Court Opinion

ID: 5183030
Source: CourtListenerOpinion
Date Created: 2022-01-06 04:44:38.861721+00
Date Added: 2024-06-11T08:26:38.585485
License: Public Domain

Patterson, J. (dissenting):
This was an action to recover the value of goods sold and delivered by the plaintiff to the defendants. The cause of action set forth in the complaint was admitted in the answer, but the defendants sought to recover upon two counterclaims. On the trial, the justice presiding, after hearing some evidence offered to establish those counterclaims, held, upon giving construction to the written *39instrument under which the defendants claimed, that as matter of law no recovery could be had by the defendants, and he thereupon stopped the trial, dismissed the counterclaims and directed a verdict for the plaintiff. From the judgment entered upon that verdict this appeal is taken.
The counterclaims referred to arose under the terms of a written instrument signed by both the plaintiff and the defendants, which is in the words and figures following:
“ This Agreement, made this 18th day of September, one thousand eight hundred and ninety-four, between H. Ellis & Company, of Baltimore, Maryland, parties of the first part, and Leopold Miller & Sons, of New York, parties of the second part:
“ Witnesseth: That the parties of the first part are to make an allowance to the parties of the second part of one thousand dollars per annum, said amount to be deducted in equal monthly installments ($83.33) from current bills.
1£ Parties of the first part also bind themselves to make a further allowance of two (2%) per cent, below the price given to any other house in the States of New York and New Jersey on the £ Recruit ’ cigarettes.
“ In consideration of the above, the parties of the second part also bind themselves not to push any nickel package of all tobacco cigarettes made of bright tobaccos, and they further bind themselves not to sell or offer for sale — directly or indirectly — the said £ Recruit ’ cigarette for less than $3.60 less 2% per thousand. And they also agree to push and do all in their power to increase the sale of the said 1 Recruit ’ cigarettes.
££ This agreement to remain in force from five years from the above date. “ H. ELLIS & CO.
££ LEOPOLD MILLER & SONS.
£< Witness:
££ Abkaham de Lemos.”
It was claimed and proved by the defendants that they and the plaintiff carried on business for some five months or more under the arrangement provided for by the instrument above set forth; but that in March, 1895, the plaintiff refused to comply further with the terms of the instrument or to be bound by it. The first counterclaim was for the proportionate share of the allowance of $1,000 a year pro-*40Tided for in the contract, and the second for damages arising from the plaintiff’s refusal further to perform the contract and from his violation of the same, by placing himself in a position (as the proof showed) by which he willfully disabled himself from further performing it. He had sold out all his business to the American Tobacco Company, with which the defendants had not contracted, and against which they could make no claim or demand on this contract. The justice at the Trial Term held that the contract was one relating altogether to future dealings between the parties ; that it bound neither the plaintiff nor the defendants to any specific duty or obligation; that there was nothing in its terms requiring the plaintiff to sell nor the defendants to buy any amount of goods, nor indeed to trade with each other at all, but that it simply stipulated for what should be allowed the defendants in case they did buy from the plaintiff.
