Newburgh v. FLORSHEIM SHOE COMPANY

• Decision Date: 29 December 1961
• Docket Number: Civ. A. No. 59-240.
• Citation: 200 F. Supp. 599
• Parties: Edward M. NEWBURGH, Plaintiff, v. FLORSHEIM SHOE COMPANY and International Shoe Company, Defendants.
• Court: U.S. District Court — District of Massachusetts

200 F. Supp. 599

Edward M. NEWBURGH, Plaintiff, v. FLORSHEIM SHOE COMPANY and International Shoe Company, Defendants.

Civ. A. No. 59-240.

United States District Court D. Massachusetts.

December 29, 1961.

DiMento & Sullivan, James J. Sullivan, Jr., Boston, Mass., for plaintiff.

Charles F. Choate, Gordon K. Bell, Henry G. Weaver, Jr., Choate, Hall & Stewart, Boston, Mass., for defendants.

CAFFREY, District Judge.

This is an action in contract by the plaintiff, a resident of Massachusetts, against the Florsheim Shoe Company, a corporation organized under the laws of the State of Illinois, to recover certain commissions the plaintiff alleges are owed to him under the terms of an oral employment agreement between these two parties. The suit was commenced by writ dated February 9, 1959, returnable to the Superior Court for Suffolk County, Commonwealth of Massachusetts. The action was thereafter removed by the defendants to this Court, with jurisdiction based upon diversity of citizenship of the parties. The International Shoe Company is joined as a party-defendant due to the fact that it acquired all the capital stock of Florsheim Shoe Company in November 1956 and thereafter continued to operate Florsheim as a division of International. International has stipulated that it will pay any liability to the plaintiff which is found to be owing to him by Florsheim.

The evidence showed that during the period 1940 to 1948 the plaintiff, as a shoe jobber, purchased quantities of shoe leather products from Florsheim. On or about October 1, 1948, however, the plaintiff and Florsheim, through its representative, Edward Meltzer, entered into an arrangement by which the plaintiff ceased purchasing shoe leather products from Florsheim for his own account and agreed to procure business and customers for Florsheim as a commission salesman. Under this arrangement Meltzer agreed that the plaintiff would be paid a commission of 3 per cent of the gross purchase price of all leather insoles and outsoles purchased by customers that plaintiff had procured. As part of the oral agreement, every customer obtained by plaintiff had to be approved by Florsheim's credit department.

Meltzer further agreed that Florsheim would maintain books and furnish the plaintiff with duplicate invoices showing the quantity and cost of all purchases made under the new arrangement. Although it is not clear from the evidence whether the parties actually agreed that the plaintiff would be paid commissions on future sales even though he did not service the accounts of the customers, the fact that Florsheim thereafter did pay commissions on sales which the plaintiff did not actually service indicates that the parties so understood their arrangement. No time period was specified as to this arrangement and, in making it, the parties did not discuss how termination would be made or whether commissions would be paid on sales made after termination.

Thereafter, the plaintiff obtained an order for sole leather from the Koss Shoe Company, a Maine corporation. This order was approved by Florsheim's Credit Department and the sale was completed. After this initial sale Florsheim made sales of both insoles and outsoles to the Koss Shoe Company and paid plaintiff a commission of 3 per cent on all such sales up until April 1954. In most instances, sales to Koss were made and negotiations therefor were conducted directly with Koss by Meltzer without any action by plaintiff.

In April 1954, Joseph Koss, President of Koss Shoe Company, indicated to Meltzer that he was not willing to pay the price which Florsheim was asking for a particular lot of insoles. The testimony of both Meltzer and Koss indicates that Meltzer told Koss that in order to secure the sale he, Meltzer, would inquire of plaintiff and see if plaintiff would waive his commission. Meltzer then discussed the matter with the plaintiff and it is uncontroverted that plaintiff did agree to make a waiver. However, the parties are in dispute over the question of whether the plaintiff waived his commission as to all future orders from Koss for insoles or for that one order only. Meltzer testified that the plaintiff agreed to waive all future commissions on the sale of insoles to Koss "provided we would take care of him on the outsoles." The plaintiff testified "I will waive the commission on this particular order."

