Court Opinion

ID: 5220668
Source: CourtListenerOpinion
Date Created: 2022-01-06 16:33:11.431368+00
Date Added: 2024-06-11T08:27:30.675631
License: Public Domain

McLaughlin, J.
(dissenting):
There is substantially little or no dispute between the parties as to the material facts involved. On the 5th of July, 1901, the plaintiff, who was then, and for some time had been, the sole agent and representative in the United States of a German firm which manufactured corsets, entered into a tripartite agreement in which he was designated as party of the first part, the German firm as parties of the second part, and the defendant as party of the third part, by which the latter acquired the exclusive right to sell, in the United States and Canada, corsets manufactured by such firm. The agreement provided that “ this contract is to take effect on the first day of November, 1901, and is to continue in force for the term of fifteen (15) years, subject to termination, however, at the expiration of five (5) years by the giving of written notice, by registered mail, one (1) year in advance to the said party of the first part, and to the parties of the second part.” Simultaneously with the execution of the contract, the plaintiff and the defendant entered into a contract — copy of which is set out at length in the prevailing opinion — wherein plaintiff was désignated as party of the first part and defendant party of the second part. The .fact is not disputed but what the defendant, within the terms of the contract between the plaintiff, the German firm and himself, gave the notice within the time and manner therein provided that he would, at the -expiration of the five *386years, terminate the- contract. Notwithstanding that fact, the plaintiff claims he is entitled to, and has, recovered a judgment for $7,500, with interest, representing the royalties due under his contract with the defendant for the year following November 1, 1906 — that is, the .year following the termination of the contract with the German firm.
The right to maintain the action and sustain the' judgment is predicated upon -the proposition that the contract between the plaintiff, the German firm and the defendant was never actually terminated in good faith; that it was a’mere pretended termination entered into for the sole purpose of freeing the-defendant from paying the plaintiff the royalties stipulated-to be paid to him.
I am of the opinion that the defendant’s motives in terminating the contract with the German firm. are of no importance. The contract gave him the absolute legal right to terminate it at the expiration of five years, on giving a notice to that effect afr the time and in the manner therein provided. He gave the notice as provided in the contract; it was thereby terminated, and the plaintiff thereafter was not entitled' to the royalties provided in the contract between himself and the defendant, because under their contract it will be observed there was an express provision that “ It is also agreed that whenever the party of the second part should cancel the contract after five years, as stipulated, the annual royalty and commission shall cease.” The defendant having the legal right to terminate the contract with the German firm, and having exercised such right, it does not lie with the plaintiff to say it was not done in good faith. When one has a legal right to do a thing, his motives in doing it will not be inquired into..
' Not only this, but I think the evidence clearly and conclu- ' sively shows that the defendant in .terminating the contract acted in entire good faith and the finding of the jury to the contrary is against the evidence. It is true another contract, embodying some,-not .all,.of the terms and conditions of the-old contract was entered into by the defendant and the German firm, which went into effect immediately following the termination of the old contract. The correspondence between the defendant and the German firm shows why the new contract *387was made. The defendant frankly stated in a letter to the German firm that he was terminating the old contract because it was impossible for him to continue the sanie “owing to the very large commission which we have been paying to Mr. Schweinburg since our contract is in force, and which makes the cost of your goods almost prohibitive and beyond domestic competition. ” If the defendant could not carry out the contract with the German firm with profit to himself; by reason of the royalty which he had to pay to the plaintiff, then he could terminate it, though the sole purpose was to free himself from paying such royalty.
It is suggested, not by counsel, that because the question of defendant’s good faith in'terminating the contract was submitted to the jury — to which no exception was taken and no request for instructions to the contrary made — that thereupon such instruction became the law of the case and defendant is not now in a position to raise the question. A complete answer to this suggestion, as it seems to me, is that at the close of plaintiff’s testimony defendant’s counsel moved for the dismissal of the coinplaint upon various grounds, one of which was that there' was no proof that the notice terminating the contract was given in bad faith. And, again at the close of the whole case, upon similar grounds, the defendant’s counsel-moved for the direction .of a verdict. The motions in each instance were denied and an exception taken. These exceptions cannot be destroyed because an exception was not taken to the charge submitting such question to the jury. Prior to the charge the court had held that defendant’s good faith was a question to be submitted to the jury. It was, therefore, unnecessary to except to the charge on this subject in order to take advantage of the previous exceptions. An exception once taken to a ruling is available without thereafter repeating it to a similar ruling.
Besides, I think at the close of plaintiff’s case the court should have dismissed the complaint, and having failed to do this, then at the conclusion of the testimony should have directed a verdict for the defendant. The defendant not only, as we have seen, had a right to terminate the contract with the ’German firm, but there is absolutely no' evidence which *388tends, as I read the record, either directly or indirectly, to establish that the defendant in terminating the contract acted in had faith, even if that .question bé deemed a proper subject of inquiry. ■
The tripartite agreement was for a term of fifteen years, but it might be sooner terminated, (1) at the expiration of five years by the defendant’s giving the written notice therein provided; and (2) at any time in case there were a change in the tariff laws of the United States by which the duty should be increased to such an extent that, in the -judgment of this defendant, further importation of corsets would prove unprofitable. The right of the defendant to terminate the contract at the expiration of five years was fully and explicitly recognized by the plaintiff in his contract with the defendant. It was also recognized in the plaintiff’s letter to the Gferman firm in which, referring to the notice served by the defendant, he ' said: ’ “ The communication which you made to me with regard to the notification of termination of B. A. & Oo., surprised me very much for the alleged canse has no legal foundation. The notification of termination would have been- warranted, but since B. A. & Co. have alleged a ground as the reason from which you stand entirely remote ⅜ ¾ % I believe that you rightlyrefusedtheacceptance ⅜ ⅜ ⅜.”
