Case Name: The Warren Chemical & Manufacturing Co., App'lt, v. Giles J. Holbrook, Resp't
Court: New York Court of Appeals
Jurisdiction: New York
Decision Date: 1890-02-25
Citations: 29 N.Y. St. Rep. 848
Docket Number: 
Parties: The Warren Chemical & Manufacturing Co., App’lt, v. Giles J. Holbrook, Resp’t.
Judges: 
Reporter: New York State Reporter
Volume: 29
Pages: 848–851

Head Matter:
The Warren Chemical & Manufacturing Co., App’lt, v. Giles J. Holbrook, Resp’t.
(Court of Appeals, Second Division,
Filed February 25, 1890.)
1. Principal and agent—Compensation of agent dependent upon success—Principal cannot terminate agency merely to deprive AGENT OF COMPENSATION EARNED.
When the compensation of an agent is dependent upon the success of his efforts in procuring a contract for his principal, and his subsequent performance of the work, the principal will not be permitted to stimulate his efforts with the promise of reward and then when the contract is obtained and the compensation assured after construction, terminate the agency for the sole purpose of securing to himself the agent's profits.
2. Statute of frauds—Performance within a year.
The statute of frauds does not include an agreement where there is nothing in its terms inconsistent with complete performance within a year.
Appeal from a judgment of the general term, first department, entered upon order, affirming a judgment in favor of defendant entered upon a verdict at circuit.
William W. Niles, for app’lt; William Talcott, for resp’t.
Affirming 9 N. Y. State Rep., 293.

Opinion:
Parker, J.
This action was brought to recover for a quantity ,of roofing material. The answer admitted the sale, delivery and balance unpaid to be as set forth in the complaint, and set up by way of counterclaim, in substance, that defendant was the agent of the plaintiff for the district of Northern New Jersey for "Warren's Anchor Brand National Asphalt Roofing." That by the terms of the agency he solicited contracts for putting on the plaintiff's patent roofing. The contracts to be made with the plaintiff but the defendant to do the work and pay the plaintiff an agreed price for the material. That within his territory the plaintiff, aided and assisted by the defendant, procured a contract to put the roofing on some buildings about to be erected, or in process of erection by the West Shore & Buffalo Railway Company. That it was expressly stated to him by the officers and agents of the plaintiff that he was to do the work. He then proceeded to make the necessary arrangements in order to fulfill the contract, including the purchase of gravel and other materials which the plaintiff did not furnish. That he was only permitted to put on the roof of the round house, the plaintiff refusing to furnish the materials or suffer him to do the other work. That instead, the plaintiff did the work and retained the moneys paid therefor. That thereby he sustained damages to the amount of $6,756 and demanded judgment therefor, less the amount of plaintiff's claim! He also demanded a further sum, by way of counterclaim, for work done upon another building, but as the -verdict of the jury was in favor of the plaintiff as to it, no further reference thereto is required. What may be said hereafter will refer solely to the first counterclaim.
At the close of the testimony the plaintiff moved the court for a dismissal of the counterclaim and for judgment. Several grounds were assigned, but they may properly be grouped into three propositions: First, there is not sufficient evidence of a contract of agency to authorize a recovery; second, if there was a contract, then the plaintiff having reserved the right to terminate it, the exercise of such right relieved it from all liability; and, third, in any event, the alleged contract was void under the statute of frauds.
The evidence on the part of the plaintiff tended to show that prior to February, 1872, the Messrs. Morton were acting as agents for the plaintiff in a territory known as northern Hew Jersey. That, at about that time, the defendant bought out one of the Mortons, and the new firm was recognized by the plaintiff as its agent. Subsequently, the firm was dissolved and the defendant alone continued the business. The plaintiff was notified of the change and accepted the defendant as its agent. That it was agreed that, during the pleasure of the plaintiff, the defendant should have the exclusive right to apply the roofing material within the territory of northern Hew Jersey.
Hnder this arrangement, the defendant alone, and also in conjunction with the officers and employees of the plaintiff, solicited contracts for the putting on of the roofing. When a piece of work was obtained, the contract was made by the plaintiff. It shipped the patent roofing to the defendant, who did the work and furnished such other materials as were required to perform the contract; the defendant "paying the plaintiff an agreed price for the patent roofing, and retaining the balance of the contract price for services rendered in attempting to secure contracts and putting on the roofing.