Before considering the question of waiver, the defendant's contention that there was no enforceable contract between the parties must first be considered. Defendant relies on Restatement of Contracts, Sec. 79, Bartlett v. Keith, 325 Mass. 265, 90 N.E.2d 308, and Bernstein v. W. B. Mfg. Co., 238 Mass. 589, 131 N.E. 200, as supporting his argument that the contract was void at its inception for the reason that "Newburgh promised nothing" and, therefore, there is no consideration to support Florsheim's alleged promise.

There are several answers to this contention. One is that in determining whether or not there was a contract, the conduct of the parties with reference to the alleged contract may be considered. I find that defendant paid plaintiff 3 per cent commissions from 1948 to 1958, and that in Exhibit A offered by defendant defendant concedes its liability to plaintiff in the amount of $5928.24 for 3 per cent commission on defendant's sales of outsoles to Koss between November 1956 and December 1958. The letter from defendant by Meltzer, to plaintiff, dated December 12, 1958, formally terminating the relations between plaintiff and defendant concedes that plaintiff represented defendant "very well for the past ten years" and refers to "an item of accrued commissions due you." It is not clear just what defendant's theory is as to the basis of its liability to plaintiff for the items it conceded were "due" to plaintiff if there was no valid contract between them. Suffice it to say that defendant's contention that there is no valid contract is without merit. I find and rule that a valid oral contract was made in September of 1958, under which defendant agreed to pay plaintiff a 3 per cent commission on future sales by defendant of outsoles or insoles to any new customers located in New England procured as customers of defendant by plaintiff. I find that the contract did not require plaintiff to "service" these customers and that this contract was terminable at will. Substantially similar contracts have been held valid in Emerson v. Ackerman, 233 Mass. 249, 124 N.E. 17, and Globe Paper Co., Inc. v. Russell Box Co., 291 Mass. 1, 9, 195 N.E. 710.

In evaluating the conflicting testimony in this case as the trier of fact, I must consider, inter alia, the extent to which witnesses are either corroborated or contradicted by documentary evidence and their demeanor on the witness stand, and draw reasonable inferences therefrom. The plaintiff displayed belligerence and rudeness, and was argumentative and unruly. His truculent attitude did nothing to advance his cause or enhance his credibility. Exhibit 3 of Defendant's Exhibit A indicates that after April 13, 1954 Florsheim sold $89,176.80 worth of insoles to Koss, on which a 3 per cent commission would be $2675.30. On the other hand, Exhibit 6 of Defendant's Exhibit A shows that from November 1, 1956 to December 15, 1958, Florsheim sold $197,661.50 worth of outsoles to Koss, on which the 3 per cent commission (conceded by defendant to be due to plaintiff) figured out to $5928.24.

Having in mind plaintiff's attitude on the witness stand, I believe Meltzer's testimony that plaintiff waived the low commission on insoles to protect his right to collect the larger $5928.24 commission on outsoles. In so finding I have in mind that the plaintiff was experienced in this trade, knew the relative volume of insole and outsole sales to Koss, and, most importantly, knew that he had a contract terminable at will which could be cut off at any time by Florsheim. I do not believe that plaintiff waived only on the one sale and I find that, as testified by Meltzer, he waived on insole sales to Koss after April of 1954 to protect his right to continue to receive commissions on outsole sales to Koss thereafter.

The balance of plaintiff's claim relates to commissions alleged to be due by reason of sales by defendant to the William F. Reddish Leather Company. Defendant claims plaintiff is barred by an account allegedly stated between the parties.¹ Regarding this defense raised by Florsheim that it was discharged of all liability because of an alleged Account Stated, suffice it to say that cases in Massachusetts indicate that although a creditor may bring an action against his debtor on an implied promise of the ...