Norm Advertising, Inc. v. Monroe Street Lumber Co.

• Decision Date: 12 July 1946
• Docket Number: 29863.
• Citation: 25 Wn.2d 391,171 P.2d 177
• Court: Washington Supreme Court
• Parties: NORM ADVERTISING, Inc., v. MONROE STREET LUMBER CO.

171 P.2d 177

25 Wn.2d 391

NORM ADVERTISING, Inc., v. MONROE STREET LUMBER CO.

No. 29863.

Supreme Court of Washington

July 12, 1946

Department 1

Rehearing Denied Sept. 13, 1946.

Action by Norm Advertising, Inc., against Monroe Street Lumber Company for breach of contract wherein defendant agreed to pay to plaintiff a specified sum of money, in installments for a series of copyrighted pictorial illustrations together with certain advertising matter. From a judgment for defendant, the plaintiff appeals.

Reversed and cause remitted.

Appeal from Superior Court, Spokane County; Timothy A. Paul, judge.

Harrison M. Berkey, of Spokane, for appellant.

Charles W. Gillespie, of Spokane, for respondent.

STEINERT Justice.

This was an action for breach of a contract wherein the defendant agreed to pay to the plaintiff a specified sum of money, in installments, for a series of copyrighted pictorial illustrations together with certain advertising matter, all to be supplied periodically by the plaintiff for use by the defendant during a term of one year. Upon joinder of issue the cause was tried to the court without a jury. At the conclusion of plaintiff's evidence, the defendant moved for a dismissal of the action. The motion was denied. The defendant thereupon, without producing any evidence of its own, rested its case. The court rendered its decision in favor of the defendant upon the evidence as adduced, and thereafter made findings of fact from which it concluded that the action should be dismissed with prejudice. Judgment was entered accordingly and plaintiff appealed.

Appellant, Norm Advertising, Inc., is a New York corporation and as such conducts an advertising business which ramifies throughout the several states. Under its method of operation, certain of its representatives from time to time make surveys of various types of business, and, with that information, its artists prepare cartoons or pictorial illustrations suitable and intended to attract the attention of the public to the merchandise sold by concerns engaged in the kind of business so surveyed. These pictorial illustrations, when prepared, are copyrighted by the appellant. From the original drawings prepared by appellant's artists, 'zincs' are made, and from these zincs impressions are produced in the form of mats for prospective advertising uses by the the various merchants who may subscribe for appellant's service.

Having made this preliminary preparation, appellant sends its traveling salesmen throughout the county to call upon mercantile concerns engaged in businesses of the kinds previously surveyed, with the view of interesting such concerns in the service which the appellant has to offer. This service contemplates not only the periodic delivery of a specified number of such pictorial illustrations by the appellant to the subscriber, for use by the latter in various advertising media, but also the periodic preparation and delivery, by appellant to the subscriber, of certain written advertising matter, termed 'write copy,' to accompany the pictorial designs. This 'write copy' is based upon information supplied by the subscriber upon a printed form furnished by the appellant and termed an 'analysis'. The subscriber is also permitted and encouraged to send in additional information from time to time for the purpose of enabling the appellant to prepare appropriate 'write copy' during the term of the particular subscription.

Respondent, Monroe Street Lumber Company, is a Washington corporation, located in Spokane, and is engaged in the building supply and fuel business.

On October 6, 1945, one Leslie M. W. Neville, appellant's traveling solicitor and salesman, called upon the respondent and explained to Mr. H. O. Schumacher, president of the respondent company, the nature of the advertising service furnished by the appellant. The result of that conference was that Mr. Schumacher signed a printed agreement, furnished and filled in by the salesman reading as follows:

'Norm Advertising, Inc.

79 Madison Avenue

New York, N. Y.

'Reserve for me Fifty-two copyrighted illustrations and write copy, both as you think best, and grant me the exclusive right to use same in advertising the builders supply-Fuel business in newspapers and other media of Spokane State of Washington only, during the term of this agreement and any renewal thereof. Ship 4 or 5 mats of the above illustrations monthly, F.O.B. New York, by mail, beginning as soon as possible. Size of mats to be about 1 or 2 columns wide.

