Court Opinion

ID: 3986748
Source: CourtListenerOpinion
Date Created: 2016-07-06 10:42:52.287886+00
Date Added: 2024-06-11T13:53:47.275793
License: Public Domain

This is an action by plaintiff to recover $2,437.50, balance alleged to be due for goods manufactured, sold, and delivered to defendant pursuant to a written contract dated November 21, 1928. Defendant answered denying liability and filed a counterclaim wherein it sought to recover judgment against plaintiff for damages in the sum of $9,160 for breach of contract. The case was tried to the court without a jury. From a judgment in favor of defendant dismissing plaintiff's complaint and for damages in the sum of $2,000 on its counterclaim, plaintiff appeals and assigns numerous errors. For convenience we shall first treat the assignments of error to the dismissal of the complaint, and later take up the assignments directed to the judgment on the counterclaim.
The evidence discloses the following facts: Defendant is a Delaware holding corporation, owning practically all of the stock in a number of banks in Utah, Idaho, and Wyoming. Its principal place of business is Ogden, Utah. M.S. Eccles is its president, and E.G. Bennett is its vice president, manager, and purchasing agent. Plaintiff is an Illinois corporation engaged in the business of manufacturing and selling leather wallets and advertising matter consisting of form letters and cards designed to promote savings accounts in banks, and the furnishing of operators to manage such advertising campaigns. B.T. Moran is the president and manager of plaintiff corporation. Its sales agent throughout the Intermountain West at the time of the execution of this contract was E.A. Waugh. As a result of negotiations between Waugh and Bennett a proposal for contract was drawn by Waugh and signed by Bennett on the night of November 21, 1928, and sent by mail to the office of the company at Chicago for acceptance. It was, after receipt, accepted by B.T. Moran at Chicago who wrote his name on the contract under the words "Accepted: B.T. Moran, Inc." It is conceded the order was not a contract until accepted by the corporation. One of the disputed points in the case is when the offer was accepted. The contract is as follows: *Page 320 
                               "B.T. Moran,
                       "400 North Michigan Avenue,
                                "Chicago.
Manufacturer for an                            "Date Nov. 21, 1928.
Ship to First Security Corporation
City    Ogden     State of Utah.
Quan.       Description                                           Price each
 24,500 Letters at per M ............................................ $15.00
144,000 Cards at per M ..............................................   5.00
  1,500 Men's Goat Skin Single Units ................................   1.45
  1,500 Men's Ostrich Grain Single Units ............................   1.45
  1,500 Men's Calf Skin Single Units ................................   1.45
  1,500 Women's Goat Skin Units .....................................   1.45
  1,500 Women's Ostrich Grain Units .................................   1.45
  To be shipped by express F.O.B. Factory. Terms: Net 30 days.
                              "Stamp Wallets
   "Per copy attached — Letters per copy attached six different
banks — The fewer the words the better the appearance of wallet.
   "B.T. Moran, Inc., agrees, without additional charge to furnish an
operator to manage purchaser's campaign for a period not to exceed thirty
days for each thousand wallets ordered.
                                "Remarks.
   "Five operators at once per letter. Rush shipment — Exclusive in
all towns in which corporation has banks.
   "All oral and other representations and understandings are fully set
forth herein, and this contract is not subject to cancellation without the
consent of both parties hereto.
"Purchaser                  First Security Corporation
                                 "By E.G. Bennett,
                                            Authorized Purchasing Agent V.P.
"Accepted:
"B.T. Moran, Inc.
  "Salesman E.A. Waugh,
      "Representing B.T. Moran, Inc."

