King Powder Co. v. Dillon

42 Colo. 316

• Court: Supreme Court of Colorado
• Decided: January 15, 1908
• Docket: No. 5340; No. 2986 C. A.
• Status: Published

Opinion

Mr. Justice Maxwell

delivered the opinion of the court:

This is an action to recover commissions plaintiff claims are due him, under a written contract which he made with the defendant company.

Prom a judgment in his favor is this appeal.

The action was commenced by filing a complaint November 13, 1900, which was in one count based upon an alleged exclusive agency for the sale of defendants powder in the state of Colorado.

June 15, 1903, two days before the commencement of the trial, by leave of court, plaintiff filed an amended complaint which was in two counts; the first based upon an alleged exclusive agency, as in the original complaint, and averred that by reason of the sales of powder made directly by defendant or its agents, within the state of Colorado, plaintiff was entitled to $12,012.50 as commissions upon the sales of such powder; the second count alleged that on or before the 6th day of October, 1899, plaintiff was appointed agent of the defendant, throughout the state of Colorado, for the sale of defendant’s powder, and that by the terms of said contract plaintiff was to receive 5 per cent, commission upon all sales of powder throughout the state of Colorado; that in the fall of 1899 certain contracting firms had undertaken to do the grading and construction of a certain line of railroad; that plaintiff entered into negotiations with such contractors for the sale to them of the powder of the defendant, and sold to one of the firms of contractors, some time during the month of November, 1899, about 1,200 kegs of such powder; that the Baxter & Kearns Mercantile Company, a copartnership consisting of George W. Baxter, George T. Kearns, R. Clough and William Anderson, desired to make arrangements with plaintiff to handle the powder of defendant, for the purpose of using the same in the construction of the above mentioned railroad, and entered into negotiations with plaintiff for that purpose, all of which was well known to the defendant, and that other contracting .firms, viz., Orman & Crook, Carlile, Dittmer & Weitbrec, Clough & Anderson (the latter being members of the Baxter & Kearns Mercantile Company) intended to use the powder of defendant company in their work upon said railroad; that William Anderson, a member of the firm of Clough & Anderson, and also of the Baxter & Kearns Mercantile Company, entered into negotiations and completed an arrangement with the defendant company, whereby defendant company was to sell and furnish directly to such contracting firms, or through the Mercantile Company, powder to he used in the construction of such railroad, at a sum less than the price which said defendant company had authorized and instructed plaintiff, as its agent, to sell and dispose of the same; that under such arrangement the defendant company, while the plaintiff was still its agent, between the 6th day - of October, 1899, and the 6th day of October, 1900, sold directly to said Mercantile Company, or through such company to the contractors above named, 155,000 kegs of powder ; that the defendant company well knew that plaintiff was negotiating with the Mercantile Company and the contractors for the sale of its powder; that by virtue of the contract existing between plaintiff and the defendant, plaintiff became and was entitled to a commission upon the sales of such powder in the sum of $12,012.50.

The defendant, by its answer, put in issue every material allegation of both counts of the complaint, and set forth in haec verba the written contract entered into by and between plaintiff and defendant on the 6th day of October, 1899, the first paragraph of which, so far as pertinent, is as follows:

“By this agreement, dated at Denver, Colorado, this 6th day of October, 1899, Thomas F. Dillon, Jr., of Denver, Colorado, becomes agent of The King Powder Company, of Cincinnati, Ohio, for the sale of its black powder at Denver, Colorado, and throughout Colorado.”

The above paragraph of the written contract is the only expression contained in the contract which in any manner defines the territorial character or extent of the agency of plaintiff.

Upon the trial plaintiff took the position that the contract was ambiguous and uncertain, and that oral testimony was admissible to explain the ambiguity and uncertainty.

Over the objection of defendant, a. mass of evidence, both oral and documentary, was introduced by plaintiff, in his effort to prove that he was defendant’s-exclusive agent in the state of Colorado.

This evidence consisted of correspondence between the parties preceding the execution of the contract, statements of the officers and agents of the company preceding and following the execution of the contract, testified to by plaintiff and another witness for plaintiff, and a mass of letters and telegrams exchanged between the parties after the contract had been executed. This testimony was allowed to. go to the jury upon the theory, as stated by the court, that it had a tendency to prove a contemporaneous construction placed upon the contract, by the parties themselves.

Plaintiff testified to efforts made by him to sell the defendant’s powder to the Mercantile Company, and the contractors, which evidence will be hereinafter referred to.

It also appeared in evidence that in the latter part of December, 1899, Anderson, of the contracting firm of Clough & Anderson, and of the Baxter & Kearns Mercantile Company, went to Cincinnati, Ohio, and entered into negotiations with the defendant company which-ultimately resulted in a contract between the defendant company and the Mercantile Company, by which the Mercantile Company was appointed agent of the powder company for the sale of its powder throughout the state of Colorado. Plaintiff had nothing to do with making this contract.

