Ralph v. Karr Mfg. Co.

• Decision Date: 07 June 1974
• Docket Number: No. 59211,59211
• Court: United States Appellate Court of Illinois
• Parties: Richard S. RALPH, d/b/a Richard S. Ralph & Associates, Plaintiff-Appellee, v. KARR MANUFACTURING CO., an Illinois corporation, Defendant-Appellant.

Page 219

314 N.E.2d 219

20 Ill.App.3d 450

Richard S. RALPH, d/b/a Richard S. Ralph & Associates, Plaintiff-Appellee, v. KARR MANUFACTURING CO., an Illinois corporation, Defendant-Appellant.

No. 59211.

Appellate Court of Illinois, First District, Fifth Division.

June 7, 1974.

Rehearing Denied July 25, 1974.

Victor G. Savikas, Friedman & Koven, Chicago, for defendant-appellant

James D. Griffith, David H. Pauker, Pauker & Griffith Ltd., Chicago, for plaintiff-appellee.

SULLIVAN, Presiding Justice:

Defendant appeals from a verdict and a judgment entered thereon in plaintiff's favor for commissions owed pursuant to the terms of a sales and marketing agreement.

Defendant is a manufacturer of metal stampings and plaintiff was a marketing and management consultant. On February 17, 1967, the parties entered into an agreement entitled, 'Sales Management and Marketing Consultant Agreement' ('agreement'), which contemplated that plaintiff, using his best efforts, was to manage and increase defendant's sales program by and through the retention of a sales force comprised of manufacturers' representatives. As consideration for this effort, plaintiff was to receive a $100.00 monthly retainer for three years and a three percent (3%) commission on defendant's sales to non-house accounts. The term of the agreement was to run until January 31, 1970.

On February 28, 1969, plaintiff was dismissed by defendant and thereafter filed this suit to recover unpaid monthly retainers and past and future commissions as provided for in the agreement. Specifically, plaintiff sought to recover the monthly retainers from November, 1968, through At trial, the following testimony was adduced. Plaintiff testified that after the formation of the agreement, he undertook to fulfill his duties (as provided for in the agreement) in the following manner: He established and coordinated a sales force of independent manufacturers' representatives; he assisted in the preparation of a brochure advertising defendant's services; he instituted a sales control program comprised of several component parts; he conducted what he termed to be 'marketing surveys' and established a multi-tier quotation system. In addition, he introduced a stipulation entered into between the parties which reflected that the total sales of defendant, exclusive of house accounts, from December, 1968 through November, 1969, were $626,677.11; from December, 1969 through January, 1970 were $117,461.64; and from February, 1970 through January, 1971 were $1,167,320.33.

January, 1970, $2,700.00; commissions for the period from November, 1968 through February, 1969, $6,390.00; and 3% Of what the sales would have been for the period February, 1969 through January, 1971.

Plaintiff called Stan Karr, president of defendant company, under section 60, and elicited that prior to the formation date of the agreement, defendant did no business with Honeywell and Mallory, who later became defendant's biggest customers. Karr could not recall whether Honeywell and Mallory became and continued to be defendant's customers through plaintiff or his sales force's efforts.

In his section 60 examination, plaintiff testified that three-quarters of the representatives hired by him did not bring in a single sale and further, that he had performed no services for Honeywell and, after one meeting in April, 1969, he had no contact with Mallory. Sales to those two companies generated 90% Of his commissions.

Steven Murray, director of engineering for Mallory, testified on behalf of defendant that he was involved with every Mallory order sent to defendant from February, 1967 through February, 1969, and that the decision to place orders with defendant was not the result of plaintiff's efforts. However, on cross-examination, Murray acknowledged that plaintiff's representative met with him prior to any orders being placed with defendant. In addition, he admitted that he had no knowledge of whether plaintiff's representative had contact with the other employees in Mallory's purchasing department.

Michael Ondoe, supervisor of buyers for Honeywell, testified on defendant's behalf and stated that he never had any contact with plaintiff or any of his representatives and that all of his dealings with defendant were through Stan Karr. On cross-examination, Ondoe admitted the authenticity of an order from Honeywell through plaintiff's representative prior to any order Ondoe placed directly with Karr.

The jury returned a verdict for $66,284.84. Defendant appeals from this verdict and the judgment entered thereon.

