Parry Manufacturing Co. v. Lyon

Opinion of the court by CHIEF JUSTICE PAYNTER Reversing. The appellees claim they had a contract with the appellant by which it promised and agreed to deliver to them at Monticello, Ky., a car load of vehicles, consisting of phaetons, buggies, etc., at certain prices, and, having failed to do so, it violated the contract, resulting in their damage, for which a recovery is sought. It appears from the record that the appellees first proposed to engage in- the buggy and saddlery business, and began to negotiate with the appellant to get vehicles from it. This negotiation resulted1 in bringing .an agent of the appellant and the appellees together in December, 1898. The appellant has printed blanks, upon which it requires customers and agents to make application for vehicles- It also has a contract called a “special agency contract,” and it' requires those whose orders for vehicles it approves to sign it. It is admitted by W, R. Lyon, representing the firm, that the special agency contract was to be signed before any vehicles were to be shipped upon the orders which he ha.d ■made, and in his letters he asked for delay in signing that [615] contract. In his testimony he said he understood that the orders for specifications which he made for vehicles were in connection with the special agency contract that was to be signed by him and returned to and accepted by the appellant, and that the' company would be under no obligation to prepare and ship the vehicles until it should be signed by him and returned to the company. So the orders which the appellees made, for vehicles were not to be complied; with until the special agency contract wlas executed by them and accepted by the appellant. In order to determine what is the real contract between the parties, it is essential to consider the written application for vehicles together with the special agency contract, for these writings ■together constituted the evidence of the contract between the parties, if one was actually made. In this connection, it is proper to state that the appellant claims that the appellees 'were simply to be its agents in the sale of such vehicles as might be shipped to them, and it had the right, under the terms of the contract, to ship or not to ship, the vehicles; that if it had shipped the vehicles to the appellees, it had the right to order them returned to it; and that, as it had that right, the right to withhold the shipment existed. In the written order which the appellees made for the vehicles it is expressly stated that “all the goods shipped on this contract, and the proceeds of the sale thereof, shall be and remain the property of Parry Manufacturing Company, and subject to its order si.” In the special agency contract, it Is provided, among other things, that the appellees were to. be the .agents of the appellant in the sale of the vehicles; that this agency was to continue from the 1st of March, 1899, at 9 o’clock a. m., and to terminate at a like hour on December 1, 1899, “unless [616] sooner revoked by said Parry Manufacturing Company;” that a notice from it to the appellees, stating its intention to abrogate the contract, was to have the effect of immediately canceling the same. It is further provided that all specifications from the appellees for shipment during the life thereof should become part of it; that the appellees were to recrate and reship any and all of such, vehicles at any time it might elect; that the appellees should be compensated by the appellant for their services by receiving a commission equal to the difference between the consigned invoice price and the net amount realized on the sale of the goods; that the proceeds of the sales should remain its property; that the agents were authorized to retain as their commission all cash in excess of the invoice, less o per cent.; and that, to make certain the character of the business relationship the appellees should sustain to it, the contract provides “that this is an agency contract for the sale of vehicles.” There is no ambiguity in the writings which are claimed by the appellees to be the evidence of the contract between the appellant and themselves. It is a question of law for the court whether the terms of the writings amount to a contract of sale, or whether by its terms the appellees were to act as the agents of the appellant in the sale of the vehicles to be shipped under it. The appellees were designated as agents. It is expressly said in the contract that they are to act as agents in the sale of the vehicles; that the vehicles were to remain the property of the appellant, and when sold the proceeds were to belong to it, less commissions stated. Appellant reserved the power to have such vehicles as might be shipped to the appellees returned to it. The parties were capable of making an agreement, and to determine what the rights of each should be thereunder. The appellees agreed that the appellant should have the [617] Tight to revoke and cancel the contract at will, and the refusal to ship the goods was tantamount to a revocation of the contract. Besides, if the appellant had the right to order any or all the vehicles which it shipped the appellees returned to it, the right to refuse to ship the vehicles which it could order returned necessarily existed. The contract designates the period in which the contract should exist, but this period could be terminated upon a revocation of it by appellees, not for cause, — but if it chose to ■do so. in the exercise of its judgment. We are of.the opinion that, as the appellant had the right to revoke the contract creating the agency at will, no damage could accrue to the appellees for failure to deliver the vehicles, the shipment of which was contemplated under the contract. The appellees insist that order No. 2, for the special lot •of vehicles, four or five in number, was not embraced) in the contract; that they were to pay cash for them. Taking the order with the special agency contract, this contention is not sustained, because the order in express terms says the vehicles are to remain the property of the appellees. However, if it can be shown on another trial that order No. 2 was not intended to be embraced as part of the “special agency contract,” and under proper instructions the jury reaches the conclusion that a contract of sale of the vehicles ¡mentioned in order No. 2 was actually made, then the appellees would be entitled to recover the difference -between the contract price at Monticello and the market price of them or like vehicles at that time and place. The question of prospective profits in the sale of vehicles should not be permitted to be proven. The court erred in instructing the jury, and, on a return of the case, should give the law in accordance with this opinion. The cause is reversed for proceedings consistent with this opinion.