National Cable & Mfg. Co. v. Filbert
| Decision Date | 31 March 1913 |
| Citation | 140 N.W. 741,31 S.D. 244 |
| Parties | NATIONAL CABLE & MANUFACTURING COMPANY, Plaintiff and respondent, v. W. F. FILBERT, Defendant and appellant. |
| Court | South Dakota Supreme Court |
Appeal from Circuit Court, Grant County, SD
Reversed
Thos. L. Bouck
Attorney for Appellant.
Thad. L. Fuller, Burns & Hillman
Attorneys for Respondent.
Opinion filed March 31, 1913
This action grew out of a contract entered into between the plaintiff, a corporation doing business at Niles, Mich., and the defendant, a hardware and implement dealer at Twin Brooks, S.D. The contract was entered into on the 18th day of December, 1907, and provided for the sale, by the plaintiff to the defendant, of a quantity of copper cable and other material and fixtures that enter into the construction and equipment of lightning rods. The contract provided for the delivery, by the plaintiff, of the goods at the railway station at Niles, Mich. The contract gave the defendant the exclusive right to sell the merchandise described in the contract, and other merchandise of a similar character to be purchased from the plaintiff, but restricted the territory within which he might sell to Twin Brooks, Milbank, Corona, and Marvin and limited the time within which he might sell to the period between the acceptance of the contract by the plaintiff and the 1st day of December, 1908. The defendant was also bound by the contract, during the above period, not to purchase any similar goods from any other manufacturer. It contained a covenant fixing the minimum price for which he should sell said copper cable, and also contained the following covenant, to-wit:
"That said first party [plaintiff] agrees to furnish a salesman to assist in starting the business as soon as possible after requested by said second party, and that said second party, in case a salesman is furnished at his request, agrees that on arrival of the said salesman, he, said second party, will furnish a man and team and at once proceed to canvass jointly with said salesman, exclusively for the sale of lightning rods, and that, as soon as said canvass is terminated, he, said second party, hereby agrees to pay said salesman, as compensation for his services, an amount equal to one-half of the profits arising from the sale of the goods during said canvass."
Plaintiff's agent also, in addition to the numerous restrictions contained in the written contract, gave defendant positive instructions not to attempt to put up any rods until they (meaning some of plaintiff's agents) were there to show him how to put them up.
In consideration of the many restrictions placed upon the defendant in regard to the price, the use, and the disposition defendant was to make of these goods, he was little more than an agent of the plaintiff for the purpose of selling plaintiff's goods for a limited period of time within restricted territorial limits. Blank spaces in the contract providing the terms of payment were never filled out; but the treasurer and assistant treasurer of the plaintiff corporation both testified that the goods were to be paid for on the list of June, 1908. The goods were shipped by the plaintiff and received by defendant at his place of business in Twin Brooks, S.D. No question was ever raised as to the value of the goods, or that they were not shipped according to contract; but defendant claims that the plaintiff never furnished him with a salesman to assist in starting the business, as provided for in said contract, and justifies his refusal to pay the bill solely upon that ground.
The defendant alleged and proved by the evidence that he did not understand or know anything at all about selling lightning rods, or how to put them up, at the time of entering into the contract. That, in order to sell them, it was necessary to go out and put them up for the purchasers on the buildings to be protected thereby, and that it required some expert skill and experience to do this properly. That these facts were well known to the plaintiff, and that it was in contemplation thereof that the agreement to furnish a salesman was inserted in the contract. He also alleged and proved that he made repeated requests upon the plaintiff to furnish such salesman, or expert, as he was termed at the trial, but that plaintiff wholly failed to comply with said request, and thereby rendered the goods wholly valueless to him. He retained the goods until the 10th day of May, 1909, when he attempted to rescind the contract and returned the goods to the plaintiff at Niles, Mich.