The contract entered into by the defendant with •the Mercantile Company was known as a “cash” contract, under which the powder company sold to the Mercantile Company its powder and charged the schedule price of the same to the Mercantile Company, allowing the company 10 per cent, commission for acting as its agent and 2 per cent, discount for cash, or within ten days, the Mercantile Company being at its own expense for the storage of the powder and guaranteeing all accounts for powder sold by it.

The contract entered into between plaintiff and defendant was .what is known as a “consignment” contract, by the terms of which the powder company, at its own expense, constructed and maintained magazines for the storage of its powder in and near Denver, the powder remaining its property until the same was sold; it assumed all risks for loss by fire and theft, and for the collection of accounts made by its agent Dillon,, no guarantee for the payment of such accounts by Dillon being contained therein, and a bond in the sum of $5,000.00 being given by Dillon to protect the powder company under the contract; Dillon being allowed 5 per cent, commission upon all sales of powder made by him.

It will thus be seen that the contracts entered into by the defendant with plaintiff and with the Mercantile Company were radically different in their terms.

The defendant company admitted that it sold to the Baxter & Kearns Mercantile Company, between the 6th of October, 1899, and the 6th of October, 1900, being the time covered by Dillon’s agency contract, upon which suit was brought, 32,200 kegs of powder at $1.55 per keg, the 5 per cent, commission on which amounted to $2,495.50.

Upon the close of plaintiff’s testimony, defendant moved a nonsuit, upon the ground, first, that the contract between plaintiff and defendant, which had been introduced in evidence, showed conclusively upon its face that plaintiff did not have an exclusive agency for the sale of defendant’s powder within the state of Colorado; and, second, that under the second count, the powder which was sold by the defendant to the Baxter & Kearns Mercantile Company was sold without the instrumentality or agency of plaintiff in any manner, and that plaintiff was not entitled to recover anything from the defendant.

This motion was granted as to the first count and overruled as to the second count.

The defendant introduced no evidence.

The verdict of the jury was in favor of plaintiff in the sum of $2,495.50, being 5 per cent, commission upon the sale of 32,200 kegs of powder at $1.55 per keg.

Many errors are assigned upon the rulings of the court during the trial, upon the introduction and rejection of evidence, the instructions given to the jury, and requested instructions refused.

In the view which we take of this case, we believe that the same should be disposed of upon the errors assigned upon the ruling of the court refusing to grant a nonsuit upon the second count.

There are certain rules and legal principles which may be considered well settled in this state, governing the rights of a broker to commissions.

In the absence of a 'contract to the contrary, some of those principles may be stated as follows:

The broker will be entitled to commissions when he has produced a customer ready, able and willing to purchase upon the terms and at the price stipulated by the principal. The broker must be the efficient agent or procuring cause of the1 sale. The broker will be entitled to his commissions when he has produced a customer ready, able and willing to purchase upon the terms and at the price stipulated, although consummation of the sale be prevented by failure or refusal of the principal to proceed therewith, through defect of title, or for other cause, and the broker may recover commissions when the sale is prevented by the wrongful act of the principal.— Babcock v. Merritt, 1 Colo. App. 84; Cole v. Thornburg, 4 Colo. App. 95; Colburn v. Seymour, 32 Colo. 430, and cases cited; Fox v. Denargo Land Co., 37 Colo. 203; Ross v. Smiley, 18 Colo. App. 204.

It is well settled that it is the duty of the court to grant a nonsuit when plaintiff’s evidence does not warrant a verdict in bis favor.

Counsel for appellee in his brief says that plaintiff does not claim in the second count an exclusive agency, but alleges a contract by wbicb be was to receive 5 per cent, commission on sales of black powder in Colorado, and alleges facts by wbicb it appears that plaintiff was prevented from earning sncb commission by tbe wrongful acts of tbe company in interfering witb and selling to customers of plaintiff at a less rate than be was authorized to sell at, thereby preventing plaintiff from selling the powder wbicb otherwise be would have sold.

It will be noticed that in tbe above statement of appellee’s position, tbe commission to wbicb plaintiff claims be was entitled was not limited to tbe sales of black powder in Colorado made by plaintiff, but included all sales of black powder, and that this is tbe position of plaintiff here is manifest by tbe strenuous efforts made by counsel in bis brief to- sustain tbe contention that notwithstanding the ruling of tbe court below, to the effect that tbe contract did not grant an exclusive agency, still counsel claims such contract did grant an exclusive agency.

This conclusion is borne out by this allegation of plaintiff in tbe second count of bis complaint:

‘ ‘ That by tbe terms of such agreement and contract, tbe plaintiff was to receive 5' per cent, commission upon all sales of black or blasting powder # * throughout tbe state of Colorado.”

As we read the authorities and apply them to tbe facts in this case, in order to recover it was incumbent upon plaintiff to prove:

1. That be was acting under a contract wbicb gave him an exclusive agency, witb a right to commissions whether tbe sales were made by himself, or directly or indirectly by tbe defendant.