In the fall of 1881, some of the agents or servants of the plaintiff called defendant's attention to the amount of roofing in contemplation by the Hew York, West Shore & Buffalo Railway Company, and requested him to join in an attempt to secure the job.
This he did, and to that end contributed both time and money. The president of the plaintiff requested that the price be named by the defendant, and asserted that if the contract should be obtained it would be in defendant's territory and would be his job. It was obtained, and subsequently the defendant was instructed to prepare to perform the work. He entered upon its performance, but was only permitted to roof the round-house. Whether, by the terms of the agency, the defendant acquired the exclusive right to use the plaintiff's roofing materials within the territory in which the West Shore buildings are situate, was sharply litigated upon the trial and has been pressed upon our attention here. Respecting that issue, we agree with the learned trial court that the establishment of defendant's counterclaim does not depend upon whether, under the original agreement of agency, the defendant was exclusively entitled to put on the roofing in this territory. For the evidence at least permitted a finding that not only had he been an agent of the plaintiff for years, but that such agency was recognized and adopted in and extended to this particular transaction.
As to the existence of the contract of agency, therefore, a question' was presented for the jury. It was also urged, in support of the motion for judgment, that by the terms of the agency the plaintiff was at liberty to terminate it at any time. That, therefore, the plaintiff did not exercise a right reserved of which the defendant cannot be heard to complain. We cannot assent to that proposition in the breadth contended for it.
The right to terminate the agency had only one limitation it is true, but it had one. The time of its exercise was subject to the ordinary requirements of good faith. When the compensation of an agent is dependent upon the success of his efforts in procuring a contract for his principal, and his subsequent performance of the work, the principal will not be permitted to stimulate his efforts with the promise of reward, and then when the contract is obtained, and the compensation assured after construction, terminate the agency for the sole purpose of securing to himself the agent's profits. At any time before there was a reasonable assurance that the contract would be obtained, the plaintiff might have terminated the agency.
But after it was obtained, and his right to such profits as might accrue became assured, it could not be put at an end in bad faith, and as a mere device to deprive the agent of the fruit of his labors.
The defendant's evidence tended to show that the plaintiff's refusal to permit him to complete the work, after he had by his direction purchased materials, and entered upon its performance, was.done in bad faith and for the sole purpose of depriving him of the large profits likely to accrue. On the other hand, the trend of plaintiff's evidence was in the direction of good faith on its part in terminating the agency. Thus was presented a question of fact for the consideration of the jury, and the trial court rightly so held. Assuming that the contract was one for the sale and delivery of patent roofing materials to be thereafter manufactured and delivered, the most favorable view possible for the plaintiff, it is not within the statute of frauds. True there was no note or memorandum of the contract. But, in this state, we regard the established rule to be, that a contract for the sale of articles, thereafter to be manufactured and delivered, does not come within the condemnation of that provision. Parsons v. Loucks, 48 N. Y., 17.
While it is true, as insisted by the appellant, that 'it was not provided by the terms of the contract that it should be performed within one year from its making, neither was it provided that it should not be performed within such period. Rothing whatever was said as to time. Row the statute does not include an agreement which is simply not likely to be performed nor yet one which is simply not expected to be performed within the space of a year. Reither does it include an agreement which, fairly and reasonably interpreted, admits of a valid execution within that time, although it may not be probable that it will be. Kent v. Kent, 62 N. Y., 560.
The statute as interpreted by the courts, therefore, does not include this agreement, for there is nothing in its terms inconsistent with complete performance within a year.
It follows that the motion for judgment was properly denied.
The first exception to which our attention is called does not present a question for review. The objectionable evidence constituted the unresponsive portion of an answer to a proper question, answered without objection. The plaintiff contented himself with an objection and exception, after answer given, instead of a motion to strike out.
The rejection of the letters, marked " C " and " H " for identification, appears to have been based, in part, upon the objection that they had no reference to the contract in dispute. As we are prevented from examining them by reason of their exclusion from the printed record, it must be assumed that the trial court rightly determined that they did not relate to the pending controversy.
The evidence offered for the purpose of showing the amount of damages sustained, was properly received. The element of damage, recoverable in this case, consisted of gains prevented. The proper measure, therefore, was the loss of profits so far as provable. Wakeman v. Wheeler & Wilson Mfg. Co., 101 N. Y. 205.
An examination of each of the many exceptions taken fails to disclose any error justifying a reversal.
The judgment should be affirmed.
All concur, except Haight, J., not sitting.