The contract as signed refers to a letter "per copy attached." There was a difference between the parties as to the identity of the letter referred to. Defendant claimed the letter was one written by Waugh to Bennett outlining the requirements of the several banks, which letter was admitted in evidence. Plaintiff's testimony was to the effect that a letter written by Waugh to B.T. Moran was the one referred *Page 321 
to. This letter was identified as an exhibit, but was not admitted in evidence for the reason it was not sufficiently connected up with the defendant. No error is assigned to its exclusion. The wallets, letters, and cards referred to in the above-quoted contract were to be used by the defendant's banks at Logan, Rock Springs, Idaho Falls, Pocatello, Boise, and Nampa. The full order for the wallets was prepared and shipped, as were the letters and cards for all the banks except the one at Boise. A bill was submitted by plaintiff to defendant which included all these goods in the total sum of $11,597.50. The defendant promptly paid $9,160 but refused to pay the balance of $2,437.50 for wallets shipped to the Pacific National Bank at Boise. This action was commenced to recover such balance claimed to be due and payable. Defendant defends this action on the ground, as claimed by it, that it canceled the order so far as it affected all supplies for the Boise bank, including, not only letters and cards, but also wallets, and that notice of cancellation was given before its offer was accepted by plaintiff and before the contract became a complete executory contract. The evidence with respect to cancellation shows that the written order was signed by Bennett at about 8:30 p.m. on the evening of November 21st. On the same evening, and after the order was signed, Bennett had a conversation over the telephone with Mr. Tucker, cashier of defendant's bank at Boise, and learned from him that Waugh had not correctly reported Tucker's views with respect to the desirability of an advertising campaign on behalf of the Boise bank. Tucker claimed that he was not in favor of the campaign at all. It appears that the defendant had only recently acquired a controlling interest in the Pacific National Bank at Boise and was about to change its name so it was inadvisable to print any advertising matter until the change of name could be effected. Bennett testified he attempted but failed to get in touch with Mr. Waugh that evening, but that the next morning he sent a telegram addressed to him at the Hotel Utah in Salt Lake City as follows: "Cancel work on order until can get in touch *Page 322 
with you. 'Phone me promptly on your return." That Waugh called Bennett on the telephone either the evening of the 22d or the morning of the 23d and stated he had received the telegram and wanted to know why the contract was canceled, and arranged for a meeting which was held on the evening of the 23d at the Hotel Utah in Salt Lake between Eccles, Bennett, and Waugh. At this meeting there was considerable conversation between the parties. It seems there had also been a misunderstanding with respect to the order for Rock Springs. Defendant claims the order for advertising matter for the Rock Springs bank was also canceled, but was later reinstated. The goods were shipped, used, and paid for, and the campaign conducted at Rock Springs. Since that portion of the contract is not now in question we shall make no further reference to it. Bennett testified that at this meeting he stated explicitly to Waugh that the order for Boise was canceled, and said, "Don't you have those supplies stamped or anything like that, because this is a cancellation of the order." That Waugh said it was not too late and he would fix the matter satisfactorily. No cancellation of the Boise order, so far as shown by the record, was transmitted to the office of plaintiff by Waugh, but merely directions to withhold printing of the letters and cards until further instructions. The wallets were made up and delivered to the Boise bank.
This is a law action tried to the court without a jury, and for that reason this court may not weigh the evidence and itself make findings. We may merely examine the record to determine whether there is sufficient competent evidence to support the findings of the trial court, and, if such is found, then it becomes our duty to sustain the findings. The        1, 2 evidence is voluminous, and we shall not attempt to set it out here even in abbreviated form. It is sufficient to say that on each of the disputed points there is evidence in the record which, as we view it, would support findings either in favor of the plaintiff or the defendant on the respective contentions made by each. Two questions *Page 323 
arise: First, did the defendant give notice of the cancellation of its order for wallets for the Boise bank; and, second, if such notice was in fact given was it given before acceptance of the order by the plaintiff at its Chicago office?
