Stephens v. Howe — 34 N.Y. Super. Ct. 133

Majority

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BENJAMIN F. STEPHENS, Plaintiff and Respondent, v. MANLY HOWE et al., Defendant and Appellant.

Headnote

I. Contract. Option as to mode op payment.

1. What contract gives such option. Where one proposes to do work and furnish material for another at a certain rate gold, or a certain other rate currency, which proposal is accepted, an option as to mode of payment is provided for.

2. First right to exercise the option, belongs, under such a contract, to the party who is to make payment.

3. When he must exercise the right. Before he is in default for nonpayment.

a. When he is in default. When a day certain is fixed for payment he is in default if he does not pay at the day; if a day certain is not fixed he is not in default unless he neglects to pay upon demand made after the debt has become payable.

4. Effect of his exercising the right is to bind both parties.

5. Effect of his not exercising the right is to give the other party a right to elect; in which case his election binds both parties.

6. Evidence of exercising the right, what is sufficient.

a. The receiving of bills for the work, &c., made out on the gold basis without objection, is sufficient evidence of an election by the party so receiving to pay on that basis.

5. The sending of bills made out on the gold basis is sufficient evidence of an election to receive payment on that basis.

H. Contract payable in gold. Currency in which damages should be assessed.

Damages should he assessed, and judgment should be payable in gold.

HI. Contract por work and materials, to be performed and furnished. Eeseission of.

1. Notice to the person who is performing and furnishing under the contract, to stop, so far operates as a rescission of the contract as that he cannot proceed and recover the contract price as for work done and materials furnished after such notice given.

2. His remedy is the recovery of damages for breach of contract.

3. Complaint, form of, under which such damages are or are not recoverable.

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а. They cannot be recovered under a complaint on the contract for the contract price.

б. The complaint must be for damages for breach of contract.

Before Monell, Jones, and Spencer, JJ.

Decided December 31, 1873.

Appeal from judgment entered on referee’s report.

Action to recover for the publication of certain advertisements in newspapers printed and published in the island of Cuba.

The complaint alleged, that the defendants employed and directed the plaintiff to publish certain advertisements, of certain preparations and merchandise, of which the defendants had an interest, or were the owners, in certain newspapers published in the island of Cuba, for which they were to pay the sum of nine cents per line for each insertion. That the plaintiff caused such advertisements to be published, the same occupying four hundred and seven thousand six hundred and.two lines, and amounting, at the contract price, to the sum of thirty-six thousand six hundred and eighty-four dollars and eighteen cents, of which the sum of four thousand three hundred and four dollars had been paid. Judgment for the balance was demanded.

The answer admitted the employment, but insisted that the price was to be four and a half cents per line ; and that it was agreed that none of the advertisements should exceed thirty lines of printed matter; and that the total amount to be paid for such advertising should "not exceed the sum of three thousand dollars, which sum the defendants had paid.

By a supplemental answer, the defendants alleged that the four and a half cents a line was not only as compensation to the plaintiff for his services, but also to reimburse him for such sums as he might pay out

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for the publication of such advertisements; and that, the sum, nor any part of it, should be due until the several newspapers had been paid.

The answer further alleged that the plaintiff had not paid such newspapers, and that the proprietors thereof were claiming payment of the defendants.

The action was tried by a referee.

On the trial, the plaintiff introduced a letter from himself to the defendants, and their reply thereto, of which the following extracts only are material:—

“Boston, February 13, 1865.

“Messrs. Howe & Stephens :

“Gentlemen : Enclosed please find my circular list of newspapers published in Spanish dominions. I will agree to insert your advertisements of “ Family Dyes” as frequently as you may decide upon, in. any or all the said newspapers during the year 1865, upon the following terms:

“Once per week in each, at five cents gold, or ten cents currency per line each insertion. Oftener than once or every day for four and a half cents gold, or nine cents per line currency.”

The defendants’ reply was as follows :—

“Bent. . F. Stephens, Esq.:

“Dear Sir : Tours of this date came to hand this P. M. In regard to advertising in Cuba papers, we have sent you cuts and three different advertisements per Adams Express to your address. We wish you to form an advertisement of about forty lines; have it inserted .in each of the papers on your printed list coming under the head Island of Cuba, making twenty-six papers, at prices of your of this date, and as much lower as you can make them.”

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It was also proved by uncontroverted evidence that plaintiff had rendered to defendants seven bills for advertising,' covering the period between March 20, 1865, and November 14, 1865, all of which bills were made out on a basis of four and one-half cents in coin, and were received by defendants without objection.

