Maple Island Farm v. Bitterling

• Decision Date: 30 March 1954
• Docket Number: No. 14455.,14455.
• Citation: 209 F.2d 867
• Parties: MAPLE ISLAND FARM, Inc. v. BITTERLING.
• Court: U.S. Court of Appeals — Eighth Circuit

209 F.2d 867 (1954)

MAPLE ISLAND FARM, Inc. v. BITTERLING.

No. 14455.

United States Court of Appeals Eighth Circuit.

January 11, 1954.

Rehearing Denied March 30, 1954.

Pierce Butler, St. Paul, Minn. (M. J. Doherty and Doherty, Rumble & Butler, St. Paul, Minn., were with him on the brief), for appellant.

Warren E. Burger, St. Paul, Minn. (Roland J. Faricy, Richard A. Moore, B. Warren Hart and Faricy, Moore & Costello, St. Paul, Minn., were with him on the brief), for appellee.

Before GARDNER, Chief Judge, and WOODROUGH and THOMAS, Circuit Judges.

WOODROUGH, Circuit Judge.

Maple Island Farm, Inc., a Minnesota corporation having its principal place of business at Stillwater, Minnesota, has long been engaged in manufacturing and selling powdered milk (among other things), and beginning in 1946 large quantities of its powdered milk were sold in Mexico and Venezuela. This action was brought against the corporation by Walter Bitterling as plaintiff, to recover sums of money for which he claimed the defendant became indebted to him, in connection with the sales of powdered milk in those countries. The amended complaint set forth two causes of action, the first based upon defendant's Mexican business, and the second upon its Venezuelan business. There was federal jurisdiction because of diversity of citizenship and amount involved. Maple Island Farm, Inc. v. Bitterling, 8 Cir., 196 F.2d 55. On trial to the court without a jury the plaintiff had judgment on his first cause of action for $26,833.91 with interest, and on the second cause of action for two amounts aggregating $125,548.34, with interest, less an offset in the sum of $4,140.54, with interest. Defendant Maple Island Farm, Inc., appeals.

For his first cause of action plaintiff alleged:

"That between August 30, 1945, and December 31, 1946, at the special instance and request of defendant the plaintiff rendered services to the defendant with respect to defendant\'s exporting its products into Mexico, including counsel and advice with respect to the procedures, practices and commercial customs involved in exporting its products, and in the plans and programs for sales promotion of its products in Mexico and for the selection, appointment and establishment of Centro Mercantil de Monterrey, S. A. as importer and distributor for the defendant in Mexico for the distribution and sale of defendant\'s powdered milk products in Mexico, upon defendant\'s express agreement and promise that the defendant would pay the plaintiff for his services a commission of one cent (1¢) per pound on all powdered milk products thereafter distributed by the defendant in Mexico through Centro Mercantil de Monterrey".

"That the plaintiff fully and faithfully performed the agreement described in the preceding paragraph and that defendant has since the date first mentioned in the preceding paragraph sold and distributed through Centro Mercantil de Monterrey in excess of two million pounds (2,000,000) of its powdered milk products, and plaintiff on information and belief therefore alleges that he has earned and is entitled to receive a commission of not less than $20,000; that the plaintiff has demanded payment of said commission and defendant has failed and refused to pay the same."

Wherefore, plaintiff prayed for judgment against the defendant in the amount of $20,000, interest and costs.

Defendant admitted in its amended answer that since and including 1946 it had sold and shipped into Mexico for sale through Centro Mercantil de Monterrey S. A., as distributor, upwards of two million pounds of its powdered milk, but denied the other allegations of the complaint and prayed dismissal thereof.

The evidence introduced on the trial of the case tended to show that plaintiff first learned of defendant's contemplated export of powdered milk in September, 1945. Plaintiff at that time was employed by Corporacion Americana and living in Caracas, Venezuela. Except for relatively short periods of time spent in the United States, he had lived and worked in various countries in Central and South America since 1935. Most of this time was spent in Venezuela working for American-controlled companies. During these years plaintiff had acquired a command of the Spanish language and had become familiar with the business and social customs of these Spanish-speaking countries. He did not, however, have any experience in importing and exporting, nor did he have any knowledge concerning the manufacture and sale of powdered milk and other dairy products. In addition to being employed by Corporacion Americana, plaintiff owned one-half interest in and was president of Compania Commercial Ultramar (hereafter referred to as Ultramar), a Venezuelan corporation organized to represent foreign manufacturers in Venezuela.

