Court Opinion

ID: 6900207
Source: CourtListenerOpinion
Date Created: 2022-07-23 21:54:10.247553+00
Date Added: 2024-06-11T16:06:08.792599
License: Public Domain

Mr. Justice Moore
delivered the opinion of the court.
It is conceded by the defendant’s counsel that the plaintiff was entitled to the sums for which judgment was rendered on the fourth and fifth causes of action; but it is insisted that the court erred in permitting the complaint to be amended after immaterial testimony had been admitted over objection and exception, and also in refusing to grant a judgment of nonsuit on the second cause of action, for the recovery of discounts, etc., and that, as the' defendant was entitled to a counterclaim of $2,277.25, judgment should have been rendered in its favor and against the plaintiff for $1,135.28, in excess of the sums so admitted to be due. It is argued that, though the contract in question contains a stipulation for the reciprocal purchase and sale of furniture, the second cause of action is based on the theory that the agreement created an agency, whereby the plaintiff was authorized to sell the goods delivered to it by the defendant at any price it might demand and to allow such discounts and reductions as it chose to grant to its customers, retaining a commission of 13 per cent, and that the defendant was bound by sneh action. The court filed with its findings an opinion to the effect that the contract of the parties manifested a sale and did not create an agency; that, though the plaintiff’s counsel asserted at the trial that the second cause of action was founded on the original contract, the averment in the complaint of an agreement to allow extra discounts and special freights was equivalent to an allegation of the making of new agreements modifying the original contract, and, as *364such, stated a good cause of action before amendment; and that the further averment in the complaint that these special agreements were made in accordance with the original contract and amounted to a change in the list price, should be treated as surplusage.
1. An examination of the contract referred to convinces us that it was the intention of the parties that the absolute property in the furniture was to be transferred from the defendant by the delivery of the goods to and the acceptance thereof by the plaintiff,'which was to pay for and keep them, thereby creating, as the lower court properly held, a sale and not an agency: 24 Am. & Eng. Enc. Law (2 ed.), 1027. Because the defendant stipulated to sell the entire manufactured products to the plaintiff, which was designated in the schedule of furniture and the list of prices issued by the defendant as its sole agent in the territory mentioned, did not change the character of the transaction. Thus, a contract by the manufacturers of corn cutters appointing a person as general Western agent for the exclusive sale of the machine and providing for the payment of a certain amount for each, subject to a discount for cash, was held to be a contract of sale and not of agency: Alpha, Checkrower Co. v. Bradley, 105 Iowa, 537 (75 N. W. 369). To the same effect see Granite Roofing Co. v. Casler, 82 Mich. 466 (46 N. W. 728); Mack v. Drummond Tobacco Co. 48 Neb. 397 (67 N. W. 174, 58 Am. St. Rep. 691).
2. The deduction by the court in its opinion that the plaintiff’s counsel claimed that the second cause of action was based entirely on the original contract, though probably not equivalent to a statement to that effect contained in the bill of exceptions, is nevertheless entitled to consideration as an assertion of a solémn admission by one of the parties: B. & G. Comp. § 158.
3. The admissions of an attorney, made within the scope of his authority and during the continuance of his employment, bind his client to the same extent as a stipulation: 3 Am. & Eng. Enc. Law. (2 ed.), 327. This rule is not invoked to *365charge the plaintiff with an acknowledgment of a fact prejudicial to its interests, but as tending to show the theory of its counsel as to the basis of the second cause of action.
The plaintiff’s manager testified that the corporation which he represented was the agent for the defendant and as such was not authorized to- sell the furniture delivered to it above or below the stipulated prices, for which service it was entitled to 13 per cent for handling the goods. We think it was the theory of the plaintiff and of its counsel that the contract of the parties created an agency, and that the averment in the complaint that plaintiff, on ascertaining the amount of the discounts and reductions, immediately gave a statement thereof and charged the same to the defendant, to all of which it assented, confirms this view. If the plaintiff was such agent and sold the furniture at a discount or paid the freight on the shipment of goods and the defendant, upon notice thereof, assented thereto, as alleged, such acquiescence was a ratification which rendered it liable to repay the sums so expended, without an averment of an agreement to pay the same. The fact that the clause “and agreed to pay the same” was omitted from the complaint, but incorporated therein by amendment after the cause was submitted, tends to corroborate the belief that the second cause of action was founded on the theory of an agency. The defendant’s manager evidently thought the contract created an agency, for in a letter which he wrote the plaintiff November 18, 1903, he says:
“We note that you have made quite a material advance on the price of chiffoniers, and would like to inquire if you have been selling them at the list price, as you now have it? If so, we trust you will figure out the difference coming to us on them.”
