Court Opinion

ID: 5235239
Source: CourtListenerOpinion
Date Created: 2022-01-06 17:07:23.69832+00
Date Added: 2024-06-11T08:27:43.297764
License: Public Domain

Clarke, J. (dissenting):
The action is brought to recover §1,650 license fees claimed to he due under a contract under which the plaintiff gave to *588the defendant the right to represent the play “ La Tosca ” within the United States and the Dominion of Canada until the 1st day of July, 1912. Three hundred and fifty dollars were paid on the execution of the contract, and defendant agreed to pay fifty dollars royalty for each and every performance and to represent said play for at least forty performances, and, failing' to represent the play for forty performances, to pay fifty dollars for each performance less than forty that he should have failed to represent the same. The contract contains this further clause: “ It is hereby understood and agreed hy both parties hereto that the said play shall be produced with Mrs. Leslie Carter in the part, in every performance.”
The answer set up that at the time when the contract was made it was agreed and understood between the parties that the defendant had been granted the sole and exclusive right and license to publicly present the said play and that, prior to the making of the contract and- at the time thereof, there was and now is prevailing in the theatrical profession in the United States and Canada a uniform, continuous and well-settled custom and usage with respect to the granting of licenses to publicly perform plays, that where such license or right to perform a play is granted and the parties to such license contemplate that such play is to he produced with a celebrated actor or actress as one of the cast, such license or privilege is deemed and construed to be exclusive within the territory and for the period for which it is granted, and that plaintiff breached the contract by granting the right to produce to others who did produce the play during the period and within the territory granted without the knowledge of the defendant; it also contains a counterclaim for the $350 down payment.
Upon the trial the defendant attempted to show hy certain theatrical managers that there was such a usage and custom well known to theatrical people in the United States and Canada at the time of the making of this contract and under the circumstances disclosed, to wit, the agreement that there should be included in the cast a celebrated actor or actress, and that hy such usage and custom the right to produce meant the exclusive right. All of this evidence was ruled out and exception taken. The contract being in writing and being pro*589duced and in evidence and the amount being fixed and clear the court directed a verdict for the plaintiff.
I am inclined to think that the evidence offered of custom and usage was competent; that it was not offered to contradict the contract, which did not provide that the rights should not be exclusive, but that it explains the phrase, “the right to represent the said play ” and interprets what it meant among that class of business people who make and carry out such contracts.
In Schipper v. Milton (51 App. Div. 522; affd., sub nom. Smith v. Milton, 169 N. Y. 583) the contract provided for the sale of about “ (4,000) four thousand bales Current quality Manila Hemp at (5c) five cents U. S. Gold per lb. About (1,000) one thousand Bales Current Leyte, guaranteed equal Good Current quality Manila Hemp at (5%) five and one-eighth cents U. S. Gold per lb. No red Hemp. * * * The Hemp to be of above described quality, sound and in good order. * * * Any dispute on quality to he settled by arbitration in usual manner.”
The defendants refused to accept upon the ground that the quality of the hemp was inferior to that agreed to he delivered. Plaintiffs claimed that it was well known to all persons dealing in Manila hemp that the quality of the hemp cannot be ascertained from the marks on the bales; that every bale is sure to contain a considerable quantity of hemp of a quality different from that marked on the outside of the bale, and that it is impossible for any one selling a cargo of hemp to deliver the precise quality which is specified in the contract; and, therefore, they claim that there has arisen among dealers in hemp a well-established custom by which the quality specified in the contract is regarded simply as a measure of the value of the hemp to he sold; and that whenever a cargo arrives, if the •parties to the contract cannot agree upon the valuation, it is .the custom to refer it to arbitrators, who shall inspect the hemp and fix the allowance to he made to the purchaser for the inferior hemp, and that upon such arbitration the price to be paid is to be established and the rights of the parties depend.
The defendants claimed that the evidence established no such custom, and that if it did the custom was unreasonable, unnec*590essary and contradicts the contract, and that for these reasons the rights of the parties could not be affected by it.
