BAUM ASSOCIATES, INC., a corporation, Appellee,
v.
SOCIETY BRAND HAT COMPANY, a corporation, Appellant.
BAUM ASSOCIATES, INC., a corporation, Appellant,
v.
SOCIETY BRAND HAT COMPANY, a corporation, Appellee.
Nos. 72-1253, 72-1256.
United States Court of Appeals,
Eighth Circuit.
Submitted March 13, 1973.
Decided April 19, 1973.
Rehearing Denied May 11, 1973.
Richard S. Marx, Clayton, Mo., for Society Brand Hat Co.
Charles Alan Seigel, St. Louis, Mo., for Baum Associates.
Bеfore VAN OOSTERHOUT, Senior Circuit Judge, and MEHAFFY and HEANEY, Circuit Judges.
MEHAFFY, Circuit Judge.
This is a diversity action by a New York corporation, Baum Associates, Inc.,1 against a Missouri clothing manufacturer, Society Brand Hat Company,2 to recover commissions allegedly due plaintiff for the procurement of customers for defendant. In the district court defendant Society Brand argued that plaintiff's claims for commissions (1) were barred by the statute of limitations; (2) were barred by the statute of frauds; and (3) were excessive bеcause they included commissions on an account not actually procured by the plaintiff. The trial court, with The Honorable H. Kenneth Wangelin presiding, heard the matter without a jury and rendered judgment in favor of plaintiff for most of the commissions sought in the complaint. Baum Associates, Inc. v. Society Brand Hat Co.,
The background facts of this case have already been reported in some detail in the district court's opinion. We will thеrefore limit our discussion of the facts to a summary of the elements necessary to our decision.
The issues presented in this appeal arise out of three separate contracts between plaintiff and defendant. The first contract is a formal written agreement in which plaintiff agreed to solicit McGregor-Doniger, Inc. as a customer for defendant and defendant agreed to pay plaintiff a 60cents commission for each dozen pair of trousers thereafter delivered by defendant to McGregor.3 The second contract is similar to the first except that: (1) it involved the solicitation of Campus Sportswear, Inc.; (2) the commission agreed upon was 30cents per dozen; and (3) the agreement was not reduced to writing in a single formal document. The third contract is also similar to the first except that: (1) the contract dealt with the solicitation of Comus, Inc.; (2) the commission was 25cents per dozen; and (3) the сontract was not reduced to a single written instrument.
The findings of fact of the district court reflect that each of the three customers was solicited and procured by plaintiff for defendant. The trial court also found that defendant manufactured trousers for each of the customers and paid plaintiff commissions on the production until August 1963. On August 13, 1963, however, defendant wrote plaintiff a letter purporting to terminate all of their contracts. No further commissions were paid by defendant to plaintiff after this letter of termination. Plaintiff refused to accept defendant's attempted termination and on April 2, 1970 filed this action.
The first problem presented in this appeal is the selection and application of the appropriate statute of limitations. The parties agree that Missouri law is controlling but they disagree over which Missouri limitation should be applied. In its cross-appeal plaintiff argues that the ten year limitation for actions on written promises to pay, Rev. Stat.Mo. Sec. 516.110(1) (1969), V.A.M.S., should be used. Defendant contends that the five year statute, Rev.Stat.Mo. Sec. 516.120(1) (1969), V.A.M.S., is applicable. We agree with the district court and the defendant that the five year statute should be applied. The pleadings in the trial court and on appeal clearly indicate that plaintiff's cause of action is not one upon a written promise to pay as contemplated in the ten yeаr statute. See Martin v. Potashnick,
Having determined that the five year limitation is controlling, a more difficult problem arises in the application of the statute. Defendant argues that the contracts in dispute were contracts in perpetuity and therefore were terminable at will, or at least after a reasonable time. Superior Concrete Accessories v. Kemper,
We agree with the district court's application of the statute of limitations. We recognize that Missouri, like most other jurisdictions, generally refuses to enforce аn obligation in perpetuity. E. g., Superior Concrete Accessories v. Kemper, supra; Paisley v. Lucas,
Second, contractual relationships between businessmen are not abstract matters that are to be judged without reference to the customs and usages of the industry. Although we have found no Missouri cases dealing with textile contract brokerage agreemеnts, other courts, when faced with such questions, have realistically measured the agreements of the parties in light of industry practices and the relative positions of the parties. In this case defendant Society Brand was heavily dеpendent upon government contracts and was anxiously seeking some means to enter the private od civilian market. Mr. Baum, on the other hand, was a man with several decades of experience in the clothing industry. It is cleаr that Baum's efforts in effecting the shift for Society Brand from the government market to the private market was a very valuable service which defendant could not afford to purchase other than on a long-term commission basis. In light of these practical considerations we do not feel that this case is an appropriate one for an automatic application of the general rule against enforcing obligations in perpetuity. Compаre, e. g., Zupan v. Blumberg,
Third, this case falls squarely within the purview of at least two of the rules by which Missouri has qualified its general policy against any enforcement of an obligation in perpetuity. The first rule is that where a contract has been fully performed by one party it cannot be terminated by the other. Union Pac. R. R. v. Kansas City Trans. Co.,
The last two issuеs presented in this appeal are basically fact questions and can be dealt with summarily. First defendant argues that the statute of frauds bars recovery of the commissions because none of the writings set forth commission rates for thе accounts that would be applicable for the full term of the contracts. We recognize that the Missouri statute of frauds provides that price is an essential element of the writing or writings that make up the contract. E. g., Byers v. Zuspаn,
The final issue presented in this appeal is whether or not plaintiff actually procured the Comus account and therefore is entitled to commissions on it. The district court specifically addressed this same factual question at the trial level and found that defendant's argument was built upon a scheme to deprive plaintiff of the commissions it had hitherto received on the Comus account. We have reviewed the record and are convinced that the district court's conclusion in this regard was supported by substantial evidence.
We find also that the other determinative issues in this case present basically factual matters grounded on substantial evidence which is as it should be binding on a court of review.
The judgment of the district court is affirmed.
Notes
Baum Associates, Inc. is the successor in interest to the original contracting party Baum Mfg. Company. Defendant has challenged the status of Baum Associates as not being the real party in interest. We find this issue frivolous and dismiss defendant's argument in this regard on the basis of the district court's opinion
Society Brand Hat Company is the successor in interest to the original contracting party Apparelcraft, Inc
"AGREEMENT
"Apparelcraft, Inc. agrees to employ Baum Manufacturing Corp. to procure contracts for the manufacture of trousers from McGregor-Doniger, Inc. and its affiliates and/or Brook Mfg. Company of Old Forge, Pa.
"Apparelcraft, Inc. agrees to pay Baum Manufacturing Corp. five (5cents) per pair of trousers on all contracts, orders or reorders procured by either Baum Manufacturing Corp. or Apparelcraft, Inc. from the above two firms and delivered by Apparelcraft.
"Payment to be due and payable within 10 days after receipt of payment by the customer. Copies of all invoices are to be furnished to Baum Manufacturing Corp. "Baum Manufacturing Corp. will devote only such time as they deem necessary to procure and service business from the above two firms."