The contract must be construed in the light of surrounding circumstances and in view of the situation of the parties as to its subject-matter (Griffiths v. Hardenbergh, 41 N. Y. 464; Matter of The N. Y. Central R. R. Co., 49 id. 419), and so construing it we ascertain, from such evidence as the defendants were allowed to give, that the instrument was not a mere contract exclusively pertaining- to the prices of goods that might be bought, but it related to a current business between the parties, which had been continuous for a long time, and which it was assumed would continue for five years more, and which it was the fixed purpose of both parties to have continue, but only upon terms more definite and precise than had theretofore been agreed upon. If the agreement were simply one for purchase and sale of goods, and nothing further -were embraced in it, the construction given by the court below might be sustained; but it is a contract for the regulation of a business established between the parties to it, and that business consisted, in an important part, of the defendants marketing the plaintiff’s manufactures. The plaintiff was looking for an increased market for his goods through the instrumentality of the defendants, by giving to them concessions and considerations to induce them to apply all their efforts to the sale of the plaintiff’s manufactures in preference to those of other makers of similar goods. In consideration of the defendants’ undertaking the plaintiff agreed to give certain advantages to them, and the *41defendants specifically agreed, in so many words, to do all in their power to increase the sale of the plaintiff’s manufacture during the period of five years. The benefit to the plaintiff is obvious; the consideration for the plaintiff’s promise is clear, for it is elementary that a sufficient consideration for such a promise is the assumption of any obligation, charge or inconvenience that a promisee may assume at the express or implied request of a promisor. Notwithstanding the untimely termination of the trial, there is enough before us to show the situation of the parties. The plaintiff had been a small manufacturer of cigarettes ; the defendants were among the largest firms of tobacco merchants in the United States ; they had large facilities for selling cigarettes, and about the year 1889, they began to buy and sell goods manufactured by the plaintiff. Between that year and 1894, they sold on an average over 3,500,000 of the plaintiff’s cigarettes every year. They had thus marketed many of the plaintiff’s goods; they advertised the brands, sent out price lists and cards and circulars, gave samples to their salesmen, showed the goods in store, and did all they could to promote sales. It is true this was done also for their own benefit, and there was no technical relation of agency in the matter, but it was with direct reference to the continuation of this dealing which resulted in putting upon the market large quantities of the plaintiff’s goods, .that a written contract was made. It was agreed that it should continue for five years from its date; it bound the defendants to the active duty of pushing the plaintiff’s wares and endeavoring to increase the sale of them, for the performance of which duty they were to be paid the sum of $1,000 a year. That such payment was to be made by monthly installments and deductions from current bills does not affect the fact that that $1,000 a year was a provision for compensation. The defendants thus assumed to do certain things for the benefit of the plaintiff, and bound themselves for the term of five years, not only to sell the plaintiff’s goods, but to do all in their power to increase their sales beyond the quantities they had sold before the date of the contract. It is not to be doubted that, had the defendants refused to sell the plaintiff’s goods, or had they urged purchasers to buy similar goods of a rival manufacturer in preference to those made by the plaintiff, they could have been held liable in damages for so doing. In order to perform *42their contract to sell to others, the defendants were compelled to buy from the plaintiff, and the contract, although silent as to specific quantities, contemplated that purchases to a very considerable amount were to be made because the allowance of $1,000 a year ■ was to he given to the defendants by way of a credit in monthly installments upon current bills. There was, therefore, a contract providing for a continuous business for five years, a consideration of mutual promises and mutual benefits, a clear obligation to perform an active duty resting upon the defendants, and a basis of past and current dealings on which to base an expectation of the amount of future transactions and proof of business actually done between the parties under the written contract. Although there is not an express promise to supply the defendants with goods upon their order, the correlative obligation of furnishing such goods rested upon the plaintiff in consequence of the obligation the defendants assumed to “ do all in their power to increase the sale ” of the plaintiff’s goods. That could not be done unless the plaintiff furnished them the goods, and it is idle to claim that the contract was not made in view of reciprocal obligations of the parties to it. ' All the terms and purposes of the contract are to be considered, and as it was intended to be an operative one, and as business was actually conducted under it, the necessary implication is that the plaintiff intended and contracted to deliver to the defendants all the goods they might order under it during the period of five years. But it is said that there can be no measure of damages for the breach of the plaintiff’s contract. It is true we cannot now say what the true measure of damages is, for by the course pursued by the trial justice the defendants were prevented from proving or offering to prove any damage, or from laying the foundation for the declaration of any rule. If there were not a complete breach of the contract shown, the defendants’ case was prematurely closed by the ruling of the court, and they were thus prevented from making any further proof. The defendants should have been allowed to proceed with their proof and to give further evidence, and to show what damage they sustained, if any.
The judgment should be reversed and a new trial ordered, with costs to appellants to abide the event.
Williams, J., concurred.
Judgment affirmed, with costs.’