Al J. Goodman & Co. v. Bucyrus Erie Company

469 F.2d 1274, 1972 U.S. App. LEXIS 6619
CourtCourt of Appeals for the Seventh Circuit
DecidedNovember 21, 1972
Docket71-1586
StatusPublished
Cited by2 cases

This text of 469 F.2d 1274 (Al J. Goodman & Co. v. Bucyrus Erie Company) is published on Counsel Stack Legal Research, covering Court of Appeals for the Seventh Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Al J. Goodman & Co. v. Bucyrus Erie Company, 469 F.2d 1274, 1972 U.S. App. LEXIS 6619 (7th Cir. 1972).

Opinion

KILEY, Circuit Judge.

This is a diversity suit seeking damages for breach of an alleged oral contract. The district judge, 327 F.Supp. 107, found the evidence insufficient to establish a contract and entered judgment for defendant Bucyrus Erie Company (Bucyrus). Plaintiff Al J. Goodman & Co. (Goodman) has appealed. We affirm.

*1275 Goodman, at the time of the alleged incidents, was a North Carolina partnership engaged in the business of acting as broker in the purchase and sale of new and used construction equipment. Bucyrus, a Delaware corporation with its principal office in Milwaukee, Wisconsin, was engaged at the time in the manufacture and sale of large earth moving equipment. The alleged oral contract concerns the sale of a used dragline by Mussens Ltd., a Canadian distributor of Bucyrus’ products, to Henry J. Kaiser Co. (Canada) Ltd.

In the summer of 1964 Kaiser was preparing to bid on a large construction contract in Canada. Its equipment manager, Racher, telephoned Goodman on September 2, 1964 and asked for information about available equipment to be used in preparation of Kaiser’s bid. Goodman wrote Racher about a used Bu-cyrus dragline and quoted a price of $165,000.

On the following day, Goodman wrote Bucyrus’ used equipment coordinator, Hollingsworth, and indicated that “[w]e have today offered the [dragline] listed with us by you for resale to one of our interested customers.” Goodman inquired whether the dragline was still available and stated he would “appreciate your cooperation.” Goodman also indicated that he would further advise Hollings-worth “if our customer is interested.”

On September 9 Racher again called Goodman expressing an interest in the dragline as quoted in Goodman’s September 3 letter, and said he would like to inspect it. Immediately thereafter, Goodman made a telephone call to Hol-lingsworth and indicated Kaiser’s interest. In the course of the conversation, Hollingsworth told Goodman that he was the first person to bring Kaiser to his attention and added that the dragline was available and inspection could be made at Madisonville, Kentucky. Hol-lingsworth also stated that he had an inspection report made by a Bucyrus employee available for Kaiser use. He told Goodman that Bucyrus would not quote Kaiser a figure, but warned that the “asking price of $135,000” was well known in the trade.

Goodman passed the information from Hollingsworth on to Racher, who thereafter followed Goodman’s suggestion of contracting Hollingsworth for additional information. After Racher’s telephone call to Hollingsworth, the latter contacted Goodman to inquire as to Racher’s address so that the inspection report on the dragline could be sent to him. On September 10 and 11 Racher went to Kentucky with a Mussens representative and inspected the dragline.

After his September 9 telephone conversation with Goodman, Racher, who had no authority to make the purchase, gave the information obtained from Goodman to his superior, Davis, who began dealing in Canada with Mussens. Davis and Mussens had earlier been in touch with respect to equipment, other than the dragline, for the Canadian project. Davis favored Mussens, over Goodman, because of past dealings, Mussens’ Canadian location, and accessibility for service.

Subsequent to the September 9 conversation between them, Goodman did not participate in any negotiations with Kaiser but occasionally inquired of Hollings-worth as to the status of negotiations and requested to be advised of any developments. On December 16, 1964 Goodman learned for the first time that Mussens had obtained the dragline from Bucyrus and sold the dragline to Kaiser. Goodman’s suit followed.

The issue at trial was whether the September 9 telephone conversation between Goodman and Hollingsworth was sufficient to establish an oral contract giving Goodman an exclusive brokerage in the sale of the dragline The evidence at trial was presented by stipulation, depositions and oral testimony. Although Goodman testified at the trial, the deposition testimony of Hollings-worth, with whom Goodman spoke on September 9, 1964, was read into the record. There is no substantial dispute about what was said by each in their conversation or about other relevant events.

*1276 Goodman contends that in consideration of revealing to Bucyrus that Kaiser was his customer interested in buying the dragline, Bucyrus made the following promises: if Kaiser contacted Bucy-rus directly or through another, Kaiser would be referred back to Goodman for further negotiations regarding a sale of the dragline; no price would be quoted to Kaiser directly or through another; full cooperation would be given to Goodman in his effort to make the sale; and Goodman would be kept advised as to any developments with respect to the sale.

The alleged breach is said to have occurred as a result of Bucyrus selling the dragline to Kaiser through its Canadian distributor, Mussens, rather than performing in accordance with the above-mentioned promises. Owing to this alleged breach, Goodman sought recovery of $30,000 damages, being the difference between the $165,000 figure quoted by him to Kaiser on September 3, 1964, and the $135,000 figure at which the drag-line was sold to Kaiser.

In defense Bucyrus asserted that there was no oral contract made with Goodman on September 9 and that even if there had been Goodman was not entitled to a commission since he was not the procuring cause of the sale.

The district judge found the ultimate facts in accordance with those defenses. 2 He thought that the evidence was “at best ... an informal arrangement for the mutual exchange of information” with respect to any future contact with either party concerning the sale of the dragline. He found no violation of any alleged contract obligation by Bucyrus in the sale to Kaiser through Mussens.

Since Goodman is challenging the sufficiency of the evidence, the vital issue on appeal is whether the district court could reasonably infer from the relevant evidence that no oral contract arose.

Goodman argues that the evidence shows Bucyrus recognized “some kind of an obligation” because he was the first., broker to give Kaiser’s name to Hollingsworth, and a Bucyrus official made the statement that “if Goodman was involved somehow” in the sale he ought to receive a “finder’s fee” of $5,-000. This, however, does not compel a finding that a contract existed. We think that the district judge could well have decided that the essential elements of contract had not been proven by the evidence before him absent a showing that that evidence was customarily considered in the trade to be a binding agreement.

Hollingsworth’s promise to “cooperate” with Goodman did not compel the district court to find that Bucyrus was committed to a contract obligating it not to sell Kaiser except through Goodman. This is especially true in light of Hollingsworth’s uncontradicted testimony that Goodman did not request, and nothing was said about, a commission or a “discount for a dealer,” that no statement was made about “Goodman being protected,” and no request that Bucyrus not sell the dragline “to anyone else.”

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469 F.2d 1274, 1972 U.S. App. LEXIS 6619, Counsel Stack Legal Research, https://law.counselstack.com/opinion/al-j-goodman-co-v-bucyrus-erie-company-ca7-1972.