345 S.W.2d 912 | Ark. | 1961
Appellant and appellee are corporations organized under the laws of Arkansas. The State Highway Commission invited competitive bids for 40,000 gallons of white, and 40,000 gallons of yellow, highway paint. On June 9, 1960, both companies submitted bids. Appellant submitted a bid of $2.23 per gallon for white paint and $2.39 per gallon for yellow paint, respectively totaling $89,200 and $95,880. Pulaski’s bid amounted to $2.19 per gallon for white paint and $2.31 per gallon for yellow paint, respectively totaling $87,600 and $92,400. Under the provisions of ¡-Sections 14-119 and 14-120, Arkansas Statutes, public agencies of the State of Arkansas, in the purchase of commodities on competitive bids, are required to purchase from a resident firm, provided the bid of the resident firm does not exceed by 5% the lower bid of the non-resident firm, and further provided that the former claims the preference at the time of the submission of the bid. Both appellant and appellee claimed the preference, and the contract was awarded to Pulaski on the basis of its lower bid. Thereafter, appellant (which submitted the next lowest bid, and would have received the contract if Pulaski had not also been entitled to a preference) instituted suit in the Pulaski Chancery Court against appellee, the Commissioners of the State Highway Commission, State Comptroller, State Auditor, and State Treasurer, alleging that appellee, insofar as the sale of paint was concerned, did not meet the requirements of Section 14-120 (d),
The proof before the court consisted of the testimony of J. W. Meredith, Jr., procurement officer for the Highway Commission, C. C. Kress, president and owner of Pulaski, and Walter Skipper, Secretary-treasurer of Stebbins & Boberts. Pulaski has been engaged in business in Little Bock since 1955, selling glassware and mirrors. According to the testimony of Kress, William Armstrong Smith, of Atlanta, Georgia, contacted him by telephone sometime in January, 1960, relative to Pulaski becoming paint distributor for the Smith Company. He was not acquainted with Mr. Smith prior to that time. The conversations continued, off and on, until March, Smith bearing the expense of the telephone calls. According to Kress, he accepted the line in the latter part of March, and identified a letter that he received from Smith on March 23rd. The letter is as follows:
“We are happy to learn that you are willing to act as our paint distributor in the Little Bock area and would like to bid on State of Arkansas Traffic Paint bids as well as the various requirements on maintenance paints.
Our truck will be leaving here Friday and should arrive in Little Bock Sunday afternoon. I have given the truck driver your home ’phone number (MOhawk 6-6053) and when he arrives in town you can come down and let him in.
Enclosed is Dealer’s Price List No. 1909 as well as a Suggested Betail Price List. We will give you an additional 15% discount from the prices shown on the Dealer Price List.
We also enclose color cards and pamphlets relative to several of our products.
I trust you will be wanting to order some of these paints in the near future as we develop sales for the colors.
Your initial stock order -will consist primarily of white as 30% of the paint sold today is white and most of the painters prefer to tint it on the job.
Included in your shipment is a quantity of plain traffic paint along with the reflectorized traffic paint. The one gallon cans will be helpful to you in demonstration work in the various cities and towns in which you will be working.
There are several body builders in the Little Rock area that will be interested in purchasing aluminum from you. Mr. Caudle of Wonder State Paint Company developed aluminum sales to these body builders. I will try and find out the names of these builders so that you can develop sales on the aluminum.
Looking forward to a mutually profitable relationship with you, I remain
Very truly yours,
WILLIAM ARMSTRONG SMITH COMPANY
/s/ William A. Smith, President”
An invoice, dated March 25th, in the amount of $2,235.34, accompanied the shipment, which was sent to Little Rock by truck. The paint was received on consignment, Pulaski to pay the Smith Company as the paint was sold. Kress testified that 20 gallons of paint had been sold out of the original consignment. The testimony reflected that Smith came to Little Rock a few days prior to the making of the bid, which occasions this litigation. A bid bond was filed with the Pulaski bid, and after receiving the contract, a performance bond was filed. These bonds were arranged by Smith, and the premium on the performance bond paid by Smith. Kress testified that he prepared the hid with the assistance of Mr. Smith, after being given a unit price by the latter. He (Kress) then decided how much profit he was going to add. The witness testified that, under his arrangement with Smith, the Pulaski Company would receive the check from the Highway Department, and he would then pay the Smith Company its bill for the paint. The paint was to be manufactured in Atlanta, and shipped directly from there to the Highway Department. Mr. Kress stated that one of his employees had built shelving in late May to display the new product. Upon being interrogated as to who would pay for the costs of litigation, he replied:
“A. Mr. House, I am going to pay this if it is not exorbitant, and more than I can stand. To date, I don’t know how much this is going to be. This represents not only a suit against me, but every businessman in this State who handles an out of State item and I am going to pay everything, but believe me if I can get them to help pay it, I certainly will. I have no idea how far it will go and I may get more than I can stand.”