Rumsey, J., said: “It is a well-established rule of law that parties to a contract on a subject-matter concerning which known usages prevail are deemed to have incorporated such usages by implication into their agreement if nothing is said to the contrary. (Hostetter v. Park, 137 U. S. 31; Newhall v. Appleton, 114 N. Y. 140; Brown v. Byrne, 3 El. & Bl. 703; Walls v. Bailey, 49 N. Y. 464; Humfrey v. Dale, 7 El. & Bl. 266.) * * *
“But it is said that this custom is unreasonable, because it requires a party to accept goods of a different quality from that which he purchased. * * * But it is said in addition that this custom tends to contradict the express terms of the contract. * * * Mercantile contracts are not always to be strictly construed. The intention of the parties is to be sought, and that intention would not infrequently be defeated if the words were to be construed according to their usual import, and for that reason evidence is admitted to expound them and to arrive at the true meaning of the contract. When a custom has been proved to exist, the mere fact that it apparently varies the contract is not sufficient to exclude proof of the custom, because it is impossible, without changing to some extent its apparent effect, to add a material incident by showing that the words are not employed in their usual meaning. (Brown v. Byrne, 3 El. & Bl. 703, 715.) So that unless as the result of the parol evidence the custom established is contradictory to the express terms of the contract, it must be received for the purpose of explaining it, to enable the court to decide as to the rights of the parties as affected by the custom of which they were aware when the contract was made and which entered into their agreement.”
And Mr. Justice McLaughlin, although dissenting from the result, said:- “It is undoubtedly a settled rule of law that a usage or custom in a trade, profession or calling, when it is reasonable, uniform,. well settled, not in opposition to fixed rules of law, not in contradiction of the express terms of a contract, is deemed to foim a part of the contract and to enter into the intention of the parties.”
*591■ In Hostetter v. Park (137 U. S. 30) Mr. Justice Blatohford said: “ It is well settled that parties who contract on a subject matter concerning which known usages prevail, incorporate such usages by implication into their agreements, if nothing is said to the contrary. Robinson v. United States, 13 Wall. 363, 366.”
In Newhall v. Appleton (114 N. Y. 143) the complaint contained the averment of a contract by defendants to pay the plaintiff fifteen dollars an order “ for each and every order he obtained for said encyclopedia and four dollars for each and every order he obtained for said other publications.” The answer admitted the contract to pay the plaintiff those sums upon orders under which five volumes of the encyclopedia and ten parts of each of the other publications, respectively, had been taken and paid for by the subscriber, and not otherwise, and further alleged payment of the amount due under the contract.
Upon the trial the plaintiff gave evidence that an oral contract, as averred in the complaint, had been made. The defendants offered to show that in the subscription book business the words used in the contract had a definite and well-established meaning, and that meaning was as set forth in the answer; that the words “ fifteen dollars an order for each and every order obtained for the encyclopedia ” meant, and were well understood in the subscription book business to mean, fifteen dollars an order for each and every order obtained for the encyclopedia under which five volumes have been taken and paid for by the subscriber, and not otherwise, while four dollars an order for the other publications meant four dollars for an order under which ten parts each, respectively, had been taken and paid for by the subscriber, and not otherwise. The court held that it was error to refuse evidence in support of the defense as plead. Parker, J., writing for a unanimous court said: Every legal contract is to be interpreted in accordance with the intention of the parties making it. And usage, when it is. reasonable, uniform, well settled, not in opposition to fixed rules of law, not in contradiction of the express terms of the contract, is deemed to form a - part of the contract and to enter into the intention of the parties, when it is so far established and so far known to the parties that it *592must be supposed that their contract was made in reference to it.’ [Citing authorities.] And evidence is always admissible to explain the meaning which usage has given to words or terms as used in any particular trade or business, as a means of enabling the court to declare what the language of the contract did actually express to the parties. * * * The principle stated in the authorities cited authorized the introduction of evidence, on the part of the defendants, tending to show that by the usage or custom of the subscription book business, the words used in the contract had a well-defined meaning, which was understood by both parties to the contract, and what such meaning was. The evidence of custom was admissible, not to change or vary the contract made, but to ascertain with greater certainty what was the intention of the parties at the time of its making.”
