Court Opinion

ID: 9581432
Source: CourtListenerOpinion
Date Created: 2023-08-21 22:14:56.232328+00
Date Added: 2024-06-11T13:36:57.089428
License: Public Domain

Gordon, J.,
Concurring in Result
The majority opinion reaffirms a rule that originated more than sixty years ago with Stonega Coal Co. v. Louisville & Nashville R.R. *469Co., 106 Va. 223, 55 S. E. 551 (1906). Believing that rule can be supported only because it has been repeated in the past, I serve notice that I will not consider myself bound by it in the future. And Í hope this opinion may free other members of the Court from any future obligation to adhere to that rule.
In September 1960, the Plaskitts and Black Diamond made a contract by which Black Diamond appointed the Plaskitts its exclusive sales agents for piggy-back trailers and,, as consideration for sales commissions, the Plaskitts agreed to use their best efforts to develop markets and to promote and obtain sales of such trailers.1 During the next two years the Plaskitts devoted their energies and spent their moneys to carry out their commitment under the contract, and succeeded in “building up a large and profitable business” for Black Diamond. In September 1962 Black Diamond notified the Plaskitts that the contract would be terminated on December 31, 1962. The commissions paid by Black Diamond to the Plaskitts “did not even cover the amount of the expenses the Plaskitts incurred on [Black Diamond’s] behalf in reliance upon [the] agreement”.
Stonega recognized a rule that should be applied in this case: “[W]hen a contract calls for the rendition of services, if it is so far incomplete as that the period of its intended duration cannot be determined by a fair inference from its provisions either party is ordinarily at liberty to terminate it at will on giving reasonable notice of his intention to do so.” 106 Va. at 226, 55 S.E. at 552. Applying that rule to this case, we should reverse the judgment because the trier of fact could reasonably infer from the contract and the circumstances that the parties intended that the contract should continue in effect for a reasonable period of time.
. But other language in Stonega and language in a subsequent Virginia case2 support the conclusion that this Court has committed itself *470to a quite different rule: When a contract specifies no time for its duration, no inference can be drawn that the parties intended the contract to remain in force for a reasonable time. And that rule dictates affirmance of this case. So I do not dissent, but only because bench and bar may have relied on that rule as the settled Virginia law.
But I believe the Court should, at the next opportunity, repudiate the rule that when a contract for the rendition of services specifies no period for its duration, no inference as to duration can be drawn. Authority and reason support its repudiation and the substitution of a different rule, as shown by the following excerpts from 9 Williston, Contracts § 1017A (3d ed. 1967) :3
.“Modern industry has increasingly resorted to two general types of exclusive contracts for the distribution of its products, namely, the exclusive sales agency contract and the exclusive sales and distribution contract, or a combination of these.
“Although there is a marked distinction between a true sales agency contract and a sales and distribution contract for many purposes, yet for the purpose of determining the duration of the relation between the parties and the power to terminate it, they are so substantially similar that cases of either type are authoritative on this point for the other.4
“Any one of these types of agreement, however, since they are bilateral in nature, imposes weighty obligations on both sides during its continuance.
*471* #
“Usually, in these situations, the agent or buyer, as the case may be, is doing more than merely offering to render services or to pay the price for the goods. It is at least expected and understood, and, in fact, frequently expressly provided in the contract, that he is to make a substantial investment and to build up or maintain a business establishment for the distribution of the manufacturer’s products. On the other hand, the manufacturer intrusts the fate of his product in the defined territory exclusively to this agent or distributor, and, in thus forbearing to resort to other sources of distribution in that locality, he gives up a valuable right. The validity of such exclusive sales agencies or of such exclusive sales and distribution contracts during their continuance is obvious. As executory agreements,, they are binding if they satisfy the requisites of manifested mutual assent and consideration.
“Such difficulty as exists in protecting the agent or distributor from the hardship of summary termination is due either (1) to the actual or supposed lack of any definite period fixed in the manufacturer’s promise, or (2) to the actual or supposed ability of the agent or distributor to terminate the arrangement at will, or both.
“To meet these objections, it is usually necessary to find an express or implied definition of the period of the manufacturer’s obligation, and either a similar definition of the agent’s or distributor’s period of undertaking, or else that the agreement fairly interpreted gives the agent or distributor an enforceable option to hold the manufacturer for a fixed or reasonable period of time while remaining free himself to terminate the relationship at will.
“These cases as they have come before the courts present several variations with respect to termination.
“ * * * [The author then discusses (1) agreements where a definite time is fixed on both sides, and (2) agreements where a determinable time is fixed on one side only.]
“(3) Where the agreement contains no provision whatever for its termination.
“Quite properly, this has frequently been held an enforceable executory contract, binding upon each party for a reasonable time:5
*472“ ‘The contract of agency being indefinite as to the time it was to run, what was it duration? Where the continuation of a contract is without definite duration the law implies a reasonable time, and what is a reasonable time is to be determined from the general nature and circumstances of the case. When the obligor has expended a substantial sum of money or value or has substantially rearranged his business, as in this case, preparatory to engaging upon the terms of agreement for the benefit of obligee, he ought, through fairness, to have a reasonable time and notice of the cancellation of the contract in order that he might have a reasonable opportunity to put his house in order . . . .’ [quoting from Elson & Co. v. Beselin & Son, 116 Neb. 729, 218 N. W. 753 (1928).]
“It is the settled law of agency that if the agent or employee furnishes a consideration in addition to his mere services, he is deemed to have purchased the employment for at least a reasonable period where the duration of the employment is not otherwise defined.” 6
This Court in other cases, where the contracts in issue contained no express provision respecting material terms, recognized that those terms might be inferred from the language of the contract and the surrounding circumstances. For example, where a buyer agreed to purchase his requirements during a fixed period, but made no express promise to continue in business during that period, we held that such *473a promise could be inferred from the agreement and surrounding circumstances. Humble Oil v. Cox, 207 Va. 197, 148 S.E.2d 756 (1966); Wiseman v. Dennis, 156 Va. 431, 157 S.E. 716 (1931).
Yet this Court balks at permitting the inference that the parties to an exclusive sales contract, which fixed no period for its duration, intend the contract to remain in force for a reasonable period. Reason and the almost unanimous authority support such an inference.7