'For the right to use the above illustrations and copy, I/we agree to pay you at New York the sum of Three hundred and twelve _____/100 ( $312.00) Dollars yearly, payment for the first year to be made as follows: Seventy-eight _____/ 100 ( 78.00) Dollars 10 days after date of 1st shipment, Twenty-six /100 ( $26.00) Dollars on the first of each month thereafter until the full amount above stated has been paid. I/we agree to reimburse you monthly for postage used in shipment.

'Fifteen days after failure to meet any of the payments due, the whole amount remaining unpaid shall become due and payable forthwith.

'The term of this agreement shall be for a period of One Year from date of first shipment, and shall continue in effect under the same terms and conditions as stated herein until I/we notify Norm Advertising, Inc., by registered mail to discontinue. Payments for any additional period shall be made monthly on the first of the month following date of shipment at the rate of one twelfth of the annual charge for the first year.

'Norm Advertising, Inc., agrees not to furnish advertising service to any one else engaged in the above business in the place or places designated above during the term of this agreement or any renewal thereof so long as there shall be no default by me/us and I/We agree that the use of the above illustrations and copy, or any part thereof, shall terminate with this agreement.

'I/We understand that I/We shall arrange for publication in newspapers and other media and pay the cost of same, and that Norm Advertising, Inc., assumes no responsibility for cost or rate of publication.

'Neither party will be held responsible for any provisions or representations not embodied in writing herein and this contract is not subject to cancellation. This agreement is subject to the acceptance of Norm Advertising, Inc., at New York.

'Dated October 6, 1944

Name Monroe Street Lumber Co.

Per H. O. Schumacher, Pres.

(Official Title)

'Accepted at New York, N. Y.

By Norm Advertising, Inc.

Per Signa Ford

Date October 9, 1944'

We have italicized those portions of the agreement which were filled in by the salesman.

As appears above, the agreement was signed by respondent through its president in Spokane, on October 6, 1944, and was accepted by the appellant in New York, on October 9th.

At the time of signing the agreement, Mr. Schumacher also signed and delivered to the salesman a complete 'analysis' of respondent's business, for use by the appellant in preparing the 'write copy' referred to above.

Appellant duly notified the respondent by mail from New York that it had accepted the contract and that the necessary advertising material would be sent forward as agreed.

Upon receipt of the first shipment of prepared mats, respondent refused to use or keep them, but immediately returned them to the appellant, with the statement that the service did not comply with the representations made by the salesman and that any further correspondence in reference to the matter should be conducted with respondent's attorney.

Respondent having refused to cooperate further in the performance of the contract or to pay any part of the contract price, appellant in February, 1945, instituted this action to recover the full amount provided for in the contract.

A preliminary question in the case is whether the contract should be construed according to the laws of the state of New York, as appellant contends, or according to the laws of the state of Washington, as contended by the respondent.

As appears from the provisions of the contract itself, the instrument consisted of a written offer made by the respondent in the state of Washington and an acceptance thereof by the appellant in the state of New York; also, the advertising matter was to be shipped by the appellant to the respondent 'F.O.B. New York'; and payments were to be made by the respondent to the appellant in that state.

The general rule is that a contract is considered as having been entered into at the place where the offer is accepted or where the last act necessary to a meeting of the minds or to complete the contract is performed. 17 C.J.S., Contracts, § 356, p. 813. Under that rule the contract here involved must be considered as having been made in New York.

It is also the general rule that, in the absence of an agreement to the contrary, the law of the place where the contract is entered into controls the determination of the rights and liabilities of the parties. This court has recognized that general rule. Carstens Packing Co. v. Southern Pacific Co., 58 Wash. 239, 108 P. 613, 27 L.R.A.,N.S., 975; Phoenix Packing Co. v. Humphrey-Ball Co., 58 Wash. 396, 108 P. 952. Under that rule, the law of New York, if properly shown, would determine the rights and liabilities of the parties to the present contract.

In this case, however, appellant neither pleaded nor proved the law of the state of New York. In such situation, it must be presumed that the law of that state is the same as that of this state. Walnut Park Lbr. & Coal Co. v. Roane, 171 Wash. 362, 17 P.2d 896; In re Barclay's Estate, 1 Wash.2d 82, 95 P.2d 393; Smaby v Shrauger, 9 Wash.2d 691, 115 P.2d 967. While Ch. 82, Laws of 1941,...