(189 App. Div. 128)

ADAMS et al. v. GEORGE H. RIVES MFG. CO., Inc. (Supreme Court, Appellate Division, First Department. October 24, 1919.) 1. PATENTS 216-WHETHER AGENTS FOR SALE OF PATENTED DEVICE COMPLIED WITH CONTRACT QUESTION FOR JURY.

In action for breach of contract whereby plaintiffs were appointed exclusive agents for defendant for the sale of a patented device, the contract to hold good so long as sales by plaintiffs amounted to an average of $1,000 per month or more, where on plaintiffs' case their sales amounted to more than $1,000 a month up to the time of defendant's breach, and defendant claimed that the sales amounted to less, an issue of fact was presented, which should have been submitted to the jury.

2. PATENTS 216-CONTINUANCE OF CONTRACT OF Agent for sale of PATENTED DEVICE.

Under contract whereby plaintiffs were appointed exclusive agents for defendant for the sale of a patented device, the contract to hold good so long as sales by plaintiffs amounted to an average of $1,000 per month, the minimum which was to control the continuance of the contract was the amount of sales made by plaintiffs to their customers, and not the amount paid by plaintiffs to defendant.

Appeal from Trial Term, New York County.

Action by Daniel Adams and another against the George H. Rives Manufacturing Company, Incorporated. From a judgment on a dismissal of the complaint at the close of the whole case, and on a verdict directed in favor of the defendant on its counterclaim, plaintiffs appeal. Reversed, and new trial ordered.

Argued before CLARKE, P. J., and DOWLING, PAGE, MERRELL, and PHILBIN, JJ.

William S. Haskell, of New York City, for appellants.

W. E. Kisselburgh, Jr., of New York City (James F. Egan, of New York City, of counsel), for respondent.

DOWLING, J. Plaintiffs sue for damages for the alleged breach of a written agreement between the parties, whereby plaintiffs were appointed exclusive general sales agents for defendant for the states of New York and New Jersey for the sale of a patented device known as "the Rives auto pedal never slip pad," which patent had been issued to George H. Rives, president of defendant and was owned by it. Under this agreement, it was provided that

"The life of this contract shall be binding and hold good so long as the Messrs. Adams & Findley's sales amount to an average of one thousand aoilars per month or over ($1,000).”

The list price of the goods was fixed at $12 per dozen sets, less 60 per cent. f. o. b. New York City, and plaintiffs were to pay their account in full to the defendant by the 15th of each current month, for which they were to receive an additional discount of 5 per cent. Plaintiffs were "to bill and become responsible for all accounts that they may have or hereafter sell." Subsequent to June 1, 1916, defendant is alleged to have granted to plaintiffs the sales agency for certain states, in five of which they were to make additional sales of at least $6,000 For other cases see same topic & KEY-NUMBER in all Key-Numbered Digests & Indexes

(178 N.Y.S.)

per year, commencing August 1, 1916. It is alleged that plaintiffs' sales of the pads, within the territory granted to them, exceeded the sum of $11,000, and that on or about February 10, 1917, defendant refused to perform its agreement, and has since refused to perform the same, and in violation thereof has sold pads in said territory without paying plaintiffs any commission therefor, and has appointed other agents to sell in plaintiffs' territory.

The complaint set forth that the original agreement in question (though bearing date May 8, 1916) was entered into by the parties on or about May.23, 1916, which is the date when it was acknowledged. The answer of the defendant specifically set up that the agreement was entered into by the parties on May 23, 1916. Upon the trial, though it appeared that work under the contract was begun about May 21, 1916, no effort was made to question the date when the contract was made as averred.

the

[1] The complaint was dismissed upon the ground that plaintiffs did not make sales of goods within the minimum quantity fixed by their contract, and that therefore defendant's rescission of the agreement was justified, whether it took place on February 4 or February 17, 1917. Upon the record, this was erroneous. The agreement, upon pleadings and proof, was made May 23, 1916. Upon the record, defendant rescinded the contract on February 4, 1917. This was a period of 8 months and 12 days. During that time, plaintiffs' actual sales for New York and New Jersey amounted to either $9,015.15 or $8,786.05, while other orders were taken aggregating over $1,700, which were not filled. These figures were according to the testimony of their witness, Daniel Adams. The court, in dismissing the complaint, found that the sales in New York and New Jersey amounted to only $7,140.16. [2] Under the terms of the agreement, the minimum which was to control the continuance of the contract was the amount of sales made by plaintiffs to their customers, and not the amount paid by plaintiffs to the defendant. The contract was one of a sales agency. Plaintiffs were to sell defendant's goods to customers, and, even though they guaranteed the accounts and paid the bills, their obligation was satisfied when they sold to customers a minimum of $1,000 of pads per month. Even though they received a discount on their payments to defendant. Upon the record, there was an issue of fact, which should have been submitted to the jury, as plaintiffs duly requested. On the plaintiffs' case their sales amounted to either $9,015.15 or $8,786.05. Either sum was an average of over $1,000 per month for the 8 months and 12 days that the agreement was in force. Defendant's claim was that the sales only amounted to $7,140.16, the figures accepted by the trial court, which was under the required minimum. A clear issue of fact was thus presented, which should have been sent to the jury for decision.

