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Eskin v. Acheson Manufacturing Co.

decided.: July 26, 1956.

MURRAY ESKIN, APPELLANT,
v.
ACHESON MANUFACTURING COMPANY, A PENNSYLVANIA CORPORATION.



Author: Hastie

Before GOODRICH, KALODNER and HASTIE, Circuit Judges.

HASTIE, Circuit Judge.

This is an action in contract for commissions allegedly earned. For several years, until October 9, 1945, plaintiff, a citizen of New Jersey, served, by oral agreement with defendant, a Pennsylvania corporation, as manufacturer's representative having the State of New Jersey as his exclusive territory. Defendant manufactured and sold brass goods. It was mutually agreed that plaintiff was to be paid a commission of 5% on all goods shipped in his territory. Such commissions were payable on the 10th of the month following the month in which shipment was made.

As authorized by defendant, plaintiff solicited orders on the basis of defendant's current price list. At all times during the plaintiff's employment and thereafter, until February 21, 1946, defendant's policy and practice had been to fill all orders on the basis of its price list at the time the order was received. On or about February 21, 1946, defendant changed its sales policy and accepted orders only on the basis of its prices as they should be listed on the date of shipment.

During 1945, prior to this change in pricing policy, plaintiff had solicited and forwarded certain orders to defendant in the amount of $117,295.86. Price controls were then in effect and brass was in short supply so that it was not possible to fill orders for many months after they were received. Prices, being controlled, remained rather stable.

On April 2, 1946, defendant gave the following notice to all of its customers, including those whose unfilled orders had been procured many months earlier by plaintiff:

"To our Customers:

"Because of increased cost of labor, Materials, and supplies, we are obliged to adopt the following policy.

"All open orders which you have placed with us will be billed at the price prevailing on the date of shipment, regardless of the date of the order.

"In order that there may be no misunderstanding, we hereby request that you write us a letter authorizing us to proceed with your unfilled orders on this basis.

"In the event that we do not hear from you within a reasonable time, we will consider that you do not wish us to proceed and will therefore consider your orders as cancelled."

Customers solicited by plaintiff, whose orders in the amount of $117,295.86 defendant was holding for future action, were unwilling to buy on the new price basis and their orders have been cancelled for that reason. The district court found that defendant wrote the letter of April 2, 1946, in good faith because of changing economic conditions of the copper and brass industry, and not with any motive of depriving plaintiff of commissions. Price controls had been removed after the orders were received but before the letter was sent.

The trial court concluded that, in the circumstances outlined above, plaintiff was entitled to commissions only on goods actually shipped and not on the unfilled orders. From this judgment plaintiff has appealed.

This is a diversity suit filed in the District Court for the Western District of Pennsylvania. Therefore, Pennsylvania conflict of laws rules are applicable. But beyond this, the parties and the district court have assumed that the substantive law of contracts of Pennsylvania is controlling. However, the record is not informative as to the contacts, whether with Pennsylvania or New Jersey involved in the making and performance of bargains in this case.Therefore, we cannot be sure whether Pennsylvania choice of law rules would direct us to Pennsylvania or New Jersey contract law. However, that deficiency is not fatal to the adjudication of ...


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