Goodsell v. Western Union Telegraph Co.

The complaint contains allegations of two ■causes of action for the breach of contract.

It alleges that plaintiff made the contract with the Atlantic & Pacific Telegraph Company, and that afterwards the defendant, by agreement with the plaintiff, assumed and promised to perform the obligations of the Atlantic & Pacific Telegraph Company contained in the contract.

By that contract the plaintiff agreed to furnish for transmission by the telegraph company over its lines “news gathered” by the plaintiff, and the telegraph company agreed to transmit such news over its lines.

The plaintiff agreed to pay for the transmission by the company of 6,750 words each day, on an average, the sum of $5,000 each month, and a further sum, if a greater number of words were transmitted. It was further agreed that in case a less number of words were transmitted, an allowance or rebate upon the monthly sum of $5,000 were to be made; the. yearly sum, however, to be not less than $50,000.

The seventh clause provided that the collection of all moneys due or to accrue from papers or subscribers to the plaintiff shall be made by said telegraph company for the account .of the plaint'iff, and a full and detailed account shall be at all times duly kept by said telegraph company, which account shall always be open to the inspection of the plaintiff, and the same shall be furnished and rendered in due form by said telegraph company to plaintiff monthly, and payments of balances, if any, due by the telegraph company to the plaintiff shall be made on or before the 15th day of each and every month.

As a first cause of action the complaint alleged that the plaintiff provided for transmission from time to time news reports, that defendant transmitted them, and proceeded “ to collect from the different newspapers so served with plaintiff’s news reports the various sums agreed between said newspapers and plaintiffs to be paid,” which sums so collected in each month exceeded largely the sum agreed to be paid “ by plaintiff ” to the telegraph company for such service, and that there remains due and payable to plaintiff from defendant for money actually collected and re■ceived by defendant, and which should have been paid over to plaintiff by or before the 22d day of June, 1882, the sum of .$32,000.

Bor a first defence to this first cause of action, tne answer, after admitting the incorporation of the defendant and of the Atlantic & Pacific Telegraph Company and the nature of their business as

For a second defence to the first cause of action, the answer admitted that the contract set out in the complaint and therein averred to have been made by the Atlantic & Pacific Telegraph Company was in fact made, but not with the plaintiff. It averred that the plaintiff at the time, etc., “ claimed to be the president of the National Associated Press and to represent the same; that he executed said contract as president and that the Atlantic & Pacific ■ Telegraph Company entered into said contract relying upon the truth of the representations of plaintiff, and that as late as January, 1882, about one year after the date of the alleged contract, plaintiff still insisted that the National Associated Press was a bona fide and lawful association or company and that he was duly authorized to act for it; and that the said representations were not true; that the so called National Associated Press never had any existence and that plaintiff’s claim to be its president and to represent it in the negotiations and as such president to execute contracts in its name was wholly unauthorized, unlawful and fraudulent and calculated to deceive and injure the said Atlantic & Pacific Telegraph Company and that the said contract purporting on its face to be made between the Atlantic & Pacific Telegraph Company and the National Associated Press was, by reason of the facts hereinbefore alleged, wholly illegal, fraudulent and void.

For the third defense to the first alleged cause of action, the answer averred that the defendant had duly accounted for and paid over all sums, as provided by the contract to the plaintiff.

Upon the trial, the defendant took the position that the contract was not made with the plaintiff personally, and asked the referee to find that the plaintiff not being a party to the agreement, had not shown any right or title by which to enforce the same as against the defendant. The defendant did not ask a finding that the plaintiff represented that there existed a corporation named The National Associated Press, of which he, the plaintiff, was the president. It appeared by the testimony that there was an incorporation, named The National Associated Press Company, Limited. But there was no request to find that it was intended by the use of the former name to describe the latter corporation. And there was not testimony which required the referee to find, if requested, that there was such an intention in fact. In fact the designation, The National Associated Press, was applicable to a fluctuating number of representatives of newspapers, who made separate contracts with the plaintiff as to the prices which they would pay plaintiff for the transmission of

In fine, there being no natural or legal person specifically named by the description of the party of the second part, unless it was the plaintiff personally, it was a matter of fact to find what or who was intended by that description. And I think that the finding as requested by defendant was correct, that the plaintiff did business under the name and style of the National Associated Press, James H. Goodsell, president. This finding referred to a time designated as on and after February 1, 1881, ten days after the contract was made. The evidence did not show that there was a different mode of doing business at the time the contract was made.