The case was tried to a jury. The plaintiff, on the trial, treated the agreement to furnish the expert as one of the "conditions precedent" to be preformed by it, and directed the greater part of its somewhat voluminous testimony to an attempt to prove that it had complied with this requirement of the agreement. At the close of all the testimony, the plaintiff moved the court to direct a verdict for it "for the reason that the undisputed evidence in this case fails to show that the defendant has established any facts sufficient to constitute a defense, and for the further reason that the evidence offered and received itself shows that the plaintiff has done all things by it required under the terms of the contract in evidence, and that the undisputed evidence in this case shows that there has not been a failure of consideration, and that the furnishing of a salesman to assist in the starting of the business, by the plaintiff, was not an element of the consideration of the contract, but that it affirmatively appears in the agreement that the defendant therein agreed to pay the salesman, as a compensation for his services, an amount equal to one-half of the profits arising from the sale of said goods during said canvass, and that the evidence offered by the defense relates to a matter which does not constitute a defense, but simply a condition, and that the measure of damages, if at all, should arise under altogether a different remedy from that which appears from the pleadings in this case." This motion was granted, and defendant took exceptions.
The appellant assigns as error: First, the admission of the original contract in evidence; second, the direction of the, verdict by the court; and, third, the entry of the judgment upon the directed verdict. The first assignment seems to have been abandoned by appellant in his brief; and, as a disposition of the third depends upon the determination of the second, it will be necessary to consider the second assignment only.
As the case appears on appeal, the question involved depends wholly upon the construction to be put upon the above-quoted clause of the contract. It is strenuously contended by the respondent that this clause in the contract is an independent covenant to be performed by the plaintiff at some subsequent time, and without reference to defendant's liability, and that therefore the court was justified in taking the case from the jury. On the other hand, it is just as strenuously contended by the appellant that this covenant is one of the material elements of the contract, or was a "mutual and dependent condition," to be performed by it to entitle it to the purchase price. If this contention is correct, then the question should have been submitted to the jury.
We may state, at the outset, that the fact that the defendant undertook to rescind by returning the goods to the plaintiff would ordinarily be wholly immaterial to a determination of the issues in the case. If it were necessary, as contended by defendant, that the plaintiff must comply with the disputed condition in the contract before it became entitled to the purchase price, it was unnecessary for him to rescind in order to avoid liability. He would have a perfect right to wait until the plaintiff had performed all of its obligations before he became liable for the purchase price. On the other hand, if the disputed clause. in the contract was an independent covenant or "condition subsequent," then the defendant became fully liable upon plaintiff's delivery of the goods, and his attempted rescission would have been of no avail.
In this case, defendant returned the goods pursuant to directions given by one of plaintiff's agents. This agent was in Twin Brooks, and defendant informed him that plaintiff had not lived up to its agreement in furnishing defendant with the assistance it had promised. The agent admitted "that they had not got round as they ought to," but that they had been terribly rushed, and would try to do better another year, "if you want to keep it" (meaning the merchandise in question). Defendant informed him that he intended to return the goods, whereupon the agent replied: "Well, we will find a place to ship it to, and, if we don't give you shipping directions, you can ship it in." Under these conditions, it became incumbent upon defendant to return the goods.
The contract does not specifically state upon its face that this provision is condition precedent, and, therefore, whether it is such or not is a matter of construction for the court, and depends upon a consideration of the entire contract and the intent and understanding of the parties themselves, as disclosed by their conduct relative thereto.
The court having directed a verdict for the plaintiff, all the evidence of the defendant must be taken as true, and he must be given the benefit of all legitimate inferences therefrom. Marshall v. Harney Peak Tin M. M. & M. Co., 1 S.D. 350, 47 N.W. 290; Bohl v. City of Dell Rapids, 15 S.D. 619, 91 N.W. 315; Ernster v. Christianson, 24 S.D. 103, 123 N.W. 711; Walklin v. Horswill, 24 S.D. 191, 123 N.W. 668.
Provisions in contracts like the one in dispute in this case have been much litigated in the courts; but, owing to the peculiar nature of the question, each case must be determined in accordance with the facts involved. No definite rule, other than to determine the real...
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