Weigend v. Hulsh

• Decision Date: 16 June 1942
• Docket Number: Gen. No. 42029.
• Citation: 315 Ill.App. 116,42 N.E.2d 146
• Parties: WEIGEND ET AL. v. HULSH ET AL.
• Court: United States Appellate Court of Illinois

315 Ill.App. 116

42 N.E.2d 146

WEIGEND ET AL.

v.HULSH ET AL.

Gen. No. 42029.

Appellate Court of Illinois, First District, First Division.

June 1, 1942.

Rehearing Denied June 16, 1942.

Appeal from Superior Court, Cook County; Grover C. Niemeyer, Judge.

Action by Gustave Weigend and others against B. M. Hulsh, doing business as the Trojan Products & Manufacturing Company and another, to recover damages based on alleged conspiracy entered into by defendants to defraud plaintiffs out of their money, wherein the defendants filed a counterclaim. From an adverse order, the plaintiffs appeal.

Order reversed, and matter remanded for further proceedings. B. M. Steiner, of Chicago, for appellants.

Fred L. Steers, of Chicago, for appellees.

O'CONNOR, Justice.

This action is brought by five plaintiffs each one claiming to have an individual, separate and independent cause of action against the two defendants to recover damages based upon a conspiracy entered into by the two defendants to defraud plaintiffs out of their money. The complaint was in six counts. Defendants moved to strike the several counts and to dismiss the suit on a number of grounds, the first of which was that “There is a misjoinder of plaintiffs because the several causes of action do not arise out of the same transaction or a series of related transactions, but, on the contrary, are separate and distinct, and neither plaintiffs nor the transactions have any relation with one another.” The court sustained the motion and struck counts 1, 2 and 5 and ordered that the action as to four plaintiffs, viz: Hurwitz, Ross, Schwartz and Dvorak be dismissed at plaintiffs' costs, and that counts 3 and 4 be dismissed as to defendant Nelson. It was further alleged that the remaining plaintiff, Weigend, file his answer to defendants' counterclaim within 10 days. It is from this order that all plaintiffs appeal.

The substance of each cause of action is that defendants conspired to cheat and defraud plaintiffs out of large sums of money by inducing them to enter into separate agreements for the resale by them of certain merchandise which they bought from defendants. That defendants falsely represented that the value of the merchandise sold plaintiffs, which was to be resold by them, was much greater than its actual value and that the profits which plaintiffs would receive for the resale of the merchandise and the ease with which it might be resold were knowingly false.

The substance of the first count is that plaintiffs at different times entered into agreements with defendant, B. M. Hulsh, doing business as Trojan Products and Manufacturing Co., to act as distributors in the sale and distribution of products manufactured by the company. By each of the five agreements each plaintiff was given a certain territory in which he was to act as exclusive distributor; that the five contracts were entered into on the following dates: Hurwitz, November 9, 1939, Weigend, November 29, 1939, Dvorak, March 9, 1940, Schwartz, April 5, 1940, and Ross, May 21, 1940.