This subject has received attention on former appeals and it has been held, as it is now held, that the plaintiff personally had a cause of action.

The remaining inquiry as to the first cause of action is, whether the referee was justified in his assessment of damages by the testimony in the cáse.

Upon this point the books of the defendant showed a balance in favor of the plaintiff amounting to $29,087.31. The significance of this lies in the fact that it shows that for whatever services had been actually rendered, the defendant had never charged the plaintiff with more than about $5,000 per month, including extras. By reducing the said balance to $16,772.42 the referee must have allowed the defendant the maximum rate for the regular service under the contract and for extra services as follows:

Maximum Price of $5,000 per month. Fifteen

months and twenty-one days]................. $78,500 00

All of schedule Z............................ 6,387 48

All of schedule Z\........................... 4,863 37

Of schedule X, the two items, showing special arrangements, “ Lawrence ”.................... 630 00

Showing “Auburn ” despatch.................. 390 00

Of schedule X-£, on same principle as X, “Auburn.” 120 00

Of schedule V, all but “ For Western Circuit ”.... 4,313 28

Of schedule .............................. 68 45

Total................................. $95,272 58

With these allowances the account stands as follows:

Collections by defendants from plaintiff’s customers,

as admitted by stipulation................... $157,800 00

Payments made by defendants to plaintiff on account thereof, as admitted by stipulation....... 45,750 00

Balance to be accounted for.............. $112,050 00

Credits to which the defendant is entitled for services and extra services..................... 95,272 58

$16,777 42

IJpon the whole case, and after due consideration of all the conflicting claims of both parties, I am of the opinion that the balance thus struck allows to the defendant all that it can reasonably claim. E there is any error in it of a substantial character, it is .against the plaintiff and in favor of the defendant, for it is by no means clear that the defendant can rightfully charge the maximum rate allowed to each and every month in addition to the extras .allowed.

The above statement of the account has been made by Judge Freedman and verified by me.

There was no error in the assessment of the damages on the first cause of action, and I proceed to the questions that relate to the second cause of action.

The second cause of action averred the making of the contract and the assumption by the defendant of the obligation of the Atlantic & Pacific Telegraph Company. It further averred that •on March 11, 1882, without any default on the part of the plaintiff, the defendant ceased, refused and neglected to further carry •out or perform said contract; that in the month of February, 1881, and in each month thereafter, the defendant had failed and neglected to render the plaintiff the account of collections as provided in the contract, although often requested by plaintiff to render such statement; that on and before March 11, 1882, plaintiff often demanded of defendant that it should carry out said contract according to its terms, and that by reason of said breaches of the said contract, the plaintiff had been greatly damaged.

The answer in its first and second defenses to this second cause of action, set up the same matter that was averred in the first and second defenses to the first cause of action, and as a third defense to the second cause of action denied that the defendant had, at any time, ceased, refused or neglected to do any of the acts provided for in said contract, or had at any time refused or neglected to render accounts of the collections made by said defendant, for said National Associated Press, or for the plaintiff.

The answer by way of counterclaim alleged that there was due from plaintiff to defendant $15,000^for_telegraphic services rendered by the latter to the'* former.

On this second cause of; action referee found for Jhe plaintiff in the sum of $30,000.

On this appeal the learned counsel f0r the defendant argues that

In March 11, 1882, the president of the defendant wrote to the plaintiff: “ I am therefore directed by the sub-committee to whom this subject was referred to say to you that from and after this date you will be charged for the transmission of your press reports the same rates as that charged for other combination press reports in the respective territories in which said reports are handled under existing agreements; and that unless such rate is paid or secured to be paid to the company, the service will be discontinued. The committee feel that you cannot regard this as short notice, since our free discussion of the subject for three months past has given you ample notice that it was our purpose and intention to increase the rates for your reports to that paid us by other customers for like services, and the committee feel that a decisive step in this, direction has been already too long postponed.”