OPINION

Defendant first contends that plaintiff did not sustain his burden of proof in establishing that defendant's sales increased as the result of his efforts. To sustain this contention, defendant points to section 2 of the agreement, which provides in part that plaintiff shall 'put forth his best efforts and to diligently provide the management of Karr's sales and marketing program and with such efforts to increase Karr's sales * * *.' Defendant argues that plaintiff was required to but failed to establish that the increase in defendant's sales were a direct result of his efforts.

Plaintiff, contrariwise, argues that in conformance with the provisions of the agreement, he formed a sales organization comprised of manufacturer's representatives, established certain procedures which facilitated the operation of this sales organization, and, in general, performed those functions necessary to the promotion and growth of defendant. Testimony relating to the fulfillment of these tasks, as well as figures representing an appreciable increase in the sales of defendant, were introduced at trial as representative of plaintiff's compliance with the agreements provisions. ¹

Consequently, the question to have been resolved by the jury was whether plaintiff performed sufficiently so that he met the conditions of the agreement and thereby established his right to the compensation provided for therein. Plaintiff argues that in order to establish performance of the conditions requiring his 'best efforts', he had to and did prove that he diligently directed his efforts on defendant's behalf. Defendant, however, maintains that mere proof of plaintiff's best efforts did not establish compliance with this condition; rather, plaintiff had the additional burden of establishing that he 'increased' the sales of defendant and, in the absence of any causal relationship between effort and result, plaintiff was not entitled to recover. The jury was instructed on plaintiff's theory of his burden of proof and found that plaintiff had performed his condition precedent to the agreement.

The express language of the agreement, when read in its entirety, provides for a diligent effort on plaintiff's part to increase the sales of defendant. It does not, despite defendant's interpretation, require that the sales of defendant Had to increase. It appears, therefore, that there was no requirement that there be an increase in sales solely from his efforts. In addition, we note that the portion of section 2 of the agreement, set forth above, cited by defendant as determinative of the issue of plaintiff's responsibility, continues with the following: 'and with such efforts to increase KARR'S sales By means of recruiting an adequate and qualified sales organization, etc.'. (All of section 2 appears in footnote 1.) When considered with the section entitled 'Ralph's Duties' (footnote 1), which delineates the scope of plaintiff's responsibilities, we believe that all plaintiff was required to establish was his performance vis-a-vis the agreement's terms. Accordingly, after reviewing the record, we are of the opinion that there was sufficient evidence offered by plaintiff of the performance of his contractual duties to allow the question of satisfactory performance to go to the jury.

Plaintiff is required to plead and prove that he performed all the conditions precedent to the contract before he can recover. (Ill.Rev.Stat.1973, ch. 110A, par. 133(c); Liberty Export & Import Corp. v. Swift & Co., 231 Ill.App. 1, 25.) However, whether a contract has been performed according to its terms is ordinarily an issue of fact to be decided by the jury. (Pescaglia v. Gianessi, 9 Ill.App.3d 582, 585, 295 N.E.2d 148.) This issue was resolved in favor of the plaintiff, and it is not the function of this court to re-determine questions of fact submitted to and decided by the jury unless the findings of fact are against the manifest weight of the evidence or the verdict is unsupported by any evidence whatsoever. (Dorweiler v. Gleim, 8 Ill.App.3d 190, 195, 289 N.E.2d 471.) In addition, we note that reasonable inferences may be drawn from undisputed or established facts and all that can be reasonably required to establish controverted facts is that the evidence, whether direct or circumstantial, creates a lesser probability leading on the whole to a satisfactory conclusion. (Smith v. Stopher, 125 Ill.App.2d 378, 387, 261 N.E.2d 16.) Here, the jury found that plaintiff performed the conditions precedent to the agreement and, under the instructions given it, we cannot say that its finding was against the manifest weight of the evidence.

This brings us to defendant's next contention that the court erred in refusing to instruct the jury as to his theory of plaintiff's burden of proof. Specifically, defendant cites the court's refusal to give his instruction 8B, which defendant claims contained the following essential language not contained in the burden of proof instruction given by the court at the request of plaintiff:

'Plaintiff has the burden of proving each of the following propositions:

'Second, that the sales of defendant were increased by reason of plaintiff's efforts.'

As hereinbefore noted, it is our opinion that plaintiff had to establish that he put forth his best efforts on defendant's behalf and he was not required to show the sales of defenda...