But it is suggested that the cessation of royalty payments under the contract is made dependent not upon the termination of the contract at the expiration of five years, but upon the cancellation of the contract after five years; in other words, the argument is that under the agreement between the plaintiff and defendant, a termination of the contract with the German firm would not terminate plaintiff’s right to the annual -royalty payment, but’ only if the contract were canceled by reason of an' increase of duty after five years. I think the words “ cancel ” and “terminate ” as used in the tripartite agreement are used synonymously. In each instance the words were used to indicate an ending of the contract and there is nothing to suggest a different meaning when both-contracts are read together, and this is the construction which the parties themselves, especially the plaintiff, put upon them. Plaintiff was securingacontractbywhichhewasto.be paid $7,500 a year *389for five years in any event, and having secured that, he agreed if the contract were ended between the defendant and the German firm after that time, he would not be entitled to the payment of royalty. This, too, is the theory upon which the action was tried and submitted to the jury. The court so held early in the trial, to which no exception was taken by the plaintiff. It said: “I am going to hold in this case that while the defendant Altman had the absolute right to terminate the contract by giving notice, that that notice must be given in good faith, and that if he gave the notice for the purpose of eliminating the plaintiff from the contract and depriving hi-m of the commission to which he was entitled under the contract, and with the purpose of immediately resuming relation's with the German firm, then the plaintiff can recover; but that will be, of course, a question for the jury in this case to determine.” He did so hold in submitting the case to the jury, saying:, “ The second contract by which Schweinburg was to get the sum of $7,500 a year during the continuance of the other contract had a provision that if the other contract was terminated that sum should also fall. At the end of the four years a notice was given by Altman, in which he said that he elected ■to take advantage of that provision of the main contract and end the contract. That notice was served upon the German firm and upon Schweinburg. ⅜ ⅜ ⅜ Of course, Altman could not give notice simply for the purpose of terminating the commission to which Schweinburg was entitled ⅜ ⅜ ⅜. Did Altman give a notice in good faith, terminating that contract and intending to terminate that contract, or did he simply give that notice as a pretense to cut off Schweinburg from his commissions and did he then intend to and did they go on with the contract in substantially the same, form? ⅜ ⅜ ⅜ The plaintiff must convince you by a fair preponderance of the evidence that his theory is correct — namely, that this contract was not in fact terminated in good faith and that it continued on practically and substantially the same terms and that the giving of the notice was merely a pretense to deprive him of his right to a commission.” No exception was taken to such instruction by the plaintiff, and it thereupon became, so far as he is concerned, the law of the case; in other words, the court held that *390under the proper construction of the two agreements the plaintiff was not entitled to recover if the notice were served by the defendant in good faith. This not only appears from the instructions given to the jury, but from the memorandum of the learned-justice in denying defendant’s motion for a new trial, in which he said: “This case was not submitted to the •jury on the theory that the contract was ended by the notice given by Altman, because of course, under the decisions Altman had the right to terminate the contract; but the question left to the jury was whether the contract was not in fact still existing between Altman and the other party, and whether the notice was hot a mere pretense to ávoid paying plaintiff the amount agreed to,be paid to him during the existence of the contract.” The plaintiff, therefore, is not in a position to urge the construction of the agreement suggested, even if it were the proper one, which I do not think it is. A party cannot adopt one construction of a contract for the purpose of getting a verdict and after that has been obtained, repudiate it and adopt another for the purpose of saving a judgment. The contract with the German firm was terminated by the defendant. He had a ’ right to terminate it, and while his motives are of no importance, nevertheless, so far as this record shows, he acted in the utmost good faith. The new contract which he made contained different terms. The old contract required him to purchase of the German firm annually corsets “ amounting to at least One hundred and fifty thousand marks, German currency.” This was eliminated from the new contract. Under the old contract he- could terminate it only in one of two ways — at the expiration of five years from its date, .or at' any time if- the duties on corsets were increased to such an extent as to make importations unprofitable. Under the new contract either party could terminate it by giving one year’s written notice.
I am also of the opinion that the trial court erred in not admitting in evidence defendant’s Exhibit 5a for identification. This was an agreement, dated October 24, 1.903, between the. plaintiff and the successor of the German firm, by which the plaintiff, in consideration.of 9,250 marks paid to him, assigned and transferred to such successor rights which he had rrnder *391certain contracts with, the German firm, including the sole right to represent and sell its products in the United States and Canada. He simply obligated such successor to carry out the contract with the defendant to November 1, 1906, thereby putting it out of his power to perform, after that date, the tripartite agreement. Haying put himself in this position, I think the defendant would have been justified in refusing to pay royalties after that time upon that ground alone, even though no prior, notice had been given. Whether this he corréct or not, the agreement was some evidence as to the construction which he put upon the tripartite agreement.
For the foregoing reasons I am unable to concur in' the prevailing opinion.
I think the judgment and order appealed from should be reversed and a new trial granted, with costs to appellant to abide event.
INGRAHAM, P. J., concurred.
Judgment and order affirmed, with costs.