Court Opinion

ID: 6884812
Source: CourtListenerOpinion
Date Created: 2022-07-23 21:25:26.791386+00
Date Added: 2024-06-11T16:05:41.177570
License: Public Domain

BRATTON, Circuit Judge
(dissenting).
Grovier-Starr Produce Company was a reputable company, engaged in the wholesale fruit and vegetable business. Its headquarters were in Hutchinson, Kansas; it had warehouses at Great Bend, Larned, Dodge City, Liberal and Wichita; it had about twenty-five trucks practically all of which were equipped for cooling; and it had about one hundred employees. In 1933, it wrote Anheuser-Busch, Incorporated, at Saint Louis, Missouri, seeking to become wholesale distributor for Budweiser beer in its trade territory. W. L. Suycott, district manager of Anheuser-Busch in Oklahoma, Western Kansas, and the Panhandle of Texas, made an investigation of Grovier-Starr with respect to its financial strength, its promptness for paying bills, and its warehouse and truck facilities. He went to its place of business in Hutchinson, and there met E, J. Grovier, Sr., E. J. Grovier, Jr., and an employee named Plet-tinger. Negotiations were begun in respect to the agency. E. J. Grovier, Sr., testified that an oral agreement was entered into which provided that Grovier-Starr should become the wholesale distributor of Budweiser beer in a specified trade territory, that it should not handle any other brand of beer, that it should terminate its existing agency for Blatz beer, that it should employ some additional salesmen exclusively for beer, that it should push the business, and that the contract should continue in force and effect as long as Anheuser-Busch manufactured beer and Grovier-Starr faithfully performed its services in connection with the business. It was stipulated that E. J. Grovier, Jr., would testify substantially the same with reference to the terms of the contract. Suycott testified that the territory was discussed, and he explained the necessity of Grovier-Starr terminating its existing agency for Blatz, that he advised the Groviers that he could only make a recommendation tO' the home office of Anheuser-Busch and that final action on the application for the agency would have to be made there, that he made a favorable recommendation, and that it was approved. He denied that he said the contract should continue to be in force and effect as long as Anheuser-Busch made beer and Grovier-Starr faithfully performed its services in connection with the business. On the contrary, he testified that he said the agreement should continue in force as long as it was mutually satisfactory to both parties. Hettinger testified that he was not present *154during all of the negotiations, and that he did not hear Suycott say Grovier-Starr was to have the agency as long as Anheuser-Busch made beer. A written report which Suycott made to his company respecting the establishment of the agency was silent as to duration. Manifestly the evidence presented a sharp issue of fact as to whether a verbal contract was entered into at Hutchinson in which it was provided that the agency should continue in force and effect as long as Anheuser-Busch • should manufacture beer and as long as Grovier-Starr should faithfully perform its services in connection with the business. But in a case of this kind where a trial by jury has been waived contradictions and conflicts in the evidence are for the trial court, not the appellate court. The trial court determined the issue against Anheuser-Busch. It was expressly found that the contract was entered into and that it did contain such a provision. The finding is abundantly supported by substantial evidence and is not clearly erroneous, due regard being given to the opportunity of the court to observe the witnesses while testifying, judge of their credibility, and determine the weight to bé given to their testimony. The finding should therefore ■ stand undisturbed on appeal. United States v. McCain, 10 Cir., 118 F.2d 479; Sauder v. Dittmar, 10 Cir., 118 F.2d 524; Thermopolis Northwest Electric Co. v. Ireland, 10 Cir., 119 F.2d 409; Thatenhorst v. United States, 10 Cir., 119 F.2d 567; Scott v. Beams, 10 Cir., 122 F.2d 777; American Employers’ Ins. Co. v. Raton Wholesale Liquor Co., 10 Cir., 123 F.2d 283; Dye v. United States, 10 Cir., 123 F.2d 385; Hartford Accident & Indemnity Co. v. City of Sulphur, Okl., 10 Cir., 123 F.2d 566.
Anheuser-Busch challenges the authority of Suycott to enter into such a contract with binding effect upon it, and the majority sustain the challenge. Suycott was district manager in a territory covering parts of three states. His duties concerned themselves primarily with matters relating to the establishment of wholesale agencies for the company. August A. Busch, Jr., and Suycott each testified that the latter did not have authority to create agencies, and that his authority was limited to making recommendations for approval at the home office in Saint Louis. But at another place, Busch testified:
“Q. What did Mr. Suycott report about it? A. To me, nothing. He reported to the other gentlemen.
