Case ID: nys_137/html/0906-01.html
Source: Caselaw Access Project
Author: {"author": "SEABURY, J.", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

(78 Misc. Rep. 152.)
    CAFFE v. NEWARK AUTOMOBILE MFG. CO.
    (Supreme Court, Appellate Term, First Department.
    November 8, 1912.)
    Principal and Agent (§ 81*)—Compensation—Breach oe Contract by Principal—Acts Constituting Breach.
    In an agreement whereby plaintiff was to have the exclusive right to sell a certain amount of the stock of the defendant corporation for a fixed commission, a provision that “a signed subscription and 25 per cent, in cash was to constitute a sale” was only intended to limit the terms upon which plaintiff might sell, and not to enable the corporation to sell its stock upon different or less stringent terms; so that its sale of stock in exchange for merchandise and patent rights during the term of the agreement was a breach thereof, entitling plaintiff to damages equal to the commissions he would have earned on such sales.
    [Ed. Note.—For other cases, see Principal and Agent, Cent. Dig. §§ 194-214, 219, 223; Dec. Dig. § 81.*]
    Tor other cases see same topic & § number in Dec. & Am. Digs. 1907 to date, & Rep’r Indexes
    
      Appeal from City Court of New York, Trial Term.
    Action by Michel P. Caffe against the Newark Automobile Manufacturing Company. From a judgment of the City Court of the City of New York, entered by direction of the court in favor of the defendant, plaintiff appeals. Reversed, and new trial ordered.
    Argued October term, 1912, before SEABURY, GUY, and BI-JUR, JJ.
    Ferguson & Ferguson, of New York City (L. C. Ferguson, of New York City, of counsel), for appellant.
    Louis Fridiger, of New York City, for respondeht.
   SEABURY, J.

This action is brought to recover the sum of $5,-•000 arising out of a breach of an agreement between the plaintiff’s assignor and the defendant. Under the agreement sued upon the plaintiff’s assignor had the exclusive right to sell $160,000 worth of stock of the defendant corporation, and was to receive therefor a commission of 15 per cent, on all sales of said stock. The agreement provided that, in so far as the plaintiff’s assignor was concerned, “a signed subscription and 2,5 per cent, in cash was to constitute a sale.” The plaintiff proved that, before the exclusive right of his assignor .to sell stock had expired, the defendant sold over $6,200 worth of stock to various persons in exchange for merchandise and patent rights. The learned court below directed a verdict for the defendant, upon the ground that the plaintiff could not recover commissions for sales made by defendant, because those sales were not made upon the terms upon which, under the agreement, the plaintiff’s assignor was limited to selling.

We think that this ruling was incorrect. The contract gave the plaintiff’s assignor the exclusive right to sell stock. This right was inconsistent with any right on the part of the defendant to sell stock. The provision in the contract that a signed subscription and 25 per cent, payment in cash should constitute a sale was intended to limit the terms upon which the plaintiff’s assignor was authorized to sell the stock. It was' not intended to mean that the defendant could sell stocks, provided it sold them upon different or less stringent terms than those upon which the plaintiff’s assignor was required to sell. Such a construction of the contract would render the exclusive privilege to the plaintiff’s assignor valueless. As we construe the contract, its meaning is that the plaintiff had the exclusive right to sell $160,000 worth of stock, and that he was only authorized to sell upon obtaining a subscription and 25 per cent, cash, and that, while this exclusive privilege was outstanding, the defendant had no right to sell stock, and, if it did sell, the plaintiff was entitled to recover damages equaling the commissions that he would have earned upon such sales, even though the defendant sold upon terms different from those upon which the plaintiff’s assignor was limited to selling.

It follows that the judgment should be reversed, and a new trial ordered, with costs to the appellant to abide the event. All concur.