2. He must have bad a customer ready, able and willing to buy, and must have been the' procuring cause of tbe sale; or, having such customer, be must have been prevented from making the sale by the wrongful act of the defendant.

1. Without hesitation we agree with the ruling of the trial court to the effect that the written contract relied upon by plaintiff in this case did not confer upon him an exclusive agency; and we may say, further, that the evidence introduced by plaintiff himself establishes the fact that plaintiff must have known at the time he entered into the contract that he did not gain thereby an exclusive agency, for the reason that during negotiations which led up to the making of the contract, he insisted that the word “exclusive” be inserted in the contract, which was refused by the company, and the contract as written above was entered into.

2. There is nothing whatever in the record to show that plaintiff had anything whatever to do with the making of the contract between the powder company and the Baxter & Kearns Mercantile Company, and having concluded that the contract between plaintiff and defendant was not an exclusive agency contract, there was nothing in the relation between plaintiff and defendant which prevented defendant from entering into a contract with the Baxter & Kearns Mercantile Company, upon such terms as it might see fit. Conceding that the sales made by the Baxter & Kearns Mercantile Company to the railroad contractors, were made directly by the defendant company to the contractors, the evidence shows beyond controversy that the Baxter & Kearns Mercantile Company, prior to the time it entered into the contract with the powder company, had been selling the contractors Laflin & Band powder, so that if the plaintiff had been negotiating with the contractors for' the sale of the defendant’s powder to them, or had made sales of such powder to them, the possibility of plaintiff’s making sales to the contractors was foreclosed by tbe fact that tbe Mercantile Company bad secnred this trade and tbe plaintiff bad lost tbe same; and tbis, as before stated, before tbe Mercantile Company bad entered into a contract with tbe powder company.

"While tbe complaint alleges that plaintiff was negotiating with tbe contractors for a sale of defendant’s powder, and tbe plaintiff so testified, other testimony introduced by plaintiff shows beyond question that all that plaintiff did was to solicit tbe trade, but bad secured no definite or binding promises or agreements from any of tbe contractors that they would buy their powder of him, nor bad be sold to any of tbe contractors, excepting Clough & Anderson, any of defendant’s powder.

To bold that an agent by simply soliciting trade which results in no definite business arrangements, no binding contracts, entitles him to commissions on sales made by bis principal or other agents, to tbe person or persons solicited, in tbe absence of an exclusive agency, would be to place it in tbe power of an agent to effectually prevent bis principal from ever selling any goods to any persons desiring to purchase tbe same or who were in tbe trade, by the agent simply addressing circulars or personal letters or making personal calls upon such persons. We know of no principle of law which would sustain any such position.

From a very careful examination of tbe record in tbis case we are of the opinion that there is nothing whatever in tbe evidence to sustain tbe contention that plaintiff was in any sense of tbe word tbe efficient agent or procuring cause which resulted in tbe sale of any of tbe powder upon which be now claims a commission.

Plaintiff alleges, in bis complaint, that under the contract made between tbe powder company and tbe Mercantile Company, the Mercantile Company was authorized to sell powder* at a price less than the price which the defendant company authorized plaintiff to sell for.

The contract between the defendant company and the Mercantile Company, introduced in- evidence, contains a schedule of prices at which the Mercantile Company was authorized to sell the powdfer of the defendant, which schedule is identical with the schedule of prices contained in the contract between the defendant and the plaintiff; and the undisputed evidence of all the witnesses who testified upon this point, is to the effect that no powder whatever — not a single keg of powder — was sold by the Mercantile Company to any one of the contractors to whom it sold powder, or to any one else, at less than the schedule prices, so that we are forced to the conclusion that this contention of plaintiff cannot be maintained.

But, it is said by counsel for appellee that the fact that the powder company allowed the Mercantile Company a commission of 10 per cent, as its agent and 2 per cent, discount for cash or within ten days, which facts are undisputed, supports his contention in this behalf.

When we take into consideration the fact that under the contract with the Mercantile Company, the defendant incurred no risk on account of loss by fire or theft, and no expense on account of storage, and that all sales were guaranteed, all of which risks and expenses were assumed by the defendant under the contract with plaintiff, and that one contract was a sales contract and the other contract a consignment contract, we are led to believe that the difference in commissions was amply justified by the difference in the character of the contracts, and in the absence of any testimony to show that any sales were made to any of the persons whom plaintiff claims as his customers at a less price than the schedule of prices at which plaintiff was authorized to sell powder, we conclude that this contention of plaintiff is untenable.

From a careful review of all the testimony in the case we believe that plaintiff utterly failed to prove a cause of action, under either the first or second count of the complaint, and that it was the duty of the court to have granted the motion for a nonsuit, for which reason the judgment will be reversed.

Reversed.

Chief Justice Steele and Mr. Justice Helm: concurring.