 The facts recited in this paragraph were alleged by the Plaskitts and, therefore, must be accepted since the trial court sustained Black Diamond’s demurrer.

 “The question is not what would have been a reasonable contract, nor what it may be supposed or conjectured the contracting parties contemplated or anticipated when the contract was entered into; but what did they agree to as evidenced by their contract. * * * The parties to the contract seem to have left out of consideration its duration, or at least failed to make it the subject of contract obligation.” Stonega Coal Co. v. Louisville & Nashville R.R. Co., supra at 227, 55 S.E. at 552.
“As to the written contract, it will be observed that there is nothing said as to the time during which it should continue. There is nothing in the circumstances to determine its duration. Either party was, therefore, at liberty to terminate it at will, on giving reasonable notice of the intention to do so.” Stutzman v. Nash & Son, 189 Va. 438, 446, 53 S.E. 2d 45, 49 (1949)
On the other hand, neither Stonega nor Stutzman should control this case. The
*470issue in Stonega was whether the contract should continue perpetually, not whether it should continue for a reasonable time. In Stutzman, the plaintiff-manufacturer brought suit against the sales agent for breach of an exclusive sales contract. The defendant-agent alleged that the manufacturer had failed to carry out its obligation to supply sufficient goods to meet the demands of the trade, which the agent had built up by expending substantial moneys; that, in fact, the manufacturer had abandoned the manufacture of the product; and that it had become necessary for the agent to obtain a supply of goods from other sources. This Court upheld the chancellor’s finding for the defendant.
The majority opinion relies on another Virginia case, Town of Vinton v. City of Roanoke, 195 Va. 881, 80 S.E.2d 608 (1954). Like Stonega,- the issue in Town of Vinton was whether the contract should continue perpetually, not whether it should continue for a reasonable time.

