Rosenthal v. Rubin — 148 A.D. 44

Majority

p. 44

Samuel B. Rosenthal and Charles Savage, Copartners, Doing Business under the Firm Name and Style of S. B. Rosenthal and Company, Respondents, v. Edward Rubin, Appellant.

First Department,

December 29, 1911.

Headnote

Pleading — contract — performance of conditions precedent — employment of agent on commission.

A demurrer to a complaint does not admit legal conclusions therein, the construction put by the plaintiffs upon the contract in suit, or the correctness of the inferences they draw from the facts alleged.

Where in an action to recover for breach of contract of employment, providing that plaintiffs should act as defendant’s agents for a certain period to sell goods on commission; that at their own expense plaintiffs should employ salesmen, furnish them with trunks, advance their traveling expenses and also advertise defendant’s goods, and that defendant should advance plaintiffs $80,000 on account of future commissions in three installments on certain fixed future dates, it appears that plaintiffs were not discharged until after the dates fixed for the payment of the

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money, it is necessary for them in order to recover the $30,000 to allege either that they had duly performed all the conditions of the contract on their part to be performed, or else to set out specifically that they did employ salesmen, provide them with necessary traveling equipment, pay their expenses and advertise defendant’s goods as required by the contract.

An allegation in the complaint that plaintiffs entered upon the performance of their said contract and “ performed the same fully and entirely ” until a certain date, when they were wrongfully discharged, is not equivalent to an allegation that plaintiffs “ duly performed all the conditions” of the contract on their part to be performed.

A complaint which after setting forth the terms of the contract merely alleges that plaintiffs performed the contract “ fully and entirely ” until they were discharged is demurrable.

Another cause of action setting forth the same facts as to the $30,000, which further alleges that plaintiffs earned certain commissions both prior and subsequent to their discharge, but which nowhere alleges that they had duly performed the contract prior to the discharge, and does not set forth facts showing that they had so performed, is also demurrable.

For anything that occurred subsequent to their discharge plaintiffs’ cause of action is not for commissions on orders or sales, but for damages for breach of contract.

Appeal by the defendant, Edward Rubin, from an interlocutory judgment of the Supreme Court in favor of the plaintiffs, entered in the office of the clerk of the county of New York on the bth day of October, Í911, upon the decision of the court, rendered after a trial at the New York Special Term, overruling the defendant’s demurrer to the amended complaint.

Charles Goldzier, for the appellant.

Alex. B. Greenberg, for the respondents.

Appeal from an interlocutory judgment overruling demurrers to the first and third causes of action set out in the complaint, upon the ground that neither of them states facts sufficient to. constitute a cause of action. The demurrers were overruled, as appears from the opinion of the learned justice sitting at Special Term, upon the ground that each cause of action was predicated, not upon the plaintiffs’ performance of the contract, but upon the ground that such performance had been prevented by the defendant, and, therefore, need not be alleged.

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In the first cause of action the plaintiffs allege, in substance, a contract by which the defendant employed them as his agents for a period of eleven months from February 1, 1910, to sell furs in a certain territory upon a stated commission; that by the terms of the agreement the plaintiffs, at their own cost and expense, were to employ salesmen, furnish them with trunks, advance their traveling expenses, and also advertise defendant’s goods; that the defendant agreed to advance to the plaintiffs the sum of $30,000 on account of future commissions, and to pay that sum in three installments of $10,000 each on the first days of March, May ánd June following the making of the contract, the amount thus advanced to be deducted from the commissions when earned; that “the plaintiffs entered upon the performance of their said contract and performed the same fully and entirely until about the 15.th day óf June, 1910,” when the defendant wrongfully discharged them; that no part of the $30,000 has been paid, except the sum of $5,000, and the balance is still due and owing, for which judgment is demanded.

The third cause of action sets up the same agreement, contains the same allegations as to performance and discharge, and then alleges that the amount of sales made by defendant, through plaintiffs’ efforts, before and subsequent to the discharge, entitle the plaintiffs to a commission of $43,500, against which is credited the sum'of $30,000; that is, the amount agreed to be advanced, leaving a balance due of $13,500, for which judgment is demanded.

The point of the demurrer to each cause of action is that the performance of conditions precedent is not sufficiently alleged; that the allegation “that the plaintiffs entered upon the performance of their said contract and performed the same fully and entirely until about the 15th day of June, 1910,” when they were wrongfully discharged, is not equivalent to an allegation that the plaintiffs “duly performed all the conditions” of the contract on their part to be performed. Section 533 of the Code of Civil Procedure provides that in pleading the performance of a condition precedent in a contract it is not necessary to state the facts constituting performance, but the party may state generally that he duly performed all the conditions on his part.

