Case Name: The Hopedale Electric Company, Respondent, v. The Electric Storage Battery Company, Appellant
Court: New York Supreme Court, Appellate Division
Jurisdiction: New York
Decision Date: 1899
Citations: 39 A.D. 451
Docket Number: 
Parties: The Hopedale Electric Company, Respondent, v. The Electric Storage Battery Company, Appellant.
Judges: 
Reporter: Appellate Division Reports
Volume: 39
Pages: 451–454

Head Matter:
The Hopedale Electric Company, Respondent, v. The Electric Storage Battery Company, Appellant.
Contract—measure of damages where a vendee fails to make a test, upon the result of which payments are to he based..
Where a contract for the sale of the property of one storage battery company to another provides, among other things, for the payment in the future to the vendor of stipulated amounts, dependent upon the relative superiority of the system of the vendor over that of the vendee, to be determined by a competitive test to be made by the latter, the vendor is not, in the event of the vendee’s refusal to make the test, entitled to recover under the contract the sum stipulated to be paid the vendor in case the vendor’s system showed the highest relative efficiency contemplated by the contract; its remedy is by an action to recover damages for the breach of the vendee’s undertaking to make the test.
Appeal by the defendant, The Electric Storage Battery Company, from an interlocutory judgment of the Supreme Court in favor of the plaintiff, entered in the office of the clerk of the county of New York on the 15th day of December, 1898, upon the decision of the court, rendered after a trial at the New York Special Term, overruling the defendant’s demurrer to the complaint.
Elihu Root, for the appellant.
Austen G. Fox, for the respondent.

Opinion:
Van Brunt, P. J.:
The complaint in this action, after alleging the due incorporation of the plaintiff and defendant, set forth an agreement entered into between the parties on the 18th of September, 1898, whereby the plaintiff agreed to sell to the defendant its letters patent and also certain land and buildings belonging to the plaintiff, together with the cars, tools, machinery and personal property therein, and by which the defendant agreed, upon tender of the conveyance of the property above referred to, within thirty days from the date of the agreement, to pay to the plaintiff the sum of $150,000 in the manner therein stated. The agreement then recited that the plaintiff claimed that the system of storage battery as operated by it was equal to and superior to the system operated by the defendant, and the defendant agreed that if, upon a competitive test of the two systems, that of the plaintiff was equal to that of the defendant, it would pay to the plaintiff the further sum of $100,000 ; if five per cent superior, the sum of $150,000; if ten per cent superior, the sum of $300,000; if twenty per cent superior, the sum of $500,000. This recital was followed by an agreement upon the part of the defendant that it would forthwith proceed to institute this competitive test, the cars and batteries to be operated under the system of the plaintiff, to be prepared by and be operated under the control and management of agents selected or approved by it. The agreement further provided that the conditions, such as time, place, track, length of operation, number of cars to be used, etc., under which the test should be made, should be agreed upon by both parties as soon as might be after the execution of the instrument, it being understood that the test of superiority should be determined by the durability, efficiency, economy, speed and reliability of service.
The complaint further alleged that thereafter, and in accordance with the terms of the contract, the plaintiff duly conveyed and transferred the property mentioned in the contract and put the defendant in exclusive possession and control of the system, and that the defendant has ever since remained in such exclusive possession and control ; and, further, that in the system of the plaintiff there was attached to each car certain power-saving machinery, etc., and that the plaintiff has been at all times since the making of the contract ready and willing to perform its part of the contract, and that at divers times it has requested and urged the defendant to institute and proceed with the test provided for in the contract, which the defendant has refused to do.
The plaintiff admits the payment of the $150,000 agreed to be paid upon the conveyance of the property and demands judgment for the sum of $500,000.
To this complaint the defendant demurred upon the ground that it appears upon the face thereof that it does not state facts sufficient to constitute a cause of action. This demurrer having been overruled, from the interlocutory judgment thereupon entered this appeal is taken.
The theory upon which tills action seems to proceed is that the defendant, having failed to make the test which it was required to make, the amount provided for under said contract, in case such test showed that the plaintiff's system ivas twenty per cent superior to the defendant's, had become due. It is difficult to see upon what such a claim can be predicated. There is no promise to pay contained in the contract unless the test showed certain superiority upon the part of the plaintiff's system. The whole obligation to pay depended upon the establishment of that superiority. There has been a question raised as to whether the contract is not so indefinite that no action can be predicated upon it. But, assuming, for the purposes of this appeal, that such an objection is not well taken, we cannot see how an action for the money agreed to be paid under-the contract can be maintained until it is shown that the conditions, upon which it was to be paid existed. If the defendant refused to-make the test in order to ascertain the degree of superiority, if any-existed, the plaintiff would have a right to recover damages because-of that breach of the defendant's undertaking in the contract; and, whatever damages the plaintiff might have sustained by reason of such breach of the undertaking upon the part of the defendant to make this test, the plaintiff would be entitled to recover, not as money falling due by the terms of the contract, but as damages sustained by reason of the defendant's breach of the contract. It, therefore, follows that there are no allegations contained in this complaint to justify a recovery upon the ground of the damages sustained by reason of the breach, because there is no allegation pertinent to such a cause of action.
We are of opinion that the judgment should be reversed, with costs, and the demurrer sustained, with costs, with leave to the plaintiff to amend its complaint upon payment of such costs.
Patterson, O'Brien, Ingraham and McLaughlin, JJ., concurred.
Judgment reversed, with costs, and demurrer sustained, with costs, with leave to plaintiff to amend its complaint on payment of such costs.