In Walls v. Bailey (49 N. Y. 464) the action was instituted to recover a balance alleged to be due for plastering the defendant’s house. The contract provided a* price per square yard. The plaintiffs claimed that in-determining the number of square yards the openings, including the doors and windows, were to be measured as plastering, and that in rooms plastered with two or three coat work, the part of the work behind the cornice and baseboard was to be measured as though actually plastered with two or three coats, though the same was only plastered with one coat. This claim was based on the assumption that at the time the agreement was made it was the custom of plasterers to so charge. Judge Folger said: ‘' Every legal contract is to be interpreted in accordance with the intentibn of the parties make ing it. And usage (with a limitation hereafter noticed), when it is reasonable, uniform, well settled, not in opposition to fixed rules of law, not in contradiction of the express terms of the contract, is deemed to form a part of the contract, and to enter into the intention of the parties. * * * Parties are held to contract in reference to the law of the State in which they reside. * * * And so they are presumed to contract in ref erence to the usage of the particular place or trade in or as to which they enter into agreement * * * when it is so far established and so far known to the parties that it must b.e supposed that their contract was ma-de in reference to it. * * * Evidence of *593usage is received, as is any other parol evidence, when a written contract is under consideration. It is to apply the written contract to the subject matter, to explain expressions used in a particular sense, by particular persons, as to particular subjects, to give effect to language in a contract as it was understood by those who made use of it. (Per Savage, Ch. J., Boorman v. Johnston, 12 Wend. 573.) * * * There are many cases in which the language used would seem to indicate that the existence of a usage of a trade, profession or locality having been shown, the presumption indisputable arises that the parties did contract in reference to it.” After citing a number of cases, upon the particular question as to whether the defendant was entitled to show his ignorance of the existence of the usage claimed, the opinion proceeds: “It is for the jury then, under proper instructions from the court, to take all the evidence in the case; that as to the existence, duration and other characteristics of the custom or usage, and that as to the knowledge thereof of the parties; and therefrom to determine whether there is shown a custom of such age and character, as that the presumption of law will arise, that the parties knew of, and contracted in reference to it; or whether the usage is so local and particular, as that knowledge in the party to be charged must be shown affirmatively or may be negatived.”
In Underwood v. Greenwich Ins. Co. (161 N. Y. 413, 423) the rule governing the admission of evidence of usage to affect and interpret a contract as laid down in Newhall v. Appleton (114 N. Y. 140) and Atkinson v. Truesdell (127 id. 230) was quoted with approval. The rule in Walls v. Bailey (supra) was quoted with approval in London Assurance Corporation v. Thompson (170 N. Y. 94, 99).
In Miller v. Fischer (142 App. Div. 172) plaintiff brought an action upon a contract for the hiring of a canal boat for the transportation of ice. The defendant’s contention at the trial was that there was a custom among boatmen and ice dealers known to the plaintiff to the effect that boats engaged in the transporting of ice should not be paid for unless ice should form of sufficient thickness to be marketable. The trial *594court ruled that the contract was specific and that proof of custom was immaterial. Mr. Justice Houghton writing the unanimous opinion of the court said: “We are of opinion this was error. Assuming that the telegrams and writings which passed between the parties constituted a binding written contract, still the terms are not so specific that it can be said as matter of law that it was not made with reference to a well-known and uniform custom of the business. Parties are presumed to contract in reference to a uniform, continuous and well-settled usage or custom pertaining to the matters as to which they enter into agreement, where such usage is not in opposition to well-settled principles of law, and is not unreasonable and not in contradiction of the express terms of the contract, whether such contract be written or oral.” (Citing cases.)
The foregoing are but a few of the cases establishing the proposition that evidence of usage for the purpose of establishing the intent of parties to a contract who are engaged in any business, trade or profession, is admissible when such evidence does not contravene positive provisions of law or contradict the clear and express terms of the contract itself.
In the case at bar the parties were both in the theatrical business and made a contract in reference to theatrical matters. That business is as clearly a distinct business as any of those considered either in the cases cited or in others to be found in the books; and it may well have particular usages which must be taken into consideration in ascertaining the intent of such contract, or which by such long and universal continuance arrive at the dignity of custom as binding as a rule of law. .Whether the particular evidence sought to be introduced would have been sufficient to have' supported the allegations of the answer and controlled the disposition of the case is not before us. The sole question is. whether such evidence was competent. I have no doubt that it was and, therefore, in my opinion the determination of the Appellate Term and judgment and order of the City Court should be reversed and a new trial granted, with costs in all courts to the appellant to abide the event.
Dowling, J., concurred.
Determination of Appellate Term affirmed, with costs.