Plaintiff is an Illinois corporation engaged in the manufacture of wall paper with offices at Chicago. Defendant is a Colorado corporation with offices located in Denver, and is engaged in paint contracting and in the wholesaling and retailing of wallpaper. J. P. Guiry is president of the defendant, and Quackenbush is factory superintendent and sales manager of plaintiff. Business relations between the two companies began in 1925, whereby defendant company sold plaintiffs product in what is known as the Denver territory which included Colorado and all or parts of surrounding states. The record discloses that through this business relationship, the defendant company handled plaintiffs product exclusively in the mentioned territory, until sometime in 1932, when differences arose which caused plaintiff to place its line with another Denver concern. At this time defendant was indebted to plaintiff in the amount sued for. Defendant admitted the correctness of the amount but denied owing it because of the allegations of its counterclaim by which it set out that plaintiff was indebted to it in the sum of $3,099.76 for expenses and loss of profits after the deduction of its indebtedness due on the book account.