190 Iowa 814 | Iowa | 1921
— The conceded facts in this case show that the plaintiff, who resides at Osceola, in Clarke County, was the agent of the Ford Motor Company and defendant, for the sale of Ford automobiles, accessories, and supplies at that place, and also at Murray, Iowa, during the seasons of 1914-1915 and 1915-1916. The business at Osceola was conducted in the name of A. M. Babb, and at Murray in the name of Babb Murray Auto Company. Separate contracts for these agencies were entered into with the parties named above on October 29, 1914, and a single contract, covering approximately the same territory as that covered by the two prior contracts, on August 30, 1915. The contracts of October 29th covered the period to July 31,
“As third party’s commission for making such sales of Ford automobiles, first party will, after payment by the purchaser allow to third party (except in the cases specified in Subdivision nine hereof) fifteen per cent (15%) of such full advertised list price, and will allow to third party such freight and delivery charges, and United States excise, if any, as aforesaid.
“First party agrees to allow and pay to third party the following additional commissions on the net amount of business he shall do hereunder during the term of this agreement upon Ford automobiles, but not on Ford parts, repairs or accessories, namely: No added commissions whatever when his said business shall total less than $5,000.00, but when the third party shall have done such business (not including freight charges and not including his fifteen (15%) per cent commission) * * * to the amount of $5,000.00, his right to additional commissions shall begin, and he shall be entitled to such added commission as follows: On all such business totaling less than $10,000.00, one (1%) per'cent; if $10,000.00 and less than $20,000.00, two (2%) per cent on all such business; if $20,000.00 and less than $35,000.00, three (3%) on all such business; if $35,000.00 and less than $50,000.00 four (4%) per cent on all such business; if $50,000.00 or more, five (5%) per cent on all such business.’’
At the time of signing the contracts above referred to, plaintiff also signed releases attached tó the contracts to the Ford Motor Company, and separate releases to defendant, in form as follows:
‘.‘Exhibit B. I hereby specifically agree to release and do release the Herring Motor Company from any and all obligations to pay me rebate money which may be earned under my contract with themselves and the Ford Motor Company of date October 29, 1914, and said, contract is hereby amended in this respect as between myself and the Herring Motor Company.
“I further authorize the said Herring Motor Company to collect and receipt for any bonus earned under said contract and to indorse any drafts issued in payment of same. ’ ’
Plaintiff, in his petition, which is in three counts, demands judgment against the defendant as follows: On Count 1, added commissions upon 3 per cent of the total net proceeds derived from the sale of Ford automobiles during the season of 1914-1915; in Count 2, upon 2 per cent thereof for the same period; and in Count 3, 3 per cent for the season of 1915-1916. To this petition the defendant, Herring Motor Company, filed answer and cross-petition, admitting the execution of the contract, but alleging that, by mutual mistake or. oversight, neither of said contracts nor the releases to them express the true intention and agreement of the parties; and prayed the reformation thereof.
Defendant claims, and alleged in its answer, that the parties in fact specifically agreed that the added commissions allowed by said contracts should be collected and retained by defendant, but that, by mutual mistake or oversight, the words “third party,” instead of “second party,” were used in Paragraph 30 of said contracts, and that the words “and retain the same as its compensation under said contract” were omitted from the last paragraph of the several releases executed to defendant; and it prays that ^ same be so reformed as to express the true agreement of the parties. The trial below was upon
A. R. Rockwell, sales manager, and C. L. Herring, general manager and president of the Herring Motor Company, were called as witnesses in defendant’s behalf. From their testimony it appears that, during the time covered by the several contracts in question, the Herring Motor Company was the distributing agent of the Ford Motor Company at Des Moines, and handled Ford automobiles, accessories, and supplies, which it sold generally to sublimited agents throughout its territory; that, prior to the season of 1913-1914, an added commission was paid to defendant upon net sales of automobiles within its territory, the maximum of which was in excess of 5 per cent; but that for the seasons of 1914-1915 and 1915-1916, the maximum additional commission provided by its contracts with the Ford Motor Company was 5 per cent; and that it received no other or further commission from the sale of Ford automobiles. Releases for the season of 1913-1914 were taken by defendant, but were not signed, however, until in January, 1914; but they are also identical with the like instruments quoted above. The added commissions earned under the contracts above referred to were received by defendants from the Ford Motor Company, and paid to plaintiff and his subsidiary companies some time after the close of the season’s business. All of the contracts and releases in controversy were presented to plaintiff by Rockwell, and signed by him in his presence, at the office of the Herring Motor Company at Des Moines. Rockwell further testified that he fully explained to plaintiff, when the contracts of October 29, 1914, were signed, that the Ford Motor Company had reduced the added commissions, or bonus, as it is sometimes called by the witnesses, payable to defendant under its contract therewith, to a maximum of 5 per cent; and that it was the intention of defendant to retain this commission for itself; and that the only commission plaintiff would receive was the 15 per cent upon the list price of automobiles sold; that plaintiff objected to this arrangement, but, after some discussion, and a conference with Mr. Herring, he agreed thereto, and signed the contracts and releases in controversy. He further testified that the question
