Kelvinator Sales Corp. v. Goebel

79 F.2d 741, 1935 U.S. App. LEXIS 4256
CourtCourt of Appeals for the Fifth Circuit
DecidedNovember 13, 1935
DocketNo. 7782
StatusPublished

This text of 79 F.2d 741 (Kelvinator Sales Corp. v. Goebel) is published on Counsel Stack Legal Research, covering Court of Appeals for the Fifth Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Kelvinator Sales Corp. v. Goebel, 79 F.2d 741, 1935 U.S. App. LEXIS 4256 (5th Cir. 1935).

Opinion

HUTCHESON, Circuit Judge.

This suit was brought by appellee as assignee of one Daubs, appellant’s Georgia distributor, to recover sums claimed to be due by it because of its having canceled Daubs’ contract. Tried to a jury, it resulted in a verdict and judgment for $3,000.

Appellant relies for reversal on two claimed errors; the allowance of a trial amendment, and the failure of the trial court to peremptorily instruct out of the case an item of $4,-802.74. . This item is the amount claimed as due on account of appellant’s failure to repurchase Kelvinator products left in the distributor’s hands when his contract was canceled.

Appellant as first party, and Daubs as second party, in June, 1929, made a contract consisting of a base agreement, and supplements, for the distribution in Georgia of appellant’s merchandise. The base agreement, standing alone, gave each party, without limitation and without liability to the other, the right to cancel the agreement upon notice. But it did not stand alone. By one of the supplements to it1 appellant imposed limitations on its right of cancellation by in effect agreeing that, if it canceled unless for the causes stated in the supplement, it would take back at current distributor’s prices; the stock Daubs had on hand. In 1931, after considerable discussion and controversy throughout the fall of 1930, the contract with Daubs was canceled and a new distributor was appointed. At no time in the course of the discussions and actions preceding and following the cancellation did appellant claim that Daubs had either failed “to fulfill all distributor functions,” or that his. “quarterly purchases of Kelvinator products” had fallen short. It did not, on that score, refuse to purchase from Daubs “all Kelvinator products of current issue and in merchandisable condition,” as provided in the supplemental agreement, on his hands at the time of cancellation. On the contrary, it purchased a considerable part of what he had on hand, refusing the balance only on the ground that ■they were not products “of current issue and in merchandisable condition.”

Daubs, without a distributor’s. contract, unable to dispose of the refused stock at current distributor’s prices, sold it out from time to time at what he claimed was .the market value, and assigned all his claims, including that on this item, to appellee.

As first brought, the petition set up appellant’s agreement to repurchase the mcr- ' chandise on hand, its breach of that agreement, and as to this item $7,325.85 as the value at current distributor’s prices of the merchandise on hand. Appellant, answering, did not deny liability under the repurchase agreement on the ground that it had canceled the contract for cause. It denied that it had canceled the contract, and pleaded that Daubs had. Thereafter, plaintiff, by amendment as to the items of merchandise with which this appeal is concerned, alleged that they had all been sold and that appellee had received for them a total of $2,622.16. The case was tried on these pleadings, exqept that appellee was allowed, after the conclusion of the argument of counsel, to file a trial amendment.2 This was allowed over the objection of appellant that -appellee had elected, as the remedy upon which to base his suit, to recover for the difference be- - tween the contract price and the price of resale, and that he could not now by amendment change the basis of his recovery. It further objected that there was no evidence in the record to sustain the allegations of the amendment. In addition to the accounting evidence as to debits and credits between appellant and its distributor, a great deal of evidence was offered as to who had canceled the contract, and as to settlements which each side claimed [743]*743had been made. In addition, upon appellee’s contention that Daubs had not understood the supplemental agreement as requiring him to make any specified number of purchases, and that the provision in it, “and whose quarterly purchases of Kelvinator products shall equal or exceed the distributing territory’s proportion of the National Sales volume,” was ambiguous, the court permitted both sides to prove the negotiations which had led up to its making, and what had been said between them in connection with it. All of this testimony, along with that of one of appellant’s accountants as to what “the distributing territory’s proportion of the National Sales volume” was, the court sent to the jury, under instructions not excepted to, for them to determine what the supplemental contract was and whether there had been a breach of it.

In addition to these issues, the court submitted, still without exception, the issue of who had in fact canceled the contract, what amount of Kelvinator products of “current issue and merchandisable condition” in distributor’s hands at ,the time of cancellation appellant had refused to take, and whether the net amount of $4,-802.74, claimed on account of this purchase agreement item, representated the difference between the current distributor prices for these items, and their market value at the time ol the refusal to take them. None of these charges were excepted to. Appellant stood in the court below, and stands here, as to this item, on its exception to the allowance of the trial amendment, and that to the refusal of the requested charges to withdraw this whole item from the jury.

Its first point on the amendment is based upon the claim that appellee, by pleading as he did before the amendment that the distributor’s prices for the goods appellant did not take back aggregated $7,-424,90, that he had sold them for $2,622.16, leaving a balance due of $4,802.74, had elected the second remedy provided for by a seller by section 4131, Georgia Civil Code 1910, a,nd could not by amendment change his position.

We do not think this point well taken. If the suit be treated as a suit under section 4131 by a seller against a defaulting buyer, wc think the Georgia decisions make it plain that it is not what the seller pleads lie did, but what he actually did, that constitutes the election, and where, as here, the method of selling as agent for the vendee was neither actually selected nor pleaded, the mere allegation that the goods had been sold did not at all prevent amendment of the pleadings to recover the difference between the contract price and the market price at the time and place of breach. Harris & Co. v. P. E. Vallee & Co., 29 Ga. App. 769, 116 S. E. 642; Rowland Co. v. H. V. Kell Co., 27 Ga. App. 107, 107 S. E. 602. Besides, we do not think this is a case of a seller suing a defaulting purchaser. The contract, made the basis of this suit, in effect declared that if appellant canceled the contract it would take back its goods. It was the damage from the breach of this agreement, the agreement to take back at a price, for which appellee sued. For that breach the true measure of recovery was such amounts as were necessary to make the distributor whole as to the goods which he had purchased from the company in reliance upon its agreement to take them off his hands in case it canceled. In such a suit appellant cannot complain if, without charging it for costs of carrying, storage, and costs of sale, the plaintiff, who has in a good-faith effort to minimize his damages sold the goods left on his hands for their market value, claims reimbursement only for the difference between the cost of the goods to him and what he has received for their resale.

Equally without merit is the second point made against the amendment, that it did not conform to the proof.

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Bluebook (online)
79 F.2d 741, 1935 U.S. App. LEXIS 4256, Counsel Stack Legal Research, https://law.counselstack.com/opinion/kelvinator-sales-corp-v-goebel-ca5-1935.