Case ID: ad_160/html/0803-01.html
Source: Caselaw Access Project
Author: {"author": "McLaughlin, J.:", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

Charles W. Schaffer, Respondent, v. Vandewater & Company, Ltd., Appellant.
    First Department,
    February 6, 1914.
    Principal and agent — assignment of contract appointing agent to sell automobiles — contract construed — action to recover deposit made by agent — counterclaims — failure of plaintiff to accept car delivered by original principal — failure to order cars as agreed.
    Where a contract appointing the plaintiff an agent to sell automobiles expressly provided that he “ agrees * * s to, and hereby does, order ” from his principal a certain number of cars which he agreed to accept and pay for as ordered, and required him to make a deposit on the cars ordered, the defendant, to whom the plaintiff’s principal assigned all rights under the contract with the plaintiff’s consent cannot, when sued by the plaintiff to recover the deposit made by him, assert a counterclaim based upon the fact that the plaintiff refused to accept a ear delivered by his original principal, if the assignment did not transfer such claim.
    But as the original contract of agency required the plaintiff to purchase absolutely a certain number of ears within one year, and did not merely give him an option to purchase, the assignee of the contract when sued for the deposit may assert a counterclaim based upon the plaintiff’s fail ure to order and accept the cars as he agreed to do.
    Appeal by the defendant, Vandewater & Company, Ltd., from an order and determination of the Appellate Term of the Supreme Court in favor of the plaintiff, entered in the office of the clerk of the county of New York on the lYth day of June, 1913, affirming a judgment of the Municipal Court of the City of New York, borough of Manhattan, fifth district, in plaintiff’s favor.
    
      Abraham P. Wilkes, for the appellant.
    
      George B. Keeler, for the respondent.
   McLaughlin, J.:

On the 25th of October, 1910, the plaintiff and the Correja Motor Car Company entered into a written contract by which the former was given the agency for the sale of the Correja cars within certain specified territory for the period of one year. The contract expressly provided that the plaintiff £< agrees * * * to, and hereby does, order from the Company the following cars at the prices and subject to the discounts set forth in Paragraph Second- of the Company’s agreements herein: Twenty (20) Correja 1911 Speed Runabout, and agrees to accept and pay for * * * as ordered.

“Second. To deposit with the Company on account of the cars herein ordered, Five Hundred Dollars ($500.), to apply as a blanket deposit on the cars ordered, with the understanding that the Company may at its option credit against any account past due from the Dealer to the Company any portion of or all of said deposit not already applied upon the purchase price of any car. Said deposit to be returned in full at end of the season.”

After the execution of the contract the plaintiff made the deposit in accordance with the terms specified. On March 11, 1911, the Correja Motor Car Company entered into a contract with the defendant by which the contract with the plaintiff was assigned to it, subject to his consent. The provision in regard thereto was as fofiows: “The party of the second part [Correja Motor Car Company] herewith sells, assigns and sets over aU its right, title and interest unto the party of the first part to the f oHowing contracts and to the payments to be made thereunder, as well as to all the moneys to be received or paid under said contracts severally: [here follows a list of contracts, including the one with plaintiff]. It being agreed between the parties hereto that the party of the first part [the defendant] will fill said contracts as far as filling the same is possible or is agreed to by the party to the contract, * * * and will also allow to each party under said contracts the sum of $25 from the purchase price of each car, which respective sums of $25 on each car shall be credited on the deposits given by the parties to said contracts to the party of the second part and the party of the second part hereby agrees to retain all of said deposits by it so received in Eeu [of] the commissions to be paid by the party of the first part to the party of the second part on the car so manufactured and shipped under the terms of said contract and as hereinafter more fully provided. ” Then foHow provisions to the effect that if an allowance of $25 on a car ordered by any agent did not equal the amount of his deposit, then the amount of the allowance should be changed accordingly, and that the assignment of the contract should be inoperative and of no effect unless the agent consented to it. Thereafter the plaintiff did consent to the substitution of the defend-' ant for the Oorreja Motor Car Company. In December, 1910, before the substitution, the plaintiff gave directions for the delivery of one of the cars ordered in his contract. He never gave any directions as to the other nineteen and they were never tendered to him, although defendant was able and willing to supply them. This action was brought to recover the $500 deposited by the plaintiff with the Oorreja Motor Car Company. A recovery was sought from defendant on the theory that the latter assumed and agreed to discharge whatever obligation rested upon the Oorreja Motor Car Company with reference to such deposit. The defendant, in addition to denying plaintiff’s right to recover the deposit, set up two counterclaims, one for $500 for plaintiff’s failure to accept and pay for one car shipped by the Oorreja Motor Car Company to Philadelphia, and which he refused to accept, and the other for $2,000 for failure to accept and pay for the other nineteen cars specified in the contract. At the trial the court dismissed both counterclaims and rendered judgment in favor of the plaintiff for the full amount of the deposit, together with interest thereon, and the same was affirmed on appeal to the Appellate Term. Defendant, by permission, appeals to this court.

The dismissal of the counterclaim for refusal to accept the car shipped to Philadelphia was proper. This car was delivered in Philadelphia in December, 1910, by the Correja Motor Car Company. This shipment may have been by direction of defendant, but if so it was as the agent of the Correja Company, because the contract between them was not entered into until March, 1911. Any claim for damages based upon plaintiff’s refusal to accept that car belonged to the Oorreja Company, and the contract between it and this defendant did not purport to assign the same. In the absence of proof that the same was assigned the counterclaim should not be allowed.

As to the other counterclaim I am of the opinion the same was improperly dismissed. The trial court proceeded upon the theory, as appears from the opinion, that the plaintiff was under no obligation to purchase the twenty cars specified in the contract, but merely had an option to do so. The time of acceptance and payment of the cars was at his option, that is, within the period of one year, which was the time specified in the contract. He was only to accept and pay for cars within that time “ as ordered,” but he agreed absolutely to take them within that time. The contract provided that the plaintiff “ agrees, first, to, and hereby does, order” twenty cars. He gave but one order and that was to the Oorreja Company for the one car which was shipped to Philadelphia and the other nineteen he never directed delivered at all. It was unnecessary for the defendant to tender the cars, because the plaintiff under the contract had one year in which to signify when they were to be delivered. (Hunter v. Wetsell, 84 N. Y. 549.) He was, however, as indicated, obligated within the year to direct when and where they should be delivered. Having failed to give this direction within the life of his contract, I think he thereupon became liable to respond in whatever damages the Oorreja Company or its successor, the defendant, sustained.

But, irrespective of the question of whether the defendant has a valid counterclaim, it is not liable to the plaintiff for the deposit because it never received it from the Oorreja Company, nor did it agree with that company to repay to the plaintiff the amount of the deposit except by crediting twenty-five dollars upon the purchase price of each car ordered and accepted by him. Payment in this way was adopted as a means of paying the Oorreja Company a commission on cars sold by relieving that company pro tanto from its obligation to return the deposit. Under the defendant’s contract with the Oorreja Company if the plaintiff did not order and accept cars then it did not obligate itself to pay commissions to the Oorreja Company or to pay to the plaintiff the deposit or any part of it.

The determination of the Appellate Term and the judgment of the Municipal Court are reversed and a new trial ordered, with costs to appellant to abide event.

Ingraham, P. J., Lahghlin, Dowling and Hotchkiss, JJ., concurred.

Determination of Appellate Term and judgment of Municipal Court reversed and new trial ordered, with costs to appellant to abide event. Order to be settled on notice.