Court Opinion

ID: 5187322
Source: CourtListenerOpinion
Date Created: 2022-01-06 15:30:35.114373+00
Date Added: 2024-06-11T08:26:47.907400
License: Public Domain

Smith, J.:
The appellant challenges this judgment upon three grounds: First, that judgment has been rendered for damages which did not accrue until after the commencement of the action ; second, that the plaintiff’s damage for a breach of the contract was paid in full by the settlement of the action brought in 1890; third, that the referee should not have included in the damages found the $2,000 stipulated to be paid if the sales of the compounds were successful.
The decision of the defendant’s first ground of challenge seems to rest upon the answer to the question whether this action be one at law or in equity. If the cause of action stated be a,'legal cause of action, it seems to be settled that the plaintiff’s recovery must be limited to the cause of action existing when the action was begun. If, however, the cause of action be one .in equity, the rule seems to be different, and relief is given upon the rights of the parties at the time of the trial. (Kilbourne v. Supervisors, 137 N. Y. 178 ; Haffey v. Lynch, 143 id. 248; Peck v. Goodberlett, 109 id. 189.) That this is an action in equity seems to us clear. The judgment asked is in part that the defendant shall deliver to the plaintiff the statement stipulated for in the contract. This relief is only possible in equity. The fact that damages are also sought does not take this action out of the forum of equity, where, only, the plaintiff can get all the relief to which he is entitled.
The defendant’s second ground of challenge seems to be answered by the stipulation of settlement. In that stipulation it is provided that the settlement is for moneys due up to the 1st of August, 1890. In the stipulation is indicated an intent to continue the contract in force by the provision that nothing contained in the stipulation was to be considered as modifying the contract.
■ The defendant’s objection to judgment seems more substantial. The obligation of the defendant to pay $4,000 for these patents was an absolute obligation, not in any way contingent upon the success of the business. The manner of its payment, by a per- . centage of its proceeds of the sales, contemplated a continuance of *348the business. Upon the abandonment by the defendant of the sale of these compounds, we agree with the learned referee that the defendant made itself liable for the full amount of the $4,000 which it had agreed absolutely to pay.
In the judgment directed by the referee, however, is included the $2,000 which was due only if the business \yere successful. Whether or not the business was successful was, under the contract, to be determined by the trustees of the defendant; and it is further provided by the contract that the defendant was to prosecute and execute such sales as regards the manner and time thereof as defendant should judge expedient and proper.
This contract is not akin to that class. of contracts which provide that work shall he done “to satisfaction.” Upon the determination by the defendant’s trustees as to the manner of the prosecution'of these sales and as to its success or failure depends the whole course of defendant’s business and the investment of large sums of money by the defendant. With so much depending upon their determination, when by the contract those questions were left in express words to the determination of the defendant’s trustees, something more was meant than that they must adopt the methods that a court or jury might say were proper or usual in the prosecution of such sales.
These provisions in this contract are more like provisions in a chattel mortgage authorizing the mortgagee, if he shall feel himself unsafe, to take, possession of the mortgaged property. In Allen v. Vose (34 Hun, 51) the General Term of the fifth department has held that the act of a mortgagee in taking the property under this clause could not be impeached upon the ground that he did not. have reasonable cause' to feel himself unsafe and could only he impeached on the ground of his bad faith. The construction of the clause as set forth in Jones on Chattel Mortgages (§ 431) is there approved, and it is held that the act of his taking the property creates a presumption that the mortgagee did feel himself unsafe and that such a clause vested in the mortgagee an absolute discretion to take possession of the property whenever he deemed himself insecure, and that the right did not depend upon the fact that he had reasonable ground for deeming himself insecure. The authority further says: “ If the mortgagor wishes to retain possession of *349the property until the mortgagee shall have reasonable grounds to deem himself insecure, he can insert or have inserted, a stipulation to that effect in the mortgage; or if he wishes to go still further and retain possession of the property until the mortgagee shall become in fact insecure, he can have a stipulation put into the mortgage to that effect. But if he chooses only to have inserted in the mortgage a clause that he shall have the right to the possession of the property until the mortgagee shall deem himself insecure then he can only retain the property until the mortgagee does in fact deem himself insecure and he has no right to question the grounds upon which the mortgagee entertains such feelings of insecurity.”
There is no finding here nor is there any pretense of bad faith . upon the part of the defendant’s trustees. The parties might well ' have had in mind that opinions might differ as to how such a business should properly be conducted and as to what constituted success. The manner of the introduction of these compounds to the trade, the test that should be made of their salability, and how faith at test should be prosecuted, w-ere all questions of judgment. So also was the question whether or not the compounds were so meritorious as that their sale would insure success. It was competent then for the parties to stipulate, as they have, that those matters should be left to the judgment of the defendant’s trustees. The witness Kidder has sworn that the defendant’s' trustees determined that the sale of these compounds was not a profitable venture. Having made the determination in good faith after what they considered a fair trial, it was their right to abandon entirely in 1894 the sale of the compounds without becoming liable for the payment of the $2,000 for which they were liable only in case of the success of the sales.
With these conclusions reached, it follows that the judgment must be reversed and a new trial granted, with costs' to the appellant to abide the event, unless the respondent will stipulate to reduce the judgment by deducting therefrom the sum of $2,000 with interest from the 1st of August, 1894, in which case the judgment as modified may stand affirmed, without costs of the appeal to either party.
. All concurred, Herrick, J., in the result.
*350Judgment reversed, referee discharged, and a new trial granted, costs to the appellant to abide the event, unless the respondent stipu-. lates to reduce the judgment by deducting therefrom the sum of $2,000, with interest thereon from August 1, 1894, in which case judgment as so modified is affirmed,'without costs of this appeal to either party. .