Thompson v. Miller

100 N.W.2d 410, 251 Iowa 324, 1960 Iowa Sup. LEXIS 599
CourtSupreme Court of Iowa
DecidedJanuary 12, 1960
Docket49870
StatusPublished
Cited by9 cases

This text of 100 N.W.2d 410 (Thompson v. Miller) is published on Counsel Stack Legal Research, covering Supreme Court of Iowa primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Thompson v. Miller, 100 N.W.2d 410, 251 Iowa 324, 1960 Iowa Sup. LEXIS 599 (iowa 1960).

Opinion

Garrett, J.

This is an action to recover damages for breach of contract relating to the manufacture and sale of two simple unpatented articles known as hitch pins and lynch pins. The plaintiff, Robert G. Thompson, primarily a salesman, having learned of the need and possible market for a pin or device for use in connecting certain farm implements, induced the defendant Don L. Miller to enter into a written agreement, later verbally modified, pursuant to which the pins were manufactured by Miller and sold by Thompson over a period of years.

The original contract was embodied in Exhibit “A”, a letter from Miller to Thompson, as follows:

“We agree to manufacture these pins in sizes necessary for the market at cost-plus 10% profit for the Miller Products Company Manufacturing Department. Now, when these pins are sold they will be considered as an item sold by Don Miller’s Selling Department and Bob Thompson is to receive % of the money taken in from the sale of the pins after the Miller Products Company have been paid for manufacturing them.
“It is understood this agreement applies to every hitch pin made by Miller Products Company, regardless of how, or who it is sold to.”

*326 To the above letter the plaintiff replied: “Many thanks for sending me the working agreement on the hitch pin. I think it is very fair indeed and I believe we will sell lots of the pins.”

Because of accounting problems the above agreement was later verbally modified to provide for payment on a commission basis of five cents or more per pin depending on size. Miller in his answer alleged:

“That during the years said defendants manufactured hitch pins the basis of paying commissions to plaintiff was altered and reduced to the following written terms: ‘Mr. Thompson gets .05$! each as a commission on all hitch pins which are sold and delivered and collected for by the Miller Products Co. There are also some specific numbers in the setup which he receives 10$5 commission and on the large tractor type hitch pin, he receives more than 10$!. * * ® We assume no responsibility in connection with selling hitch pins. All advertising shall be equally divided between the Miller Products Company and Mr. Thompson.’ ”

In 1956 Miller sold the entire business, plant and equipment to defendant James H. McFarland who refused to recognize any obligation to plaintiff or to enter into any contract satisfactory to him. The latter, thus being without employment or income from the hitch pin or lynch pin business he had built up, brought suit against both defendants for damages.

Trial resulted in a jury verdict against each defendant for $12,500. Motions for directed verdict and for judgment notwithstanding verdict were overruled and motions for a new trial were sustained. All parties appealed from the rulings adverse to them.

I. It is Thompson’s contention that by the terms of his contract with Miller he was permanently employed and therefore entitled to a commission on every hitch pin and lynch pin sold by Miller or Miller Products Company, under which name Miller operated, or by McFarland since he purchased the business.

It is undisputed plaintiff was paid in full to date of the sale, June 20, 1956. Miller claims the sale of the business terminated his contract with plaintiff. It is unquestioned that over the 10-year period of plaintiff’s employment he built up a substantial hitch pin business with jobbers who continued to- send in orders after McFarland took over, and presumably additional sales will *327 result from the business built up by plaintiff who claims his employment was coupled with .an interest since he not only paid his own expenses while traveling and making sales but paid half of the advertising and other sales expense.

The question is then: does the contract involved provide permanent or lifetime employment to plaintiff and is it binding on McFarland as purchaser of the business? "What did the parties intend when the contract was entered into? Was a lifetime contract then within the contemplation of the parties?

“ ‘A contract for life will be upheld only where the intention, that the contract’s duration is for life, is clearly expressed in unequivocal terms.’ ” Lewis v. Minnesota Mutual Life Ins. Co., 240 Iowa 1249, 1257, 37 N.W.2d 316, 321; Paisley v. Lucas, 346 Mo. 827, 842, 843, 143 S.W.2d 262, 270, 271.

In the instant case the words “lifetime” and “for life” were not claimed to have been used but the contract does provide that it applies “to every hitch pin made by Miller Products Company, regardless of how, or who it is sold to”, and Miller testified the agreement to pay on a commission basis was permanent and that the contract would follow the business. In this case more is involved than mere services. Plaintiff paid half of the advertising and sales costs and all of his traveling expenses. He thus had a capital as well as a labor investment.

The evidence discloses, however, that for a considerable time before McFarland took over the business, Thompson was very inactive, doing nothing to stimulate the business and making no sales. Miller expressed displeasure at that situation in a letter to Thompson in these words:

“In reviewing the activity of hitch pins over the past 2% years I find a very discouraging situation. * * * In fact you have done practically nothing to stimulate or create any new business spending the winters in Florida and a good deal of the balance of the time at Clear Lake. Progressively your activity has become less and less until this year when you have practically ceased all operation toward selling. Because we started out to help you sell hitch pins several years ago does not mean that we are obligated to continue with you on a commission basis forever.”

*328 It is reasonable to infer that sncb disinterest on Thompson’s part was not in Miller’s mind when the terms of the contract were agreed upon.

On the other hand, the hitch pin enterprise was new. It was plaintiff’s idea and uncertain as- to its future. The parties may have considered it in the nature of a joint adventure ¿ato which plaintiff was putting cash as well as his services. The original plan was to divide the profits. Plaintiff testified that in 1953 “I asked Mr. Miller * * * if he remembered our original contract on the 10% cost plus, whether the acceptance I gave him at that time on the five cents a pin, in his mind became a permanent arrangement. In mine it hadn’t. He said yes, that was to be permanent. I said, ‘That is fine, that answers question number one.’ And that became a permanent arrangement in my mind as it had been in his ever since 1945.”

It appears plaintiff was not too sure of his contractual arrangement in 1953.

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Bluebook (online)
100 N.W.2d 410, 251 Iowa 324, 1960 Iowa Sup. LEXIS 599, Counsel Stack Legal Research, https://law.counselstack.com/opinion/thompson-v-miller-iowa-1960.