Kress had not advertised as a paint dealer,: nor had he added any employees due to the acquisition of the new merchandise.
Walter Skipper, Secretary-treasurer of Stebbins, testified that most paint dealers carry a color line so that the needs of a customer can be serviced in any color or size desired. He stated that most have color mixers, i.e., tubes of various shades are mixed with a white base to arrive at different colors. He stated that the “normal paint dealer” in Little Rock has a paint shaker; likewise, according to his evidence, the ordinary paint dealer in Little Rock carries a line of accessories consisting of brushes, ladders, and painters’ tools, which are displayed prominently in the store, and such a dealer, has a complete line of flat wall paints, rubber base paints, exterior paints of all types, and carries quarts, pints, and half-pints. He was emphatic in stating that his company does not sell on consignment. On learning that Pulaski had submitted a bid, Skipper went to their place of business. He testified that he found only four cartons of paint stacked in a corner, a couple of drums, but no display at all. He stated that he saw no other paint, though it could have been in the back of the warehouse. Skipper had filed a protest with the Commission, and had requested one of the Commissioners to make an investigation. Upon viewing pictures of a paint display which had been offered in evidence, Skipper stated that such a display was not in existence at the time he visited the Pulaski store.
Appellant, in its brief, states that this case is not subject to the rule that an affirmance will be ordered where the findings of the Chancellor are not against the preponderance of the testimony, for there is but little dispute in the testimony. This is true, but the evidence is susceptible to more than one interpretation, and we are of the opinion that the question presented (when a dealer is entitled to preference under the statute) is factual, depending upon the circumstances in each particular case. In other words, there is no hard and fast rule which governs the issue in controversy.
Let us review .these facts, relied upon by appellant, as establishing its contention that Pulaski was not a bona fide paint dealer. We find no significance in the fact that the first contact was made by Smith, rather than the dealer. The proof reflects that the Smith products had formerly been handled by Wonder State Paint Company, an established Little Rock paint dealer. For some reason, not revealed by the record, the relationship between Smith and Wonder State was severed, and we find nothing unusual in a paint manufacturer endeavoring to obtain another distributor for its products. Since appellee was already engaged in selling certain building supplies, the choice seems logical enough. Kress testified that he desired to expand his business, and it seems but natural that the handling of paints would be a proper line to turn to, since glass and paint are frequently handled together.
Appellant takes the view that the shipment of the paint on consignment is a strong circumstance indicating that Pulaski was no more than an agent. We do not agree. Though, according to Skipper, appellant company has a strict rule against selling on consignment, we think unquestionably that many concerns, at least on occasion, and when dealing with merchants of limited means, do sell on consignment,
Finally, appellant emphasizes that Kress is to receive a “commission” for handling the paint. Though it bears no particular import, it is interesting to note that the word “commission” was first used at the trial by appellant’s counsel. Kress had been called to the witness stand by the opposing party, in fact, all witnesses were placed on the stand by appellant. In examining Kress relative to the amount of the bid, counsel for appellant asked:
“Q. Now, you testified in here — at least, I questioned you about who fixed the final price in the bid which you submitted to the Highway Commission?
A. Yes, sir.
Q. Is any part of this bid yours that you prepared?
A. I determined my profit, yes, sir.”
Subsequently, counsel used the term “commission”, and then asked the witness:
“Q. And you don’t want to reveal what your commission is?
A. No, sir, I certainly don’t. It would be very damaging evidence to me.
Q. All right, we won’t ask you.
A. In front of my competitor it would be damaging to me.”
Further:
“And your part of this
A. My percentage of the profit that I feel I am entitled to, yes, sir.”
We think it makes little difference as to the term used. The fact remains that before appellee could make a bid, it was necessary that he first ascertain the unit price from the manufacturer; to this, he added his profit, commission, mark-up, or whatever term one may choose to use.
We are unable to say that the Chancellor’s finding was erroneous.
Affirmed.
This subsection reads as follows: “ ‘Firm resident in Arkansas’ shall mean any individual, partnership, association, or corporation (whether domestic or foreign), which maintains, at the time of submission of the bid, a bona fide place of business and a representative inventory of the commodities on which the bid is submitted, within the State of Arkansas, and, in the case of corporations, is duly qualified to do business and is in good standing under the laws of the State of Arkansas.”
For instance, Pittsburgh Paint & Glass Company is a well known concern that has been engaged in the paint and glass business for many years. Kress also testified that he intended to take on other building products in expanding his business.
Appellant operates both a manufacturing plant and a retail store.
Kress testified that some of his glass was also bought on consignment.
Referring to the payment by the Highway Department.