It wa.s further proved by uncontroverted evidence that defendants on February 8, 1866, notified plaintiff to stop the advertisement.

One of the defendants testified that he agreed with plaintiff at Boston in July or June, 1865, that the rate of gold should be $1.40 for the future as well as past advertisements. The plaintiff testified to the contrary.

The rpferee made the. following findings:—

That on or about February 13, 1865, the defendants employed and directed the plaintiff, and the plaintiff agreed with the defendants, to prepare and publish for the defendants certain advertisements of family dyes, owned by the defendants, in certain newspapers published in the island of Cuba, oftener than ' once a week, at and for the price of nine cents per line in currency, for each insertion.

That under and in pursuance of such agreement and direction of the defendants, the plaintiff prepared and caused the advertisements to be published or inserted in the Spanish newspapers, and that the number of lines in the publication of such advertisements, in all the aforesaid newspapers, amounted to the aggregate to four hundred and seven thousand six hundred and twenty-two (407,622) lines, which at the rate of nine cents per line, in currency, amounted to the sum of thirty-six thousand six hundred and eighty-five dollars and ninety-eight cents ($36,685.98).

That the plaintiff on or about and up to May 1, 1865, paid, laid out and expended for the defendants, at their request, the sum of one hundred and thirteen dollars and sixty-two cents ($113,62), making in the

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aggregate indebtedness of thirty-six thousand seven hundred and ninety-nine dollars and sixty cents, from the defendants to the plaintiff.

That the defendants have paid to the plaintiff, on account, and are entitled to a credit of four thousand . three hundred and four dollars ($4,304), thus leaving a balance of 'thirty-two thousand four hundred and ninety-five dollars and sixty cents.

That the interest on the said balance of thirty-two thousand four hundred and ninety-five dollars and sixty cents ($32,495.60), from May 1,1866, the date from which interest was demanded in the complaint, to date of the report, amounted to seven thousand three hundred and ninety-seven dollars and twenty-two cents, making an aggregate indebtedness of thirty-nine thousand eight hundred and ninety-two dollars and eighty-two cents from the defendants to the plaintiff.

That the defendants’ advertisement “Family Dye Colors” was inserted in the newspapers, the names of which, with the time of the first insertion, the number of lines each insertion occupied in each paper, and the number of insertions in all the newspapers were set forth in a paper hereto annexed ; that the insertions were made at divers times after the commencement thereof, in the years 1865 and 1866; that it was not the agreement between the plaintiff and defendants that only forty lines should be charged for, and inserted in each of the papers, but that the insertions should be for a year, that is a year’s advertising for each newspaper, and though there were more insertions made in several newspapers, he had allowed only a year’s advertising in any instance ; that the defendants did give notice to the plaintiff to countermand the advertisements, about February 8, 1866 ; that the price to be paid for advertising was the sum of four and one-half cents gold, or nine cents currency, per line, for each insertion, and that the plaintiff is entitled, by the terms

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of the agreement, and the facts given in evidence, to receive the sum of nine cents per line for each insertion.

Judgment was entered for the plaintiff for forty-two thousand two hundred and sixty-two dollars and fifty-seven cents.

The defendants appealed.

John S. Jenness, John Alex. Beall, Clarence A. Seward, of counsel for appellants, urged :

—I. That the referee erred in holding defendants liable under their contract for a year’ s advertising in each paper. The written contract between the parties is explicit on this point. The plaintiff’s proposition was as follows : “I will agree to insert your advertisements of 6 Family Dyes ’ as frequently as you may decide upon in any. or all the said newspapers (on the inclosed'list) during the year 1865 upon the following terms, &c.” This proposition was accepted without modification in this particular. The witnesses produced by defendants testify that no change in this particular was ever talked of afterward.

II. But again, upon the question of the length of time for which defendants can be held liable for these publications, we contend, that the notice given by defendants to plaintiff in February, 1866, had, under the circumstances, the legal effect to put an end to the further continuance of the contract. The referee finds “ that the defendants did give notice to the plaintiff to countermand said advertisements about the 8th day of February, 1866.” This countermand was by letter from defendants to plaintiff, dated February 7, 1866, in which defendants write : “We would say we have ordered all advertising done through you to be stopped some months ago.” Referring to a previous oral countermand in the previous November. We contend that as a matter of law defendants had a right to discharge

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plaintiff from further employment, and to discontinue any further advertising, always subject to the defendants’ liability for damages, if the plaintiff could be shown to have sustained any. The relation of the plaintiff towards the defendants, as it is correctly set forth in the complaint and established by the testimony, as well as found by the referee in his report, was that of agency, the plaintiff being employed by defendants to procure the publication of defendants’ advertisement in sundry Cuban newspapers ; and such appointment being revocable at defendant’s pleasure, subject always to such a rule of damages as the case may call for (see Story on Agency, § 466). The broadest rule of damages which could be a pplied in the present case would be to hold defendants liable to plaintiff upon all contracts which he had made previous to the revocation of his authority with the sundry newspapers. Had the plaintiff on the trial shown that he had, previous to the revocation of his authority, actually ordered defendants’ advertisement inserted for one year and that he had paid for the same—then, if his efforts to cancel his contracts with the newspapers had failed, the law might well entitle the plaintiff to the damages claimed.