Mr. Bennett testified directly that he did cancel the order both by telegram on November 22d and by conversation with Waugh on the evening of the 23d. There is undoubtedly sufficient evidence to show notice of cancellation. Whether it was given timely is a question of fact, and whether notice to Waugh was notice to his principal is a question of law. The court made finding that on or about November 22, 1928, and before the order had been accepted by plaintiff, the defendant withdrew and countermanded the order so far as the same related to the Pacific National Bank of Boise. Appellant attacks the finding as erroneous and not supported by evidence, and contends that the defendant did not sustain the burden of proving modification or cancellation of the order before acceptance.
If notification to Waugh is notice to his principal, then we think there is sufficient evidence to support the finding. Mr. Moran testified that he received the order through the mail on the 23d of November and on or about that date placed his signature of acceptance on the contract and gave directions to the factory to commence work on the order; that his plant was of such capacity that the 7,500 wallets could be manufactured in about two days. The defendant relies on other facts and circumstances tending to prove or proving that acceptance was not thus promptly given to the contract. Notice of acceptance was sent to the defendant by letter dated November 28th, as follows:
                        "B.T. Moran, Inc. "400 North Michigan Avenue, "Chicago.
"November 28, 1928.
"First Security Corporation, Ogden, Utah.
"Gentlemen: Attention Mr. E.G. Bennett, V.P.
"We acknowledge with thanks your order of the 21st for 7,500 combination wallets and dime banks, 24,500 letters and 144,000 cards. *Page 324 
All these items are now being prepared and will be shipped as promptly as possible.
"We shall start the campaign in all of the banks (5), except the Pacific National of Boise, next week.
                       "Very truly yours, B.T. Moran, Inc. "B.T. Moran."
Moran testified that it was his practice to acknowledge orders within 24 hours of receipt, although this was not an invariable rule. From the letter it appears that the work of manufacture of the goods had commenced, although not yet completed. The wallets were not received at Boise until on or about December 15th. The court could well find as it did, from all the evidence, that cancellation of the order, either by telegram of the 22d or verbal notice on the 23d, was given prior to acceptance of the order. Certainly notice of cancellation was given before notice of acceptance was mailed from plaintiff's office in Chicago.
The rule, as stated in 1 Page on the Law of Contracts (2d Ed.) paragraph 152, is as follows: "If an order is subject to approval by some designated officer of the seller, such contract does not take effect until it has been approved and such approval has been communicated to the buyer." See,              3 also, Krohn-Fecheimer Co. v. Palmer, 282 Mo. 82,221 S.W. 353, 10 A.L.R. 673. Such an order as the one in question might, however, have been accepted by filling the order and shipping the goods. 1 Page on the Law of Contracts 154; 13 C.J. 284. The order was not filled or the goods shipped until after November 23d.
While appellant does not concede there was a cancellation, it strenuously contends that the notice to the agent was not notice to his principal since the agent's authority was limited, and that notice of such limitation of authority was contained in the contract signed by the defendant. The contract provides: "All oral and other representations and             4-6 understandings are fully set forth herein, and this contract is not subject to cancellation without the *Page 325 
consent of both parties hereto." This language merely limits the authority of the agent to the terms and conditions of the agreement or offer as incorporated in the writing. Certainly such agent may not, after acceptance of the same by his principal, modify or change any of the terms or conditions of the contract. This, however, does not deny his authority to receive, on behalf of his principal, notice of withdrawal or cancellation of the order in whole or in part before it became a completed contract by acceptance. The words, "this contract is not subject to cancellation without the consent of both parties hereto," can, of course, not limit the right of the offeror to withdraw or change his offer before acceptance. If this language be construed to be a stipulation that the offeror cannot withdraw his offer before acceptance it is without consideration and hence not binding. The rule is stated in 23 R.C.L. p. 1288, as follows: "In case of orders for goods given to a traveling salesman of the seller, whose authority extends only to the solicitation of orders and the forwarding of them to his principal for acceptance or confirmation, it is well settled that the order or offer may be withdrawn at any time before it has been accepted by the seller. Although an order does not provide that it is subject to the seller's approval, and does provide that it is not subject to change or countermand, it, nevertheless, is held that it may be countermanded prior to its acceptance by the seller, where it is given to an agent whose only authority is to take orders and forward them to his principal for acceptance." The cases are to the same effect: Cedar Rapids National Bank v. McCord,98 Ark. 81, 135 S.W. 365; Hallwood Cash Register Co. v. Finnegan
(Sup.) 84 N.Y.S. 154; Howe Scale Co. v. Wolfshaut (Sup.) 170 N.Y.S. 943; Night Commander Lighting Co. v. Brown, 213 Mich. 214,181 N.W. 979, 980; Krohn-Fechheimer Co. v. Palmer, supra; Bauman v. McManus, 75 Kan. 106, 89 P. 15, 10 L.R.A. (N.S.) 1138.