4. In Railroad Co. v. Trimble, 77 U. S. 367 (10 Wall., 19 L. Ed. 948), it was held that where there was doubt as to the proper meaning of an instrument, the construction which the parties to it have themselves put upon it is entitled to great consideration; but where its meaning is clear, an erroneous construction of it by them will not control its effect. To the same effect see also Davis v. Shafer (C. C.), 50 Fed. 764. We think *366the contract under consideration admits of no doubt as to its construction, and that it stipulated for a sale of furniture and not for the creation of an agency for handling the goods. The complaint was probably prepared, however, in deference to the views of the parties in respect to the terms of their agreement and on the assumption that the construction that they had placed upon it would be controlling. The declaration, therefore, of the plaintiff’s counsel that the second cause of action was founded wholly on the original contract would seem to be decisive of the controversy.
5. The paragraph of the complaint which the lower court considered tantamount to an averment of the making of a new agreement, modifying the terms of the original contract, is as follows:
“(11) That thereafter and after said contract had been entered into as aforesaid, the defendant as a manufacturer of the furniture referred to in the said contract and other manufacturers of a like kind of furniture and competitors of plaintiff entered into an agreement whereby said factory list price was reduced by the allowance of freights on various shipments to various parts of said territory, and said factory list price was reduced after said contract had been entered into in other respects by direction of defendant to plaintiff, and under and by virtue of said clause above mentioned, defendant was required to modify said schedule of prices attached to said contract and make out a new schedule based upon said factory list prices as the same were reduced as aforesaid, but defendant failed to modify said schedule attached to said contract or make out a new schedule in accordance with said reductions.”
We concur in the opinion of the lower court that the contract did not guaranty to the plaintiff any rate per cent of profit on the sale of the furniture. The property in the goods being vested, on the delivery thereof, in the plaintiff, it could have resold the furniture at such prices as the demand for and the competition in the trade would warrant. The agreement of the parties was subject to the construction placed upon it by the lower court, as evidenced by its opinion, from which we take the following excerpt:
“According to the terms of this original contract the defend*367ant had a right to insist that plaintiff pay it the list price in force at any particular time, less 15 per cent as agreed upon. If the list price was too high, the plaintiff could have insisted upon its revision; but, as long as it stood, plaintiff was bound by it. The mere agreement by the parties that a larger discount should be allowed to a particular purchaser or in a particular town or district did not amount to a change in the list price.' Such agreement when made was not in accordance with the terms of the original contract, but was a new agreement, or a modification of the original contract.”
6. Construing paragraph 11 of the complaint in the light of the rule thus declared as applicable to the contract, there is no averment that an agreement had ever been entered into between the plaintiff and the defendant whereby the payment of any sums as freights was to have been allowed on the shipment of furniture to any part of the specified territory. It would seem that by invoking clause 7 of the original contract, plaintiffs counsel, in the paragraph of the complaint adverted to, deduced the conclusion that by virtue of the agreement alleged to have been entered into between the defendant and other manufacturers of furniture and competitors of the plaintiff, etc., the factory list prices were reduced by the allowance of freights. It appears from the exhibits which accompany the bill of exceptions that the sum demanded by and evidently allowed the plaintiff in the judgment on account of the freights paid by it is $573.75. In our opinion, there is no legal averment on which this part of the judgment can rest. It will be remembered that after the cause was submitted the complaint was amended so as to allege that the defendant agreed to reimburse the plaintiff for the sums so paid and allowed by it, as evidenced by statements thereof.
7. This averment enlarged the scope of the complaint, so far at least as it related to the freights, and as the testimony tending to establish such facts was admitted over objection and exception, an error was committed in permitting the complaint to be amended in the respect mentioned: 1 Ency. Pl. & Pr. 585; Mendenhall v. Harrisburg Water Co., 27 Or. 38 (39 Pac. 399). The allegation of the reduction of the factory list *368prices in other respects by direction of the defendant to the plaintiff might, under a very liberal rule of pleading prevailing in this state (B. & C. Comp. § 85), support the view entertained by the trial court, that it was equivalent to an allegation of a modification of the original contract. Such change, however, could only be made by special agreement of the parties and not by invoking clause 7 of the contract as creating a liability.
Decided 21 August, 1906.
Decided 21 November, 1906.
In consequence of the error committed, to which attention has been called, we believe justice would be promoted by reversing the judgment and remanding the cause for such further proceedings as may be necessary; and hence an order to that effect will be entered. Reversed.