Case ID: misc_78/html/0152-01.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

Michel P. Caffe, Appellant, v. Newark Automobile Manufacturing Company, Respondent.
    (Supreme Court, Appellate Term, First Department,
    November, 1912.)
    Contracts — exclusive right to sell corporate stock — sale by corporation— action for damages.
    Where 'an agreement under which plaintiff’s assignor had the exclusive right to sell $160,000 worth of the stock of defendant corporation provided, in so far as he was concerned, that a signed subscription and twenty-five per cent in cash was to constitute a sale, and, in an action to recover $5,000 as damages arising out of a breach of the agreement, the proof is that before the expiration of such exclusive right the defendant sold over $6,200 worth of said stock, and the court directs a verdict for defendant on the ground that plaintiff could not recover commissions for sales made by defendant because they were not made on the . terms upon which under the agreement plaintiff’s assignor was limited to selling, the judgment will be reversed and a new trial ordered, as the exclusive right to sell given to plaintiff’s assignor was inconsistent with any right on the part of defendant to sell.
    Appeal by plaintiff from a judgment of the City Court of the city of ¡New York entered by direction of the court in favor of the defendant.
    Ferguson & Ferguson (L. C. Ferguson, of counsel), for appellant.
    Louis Fridiger, for respondent.
   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 fifteen 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 twenty-five 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 twenty-five 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 twenty-five 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.

Guv and Bijub, JJ., concur.

Judgment reversed and new trial ordered, with costs to • appellant to abide event.