Plaintiff specifically denies the conversation testified to by Rockwell and Herring, and testified that no such arrangement or agreement was entered into, but, on the contrary, claims that the following conversation occurred, at the time of signing the contracts of October 29th:
“When I came to prepare my contract in the year 1915, for the balance of the year and for 1916, I signed a release to the Ford Motor Company, and one to the Herring Motor Company. I asked him where the bonus was for the year, and he said, ‘It will come along in due time.’ Exhibit F is the one I signed to the Herring Motor Company, at the request of Mr. Rockwell. I do not remember whether I tallied with Mr. Herring or not. I very seldom had any business with Mr. Herring. I always talked with Mr. Rockwell. He handled the territory, told us how many cars we got, and I paid Mr. Rockwell for the cars. I talked with Mr. Herring in 1912, when I first went up there, but do not think I ever did about the contracts. At the time I signed these two instruments, 29th of October, 1914, I said to Mr. Rockwell, ‘Is it like it was last year, if I was to release it?’ and he says, ‘You got your money, didn’t you ? ’ I says, ‘ I wouldn’t sign if I didn’t get the money, ’ and he, said, ‘You got it last year, didn’t you?’ I read it through," and'filled in the blank places, and I knew that it was intended to be a release of my added commissions for the ensuing year, just the same as the year before. We signed, one to Ford, the-year before,”
He admits, however, that, some time after suit was brought,
It appears that the contracts and releases executed to the Ford Mptor Company were furnished in blank form by the latter to the defendant, and that either Herring or Rockwell caused the blanks to be filled up, and the instruments signed by the sublimited agents. These papers, according to the testimony of plaintiff, were either prepared, ready for his signature, when he went to the office of defendant, or shortly thereafter. He took no part in the preparation thereof, although it appears that he filled in the date on some of the releases, at the time of signing the same. It is conceded by Herring and Rockwell that the reason for the execution of three contracts in 1913 was to reduce the amount of added commissions to be paid plaintiff. A reduction in the aggregate amount of added commissions earned by plaintiff resulted from the provision of the contract providing for a graduated rate: that is, the rate was fixed by the volume of business done. The law governing the reformation of written instruments is well settled, and need not be given extensive consideration in this opinion. The evidence of mutual mistake must be shown by clear, satisfactory, and convincing proof, and some cases declare that it must be free from doubt. Noble v. Trump, 174 Iowa 320; Wagner v. Glick, 177 Iowa 623; Good Milking Machine Co. v. Galloway, 168 Iowa 550.
It will be observed that the release to the Ford Motor Company is of any and all obligations to pay plaintiff rebate money, and that this language is identical with the first paragraph of the release to defendant. Plaintiff, in his testimony, used the words “bonus,” “rebate,” and “added commissions,” interchangeably. It is conceded that the words “bonus” and “added commissions” refer to the same thing, but whether the word “rebate,” as used in the releases, was intended by the parties
As stated above, defendant asks that the contracts be reformed by changing the word “third,” italicized in the portion thereof quoted above, and by adding a clause to the last paragraph of the release to defendant, confirming in it the right to • retain the added commissions. Referring further to the preparation of the contracts and releases, Mr. Herring testified as follows:
“I have had some experience as a dealer, in dictating understandings like that, and it was to be made as the paper shows. The contract between us and the Ford people was to be altered so that the additional bonus should come to us. I aimed to make the original contract different than it was. I ask the court to read this as I read it when I wrote it. I thought I had the contract as I intended it to be, and 150 dealers did not contest it, though most of them have been circularized.”
Circumstances shown in evidence tend, to some extent, to support the claims of the respective parties. It will be observed that, notwithstanding the declarations of Rockwell and Herring that plaintiff objected to signing the contracts and releases for both seasons, and to permitting defendant to collect and retain the commissions, neither the contracts nor releases were changed in any respect before same were signed. This is true of all of the contracts involved in this controversy. No explanation is offered of the failure to change these instruments, which are identical with the contracts and releases signed by plaintiff for the season of 1913-1914, under which defendant paid the added commissions to plaintiff according to the provisions thereof. The reasons given for dividing plaintiff’s territory so as to require three contracts would, upon his theory of the contracts,
“We enclose herewith a form of release of rebate, which we ask you to please sign and return to us at once.
“You will please understand that the execution of this release does not in any way release us from paying you the rebate which you will earn according to your contract, but does permit the Ford Motor Company to pay to us, as fast as earned upon our volume of business,-the earned rebate. This in turn will permit us to settle with you direct, promptly, as fast as you have earned any rebate. This will avoid the long delays which we have heretofore had in securing for our dealers the rebate which their volume of business has earned them.
“We know you will not hesitate to accept us for this rebate, and we promise to let you have our check just as fast as your volume of business entitled you to such bonus.
“We repeat that we would like you sign and return this release to us at once, so that we may get this plan in operation, and we also repeat that you are in no way releasing us from our obligation of paying to you the amount of bonus which your volume of business earns you under your contract, and we further agree to pay such bonus as fast as earned.”
It may be assumed that these letters correctly represent defendant’s interpretation of the contracts, and, whatever may be the full legal effect thereof, — this we do not determine, — in the absence of a modification thereof, plaintiff might reasonably