Steelduct Co. v. Henger-Seltzer Co.

California Court of Appeal Mar 16, 1942 No. Civ. No. 13281Published

Before: Hanson

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Holding. The court held that the 1938 letter contract superseded the original agreement, creating a fixed five-year term without a right of unilateral cancellation on ten days' notice. Consequently, the trial court's finding that the contract was validly terminated was unsupported by the record.

Issues

Whether the 1938 letter contract superseded the cancellation provision of the 1928 agreement.
Whether the trial court erred in finding the contract was validly terminated by the agents.
Whether the manufacturer's claims for an accounting and injunction were properly dismissed.

Disposition. reversed

Quotations verified verbatim against the opinion

“The court’s finding that the contract was validly terminated ten days after the notice was given is not sustained by the record.”

HANSON, J. pro tem. This is a controversy between a manufacturer of steel conduits and tubings and its agents who had exclusive right to sell the product in Southern California and Arizona. The primary question is whether the agents had a right to cancel the contract, which was made for a definite period, and if not, what are the rights and remedies of the manufacturer.

In the court below the manufacturer, conceiving that it was entitled to an injunction, an accounting and damages, instituted its suit in equity. On the hearing the trial court interpreted the contract between the parties as permitting either to cancel it on ten days’ written notice, and, as the agents had given such notice, concluded that there was no basis for either an accounting or damages, nor for an injunction because of alleged inequitable acts. From the judgment entered against it the manufacturer has appealed.

The original written contract entered into between the parties on September 1, 1928, provided that either party thereto might cancel the contract on ten days’ written notice to the other. In March, 1938, respondents by letter urged that a new contract be made, as their investment in the agency was heavy and they might find themselves “out on a limb” if in due course there was a change in the officer personnel of appellant. A few days later respondents submitted a letter contract addressed to themselves for signature by appellant, stating that it, or something substantially similar, would meet their views. This letter contract was signed by appellant and forwarded to respondents, who endorsed their acceptance thereon. It reads as follows:

“Youngstown, Ohio,

“May 81, 1938.

“J. H. Collier,

“President & Treasurer,

“Henger-Seltzer Company,

“Los Angeles, Calif.

‘ ‘ Gentlemen

“This is to confirm our agreement appointing the HengerSeltzer Company as our exclusive agents for Southern California for a period of five years on such lines of our manufacture as they have been regularly handling heretofore.

“It is understood that they will, throughout this period, maintain an organization sufficient to adequately represent us [477]

Steelduct Co. v. Henger-Seltzer Co.

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