In fact the plaintiff did not treat this as a present repudiation of the contract by the defendants, nor did the defendants press the plaintiff to immediate action upon the letter. In a conversation between the plaintiff and the president of the defendant, a little time after the letter, the president said to the plaintiff, that the contract could not be considered any longer; that he must inform him finally that the contract was repudiated by the company; that they would not perform any more service under the contract, but that if the plaintiff wished to carry on his business under a new contract in accordance with new terms, they would give him time to see what sort of an arrangement he could make with his customers. The plaintiff proceeded to negotiations with his subscribers until March 24, when the president wrote a letter giving new terms for a contract and then continued, “ I send you duplicates of this letter, one of which returned to me with your acceptance and signature will constitute the stipulations between yourself and this company and a sufficient basis for settlement for the services.” This was not treated as final, for the plaintiff, in a conversation had with the president a few days after the letter, asked for more time to make the experiment, and that if the company were to give more time, he would see what could be done and then the president answered: “ Go ahead and see what you can do.” The plaintiff continued his efforts with his subscribers. About the middle of June, the plaintiff told the president that he could not make new arrangements, and the president said that the subject could not be re-opened; that it was disposed of absolutely. The plaintiff then and at all times insisted that the contract should be carried out

On June 30, the plaintiff notified the company that he had not waived and did not waive any right or claims under the contract, but insisted on the same, that he had always been and still was ready, able and willing and offered to carry out the contract on. his part. The notice ended: “ My contract provides for monthly settlements and I desire to call your attention to the fact that no .settlement has been had for several months, although the .same has been promised from time to time.”

The defendants did not reply to this notice, excepting that the president said he would refer the matter to counsel, and did not make or offer to make any settlement. On the 22d Jnne, the plaintiff ceased to furnish any matter for transmission by the defendant.

From March 11th to June 22d, the plaintiff regularly furnished matter for transmission and the defendant transmitted under the 'contract, collecting the moneys as directed by the plaintiff. Indeed by their answer and the testimony they gave, they took the position that they had fully performed down to the 22d day of June, and that there was no breach by them thereafter. It is not correct to say that they had fully performed down to June 22d. They had, in violation of the contract, omitted to make monthly statements and monthly payments. It may however be conceded ■that the plaintiff maintained the contract until June 20th, and that at that time his rights were confined to recover the sums ■due by the contract and were not for damages for the loss of the contract. After June 20th, when notice was given, the defendants were bound to perform their obligation to furnish monthly statements and make monthly payments. Winchell v. Scott, 114 N. Y., 640 ; 24 N. Y. State Rep., 576. The referee might properly find that the notice of June 20th contained a demand of defendant, that they should render the statements and pay as provided. They did not do this.

While the mere omission to make one monthly statement or payment might not under some circumstances amount to a repudiation of the whole of the contract by the defendant, I am of opinion that where the omission is not made upon a ground which might not be applicable to future omissions and is not caused by peculiar circumstances that might not again occur, but appears to be upon grounds that would apply to future omissions, a single omission is a present breach that absolves the other party from the duty of considering the contract as continuing and of performing or tendering performance thereafter. In the present case, there was not a bare single omission, and nothing more. There had been earlier ■omissions, and there were facts and declarations by defendant’s agents that gave peculiar significance to the omission of defendant after June 20th. The referee might rightfully consider that, under the circumstances, the defendant was called upon to make an answer to the notice, and that entire silence was an evidence in part of an intention not to perform the contract any longer. The obligation to render statements and make payments had an

In that case the law was announced to be that “ a non-payment on the one hand, or a non-delivery on the other, may amount to such an act, or may be evidence for a jury of an intention wholly to abandon the contract and set the other party free." The learned referee did not specifically find that the omissions were accompanied with an intent wholly to abandon the contract. Eo specific finding was asked by either party on the subject. But it was found in the findings that related to the letters of March 11th and 24th that the intention of the defendants, evinced by them to repudiate the obligations of the contract, existed to June 22d.

The broad inquiry is whether, at the time in question, the one party, considering all the circumstances, took a position that properly led the other party to believe that there would be no further performance. If he did, the other party was not bound to tender further performance on his part. The testimony required the referee to find that on June 20th, or immediately thereafter, the defendants took the kind of position referred to; that they would not further perform.

It is argued that there" was an inconsistency between making the letters of March 1 and 24th a final and total breach, and allowing the plaintiff to recover, as if under the contract, down to June 22d, and then again finding that a total breach occurred by reason of the defendant’s omissions after June 20.

If there be an inconsistency in this, it has not resulted in any detriment to the defendant, for the damage to be given for the time between March 11 and June 22 would be the same if claimed under and in performance of the contract, or if claimed for breach of the contract. Howard v. Daly, 61 N. Y., 362 ; Everson v. Powers, 89 id., 527.

