Shapleigh Hardware Co. v. Enterprise Foundry Co.

305 Ill. App. 180
CourtAppellate Court of Illinois
DecidedApril 23, 1940
StatusPublished
Cited by8 cases

This text of 305 Ill. App. 180 (Shapleigh Hardware Co. v. Enterprise Foundry Co.) is published on Counsel Stack Legal Research, covering Appellate Court of Illinois primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Shapleigh Hardware Co. v. Enterprise Foundry Co., 305 Ill. App. 180 (Ill. Ct. App. 1940).

Opinion

Mr. Presiding Justice Stone

delivered the opinion of the court.

This is an action at law by Shapleigh Hardware Company, a corporation engaged in the wholesale hardware business in St. Louis, Missouri, against Enterprise Foundry Company, a corporation, operating a foundry and stove plant in Belleville, Illinois. The pleadings under which the case was tried consisted of amended complaint, answer and reply, bill of particulars of plaintiff and a counterclaim of defendant and answer of the plaintiff thereto. A trial before the court without a jury resulted in a finding of the issues for the plaintiff and judgment against the defendant for $11,632.32, and appeal therefrom was taken to this court.

Defendant for many years was engaged in the manufacture of stoves and stove parts in Belleville, Illinois, the stock being owned by A. O. Spoeneman and his brother and sister, A. 0. Spoeneman owning 300 shares out of a total of 700 shares. Prior to 1926, the said Spoeneman had no interest in, or connection with the Belleville Stove and Range Company. During that year banking interests in Belleville, who were creditors of the Belleville Stove and Range Company, requested the said Spoeneman to make a survey of the condition of that company. He did so and found its losses heavy. In 1928 or 1929 he began to buy stock in the Belleville Stove and Range Company, and by the end of 1929 or 1930 had acquired the controlling interest in that company, having 504 shares out of a total of 1000.

In 1926, the Belleville Stove and Range Company closed its foundry and entered into a contract for a term of eight years with defendant, in which contract defendant agreed to make castings for the Belleville Stove and Range Company. In July, 1932, the Belle-ville Stove and Range Company was insolvent, and among others, was indebted to the defendant, to A. O. Spoeneman and William Lugge, all of which indebtedness was unsecured.

The company then made a written assignment to William Lugge, one of its stockholders, as trustee, of all of its personal property, not pledged in a deed of trust heretofore given, covering the real estate; which personal property consisted of bills receivable, manufactured merchandise, and merchandise in process of manufacture, raw materials, and other personal effects. By the terms of this assignment Lugge, as trustee, was given full authority to convert all of said property so assigned to him into money and apply the proceeds therefrom, to two banks who were creditors, and the defendant company, and the surplus if any, was to be applied to the indebtedness of A. O. Spoeneman, H. E. Kaufman and William Lugge. The trustee thereupon took charge of all of this property so assigned to him and proceeded to sell same. After the execution of the assignment, he continued his office at the office of the Belleville Stove and Bange Company, for only two or three months and then moved his office to the plant of the defendant, where he remained until the liquidation was completed.

In July, 1932, defendant acquired the trade name and good will of the Belleville Stove and Bange Company. The trustee, Lugge, while liquidating and disposing of the trust property assigned to him did not operate the foundry or any plant of the Belleville Stove and Bange Company, did not employ any labor, other than a stenographer, paid no wages, paid no bills or expenses of any kind and had no checking account. His salary and that of his stenographer were paid by the defendant, as were his office expenses. The evidence indicates that the property assigned to Lugge was disposed of and converted into cash in the following manner: when orders for stoves or stove parts were received by him for the Belleville Stove and Bange Company such orders were turned over to and filled by the defendant, the defendant in so doing using such material as Lugge had on hand as trustee. Prior to August, 1933, invoices for these orders were sent to customers on invoice blanks of the Belleville Stove and Bange Company, on each of which was written at the bottom in red ink: “Make all checks payable to Enterprise Foundry Company; also send remittances to them at Belleville, Illinois.” Invoices sent to plaintiff from September 1933, to the end of that year were on the same forms, except that the name “Belleville Stove and Bange Company” had been scratched out and there had been printed over that name “Stove Division, Enterprise Foundry Company.”

These preliminary facts outlining the relationship of the Belleville Stove and Bange Company, and the Enterprise Foundry Company, defendant, and those individuals interested in both companies, are given in detail, because of the theory of the plaintiff and the ultimate finding by the trial court that the defendant was the undisclosed principal of the Belleville Stove and Bange Company in the contract made by the latter with the plaintiff, with which finding we are inclined to concur.

For many years prior to and including the year 1933, plaintiff had done business with the Belleville Stove and Bange Company and from time to time placed with it orders for merchandise. It had been the custom of the Belleville Stove and Bange Company to send to plaintiff and other of its customers, immediately after the first of the year, a price list containing a complete list of the articles it desired to sell and the prices for same, which were to remain in force during that year, unless notified to the contrary. This list, was mailed by Mr. Lugge, as trustee, to the plaintiff on February 25, 1933, in a letter to which he signed the name of the Belleville Stove and Bange Compnay. Among those items listed was the stove involved in this case, priced at $5.65 plus $.25 for crating.

From time to time circulars received from the United States government about business, would be sent by Lugge to various firms and on August 25,1933, he sent to plaintiff an invitation from the war department for bidding on furnishing 3,500 box-type stoves required, for use by the Civilian Conservation Corps. With the blanks Lugge inclosed a letter in the name of the Belle-ville Stove and Bange Company requesting plaintiff to put in its bid and stating that the order would be taken care of promptly, if obtained, by plaintiff. This letter was received by George McNutt, assistant buyer of plaintiff, who immediately called Lugge on the telephone and was advised by him that they would be able to. make delivery of the stoves in 30 days and at the price, stating at that time that Mr. Spoeneman was sitting at his desk.

Following this conversation plaintiff, on August 28, 1933, submitted its bid to the United States government to furnish 3,500 stoves of the kind desired for the sum of $21,315 to be delivered F. O. B. Belleville, Illinois, within 30 days after receipt of notice of the award. On September 7, 1933, plaintiff received from the government a telegram advising that its offer to furnish the stoves had been accepted. Thereupon plaintiff entered into a written contract with the United States government, date of September 8,1933, to furnish said stoves within 30 days from that date which contract-provided for a penalty of $1 per stove for each day’s delay in delivery after said 30-day period. This word was telephoned by plaintiff either to Mr. Lugge or Mr. Spoeneman and on September 8th, both of these men went to the office of plaintiff at St. Louis. There Mr. C. E. Grill who was the buyer for the plaintiff showed the telegram of award to Mr. Spoeneman and Mr.

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Bluebook (online)
305 Ill. App. 180, Counsel Stack Legal Research, https://law.counselstack.com/opinion/shapleigh-hardware-co-v-enterprise-foundry-co-illappct-1940.