqueur purchased by and delivered to the Pennsylvania Liquor Control Board; that in 1944 the employment contract was so modified as to provide that from January 1, 1945, the plaintiff's commission should be $1 per case. It is alleged that the calendar years 1940 to 1942 are not involved in plaintiff's claim; that during the year 1943, through the efforts of the plaintiff there were sold and delivered to the Pennsylvania Liquor Control Board, 2,410 cases of Southern Comfort on which plaintiff was entitled to $4,820, that during said year he received from the defendants only $1,800. It is charged that in 1944 the total number of cases sold and delivered to the Pennsylvania Liquor Control Board was 13,870, that plaintiff was entitled to commission on such sales in 1944 in the sum of $27,740, but received from the defendants only $2,500; that in the year 1945, there were sold and delivered to the Pennsylvania Liquor Control Board 28,010 cases, entitling plaintiff to $28,010, but that he received only $5,300 from the defendants.

There is an additional allegation that during the years 1944 and 1945 plaintiff sold to the Pennsylvania Railroad, and to the Lehigh Valley Railroad 305 cases of said liqueur, which were delivered by the defendants, and on account of which he was entitled to $610 commission. The complaint then alleges and itemizes payments by the defendants to plaintiff during the years 1943 to 1946 in the sum of $16,925.80, and claims that there is a balance due and owing to plaintiff in the sum of $44,254.20, judgment for which is prayed in the ad damnum clause.

In their answer, the defendants denied the allegation of the complaint as to the sale and delivery of Southern Comfort thereunder as charged in the complaint. The defendants also pleaded two affirmative defenses by way of answer, the first being that the plaintiff was employed by the Southern Comfort Corporation, and was paid in full. The second affirmative defense was that if there was a contract between the plaintiff and the defendants, it was for $1 per case of Southern Comfort sold to the State of Pennsylvania during the period in question, it is then alleged that 21,192.2 cases were sold to the State and that the defendants paid to the plaintiff the sum of $21,439.48, that in consequence there was an over-payment of $247.48 for which sum the defendants ask judgment.

The cause was submitted to a jury which found the issues for the plaintiff upon his complaint and assessed his damages at $19,780.30; on the counterclaim the jury found the issues against the defendants.

The defendants moved for judgment notwithstanding the verdict and in the alternative for a new trial. Both motions were overruled and judgment entered on the verdict. This appeal followed.

In this court appellants claim that the errors upon which they seek to reverse the judgment against them, "arise out of instructions given and refused, rulings on evidence, failure to direct a verdict for the defendants at the conclusion of plaintiff's evidence, failure to direct a verdict for defendants at the conclusion of all the evidence, and failure to grant judgment non obstante veredicto, or motion for a new trial."

We propose to examine each of these alleged errors. First, we consider whether or not the District Court erred in refusing defendants'-appellants' motion for judgment non obstante. Under rule 50 of the Federal Rules of Civil Procedure, 28 U.S.C.A., such a motion raises only the question of law as to whether or not there is any evidence which, if believed by the jury, would authorize a verdict against the party making the motion. Montgomery Ward & Co. v. Duncan, 311 U.S. 243, 250, 251, 61 S.Ct. 189, 85 L.Ed. 147; Marsh v. Illinois Central R. R. Co., 5 Cir., 175 F.2d 498-499.

Since the motion of the defendants to direct a verdict in their favor, made at the close of all the evidence, raised substantially the same question, it may be well to repeat here as briefly as possible the facts shown by the record in this case.

It appears that under the laws of the State of Pennsylvania during the period involved in this proceeding, that is, from 1939 to 1945, the producer of alcoholic liquors was forbidden to deal directly with consumer residents in that State. Producers were required to do business with such consumers through the Pennsylvania Liquor Control Board. The consumer could receive alcoholic liquors only by and through the Control Board. In order for a non-resident producer of such liquors to dispose of his product in that State, it was necessary for such producer to have a sales permit issued by the Liquor Control Board. Once such a vendor's permit is obtained a non-resident producer may register licensed agents who are allowed, subject to the rules of the Control Board, to promote or stimulate sales of their product covered by such sales permit. Southern Comfort was first listed by the Pennsylvania Liquor Control Board on November 6, 1936, but this listing was allowed to lapse in March, 1939.

In the latter part of 1939, or early in 1940, Walter J. H. Lloyd, plaintiff-appellee, wrote to Southern Comfort Corporation seeking employment in the sale and promotion of Southern Comfort liqueur in Pennsylvania. That company referred plaintiff's letter to the appellants. It appears that the defendants-appellants had charge of sales by the Southern Comfort Corporation of its liqueur in the eight or ten so-called "monopoly" states, including Pennsylvania, during all the years involved in this controversy.

Subsequently, and early in 1940, plaintiff met with the defendants. At the initial meeting arrangements were made for the plaintiff to assist in having Southern Comfort liqueur relisted in Pennsylvania, and to become the representative of the defendants in the sale and promotion of that product in the State. The plaintiff testified that at this meeting defendants agreed to pay plaintiff a commission of $3.00 per case on special orders for Southern Comfort until the product was listed in Pennsylvania. This was the same commission paid to the defendants by the Southern Comfort Corporation.

By letter, dated June 23, 1940, the defendants sent to plaintiff their check for $30 which was expressed to be "for ten cases remitted for by your state." In that same letter defendants informed the plaintiff that Southern Comfort Corporation had no right to interfere in defendant's organization, and that they would not allow officers of that corporation to hire their salesmen.

In August, 1940, Southern Comfort liqueur was again listed in the State of Pennsylvania. The plaintiff testified that at that time his commission was reduced to $2 per case. The testimony of defendants was that the commission rate to plaintiff was at all times $1 per case.

At any rate plaintiff continued his activities in the sale and promotion of Southern Comfort liqueur in Pennsylvania. He testified that because of increased sales his commission rate was reduced to $1 per case, effective in January, 1945. During the years 1940 to 1946, inclusive, plaintiff received periodic advances in money from the defendants, but he claims there was never any accounting of the actual amount due from the defendants. Beginning in early 1942, plaintiff claims that he was to receive a commission of $1 per case on all sales by district representatives employed in one or other of the four Pennsylvania districts to sell Southern Comfort liqueur. When there was no district representative plaintiff claimed he was entitled to $2 per case. It appears from the testimony of one of the defendants, William S. Thomas, that a district representative, William Fifeck, was appointed during a short period in the Pittsburgh district. He appears to have been the only district representative appointed. Mr. Thomas testified that Fifeck was paid $1 per case on sales made by him in the Pittsburgh district, and that plaintiff was likewise paid $1 on each such case.

From a stipulation entered into by the parties it appears that during the period involved in this controversy, that is to say, during the years 1943 to 1945 inclusive, there were sold, delivered and paid for by the State of Pennsylvania 33,535 cases of Southern Comfort liqueur. During that period defendants issued and plaintiff...