Lunn & Sweet Co. v. Wolfman

• Decision Date: 30 June 1926
• Citation: 256 Mass. 436,152 N.E. 893
• Parties: LUNN & SWEET CO. v. WOLFMAN et al. (two cases).
• Court: United States State Supreme Judicial Court of Massachusetts Supreme Court

256 Mass. 436

152 N.E. 893

LUNN & SWEET CO.

v.WOLFMAN et al. (two cases).

Supreme Judicial Court of Massachusetts, Suffolk.

June 30, 1926.

Report from Superior Court, Suffolk County; A. Lawton, Judge.

Separate actions of contract by the Lunn & Sweet Company against Nathan Wolfman and others to recover for shoes sold and delivered and for defendants' failure to take shoes under contract. Findings for defendants, and cases reported. Cases remitted to the superior court for further proceedings.

P. N. Jones, of Boston, for plaintiff.

E. F. McClennen, of Boston (J. J. Kaplan, of Boston, of counsel), for 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 defendant's 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 & Sweet Shoe Company. The answers set up a general denial, that the remedy for the mistake alleged is in equity, and other defenses. 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 Lunn & 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 & 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 transferred to it for a proper reason and without any 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. The directors of the Delaware company on October 1, 1919, voted ‘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 factory damaged shoes was entered into on the date last mentioned purporting to be between the defendants and Lunn & 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 & Sweet Shoe Company, were paid for by checks all payable to Lunn & Sweet Shoe Company, and all bore endorsement in that name followed by the words ‘for deposit only to the credit of Lunn & Sweet Company, T. D. Sweet, Treasurer.’ Letters written by the plaintiff to the defendants between February 1, and September 1, 1920, were on the letter heads of Lunn & Sweet Shoe Company with the word ‘Shoe’ crossed out and were signed Lunn & Sweet Company. Some of the receipts to the Boston & Maine Railroad for these shoes were signed in the name L. & Sweet Co. or by equivalent designation. Bills of lading during the period bore the name stamped in red letters against the shipper's name ‘Lunn & Sweet Co.’

The finding is made that, neither at the the time of executing the contract nor thereafter until action was begun, did the defendants have actual knowledge of the existence of the Delaware corporation or any constructive notice of it, unless the foregoing facts require that finding. It also is found that if they had known it, they would have been as ready and willing to contract with the new corporation and accept shipments from it as with the one they supposed they were contracting with. There was no evidence of fraudulent intent or purpose in the use of the name of the old corporation, nor with the failure to acquaint the defendants with the change in corporation, unless it follows as matter of law from the foregoing facts.

Some time during the year 1920, the prices of shoes fell so that new shoes were selling for less than the price in the contract for factory damaged shoes. In May, 1920, one of the defendants made complaint that the plaintiff was shipping shoes of first quality as factory damaged shoes. The judge, however found that all shoes shipped were factory damaged. No exception was saved to the refusal of the judge to give the ruling requested by the defendants as to factory damaged shoes, and the report does not make this one...