Hoover v. Agriform Chemical Co.

STONE, J.

Defendant appeals from a judgment in favor of plaintiff in the sum of $11,326. The appeal comes to us on a settled statement, which reflects that:

Growers Agriform Service, Inc. (“Growers”) was incorporated March 14, 1956. It engaged in the sale of agricultural chemicals bearing the Agriform label. Respondent Myrl P. Hoover was one of the three original stockholders of Growers and was also one of its principal sources of funds. On February 28, 1957, Growers was indebted to Mr. Hoover on a promissory note, the balance owed being approximately $16,000. Mr. Hoover had become dissatisfied with the management of Growers and wished to withdraw the funds he had loaned to it; it was agreed in writing that Growers would issue a new promissory note to Mr. Hoover in the principal sum of $16,000, payable from Growers’ future commissions at the rate of $2 per ton of fertilizer sold. Such payments were to be forwarded “directly” to Mr. Hoover by the distributor, Agriform, the appellant herein.

On March 9, 1957, Growers issued its new promissory note

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to Mr. Hoover in the principal amount of $16,000. The new note provided: “Principal and interest shall be payable as follows: When an obligation to Bernhard H. Ehrlich on an equipment conditional sales contract has been fully satisfied under a contract of the company bearing even date herewith, then immediately there shall become due and payable from Growers Agriform Service, Inc. to Myrl P. Hoover a sum calculated at $2.00 per net ton of liquid fertilizer thereafter sold and delivered to customers thereafter in said corporation’s sales territory under its agreement with Agriform of Northern California, Inc. ’ ’

The crux of the ease lies in the following addendum implementing the assignment, that was signed by appellant creditor at the time the note was executed: “It is understood that the $2.00 per ton payment mentioned above is to be made to Mr. Hoover by Agriform of Northern California, Inc. and charged to the commission account of Growers Agriform Service, Inc.

/s/ D. W. Galbraith, Pres. Agriform of No. Calif., Inc. /s/ Howard C. Goodman, Pres. Growers Agriform Service, Inc. ’ ’

Agriform of Northern California, Inc. had been incorporated in 1956 for the purpose of manufacturing and distributing agricultural chemicals of the Agriform label. In 1960 its name was changed to Agriform Chemical Company, Inc. and it was sued in'this proceeding under that name.