Lunn and Sweet Co. v. Wolfman

Decision Date28 June 1926
Citation256 Mass. 436
CourtUnited States State Supreme Judicial Court of Massachusetts Supreme Court

January 28, 29 1926.

Present: RUGG, C.


Contract, What constitutes. Corporation.

At the hearing by a judge without a jury of an action upon a contract in writing for the sale and delivery of certain goods to the defendant the judge found that a certain corporation for many years had done business with the defendant; that, without any fraudulent purpose, it sold all its assets to the plaintiff a corporation newly organized with the same stockholders, directors and officers, and that thereafter all the business was conducted by the plaintiff; the original corporation, however, kept its corporate existence. A salesman of the original corporation, who had dealt with the defendant and who continued in the employment of the plaintiff, made with the defendant the contract in issue in the name of the old corporation. He testified that he did so by mistake. Shipments were made under the contract and not until after the action was begun did the defendant learn of the change in the corporation. If he had known of the change, he would have been as ready and willing to contract with the new corporation and accept shipments from it as with the old corporation. The judge made no finding as to whether the old corporate name was used by the salesman by mistake, ruled that, the contract on which the action was based not having been made by the plaintiff with the defendant, the plaintiff could not recover, and for that reason alone found for the defendant. Held, that

(1) The salesman was the agent of the new corporation; (2) There was no question of equitable defences or set-off between the defendant and the old corporation;

(3) It appearing that the personality of the other contracting party was a matter of indifference to the defendant and that there was no fraudulent concealment of the identity of the plaintiff, and there being testimony which would justify a finding that an erroneous name was inserted by the agent in the contract by reason of his mistake, the identity of the party who made the contract with the defendant might be shown and the contract then be enforced by that party, the plaintiff;

(4) The trial judge erred in ruling that as a matter of law the contract was not made by the plaintiff with the defendant.

(5) The case, which was before this court on a report, was remanded for determination as a fact of the issue, whether the contract was made by the plaintiff with the defendant, and for the entry thereafter of such judgment as might be required by a finding on that issue.

TWO ACTIONS OF CONTRACT with declarations described in the opinion. Writs dated August 7, 1920, and March 26, 1921, respectively.

In the Superior Court, the actions were heard together by Lawton, J., without a jury. Material facts found and rulings made by him, and the terms of a report by him to this court are stated in the opinion.

P.N. Jones, for the plaintiff. E.F. McClennen, (J.J. Kaplan with him,) for the defendants.

SANDERSON, J. These are two actions of contract: one (with a declaration in eleven counts) for the price of shoes delivered under a written contract, with the eleventh count upon an account annexed for shoes delivered on the same dates and for the same amounts as those referred to in the preceding counts and the other for loss sustained from the defendants' failure to take other shoes under the same contract. In all counts, except the one on the account annexed, the plaintiff alleged that it entered into the contract, by mistake, in the name of Lunn and Sweet Shoe Company. The answers set up a general denial, that the remedy for the mistake alleged is in equity, and other defences. The cases were heard by a judge of the Superior Court without a jury, who made findings of fact and, at the request of the defendants, ruled that, as the contract on which the actions are based was not made by the plaintiff with the defendants, the plaintiff could not recover on any count in either action; and because of that ruling and for that reason alone he found and ordered judgment for the defendants. The plaintiff excepted to the ruling, finding and order. The cases were reported upon an agreement of the parties that, if the ruling and finding for the defendants were correct, judgment is to be entered for the defendants in each case, otherwise such orders and directions are to be made as justice may require; and upon a further agreement as to the amount of the judgment in each case if judgment should be entered for the plaintiff. The judge found facts as follows:

The Lunn and Sweet Shoe Company, a corporation organized under the laws of Maine, was engaged in the manufacture of women's shoes prior to October 1, 1919, and for several years before that date the defendants had, by annual contracts with that corporation, bought all the shoes of certain styles which had been damaged in the course of manufacture. On October 1, 1919, this company sold all its assets, including real estate, personal property, contracts, accounts, bills receivable, trade marks, trade names and good will of the business, to the plaintiff Lunn and Sweet Company, a corporation organized shortly before that date under the laws of Delaware. The stockholders, directors and officers of both corporations were the same. "The new corporation was formed and the assets and the business of the earlier corporation transferred to it for proper reasons and with no fraudulent purpose. The Delaware corporation has, since October 1, 1919, carried on the same business as that of the Maine corporation and at the same place, Auburn, Maine. On the same date, the directors of the Delaware company voted as follows: `To continue the business of the Lunn & Sweet Shoe Company through the acquisition and ownership of its capital stock, in the name and account of that corporation until the end of its current fiscal year, November 30, 1919.' Thereafter neither corporation took any action in reference to the other. The Maine corporation is still in existence but has not acted in any way." We interpret the word "thereafter" to refer to October 1, 1919.

On November 20, 1919, Nathan Wolfman, one of the defendants, visited the factory at Auburn, Maine, and met one Moran (the selling agent of the new corporation) who knew all the foregoing facts. He had been the selling agent of the old corporation and Wolfman had always dealt with him.

A contract in writing for one year for factor damaged shoes was entered into on the date last mentioned purporting to be between the defendants and Lunn and Sweet Shoe Company. It was signed "Lunn & Sweet Shoe Company by W.T. Moran." Moran testified that he used the name Lunn & Sweet Shoe Company by mistake, but the judge made no specific finding in regard to that matter. Shoes shipped under this contract in 1920 were invoiced on invoice heads of the Lunn and Sweet Shoe Company, were paid for by checks all payable to Lunn and Sweet Shoe Company, and all bore indorsement in that name followed by the words "for deposit only to the credit of Lunn & Sweet Company, T.D. Sweet, Treasurer." Letters written by ...

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