In Feuerstein v. German Union Fire Ins. Co. ( 141 App. Div.

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456 ), where an action was brought upon a fire insurance policy, the plaintiff alleged that he had complied with each and every one of the terms, conditions and agreements of the policy on his part to he kept and performed. It was held that this was not' equivalent to an allegation that he “duly performed.”

.In Hilton & Dodge Lumber Co. v. Sizer & Co. ( 137 App. Div. 661 ) it was held that a general allegation that the plaintiff had performed on its part all of the terms of the agreement did not sufficiently allege the performance of a condition-precedent.

In Gansevoort Bank v. Empire State Surety Co. ( 117 App. Div. 455 ) action was brought upon a bond guaranteeing the payment of a loan. The complaint alleged that every condition of the contract was fulfilled and all things happened and all times elapsed necessary to enable the plaintiff to maintain the action. It was held that such allegation was insufficient.

And to the same effect is Clemens v. American Fire Ins. Co. ( 70 App. Div. 435 ).

Under the section of the Code referred to, the plaintiffs had the option either to allege generally that they had duly performed all the conditions upon their part or to set out facts showing in detail the performance of each condition precedent. (Feuerstein v. German Union Fire Ins. Co., supra.) But as I read the cause- of action demurred to, they have done neither.

By demurring defendant admits the facts stated in the complaint. He does not, however, admit legal conclusions, the construction put upon the contract by the plaintiffs, or the correctness of the inference to he drawn from such facts. (Bogardus v. N. Y. Life Ins. Co., 101 U. Y. 328.)

In the first cause of action, under the contract pleaded, defendant obligated himself to pay to the plaintiffs $30,000 on or before the 1st of June> 1910. The contract went into effect on the first of February of that year. The plaintiffs agreed, in consideration of this payment, that they would, at their own cost and expense, provide salesmen, furnish them with the necessary equipment for traveling, pay their expenses and advertise the defendant’s goods. The plaintiffs were not discharged until the fifteenth day of June. The $30,000 became due prior to that time, viz., June first. In order, therefore, to become

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entitled to the $30,000, it seems to me that plaintiffs had to allege either that they had duly performed the conditions of the contract, or else set out specifically that they did employ salesmen, provide them with the necessary equipment for traveling, pay their expenses and advertise defendant’s goods.

As to the third cause of action, the allegations, as we have already seen, are precisely the same as the first cause of action as to the $30,000, followed by allegations that the plaintiffs had entered upon the performance of said contract and performed the same entirely until the fifteenth of June, when they were discharged; that at the time they were discharged they were engaged in carrying out the contract which they offered to perform and complete; that until they were discharged they and their salesmen had procured orders and sold merchandise for the defendant in the territory allotted aggregating upwards of $100,000, and. after the discharge the defendant sold merchandise in said territory, through plaintiffs and their 'agents, aggregating upwards of $500,000, and they became entitled to commissions upon such sales amounting to $43,500; that upon these commissions they credited the $30,000, which the defendant had agreed to pay on or before the first of June, leaving a balance due of $13,500, for which judgment was demanded. In this cause of action there is no allegation that the plaintiffs had duly performed prior to the discharge, nor are facts set forth showing that they had performed the conditions of - the contract on their part to be performed. For the reasons stated as to the first cause of action, in the absence of such allegations, plaintiffs were not entitled to recover the $30,000 or commissions upon sales made prior to the discharge, and for anything that occurred subsequent thereto their cause of action is not for commissions on orders taken or' sales made, but for damages for a breach of the contract.

The question of ñon-performance on the part of the plaintiffs, so far as the payment of the $30,000 is concerned as commissions on goods sold prior to the discharge, is in no way involved in or connected with the discharge, because they had become entitled, if at all, to the $30,000 and such commissions prior to the discharge and up to that time they had not been

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interfered with, so far as any facts are set forth, in any way. In neither" cause of action are facts pleaded showing they were entitled to such payments.

If the foregoing views be correct, then it follows that the interlocutory judgment appealed from should be reversed, with costs, and the demurrers sustained, with costs, with leave to serve an amended complaint within twenty days on payment of costs.

Ingraham, P. J., Clarke, Scott and Dowling, JJ., concurred.

Judgment reversed, with costs, and demurrer sustained, with costs, with leave to plaintiff to amend on payment of costs.

Cases cited

Gansevoort Bank v. Empire State Surety Co. 117 App. Div. 455 N.Y. App. Div. 1907-02-08 p. 47
Clemens v. American Fire Insurance of Philadelphia, PA. 70 App. Div. 435 N.Y. App. Div. 1902-03-11 p. 47