Institute for Business Planning, Inc. v. Standard Life & Accident Insurance

242 F. Supp. 100, 1965 U.S. Dist. LEXIS 6244
CourtDistrict Court, W.D. Oklahoma
DecidedJune 10, 1965
DocketCiv. No. 9445
StatusPublished
Cited by2 cases

This text of 242 F. Supp. 100 (Institute for Business Planning, Inc. v. Standard Life & Accident Insurance) is published on Counsel Stack Legal Research, covering District Court, W.D. Oklahoma primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Institute for Business Planning, Inc. v. Standard Life & Accident Insurance, 242 F. Supp. 100, 1965 U.S. Dist. LEXIS 6244 (W.D. Okla. 1965).

Opinion

DAUGHERTY, District Judge.

In this diversity case plaintiff sues defendant for an alleged indebtedness represented by a series of purchase orders received by plaintiff for business planning services it produces and offers for sale. Legal fees are also sought by plaintiff. Plaintiff claims the balance due on said purchase orders is $28,106.26. These purchase orders were issued for the most part over a period from late 1959 to late 1960. Something over twenty purchase orders are involved. They were signed by one John D. Weller, for the defendant. He first signed as Assistant Vice President and later as Vice President. It appears that Weller was in the training department of defendant, along with two other co-equal employees, all of whom worked under the direct supervision of the President of defendant. Plaintiff asserts that these purchase orders are binding upon the defendant by virtue of the authority of Weller to bind the defendant. Plaintiff does not rely upon actual express authority from defendant to Weller to execute these purchase orders, but relies upon actual authority by implication, apparent or ostensible authority, ratification and estoppel.

The defendant denies liability on the purchase orders sued on for the reasons that Weller had no authority of any kind from defendant to execute the same, and further that Weller and one Raymond S. Smith, the salesman for plaintiff involved in all of these sales and purchase orders, were guilty of misconduct amounting to a breach of their fiduciary relationships and a fraud upon the defendant, and the plaintiff as well, to obtain unauthorized and improper personal benefits to themselves in connection with these purchase orders.

The Court allowed said Raymond S. Smith to intervene herein. Smith claims he is entitled to his prescribed commissions from plaintiff on all of the purchase orders involved herein. Smith also seeks to recover his legal fees. In allowing this intervention, the Court confined Smith to any commissions which may be due him only on the purchase orders involved herein and will not consider commissions due on any purchase orders which are extraneous to the plaintiff and defendant.

The plaintiff then filed a counterclaim against Smith asserting the overpayment of commissions by plaintiff to Smith and asking for judgment against Smith for such overpayment. At the trial the plaintiff and intervenor Smith stipulated to the amount of commissions due the intervenor on the purchase orders involved herein provided same are upheld, and also the amount of overpayments by plaintiff to the intervenor in event the intervenor is entitled to no commissions on the purchase orders here involved, this latter stipulated figure being $4,012.-87.

Under the above issues the Court received the evidence of the parties. It appears, and the Court finds, that Weller was in the training department of defendant, first with the title of Assistant Vice President and then Vice President, training. The evidence establishes that he did not have actual express authority from defendant or any officer of the defendant to specifically execute the several purchase orders involved herein. The Court finds from the evidence that no officer of defendant had knowledge of these purchase orders until sometime during the first part of 1961. The intervenor Smith was a salesman for the plaintiff and in obtaining the said purchase orders only contacted Weller with reference thereto in so far as the defendant is concerned. The evidence is in conflict about some minor contacts by Smith with other officials of defendant late in the matter (March, [104]*1041961) and with reference to an attempt to clarify the situation, but the Court finds that these contacts were of no significance with reference to the issues herein, and finds that in obtaining the purchase orders involved herein the said Smith only contacted Weller, as far as the defendant is concerned. It appears that all mail and shipments from plaintiff to defendant were sent to the attention of Weller. An official of plaintiff, a Vice President, made several trips to Oklahoma City with reference to the defendant's account but never on any of these trips contacted anyone representing the defendant except Weller. It further appears that the general duties of Weller involved holding training schools for selling agents and working with these selling agents of defendant in the field. The evidence discloses that the defendant or its selling agents had made a few small purchases from plaintiff over the years before the Weller purchase order transactions and the same had been promptly paid for. After the purchase orders signed by Weller were received by plaintiff the account of defendant reflecting the same became delinquent and past due. While the account was in past due status, these several trips to Oklahoma City were made by a Vice President of plaintiff, some of which were solely for the purpose of looking into this account. The plaintiff was seeking payment both before and at the time of these said trips. Many excuses for nonpayment were given plaintiff by its salesman Smith and by Weller. These involved alleged accounting difficulties, fixing credits on binders, and confusion about purchase orders and deliveries. At the first Oklahoma City meeting between the officer of plaintiff and Smith and Weller they arrived at a current balance due plaintiff and plaintiff agreed to forego collection for some material covered by outstanding purchase orders. This agreed balance due was in the amount of $3640.75 and was covered by several purchase orders. The plaintiff was insistent upon receiving the amount so agreed upon. Weller then falsely represented to the President of defendant that he wanted to purchase ten sets of material from plaintiff for ten of defendant’s selling agents representing a total cost of $3640.75, and that the ten selling agents of defendant would repay defendant for the same or one-half thereof. On this basis the President of defendant authorized the issuance of a check for $3640.75 to plaintiff, which was delivered to plaintiff by Weller. The amount of this check coincided with the aforementioned current balance arrived at by Smith and Weller with the official of the plaintiff at Oklahoma City. There was no purchase order issued by Weller representing the exact amount of this check or covering the said ten sets of plaintiff’s material. But there were a half dozen or more purchase orders in the hands of plaintiff at the time total-ling over $15,000.00. The plaintiff applied this check to several of these Weller purchase orders.

The evidence further discloses that Weller gave a $35,000.00 purchase order for defendant to the Wilkes Printing Company for binders suitable to receive the materials of plaintiff. Connected with this purchase order transaction and on the same date thereof Wilkes entered into a written agreement with Smith wherein Wilkes would deliver the binders to Smith and also the difference for each binder delivered between what Wilkes would ordinarily charge for the same and a much higher amount charged for same by Wilkes under the Weller purchase order to Wilkes. In other words, the prices specified in the said $35,000.00 purchase order to Wilkes were padded or inflated to the knowledge of. Smith, Weller and Wilkes. Neither plaintiff nor defendant had any knowledge of this side activity until it was discovered by chance by an officer of defendant in September, 1960. Weller had knowledge of this Wilkes-Smith agreement and himself advanced personal money to Wilkes which went to cover binders delivered by Wilkes to Smith and for advances of money made by Wilkes to Smith. As a further part of this transaction Smith [105]

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Bluebook (online)
242 F. Supp. 100, 1965 U.S. Dist. LEXIS 6244, Counsel Stack Legal Research, https://law.counselstack.com/opinion/institute-for-business-planning-inc-v-standard-life-accident-insurance-okwd-1965.