The judgment appealed from will be reversed, and a new trial ordered, with costs to appellants to abide the event. Order filed. All

concur.

LEVY V. WALLACH et al.

(Supreme Court, Appellate Term, First Department.

October 27, 1919.)

1. EVIDENCE 258(1)—EMPLOYER NOT CHARGEABLE WITH DECLARATIONS BY EMPLOYÉ.

Employer was not bound by declarations of employé, regardless of proof that employment had not terminated at the time the declarations were made, in absence of proof that employé was at such time engaged in executing authority conferred upon him, and that the declarations related to business then pending so that they constituted part of res gestæ.

2. EVIDENCE

89-PRESUMPTION OF CONTINUANCE OF EMPLOYMENT OVERCOME

BY EVIDENCE OF TERMINATION.

In action for price, involving admissibility of declarations of buyers' employé to bind buyer, presumption that employment, shown to have existed at time of sale, continued and existed at time of declarations, was overcome by unimpeached and uncontradicted evidence that employment had terminated at time declarations were made.

3. APPEAL AND ERROR 1067-REFUSAL OF INSTRUCTION TO DISREGARD DECLARATIONS OF EMPLOYÉ REVERSIBLE ERROR.

In action for price, defended on ground that goods were worthless and had not been accepted, refusal to instruct jury to disregard evidence of declarations of buyers' employé that buyers were pleased with goods and would send a check in payment, where there was unimpeached and uncontradicted evidence that employment had terminated at time of declarations, held reversible error.

Appeal from City Court of New York, Trial Term.

Action by Ira J. Levy against Samuel D. Wallach and others. From a judgment for plaintiff, and from an order denying a motion to set aside the verdict and for a new trial, defendants appeal. Reversed, and new trial granted.

Argued October term, 1919, before GUY, BIJUR, and DELEHANTY, JJ.

Wise & Seligsberg, of New York City (Leon Lauterstein, of New York City, and William W. Oppermann, of Poughkeepsie, of counsel), for appellants.

Bernard Fliashnick, of New York City, for respondent.

DELEHANTY, J. The principal ground upon which this judgment must be reversed consists of error committed by the trial judge in charging the jury. The controversy arose over the sale by the plaintiff's assignor to the defendants of a large quantity of hooks and eyes, the transaction taking place in April, 1918. Plaintiff contended that the goods were sold without warranty at a reduced price and upon full and complete inspection by the defendants. Defendants contended that the goods were purchased by sample, that they failed to conform thereto, and were wholly unmerchantable and worthless. Plaintiff obtained a complete recovery in the court below.

During the trial, wherein the facts were sharply disputed, Virginie Cohen, wife of the plaintiff's assignor, testified that on or about the 20th day of May, after the goods had been duly shipped to defendants, one Jacob Klein, who had participated in the negotiations lead

For other cases see same topic & KEY-NUMBER in all Key-Numbered Digests & Indexes

(178 N.Y.S.)

ing up to the sale as an employé of the defendants, stated to her that defendants had received the goods in question, were pleased with the same, and that a check therefor should be forthcoming to her husband in payment. Defendants objected to the admission in evidence of the statement in question, on the ground that, when it was made, Klein was not an employé of defendants, and had no authority, therefore, to bind them by what he said. Klein was called to the stand, and testified that he never made the statement attributed to him, and that he left the defendants' service May 1, 1918. The defendants also produced one Goldfein, under whom Klein was employed, who testified that Klein had severed his connections with the defendants prior to May 1st; that is, in the latter part of April.

In his charge to the jury the court said:

"Something was said about statements alleged to have been made by Mr. Klein after these goods had been shipped. If you find that at the time Klein made those statements-the statements wherein he is alleged to have said in substance that Mr. Cohen was entitled to his check, and there was no reason why the check should not have been sent-if you find, at the time he made that statement, he was no longer in the employ of the defendants, then they are not in any wise bound by what he said."

Defendants' counsel then requested:

"Your honor charged, about Klein's testimony, that if they found that Klein was not in our employ, then they must disregard [the] testimony about his having said they should get a check. I ask your honor to charge the jury that the testimony in the case is uncontradicted that Klein was not in our employ after May 1st, and they must disregard any statement Mrs. Cohen said he made in our behalf after May 1st.