But I do not find that there is any inconsistency. By the letters there was an absolute repudiation of the contract by the defendants, yet while the defendants constantly refused to absolutely withdraw that repudiation, they consented that it should not be deemed to take effect for a certain time, and protracted that time, until the plaintiff declared that he could not make the arrangement for the making of which the time was given. Then the repudiation of the contract in the letter was definitively asserted. And this definitive repudiation was coincident with the total breach by defendant of omitting to furnish statement and make payment after the notice of June 20. It was not incongruous with these facts to view the letters as containing a repudiation of

The judgment should be affirmed, without costs to either party,

Freedman, J., concurs.

(dissenting).—The question as to the right of. the plaintiff to recover on the second cause of action presented on. this appeal does not differ materially from that presented to the general term of this court when the case was before us on the last appeal. See 55 N. Y. Superior Court, 173; 13 N. Y. State Rep., 278.

And a majority of the court then held that upon the case as then presented “ the plaintiff failed to establish a total breach of the contract by the defendant before he (the plaintiff) voluntarily ceased business under the contract,” and for that reason reversed the judgment in favor of the plaintiff.

I cannot see that the case is at all changed by the evidence produced on the new trial, and after a careful re-examination of the question I am of the opinion that the plaintiff failed to prove a total breach of the contract by defendant as alleged in the complaint as the foundation of the second cause of action and that the plaintiff by insisting that the contract was in force down to the 22d of June, 1882, and proceeding under it, elected to continue the contract in force. That he cannot proceed with the contract on the footing that it still exists and also treat the acts of the defendant as an immediate breach, and that bringing an action upon the contract as an existing contract and recovering a judgment for the amount due under the contract down to the 22d of June estopped the plaintiff from insisting that the acts of the defendant on the 11th of March constituted a breach.

My views on this question are fully expressed in the opinion delivered at the general term on the last appeal, and it is not necessary for me to state them here. I wish simply to call attention to the allegations of the complaint and the report of the referee. The plaintiff alleges for a second cause of action that without any failure or default of the plaintiff, on or about the 11th of March, 1882, the defendant failed, ceased, refused and neglected to further carry out or perform said contract or agreement; and also alleges that thereupon and thereafter plaintiff often requested and demanded of defendant that it should carry out. the said contract according to its terms, and plaintiff was always ready, able and willing to perform the same on his part, and duly offered to so do, but the defendant continued to refuse so to do, or to carry on or perform the services provided to be performed for the plaintiff, except that defendant would perform a less service and deliver a less number of words at a greatly increased price.

The foundation of this cause of action is thus founded upon a total breach of the contract by the defendant on the 11th of

As I understand the report of the referee, he does not find as a fact that the defendant did commit a total breach of the contract on March 11, 1882. The referee finds that the defendant wrote certain letters to the plaintiff, and that the plaintiff sent a communication to the defendant between March 11, 1882, and June 20, 1882, and then by the tenth finding of fact that from the 3d of February, 1881, to and including the 22d of June, 1882, the plaintiff fully performed and fulfilled on his part all the terms and conditions of said contract, but the defendant did not perform all the terms and conditions of said contract on its part to be performed and fulfilled as the assignee and representative of the Atlantic & Pacific Telegraph Company, and said defendant failed, neglected and refused to perform and fulfill the terms and conditions of said contract during said time.

The referee also found at the request of the defendant that after the writing of the letters of March 11th, March 24th, and May 10th, the plaintiff, continued to deliver his reports to the defendant for transmission, and the same were generally transmitted by the defendant as delivered to it, to the several points mentioned in schedule “A,” and to said other additional points as the defendant was requested to serve news reports under the contract set out in finding number four, up to the 22d of June, 1882, when the plaintiff ceased to deliver reports for transmission.

And the referee also finds that early and prior to the month of June the plaintiff in conversation with the president of the defendant, informed the president that he was unable to carry out the arrangement of March 11, 1882, March 24th, and May 10th, and said to the president of the defendant “ that he might as well stop the service,” and the said .president replied “ that he did not propose to stop the service.”

On these findings of the referee I do not think that there was such a breach of the contract as would entitle the plaintiff to abandon the further performance of the contract on his part on the 22d of June, and then maintain an action for a breach of the contract against the defendant. .

As before stated, the referee has failed to expressly find such a breach by the defendant, but has found facts which show that the defendant down to the 22d of June was carrying out the essential provisions of the contract, and had by its president expressly stated to the plaintiff that defendant did not propose to stop the service under the contract.

As was said in Bogardus v. The N. Y. Life Ins. Co., 101 N. Y., 335 : “It is only when the non-performance is of a condition precedent or when such party has wholly refused to perform or has wholly disabled himself from completing a substantial performance, that the other party is relieved from performance or a tender thereof.”