Chamberlain v. Norwood

86 So. 920, 148 La. 378, 1921 La. LEXIS 1299
CourtSupreme Court of Louisiana
DecidedJanuary 3, 1921
DocketNo. 22882
StatusPublished
Cited by2 cases

This text of 86 So. 920 (Chamberlain v. Norwood) is published on Counsel Stack Legal Research, covering Supreme Court of Louisiana primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Chamberlain v. Norwood, 86 So. 920, 148 La. 378, 1921 La. LEXIS 1299 (La. 1921).

Opinion

PROVOSTY, J.

In 1911 the two defendants, I. Duncan Norwood and T. H. Rogers, under the trade-name of Norwood Pepper & Manufacturing Company, established a factory at Norwood, La., for drying peppers and manufacturing peppers into extracts and sauces. They did this on a- borrowed capital of $1,200. They bought the peppers from the farmers of the neighborhood, including Norwood. Rogers managed the business. For his service's he was paid a small salary; his real remuneration being, as we understand, in the prospect of the expected growth of the business. In 1911 they made no profit. In 1912 they made enough to pay up the interest on the borrowed capital, and to purchase and install another machine. In 1913 they increased their business, and paid the interest on the borrowed capital and part of the prihcipal, and installed another machine and a dryer. In 1914 they again increased their business, and paid up the balance of the borrowed capital. In 1915 they added to their plant a dryer and a blower at a cost of $1,000, and with $1,200 of borrowed capital enlarged their building. On the 11th of November, 1914, they “appointed” the plaintiff their selling agent. He was an expert commercial broker and sales agent of 30 years experience, thoroughly acquainted with the spice trade, and knowing, therefore,

[381]*381how, where, and to whom to dispose' of the output of the factory to the best advantage. He was not to deyote his entire time to the business of defendants, but was to “visit once a year the principal spice manufacturing centers of the United States where he had reason to believe the” products of the factory of the defendants could be sold. Defendants “agreed to pay him” a commission of 5 per cent, on the gross sales, and to “divide equally” with him whatever amount the goods were sold at by him “over and above the price given” him by the defendants. The contract was in writing, signed by the two defendants, and was for two years, with privilege on his part of renewing it for five years more. The crop, or manufacturing, season began in the latter part of July and ended during the winter. The prices “given” him, as provided in the contract should be done, were the same at which the defendants had been theretofore selling their products, with this difference, however: that the former prices had been f. o. b. New Orleans, whereas those “given” were f. o. b. Norwood; so that the latter were higher than the former by the amount of the freight from Nor-wood to New Orleans. This price allowed the defendants a profit of some three or four cents on the dried peppers, to which line the product of the factory was confined before the termination of the agency and the occurrence of the event which has given rise to this suit. For undertaking the agency of defendants, plaintiff gave up an agency which for the time being was more remunerative than that of defendants, but with no prospect of increase; whereas, that of defendants offered, as plaintiff thought, a bright prospect in that direction. This was so because the peppers produced by the lands tributary to the factory of defendants were of a peculiar, superior kind, such as, by their brilliancy of color, might compare with the high class and high-priced imported Hungarian pepper, and yet be sold much cheaper, at a handsome profit, so that they might undersell the imported peppers, and not be subject to competition by the ordinary commercial pepper. No writing was at first executed for completing the contract by “giving” to plaintiff the minimum prices at which the goods were to be sold, but on June 8, 1915, a formal writing was drawn up for that purpose. The agency continued for IT months. In that time plaintiff realized from his commission of 5 per cent, and from the average of the sales prices over those “given” him, $2,100. Plaintiff was to pay his own expenses. They amounted to $100. So that in the 17 months of the duration of the agency plaintiff realized $2,000, or at the rate of $117.60 per month. Until the happening of the event which brought the agency to an end things went on harmoniously, and with apparently every prospect of brilliant success. Defendants do complain that during a tíip which plaintiff took to California, for pleasure, or other business than theirs, in the month of July, 1915, they were unable to locate him.' As a matter of fact some letters mailed to him, and said to have been prop-' erly addressed, were returned undelivered. But this nondelivery of the letters appears most unaccountable, under the circumstances, for plaintiff received a letter from defendants of date July 1st, mailed to his California address. Be that as it may, the business of defendants is not shown to have suffered in the least from this inability of theirs to communicate- with plaintiff; for plaintiff testifies, and is not contradicted, that the output of petitioner’s factory was sold by him practically in advance, and could have been readily sold if several times as large. In the early part of 1916 the defendants organized a corporation in conjunction with Messrs. O. B. Steele and Joseph Gebelin, first vice president and cashier, respectively, of the Bank of Baton Rouge, to carry on the same [383]*383kind of business at a factory to be located in that.city; and they transferred their said business and its assets to this corporation in payment of their shares of stock in it. Plaintiff protested against this action of defendants as soon as he heard of its being in contemplation; and, the protest not availing, he sought to have the corporation make a similar contract of agency with him, but ineffectually, and he then brought this suit in damages for breach of contract.

He claims that the business of defendants would have increased largely if it had been continued, and that the agency would have yielded him at least $4,000 per annum, and he fixes his damages in that amount.

Defendants deny that the contract was violated. They were under np obligation, they say, to continue the business for any specified time, and plaintiff was to be their agent only so long as the business continued.

[1] We do not so read the contract. It was for two years, with the privilege of renewal for five years more. Defendants obligated themselves for that length of time; and, since the agency could not go on without the business going on, the fixing .of that term for the agency fixed the term for the continuance of the business by necessary implication. Of course defendants were at liberty to discontinue the business at any time, and thereby put an end to the agency, but subject to the obligation pf compensating plaintiff for whatever injury or loss he might suffer thereby.

[2] Again, it is said in behalf of defendants that the reason for discontinuing the business was that it was losing money, and that the contract necessarily contemplated its being discontinued in that contingency.

The answer is that the business was not losing money. Its assets were taken over by the corporation at a cash valuation of $13,-000. Out of nothing it had grown in four years to that value, to say nothing of its having become an established business with a bright prospect — a fact which is found .reflected in the adoption by the corporation of the trade-name of the firm, with the addition only of the word Baton Rouge; thus, Baton Rouge-Norwood Pepper Manufacturing Com1pany. Against this1 $13,000 the two other incorporators contributed towards the capital of the corporation a factory building and site they owned in the city of Baton Rouge, at a valuation of $11,000, and $4,000 in cash. The capitalization was $30,000. Two thousand dollars of the capital stock was not issued.

Free access — add to your briefcase to read the full text and ask questions with AI

Related

SCHEINUK FLORIST, INC. v. Southern Bell T. & T. Co.
128 So. 2d 683 (Louisiana Court of Appeal, 1961)
Tidwell v. Meyer Bros.
107 So. 571 (Supreme Court of Louisiana, 1926)

Cite This Page — Counsel Stack

Bluebook (online)
86 So. 920, 148 La. 378, 1921 La. LEXIS 1299, Counsel Stack Legal Research, https://law.counselstack.com/opinion/chamberlain-v-norwood-la-1921.