 See also General Tire & Rubber Co. v. Distributors, Inc., 253 N.C. 459, 117 S.E.2d 479 (1960); Erskine v. Chevrolet Motor Co., 185 N.C. 479, 117 S.E. 706 (1923); 1 Corbin, Contracts § 96 at 413 (1963).

 As authority for the statement that cases involving sales and distribution contracts are authoritative in cases involving sales agency contracts, Williston cites Foster-Porter Enterprises, Inc. v. DeMare, 198 Md. 20, 81 A.2d 325 (1951); Superior Concrete Accessories, Inc. v. Kemper, 284 S.W. 2d 482 (Mo. 1955).

 As authority for the statement in the text, Williston cites: Willcox & Gibbs Sewing Machine Co. v. Ewing, 141 U.S. 627, 35 L.ed. 882, 12 S.Ct. 94 (1891); Abrams v. Keith Co., 30 F.2d 90 (3rd Cir. 1929); Moon Motor Car Co. of N.Y. v. Moon Motor Car Co., 29 F.2d 3 (2d Cir. 1928); Boehm v. Spreckels, 183 Cal. 239, 191 P.5 (1920); Staroske v. Pulitzer Pub. Co., 235 Mo. 67, 138 S.W. 36 (1911); Dunn v. Birmingham Stove & Range Co., 170 Okla. 452, 44 P.2d 88 (1935); Price v. Confair, 366 Pa. 538, *47279 A.2d 224 (1951); 32 ALR 209, 235; Restatement of Agency § 442, comment c at 1031 (1933); Restatement of Contracts §§ 45-47 (1932).

 As authority for the statement in the text, Williston cites: Allied Equipment Co. Inc. v. Weber Engineered Products, Inc., 237 F.2d 879 (4th Cir. 1956); Lubrecht v. Laurel Stripping Co., 387 Pa. 393, 127 A.2d 687 (1956); Cummings v. Kelling Nut Co., 368 Pa. 448, 84 A.2d 323 (1951); Lucacher v. Kerson, 158 Pa. Super. 437, 45 A.2d 245 (1946); Slonaker v. P. G. Publishing Co., 338 Pa. 292, 13 A.2d 48 (1940); Shealy v. Fowler, 182 S.C. 81, 188 S.E. 499 (1936); Restatement of Agency, § 442, comment c at 1031 (1933). See also Restatement (Second) of Agency, § 442, comment c at 340 (1957).
J. C. Mittett Co. v. Park & Tilford Distillers Corp., 123 F. Supp. 484 (N.D. Cal. 1954) also supports the statement in the text: “[W]here a contract of employment or agency for an indefinite period is based on some consideration other than the services to be rendered it will continue for a reasonable period of time.” 123 F. Supp. at 429, quoted with approval in Hunt Foods, Inc. v. Phillips, 248 F.2d 23 (9th Cir. 1957).
The majority opinion in this case attempts to distinguish Mittett and Hunt Foods on the ground that the only consideration flowing to Black Diamond was the personal services to be rendered by the Plaskitts as salesmen. But the Plaskitts furnished consideration in addition to their personal services: they not only devoted their energies, but also expended funds in excess of their commissions in order to promote the sale of Black Diamond’s products.

 The majority opinion says: “Were the court to attempt to fix a date within which the Plaskitts could have made a profit, it would not only be confronted with the involvements incident to determining when a profit had been made, but also how much profit is reasonable.” But the trier of fact would be confronted with the same problem of determining the profits, recoverable by the Plaskitts if the contract had specified a period for its duration and Black Diamond had breached the contract before the terminal daté.