“Q. Well, what was the report you finally got about it? A. That Grovier-Starr were appointed wholesalers just like anybody else.
“Q. That is what he reported? A. Yes, appointed wholesalers.
“Q. In what territory ? A. In what territory? In the territory allotted to them by Mr. Suycott.
“Q. That is, Suycott appointed them wholesalers in the territory allotted by Suy-cott? A. That is correct.”
And at a'different place in the course of the examination, Suycott testified:
“Q. About how many distributors would you say that you appointed for Anheuser-Busch in 1933, 1934, 1935 and 1936, or thereabouts ? I think that was the period of' time you covered the Kansas territory? A. In Kansas or everywhere?
“Q. Everywhere. A. I would say seventy, probably between seventy and eighty; maybe ninety.
“Q. All of those were oral contracts, were they not? A. No sir, there was no contract.
“Q. Well, I- should say your agreement, if you wish to call it that, was oral, by word of mouth? A. All agreements were oral. The company adopted the policy of sending a written letter or written contract or confirmation in 1937 or 1938.”
Furthermore, in Kansas, even though there be limitations on the authority of an agent, as between the principal and a third party, the principal is bound by the contract of the agent made within the apparent scope of the authority of the agent, unless the third party has knowledge of the limitations. Aultman Thrashing & Engine Co. v. Knoll, 71 Kan. 109, 79 P. 1074; Townsend v. Missouri Pac. R. Co., 88 Kan. 260, 128 P. 389. And where an agent is held out to the world as having the authority of a general agent and a third party in good faith and without negligence deals with him, the principal cannot thereafter be relieved of liability on the ground that the agent overstepped the limitations imposed upon his authority. Hyson v. Bankers’ Mortgage Co., 136 Kan. 259, 14 P.2d 726; Petersime Incubator Co. v. Ferguson, 143 Kan. 151, 53 P.2d 505. The provision in the contract in respect of duration was not necessarily so unique or unreasonable as to take the case out of these established principles.
A contract to be binding and enforceable must contain mutual or reciprocal obliga*155tions. Fitzstephens v. Whan, 113 Kan. 650, 216 P. 269; Van Deren v. Heineke & Co., 122 Kan. 215, 252 P. 459; Swart v. Huston, 154 Kan. 182, 117 P.2d 576. But it is not essential to mutuality that duration be specified by calendar dates. It may be fixed by reference to acts or events. While there are cases announcing a contrary rule it is my view that the contract between these parties was not so completely lacking in mutuality that no recovery of damages can be had for its breach. Kaufman v. Farley Manufacturing Co., 78 Iowa 679, 43 N.W. 612, 16 Am.St.Rep. 462; Kelly-Springfield Tire Co. v. Bobo, 9 Cir., 4 F.2d 71, certiorari denied 268 U.S. 694, 45 S.Ct. 513, 69 L.Ed. 1161.
Acting in reliance upon the contract, Grovier-Starr gave up its agency for Blatz beer, employed additional salesmen and other personnel, bought additional trucks and other equipment, and incurred and defrayed other large expenses. It created about 542 retail outlets in the trade territory; its distribution of Budweiser beer to such retail dealers during the last four months in 1933 amounted to $6,484.70; in 1934, $98,093.36; in 1935, $111,932.55; in 1936, $316,777.55; and during the first four months in 1937, $118,085.30; and its net profit for the year ending May, 1937, was $41,000. Its accounts to Anheuser-Busch were paid promptly, no complaint was registered as to the volume of sales or the manner in which the business was being conducted, on the contrary approval was voiced. Hettinger left the employ of Grovier-Starr on April 1, 1937, for the purpose of entering the wholesale beer business on his own behalf. Despite the manner in which Grovier-Starr had faithfully performed the contract on its part, Burdick, who had succeeded Suycott as district manager in that area, advised Grovier-Starr that the contract would be terminated on May first. The secretary of Grovier-Starr testified that Burdick told him and E. J. Grovier, Sr., that he was going to break the contract with them and give it to Het-tinger, that he was going to cancel it and give it to Hettinger, and that the reason for doing so was fear of Hettinger as a competitor. And Burdick testified that in his opinion Hetting'er was the only one connected with Grovier-Starr actively engaged in the beer business, and that in view of his resignation it was decided to eliminate Grovier-Starr as a distributor. I think the contract was valid, the breach was wrongful and wanton, the damages awarded were reasonable in amount, and the judgment should be affirmed.