Court Opinion

ID: 5764491
Source: CourtListenerOpinion
Date Created: 2022-01-12 17:20:15.893454+00
Date Added: 2024-06-11T08:41:36.920929
License: Public Domain

McNally, J.
Plaintiff appeals from the order denying its motion for summary judgment. The action is grounded on an agreement dated June 25,1964. Thereby, plaintiff sold to defendant patent rights, models and sketches relating to a Dataprinter. Defendant paid plaintiff $3,000 on the execution of the agreement, and agreed to pay the additional sum of $7,000 when letters patent were issued. Defendant agreed, to manufacture Dataprinters for testing to enable it “to determine, in its sole and absolute judgment, whether or not said Dataprinter would be useful in the conduct of its business. Such determination or option by Farrington [defendant] to accept or reject the Dataprinter shall be made or exercised on or before June 1, 1965.” In the event defendant exercised its option to reject, it was required to reassign to plaintiff the patent rights and related drawings, machinery and materials, and plaintiff was to be entitled to the sums theretofore paid or payable. If defendant elected to accept the Dataprinter, it was required to pay a royalty of $1 for each machine sold or leased for the period of 10 years, or the term of the letters patent, whichever was longer, and the annual minimum royalties for the first 4 years were to be not less than $10,000.
Defendant paid plaintiff the initial $10,000. The amended complaint alleges two causes of action. The first alleges defendant’s retention after June 1, 1965, of the contract property, defendant’s failure to exercise its option to reject, and then alleges defendant did thereby ‘ ‘ by its acts and conduct, accept the Dataprinter on and after June 1, 1965 ” and is entitled to *13the minimum royalties of $40,000. Alternatively, the amended complaint alleges defendant’s failure prior to June 1, 1965, to manufacture the Dataprinter for testing, thereby breaching the agreement, to plaintiff’s damage in the sum of $100,000.
Plaintiff’s motion for summary judgment is limited to the first cause of action. On May 7,1965, defendant requested plaintiff to extend the time for acceptance or rejection beyond June 1, 1965. On June 16, 1965, defendant was informed by plaintiff’s attorneys that defendant’s failure to give any written notice on or before June 1, 1965 “ was a violation of the agreement” and legal proceedings would be instituted unless payment of $7,000 was made and the contract property returned by June 23, 1965. On July 8, 1965, defendant’s attorneys submitted to plaintiff’s attorneys a draft of an agreement to transfer a patent to plaintiff and inquired as to the place of return of the contract property. This action was instituted July 13, 1965.
In October, 1965 defendant’s attorneys were informed by plaintiff’s attorneys that plaintiff was no longer interested in the immediate return of the contract property. Despite plaintiff’s failure to accede to an extension of the contract date for acceptance or rejection, defendant during July and August, 1965, conducted tests of the Dataprinter, resulting in negative reports.
It may well be that defendant’s option to accept or reject the Dataprinter was required to be exercised on or before June 1, 1965. (See Schaefer v. Thompson, 237 N. Y. 55.) However, defendant’s failure to so accept or reject the Dataprinter is not tantamount to its acceptance and undertaking to pay the royalties provided in the agreement. The contract requires defendant “ to accept or reject * * * on or before June 1,1965.” The obligation to pay royalties is similarly conditioned on acceptance: “ If Farrington [defendant] exercises its option to accept the Dataprinter, as above provided, then and in that event, in addition to the sum of Ten Thousand ($10,000.00) Dollars paid to Peripheral [plaintiff] * * * [defendant] shall pay to [plaintiff] * * * (a) A minimum royalty of Forty Thousand ($40,000.00) Dollars ”. The contract does not provide that the obligation to pay royalties is to subsist unless defendant rejects the Dataprinter on or prior to June 1, 1965. On the contrary, it conditions the royalty obligation on defendant’s acceptance of the Dataprinter on or before June 1, 1965.
The relevant contractual intent is that expressed in the contract, even though it may not accord with the subjective intent of the parties. (Matter of Ahern v. South Buffalo Ry. Co., 303 N. Y. 545, 560-561; Wilson Sullivan Co. v. International Paper *14Makers Realty Co., 307 N. Y. 20, 25.) We may not, under the guise of construction, disregard the provisions of the contract as to acceptance on or prior to June 1, 1965, and construe it as if it provided solely for an option on the part of defendant to cancel on or prior to said date. “ The rules of construction of contracts require us to adopt an interpretation which gives meaning to every provision of a contract or, in the negative, no provision of a contract should be left without force and effect. ’ ’ (Muzak Corp. v. Hotel Taft Corp., 1 N Y 2d 42, 46.)
Plaintiff’s amended complaint is grounded on defendant’s acceptance of the Dataprinter. It alleges: “ The defendant did, by its acts -and conduct, accept the Dataprinter on and after June 1,1965 and, pursuant to said contract, upon such acceptance there became due and payable from defendant to the plaintiff minimum royalties in the sum of $40,000 ”. A judgment should conform with the allegations and proof. Plaintiff may not have summary judgment on a cause of action not alleged in its amended complaint. (Cohen v. City Company of New York, 285 N. Y. 112,117-118; Wolfson v. Mandell, 13 A D 2d 760, 761; Bright v. O’Neill, 3 A D 2d 728; Elsf elder v. Cournand, 270 App. Div. 162, 165.)
Plaintiff alleges “ defendant did, by its acts and conduct, accept the Dataprinter on and after June 1,1965 ’ ’. The contract provides for acceptance by defendant “on or before June 1, 1965.” Plaintiff insists defendant was required to accept on or before June 1, 1965, and nevertheless relies on defendant’s acts and conduct subsequent thereto to establish its acceptance. This despite plaintiff’s refusal to extend defendant’s time to accept. There is an issue of fact as to whether, in the light of the conduct of the parties, and the inferences therefrom, defendant did accept the Dataprinter. (See Barber-Greene Co. v. M. F. Dollard, Jr., Inc., 239 App. Div. 655, affd. 267 N. Y. 545.) The existence of a factual issue precludes summary judgment. (Terranova v. Emil, 20 N Y 2d 493, decided November 2, 1967.)
The order should be affirmed, with costs.