"The Court: I will let the jury decide whether there is any testimony, but I will say to them that, if Klein was not in the employ of the defendants at the time he made the statements, then they are not in the slightest degree bound by it.

"Defendants' Counsel: Exception to that."

[1] The testimony was offered and received on the theory that, Klein having been employed by defendants at the time of the sale, it would be presumed that the relation continued until the contrary was shown. Even so the proof would be insufficient to bind defendant, for, as was said in Goetz v. Nut R. Co., 54 App. Div. 365, 66 N. Y. Supp. 666, cited in Corn v. Bergmann, 145 App. Div. 218, 129 N. Y. Supp. 1049:

"Declarations of an agent are not competent to charge a principal, upon proof merely that the relation of principal and agent existed at the time when the declarations were made. Something more must be shown. 'It must further appear that the agent, at the time the declarations were made, was engaged in executing the authority conferred upon him, and that the declarations related to and were connected with the business then depending, so that they constituted a part of the res gestæ.'"

[2, 3] However, when unimpeached and uncontradicted evidence was introduced herein that Klein's employment had been terminated, the presumption was overcome. It will be noted that the witness claimed that the conversation in question occurred about May 20th, a week or two after all the goods had been delivered. It is obvious that, if the jury regarded the testimony as binding on the defendants,

it was most damaging to their case, especially in view of their testimony that the goods were not accepted, and that they had not used or sold any of them.

The jury should have been instructed to disregard the testimony of Mrs. Cohen, as indicated in the request to charge, and, having failed to do so, we think the trial judge committed error, requiring the case to be sent back for a new trial. In view of this conclusion, it is not necessary to discuss other alleged errors in the record.

Judgment and order accordingly reversed, and new trial granted, with costs to appellant to abide the event. All concur.

(108 Misc. Rep. 204)

BRONX GAS & ELECTRIC CO. v. PUBLIC SERVICE COMMISSION et al. (Supreme Court, Special Term, New York County. July, 1919.)

1. GAS 14(1)—INJUNCTION TO RESTRAIN ALLEGED CONFISCATORY GAS RATES ISSUED ON BOND TO PROTECT CONSUMERS.

In gas company's action for a decree that Laws 1906, c. 125, fixing $1 per 1,000 cubic feet as maximum price for gas furnished to the general public, and Laws 1905, c. 736, fixing 75 cents for that quantity as the maximum price for gas furnished to the city of New York, are at present confiscatory and unconstitutional, where company makes out a sufficiently convincing prima facie case to justify preliminary injunction, it may be granted, with appropriate incidental relief, on company's bond to protect

consumers.

2. GAS 14(1)-IN ACTION TO ENJOIN GAS RATES AS CONFISCATORY, GENERAL ELECTRIC AND GAS BUSINESS NOT CONSIDERED.

In action by gas and electric company to have Laws 1906, c. 125, fixing $1 per 1,000 cubic feet as maximum for gas furnished to the general public, and Laws 1905, c. 736, fixing 75 cents for that quantity as the maximum for gas furnished to the city of New York, declared confiscatory and unconstitutional, the question whether plaintiff's total business, which includes its electrical department, is or is not conducted at a loss, cannot be injected into the case.

3. GAS 14(1) EVIDENCE SHOWING STATUTORY RATES CONFISCATORY AUTHOR

IZING TEMPORARY INJUNCTION.

Assuming correctness of the figures of a gas company, suing to have Laws 1906, c. 125, fixing $1 per 1,000 cubic feet as maximum price for gas furnished to the general public, and Laws 1905, c. 736, fixing 75 cents for 1,000 cubic feet as the maximum price for gas furnished to the city of New York, declared confiscatory and unconstitutional, show that statutory rate has been confiscatory since January 1, 1917, a sufficient period of loss is shown, at least until all the evidence is in, and the court may grant pendente lite relief.

4. GAS 14(1)-IN SUIT TO RESTRAIN ALLEGED

RATES AND FIX NEW RATES, INJUNCTION DENIED.

CONFISCATORY STATUTORY

In suit by gas company to enjoin enforcement of statutory maximum rates to consumer and to city of New York, wherein it seeks primarily the fixation of a new rate, and the other relief is merely incidental thereto, and it desires no relief, unless a new rate is fixed, its motion for injunction will be denied in toto, as courts are without power to fix a rate.

Action for an injunction by the Bronx Gas & Electric Company against the Public Service Commission, the Attorney General, the District Attorney of Bronx County, the City of New York, and cus

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