Civ. A. No. 1333 | D. Del. | Jul 24, 1952
This is an action brought by Laurence C. Smith and Laura C. Smith, co-partners, trading as Laurence C. Smith Co.,
The case is before the court on the pleadings, deposition, interrogatories and answers thereto and affidavits. Smith’s facts are these: Onyx is a small manufacturing company which for many years has sold throughout the country a compound known as Resin 362 and another known as Onyx-san HSB. Onyx thought these two products would be useful in the wet cleaning, part of the dry cleaning business. It discussed its idea with people by the name of Harris,
Subsequent to the naming of the compound Revitex, Harris approached Smith and asked: “Well, what am I going to get out of this?” Smith agreed Harris was entitled to something for bringing Onyx and him together and for technical assistance which it was expected Harris would render. It was agreed, however, between Smith and Harris that no definite contract should be entered into until Smith had first received a national exclusive agency for Revitex from Onyx. Smith claims it was his understanding and intention that Harris would be compensated for technical assistance and for bringing the parties together, not that Harris should receive a royalty on all sales without restriction.
Smith claims to have been orally appointed Onyx’s “exclusive agent” for the sale of Revitex in the Autumn of 1949 by two sales agents of Onyx, although he admits the terms were to- be worked out at a later date. Smith urged the exclusive agency contract be reduced to writing. In early December, 1949, Smith claims he and Onyx had reached an agreement on all the important terms of the contract, though there were a number of details which had not been resolved. After a meeting on December 12, 1949, Smith contends all the important issues and many minor ones were resolved. By January 17, 1950, only one minor issue remained — the amount of Revi-tex Smith was required to purchase during the first year. This issue was resolved by telephone and confirmed by a letter by Onyx dated January 20', 1950.
Prior to this time, James H. Tully, Onyx’s attorney, had sent to Smith’s attorneys a draft of an agreement between Smith and Onyx. In his letter Tully requested the agreement be executed “on behalf of the Smith Company by Mr. Smith as partner” and the original returned to Tully. Tully further intended to have a duplicate copy of the original executed by Onyx and send it to Smith’s attorney upon receipt of the executed original. On January 20, 1950, Tully sent another letter to Smith’s attorney in which he referred to a certain schedule which, when completed, Tully said would be annexed to the copy of the agreement “being executed by Onyx” and then sent to Smith’s attorneys.
Smith claims by January 21, 1950, if not earlier, a contract existed between Smith and Onyx. The letters, making reference to the agreement, sent by Tully, who Smith asserts was the authorized agent of Onyx, are in Smith’s opinion sufficient compliance with the statute of frauds where the alleged contract — if there was a contract — is said to have been made. Smith, moreover, claims the contract here is not even embraced by the statute of frauds so as to make compliance with the statute necessary.
Smith denies any misrepresentation to or concealment from Onyx concerning any transaction Smith had with Harris. Smith claims Onyx told him it desired to deal directly and solely with him so he therefore did not take up with Onyx a proposed three party agreement among Onyx, Harris and Smith. The agreement at any rate was not acceptable to Smith since it conflicted with his previous understanding with Harris in that Smith agreed to employ Harris in a technical capacity with a royalty tied to the technical assistance furnished and not that Harris should receive a royalty on every gallon sold. Smith asserts he never signed an agreement with Harris and, in fact, it was understood between them they would not negotiate until after Smith’s negotiations with Onyx had been completed. Smith, therefore, asserts he is not liable to Harris for any royalty payments. The only possible liability of Onyx, in the view of Smith, would come from Harris’ assertion he developed Revitex and that dispute would be between Harris and Onyx and unrelated to Smith. Finally, Smith argues his agreement with Onyx is not in restraint of trade, does not violate the antitrust laws and therefore is enforceable. Smith concludes he is at a loss to understand why Onyx repudiated its contract with him.
Turning to Onyx’s view of the facts, it is immediately apparent this case cannot be decided on a motion for summary judgment. Hart & Co. v. Recordgraph Corp., 3 Cir., 169 F.2d 580" court="3rd Cir." date_filed="1948-08-13" href="https://app.midpage.ai/document/frederick-hart--co-v-recordgraph-corporation-1476912?utm_source=webapp" opinion_id="1476912">169 F.2d 580. Rather than detail the factual differences I merely list several
Summary judgment for defendant is denied. Let an order be submitted.
On Petition for Reconsideration
Onyx has filed a “Petition for Re■consideration” seeking a determination at this time on its defense the agreement in suit is in restraint of trade, violates the antitrust laws, and is, therefore, unenforceable. This defense was one of the grounds Onyx urged in its motion for summary judgment which I denied. Onyx submits this defense can be decided on a motion for summary judgment since there are in its opinion no factual questions barring summary disposition. I disagree.
Onyx claims the contract “reveals clearly * * * it is an exclusive sales contract.” Smith asserts the agreement is one of agency. Onyx’s argument is there are no facts to support the Smith assertion.
When one turns, however, to Interrogatory No. -7 served by Smith on Onyx February 2, 1951, and the answer served by Onyx February 16, 1951, there appears in Onyx’s words the purpose of negotiations between it and Smith; the gist of the answer was Smith was to become “an exclusive distributor for defendant.” (Emphasis added.) There is much, it is true, in the present record indicating the contract was entirely a sales contract; yet there are also certain facts pointing to an agency relationship, see e. g. the proposed tripartite agreement. The words “exclusive distributor” alone do not necessarily connote only one relationship which can be pigeon-holed as either sales contract or agency contract. If an agency contract was contemplated, assuming I find a valid contract, it may never be necessary to consider the defense raised now by Onyx. If a sales contract is found, again assuming I find a valid contract, then Onyx’s defense would be relevant. What an “exclusive distributor” is, is to me a factual question about which I should like to hear a little more.
And now, to-wit, this ninth day of September, A. D. 1952, defendant’s motion for reconsideration or reargument having been read and considered, it is
Ordered, defendant’s motion for reargument be and the same hereby is denied.
. Hereinafter referred to as “Smith”.
. Hereinafter referred to as “Onyx”.
. Hereinafter referred to as “Harris”.