Plaintiff called at defendant's office in Stillwater for the express purpose of negotiating an agreement whereby either he or Ultramar would be named the exclusive agent for the importing and marketing of defendant's powdered milk in Venezuela. Plaintiff met the principal officers of defendant company and general discussions were had concerning world markets to which defendant's powdered milk might be profitably exported. Venezuela and Mexico were discussed as possible outlets for defendant's product. R. M. Hadrath, general manager of defendant company, conducted plaintiff through defendant's plants at Stillwater and in Wisconsin, explaining the productive processes, capacities, etc., of the various plants. Plaintiff realized that the possibility of defendant exporting its product into Spanish-speaking countries presented a real opportunity for him to secure a gainful connection in such export business. He therefore endeavored to convince Hadrath and the other officers of defendant that Venezuela was by far the most important market in Central or South America and that by reason of his knowledge of the language and customs of that country he should be selected to represent defendant there. Plaintiff proposed a form of contract he desired to be executed between defendant and Ultramar. It provided that Ultramar would be the sole and exclusive agent for the sale of defendant's products in all Central and South American countries and that the term of the agreement would be for ten years. Defendant, however, positively refused to enter into such an agreement.

At this first meeting between the parties, plaintiff told defendant's officers that it was very important to select a name for its powdered milk that would appeal to the Spanish-speaking people of Central and South America. He illustrated how clumsy and unharmonious "Maple Island" would be for a native to pronounce. Plaintiff suggested that the name "Valle Verde" (meaning "Green Valley") would be an appropriate name for defendant's product. No one at defendant's office in Stillwater could read or speak Spanish so undoubtedly defendant followed plaintiff's suggestion in adopting "Valle Verde" as its trade name for powdered milk exported to Spanish-speaking countries. Plaintiff also volunteered suggestions in regard to the Spanish composition of directions to be placed on the labels of cans for export. He further suggested that the trade name "Valle Verde" be registered "to protect defendant from unauthorized use of it by unscrupulous persons."

Plaintiff left defendant's office at Stillwater and returned to Chicago without having obtained a contract to represent defendant in the sale of powdered milk in Venezuela. However, negotiations between the parties were continued by correspondence and telephone.

In November, 1945, Hadrath decided to go to Mexico to investigate export opportunities and, if the market appeared favorable, to select a distributor there. Plaintiff accompanied Hadrath on this trip. Although plaintiff had never done business in Mexico he knew the language and had obtained and informed Hadrath of the names of prospective distributors there. Plaintiff testified that while on the plane enroute to Mexico he suggested to Hadrath a proposed contract which would require defendant to pay plaintiff one cent (1¢) per pound commission on all powdered milk sold through whatever Mexican distributor was selected. Plaintiff further testified that Hadrath said he thought the proposal was reasonable and would confirm it with Mr. Stoltze, the owner of defendant company, on their return to Stillwater. Hadrath emphatically denied that such a conversation had ever taken place and testified that he first learned plaintiff was claiming a 1¢ per pound commission on Mexican sales at the time this suit was filed. Stoltze testified that Hadrath had never said anything to him regarding the alleged contract proposed by plaintiff. After arriving in Mexico, the first prospective distributor Hadrath and plaintiff called on had a representative who spoke perfectly good English and had long experience in importing and selling United States products in Mexico. His company had also handled milk powder. In Hadrath's experienced judgment this company, Centro Mercantil de Monterrey, was qualified to act as distributor of defendant's powdered milk and it was later chosen to represent defendant in that capacity.

After their return from Mexico and before plaintiff left Stillwater, Hadrath gave him a check for $5,000. Exactly what items this $5,000 check was intended to cover is in dispute. Plaintiff testified that it was advanced to him to begin operations in Venezuela. Hadrath was equally as positive that the check was not an advance or loan but was intended to cover plaintiff's expenses and services in connection with the Mexican trip. It was recorded on the books of defendant as a "selling expense" and charged to the powdered milk account. Plaintiff accepted the check and received the proceeds thereof.

Upon the basis of the above evidence, the trial court made the following findings of fact:

"There was an oral agreement between the parties for the defendant

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