Ordinarily notice to an agent touching the subject-matter of his agency or in regard to the transaction in which he is *Page 326 
engaged is notice to his principal. Modern Woodmen of America
v. Berry, 100 Neb. 820, 161 N.W. 534, Ann. Cas. 1918D, 302. Notice of cancellation or withdrawal of an order        7, 8 or offer is notice to the principal where given to the agent who took the order, he having apparent authority to receive such notice. 55 C.J. 87; Night Commander Lighting Co. v. Brown, supra; Womack v. Dalton Adding Machine Co. (Tex.Civ.App.)285 S.W. 680. In the case of Night Commander Lighting Co. v. Brown, supra, the court said:
"It is elemental that an order such as this, though it contain the words `not subject to countermand,' may be countermanded at any time before acceptance. Until so accepted, it is simply an offer to purchase, and in no way creates a binding agreement. 13 C.J. 293; Peck v. Freese, 101 Mich. 321, 59 N.W. 600;Challenge, etc., Co. v. Kerr, 93 Mich. 328, 53 N.W. 555. Plaintiff's counsel contend that `by requesting the salesman to countermand this order the defendant made the salesman his agent to perform such service for him,' and, as the notice of countermand was not communicated to the plaintiff at its office, none was in fact and in law given. With this contention we are unable to agree. The notice of countermand given to the same agent who took the order was, in our opinion, notice to the plaintiff. It was the agent's duty to communicate it to his principal, and his failure to do so in no way relieved the plaintiff from the effect thereof. Mechem on Agency, § 1831; Elliott on Contracts, § 33; Goodspeed v. Wiard Plow Co.,45 Mich. 322, 7 N.W. 902; Westinghouse Electric Co. v. Hubert,175 Mich. 568, 141 N.W. 600, Ann Cas. 1915A, 1099."
Notice of cancellation to Waugh was notice to his principal, whether communicated or not, and had the effect of modifying the offer to the extent of eliminating the order for all of the supplies for the Boise bank. The court found this           9 notice was communicated before acceptance of the offer, and, as we have already indicated, there is sufficient competent evidence in the record to support such a finding.
Error is assigned to the admission of the copy of a telegram from Bennett to Waugh dated November 22d, which we have quoted above. The objection was that the copy of *Page 327 
the telegram was incompetent, not the best evidence, and no foundation had been laid for its admission. The     10, 11 paper offered was a carbon copy from the files of the defendant, and the original of which Mr. Bennett testified was sent to Waugh on the 22d. Defendant served notice on plaintiff to produce the telegram, and demanded it at the trial, and, on failure of plaintiff to produce it, offered the copy. The gravamen of the objection was that the original telegram was the paper delivered to the telegraph office rather than the one received by Waugh. No effort was made to obtain the message from the telegraph office, nor was such shown to have been lost or destroyed. There seems to be some difficulty in determining what are original telegrams within the meaning of the best evidence rule. The weight of authority seems to be that, where the telegraph company is the agent of the sender, the original is the telegram that is delivered. 2 Jones' Commentaries on Evid. (2d Ed.) § 804, p. 1473; 10 R.C.L. 910. Here the sender took the initiative in sending the message, hence the telegraph company would be considered its agent and the telegram delivered would be the original. At any rate, no prejudice resulted to plaintiff by admission of the copy. Mr. Bennett testified that, either on the evening of the 22d or morning of the 23d of November, Waugh called him on the telephone after receiving the telegram and arranged for the meeting which was held on the evening of the 23d. At this meeting Mr. Waugh asked why the order had been canceled, and the matter was discussed. According to Bennett's testimony, of which there is no contradiction, there was a definite cancellation of the order so far as it affected the supplies for the Boise bank. With the copy of the telegram eliminated there was sufficient evidence to support a finding that notice of withdrawal of the offer was communicated to the agent before acceptance of the contract by the principal at Chicago.