It is further alleged that prior to the execution of these contracts defendants, Hulsh and Nelson, entered into a conspiracy to cheat and defraud plaintiffs and other persons out of large sums of money and in furtherance of the conspiracy, inserted advertisements in daily papers in Chicago, one of which was: “Help wanted with investment. If unemployed $150.00 invest. can make you $5.00 to $15.00 daily. No mdse. selling. Address FJ143 Tribune.” That plaintiffs responding to the advertisement, called at defendants' office and were induced by various misrepresentations and false statements to negotiate and execute agreements with defendant, B. M. Hulsh, doing business as Trojan Products and Manufacturing Co., which would require substantial investments of money from each plaintiff, in consideration of which each plaintiff became a distributor of defendant Hulsh's products in particular territories. The count then alleges 10 misrepresentations made by defendants, the substance of which is that Trojan Products Company was a well established and responsible concern with a great many distributors throughout the United States; that many of the distributors were selling on an average of 50 gallons of shampoo (one of defendants' many products) to wholesale cleaning and dyeing concerns a week; that the distributors were selling large quantities of defendants' products to schools and universities, one of such distributors being named who had sold some of defendants' products for $2,000 to Purdue University. That there was great demand for a person to be assigned to a particular territory which was of great value; that each distributor had employed from 5 to 10 men, on the basis of 50% commission and that such employees were each averaging $10 a day “in cleaning or shampooing rugs or carpets with the use of said defendants' ‘Rug-O-Vator’ machine.” That defendants' products were advertised extensively by radio, including W.M.A.Q., and others; that defendants' products were uniformly priced; that defendant, Hulsh, had invented or created, as a result of extensive experiments, a new compound to be used in cleaning or shampooing rugs, which contained no soap, which could be used with one of defendants' machines to great advantage; that the value of the territory assigned to each plaintiff, as distributor, was worth from $2,000 to $5,000, but that if each plaintiff would purchase from $1,000 to $3,000 worth of merchandise it would be unnecessary to pay defendants any sum for exclusive territory.

It was further alleged that each plaintiff relied upon the representations made by defendants, as a result of which plaintiff, Weigend, was induced to give Hulsh $3,000 for merchandise and to be assigned to the State of Minnesota; that he expended other large sums of money in an endeavor to sell and distribute the merchandise but to no avail, and claimed $3,500 damages. That plaintiff, Hurwitz, paid defendant, Hulsh, $1,800 to have himself and M. W. Johnson assigned to Chicago and Evanston, and for certain merchandise and equipment to be resold in such territory; that he expended other large sums of money in an endeavor to sell and distribute the products, without success, and his damages were laid at $3,000; that plaintiff, Ross, was induced to pay Hulsh $1,000 for certain of defendants' products and was assigned to portions of Kentucky and Indiana; expended other large sums of money and he claimed $2,000 damages; that plaintiff, Schwartz, paid defendant, Hulsh, $1,000 for certain merchandise and equipment for resale in Oak Park, River Forest, Forest Park, Maywood and Melrose Park and expended other sums of money in an endeavor to sell and distribute the products. His damages were laid $2,000. That plaintiff, Dvorak, was induced to pay Hulsh $600 for merchandise and equipment for resale in Will county, Illinois; that he expended other large sums of money in a vain effort to dispose of the goods, and his damages were laid at $1,600.

Counts 2, 3 and 4, adopted by reference substantially all of count 1 and had to do particularly with plaintiff, Weigend's, claim, going into more detail in reference to his claim than did count 1; and in count 3 the written agreement entered into between Hulsh and Weigend was attached to and made a part of the count. Count 5 purports to set up plaintiff, Hurwitz's, cause of action based on the contract entered into by defendant, Hulsh, with Hurwitz and Johnson. Attached to and made a part of this count was a written contract entered into between the Trojan Products Company, by William J. Nelson, general sales agent, and plaintiff, Hurwitz, and M. W. Johnson, which contract, among other things, is to the effect that the products company had theretofore sold some of its products to a number of persons and concerns in and about Chicago and that it would continue to sell other goods to them, but on which Hurwitz and Johnson would be entitled to a certain commission. The total commission claimed under this special agreement was $849.40. It was further alleged that upon the execution of this contract, plaintiff, Hurwitz, and Johnson, became partners in the sale and distribution of defendants' products. That afterward, July 19, 1940, the partnership was dissolved and the proceeds became the property of Hurwitz; that he was entitled to have paid to him such commissions, and his damages in that count are laid at $3,000.

Count 6 adopted practically all of count 1 and was in reference to the claim of plaintiff, Schwartz. He claimed $2,000 damages.

The right to join the five plaintiffs in one suit is claimed by virtue of sec. 23 of the Civil Practice act (chap. 110, Ill.State Bar Stats.1941). That section provides: “Subject to rules, all persons may join in one action as plaintiffs, in whom any right to relief in respect of or arising out of the same transaction or...