We conclude on this part of the case that Waugh had authority to represent his principal for the purpose, not *Page 328 
only of soliciting orders, but of receiving notice of withdrawal or cancellation of the order given him, and that the finding by the trial court that such notice was given      12, 13 before acceptance of the order by his principal at Chicago is supported by evidence. This notice was binding on the company whether or not communicated to the principal. The new offer from the defendant excluded the goods originally ordered for the defendant's bank at Boise. When, therefore, the plaintiff made up and shipped the wallets for the Boise bank, it was not done pursuant to any contract and the defendant had the right to refuse to accept the goods. When Bennett learned that the goods had been received at Boise he wrote to the defendant declining to accept them and offered to return the package unopened. This plaintiff refused, and, having refused to accept the shipment, defendant was under no obligation to return the goods. The findings of fact are sufficiently supported by the evidence, and the judgment is supported by the findings. We find no sufficient error to justify reversal of the judgment of dismissal of plaintiff's complaint.
We come now to the judgment on the counterclaim. Defendant's contention is that plaintiff breached its contract with respect to the quality and experience of operators furnished and the methods adopted in conducting or managing the advertising campaign for savings accounts. It alleged      14, 15 that, because of such breach of contract, the campaign was a failure resulting in damages to defendant of $9,160, the amount paid by it to plaintiff under the contract. The contract provided: "B.T. Moran, Inc., agrees, without additional charge to furnish an operator to manage purchaser's campaign for a period not to exceed thirty days for each thousand wallets ordered." The parties by the terms of the written contract intended to incorporate in the writing all the terms and conditions which the agent was authorized by his principal to incorporate into such an agreement, and this was agreed to by the defendant *Page 329 
as evidenced by its execution of the writing. The contract stated: "All oral and other representations and understandings are fully set forth herein." Notwithstanding such declared intention, the trial court permitted the defendant to introduce parol evidence to the effect that Waugh, plaintiff's agent, represented that the operators to be furnished under the provision above quoted would be experienced men in the savings account business, especially trained in sales psychology, and would conduct themselves so as to leave no adverse reflection upon the bank, and that the campaign would be conducted wholly by the plaintiff through its operators except merely the mailing out of letters to customers of the bank by the bank officials. This evidence was objected to as an attempt to modify or alter the terms of the written instrument by parol evidence, and that such representations were beyond the authority of the agent to bind his principal. The objections were overruled and testimony of conversations between Waugh and Bennett and Eccles prior to the execution of the written agreement admitted. These rulings are defended on the theory that the contract was ambiguous, and, under the exceptions to the parol evidence rule, such conversations were admissible to show what was meant by the words "operator" and "purchaser's campaign." The rule is well settled that, where the parties have reduced to writing what appears to be a complete and certain agreement, it will, in the absence of fraud, be conclusively presumed that the writing contained the whole of the agreement between the parties, that it is a complete memorial of such agreement, and that parol evidence of contemporaneous conversations, representations, or statements will not be received for the purpose of varying or adding to the terms of the written document. The rule and the exceptions thereto are well stated in the recent case of Fox FilmCorporation v. Ogden Theatre Co. (Utah) 17 P.2d 294. The contract in that case contained recitals similar to those in the contract before us, indicating that the contract as written was intended to be complete. There *Page 330 
are no such latent ambiguities in the contract as to warrant the admission of testimony of such conversations. The admitted conversations tend to enlarge the terms of the contract and to impose obligations on the plaintiff additional to those stated in the writing, not only as to the kind or character of the operators, but also as to responsibility for the conduct of the campaign and its successful results. There is not anything in the written contract which amounts to a guaranty or warranty that the campaign would be successful or that the responsibility for conducting it to a successful conclusion would rest on plaintiff.
There was here no such agreement, shown on its face to be incomplete, as to bring the case within the rule announced inHalverson v. Walker, 38 Utah 264, 112 P. 804, and Potter v.Easton, 82 Minn. 247, 84 N.W. 1011, nor is there such ambiguity as to bring the case within the rule announced in Tyng v.Constant-Loraine Inv. Co., 47 Utah 330, 154 P. 767; Egelund
v. Fayter, 51 Utah 579, 172 P. 313; and Jordan v. Madsen,74 Utah 280, 279 P. 499. The parol evidence should have been excluded. 22 C.J. 1098-1105; 4 Page on Contracts, § 2152, p. 3763; Bowser  Co. v. Independent Dye House, 276 Mass. 289,177 N.E. 268; Farquhar v. Hardy Hardware Co., 174 N.C. 369,93 S.E. 922; Emerson-Brantingham Implement Co. v. Edgar,39 S.D. 139, 163 N.W. 575; Eastern Advertising Co. v. Patch,235 Mass. 580, 127 N.E. 516; Ridgeway Dynamo  Engine Co. v.Pennsylvania Cement Co., 221 Pa. 160, 70 A. 557, 18 L.R.A. (N.S.) 613.
The evidence without contradiction shows that the five operators required by the contract were furnished by plaintiff, and that they remained at the respective banks in charge of the advertising campaigns conducted by such banks for a period of a month or six weeks. Complaint is now made      16, 17 that some of these men were inexperienced and that at least one of them conducted himself in an unbecoming manner, which might reflect on the reputation of the bank, yet it is significant that no complaint was made to plaintiff about the character or experience *Page 331 
of these operators or their conduct until after this action was commenced. The contract construed without extraneous aid required that plaintiff supply persons as operators who by age, experience, or training were reasonably qualified to perform the duties incident to such an advertising campaign, and they were required to prosecute the work with reasonable diligence and application. The defendant may show breach of the contract, but, before it can recover, must prove the damage suffered by it because of such breach.
The last assignment of error to which we need pay attention is that the trial court's finding that, "because of the breach of said agreement on the part of the plaintiff and its failure to put over said campaign, defendant suffered damages in the sum of $2,000.00," is erroneous as not stating a finding of any fact as to how or in what manner defendant was         18, 19 damaged and is in the nature of a legal conclusion. This objection must be sustained. There is no finding of any fact on which damages in any specific amount can rest. The mere fact that defendant did not obtain as many new savings accounts as contemplated cannot afford a basis for damages where there is no guaranty that certain results would and could be obtained. The evidence shows that 1,200 new accounts were obtained, but it is silent as to the amount involved in these accounts or the value of them to the bank. It is possible that no evidence could be obtained which would show the probable value of such accounts to the defendant. The element of damages is so speculative, and the cause of damages so uncertain on the record before us, as to afford no basis for a judgment in favor of the defendant. 17 C.J. 756; 8 R.C.L. 438; Bredemeier v. Pacific Supply Co., 64 Or. 576,131 P. 312.
The judgment of dismissal of plaintiff's complaint is affirmed, and the cause remanded to the district court of Weber county for a new trial on defendant's counterclaim. Each party to bear its own costs in this court. *Page 332 
ELIAS HANSEN and MOFFAT, JJ., concur.