III. Under the language of this contract, it becomes a question of law as to the price recoverable against defendants. And as to this question we submit, that the option to pay in gold or currency was by the contract expressly reserved to defendants, and a pay in either gold or currency satisfied the contract. The option in an alternative contract belongs to the promisor (see 2 Pars, on Cont. 657; 7 Johns. 465 ; 11 Id. 59). If, moreover, it be thought that, in analogy to alternative contracts to deliver property to pay money, it was necessary for the defendants to elect what sort of money they would pay in, before action brought, we reply that such an election is positively proved to

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have been made on all the advertisements published before November, 1865.

Messrs. Eldridge & Johnson, attorneys, and of counsel, and John K. Porter, of counsel for respondents, argued:

I. The referee was right in holding that the defendants, who were in default throughout, were liable under the contract at the rate of nine cents per line for each insertion of the advertisement. 1. This is really the only point in the case, and it is of vital importance ; as a decision of it adversely to the view of the referee would compel the plaintiff to stipulate for a reduction of the price per line from nine cents in currency to four and a half cents in gold. Such reduction would be against the oath of the plaintiff, supported by the finding of the referee, that no such stipulation was made by the plaintiff with the defendants. It would also be against the rule of law hereinafter cited, that the party in default loses his option, and that the election is with the party fulfilling and enforcing the contract, as the referee held, in accordance with the decisions of the courts. 2. The contract gave to the defendants the option to pay the plaintiff either nine cents in currency, or four and a half 'cents in coin per printed line for each insertion of the advertisement in the Spanish journals of the island of Cuba, embraced in the circular list. 3. By failure to fulfill the contract in either form, the defendants voluntarily relinquished their option, and the law vested the plaintiff with the right, of election between the agreed rates in currency or in coin (McNitt v. Clarke, 7 Johns. 465 , 467). “ After the day of payment is passed, his right of elec-1 tion is gone, and the right of the payee to demand the money is absolute ” (Church v. Feterow, 2 Pen. & W. 301 ). “If a contract is to do one of two things by a given day, the debtor has until that day to make his election ; but if he suffer that day to pass without per

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forming either, his contract is broken and his right of election gone” (2 Pars, on Cont. 657, note C, 5 ed.; Chit, on Cont. 795, note M, 10 Am. ed.). The plaintiff’s readiness and willingness to accept payment in the form most favorable to the defendants, as evinced by the bills first rendered, is of no avail to the defendants, who elected to break their contract, and to make payment in either form.

II. The referee was right in holding that the contract was for one year s advertising. 1. The fact was proved and undisputed, that by the uniform custom, such a contract for advertising by the year, imports “ a year from the time the order is given, allowing a reasonable time to get the advertisement started in all the papers ; ” and that in this business of advertising in the Spanish dominions, “ it takes several months to get advertisements in, after the order is given, and it takes about the same time to stop them.” 2. The written proposition, accepted by the defendants, was for yearly advertisements, giving the rates for the year 1865, which applied, of course, to the defendants’ order given in that year. 3. It is true that the acceptance did not state in, terms the time the advertisement was to continue; but the defendants on the receipt of the order were advised in writing that the plaintiff understood it as a direction to insert it for one year in each of the papers, and were requested to correct him if he misunderstood it. They received the letter, and did not express any dissent. 4. The defendants told the plaintiff’s clerk-in February, 1865, at the time the form of the advertisement was agreed on, that they “ wanted the advertising to go in for one year in all the newspapers.” 5. The evidence as to the so-called countermand was conflicting ; and the referee finds that there was none in fact until February, 1866 ; too late, if a countermand were admissible, to stop the advertisement before the year would end. 6. But the de

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fendant, in law, could no more countermand his contract for a year, before the expiration of the year, than he could countermand a deed after its delivery, or a vote after the election.

The contract in this case was in the alternative, to pay five and a half cents in gold coin, or nine cents in currency. The defendants had the option, at any time before default, to pay in either kind of money.

But if, within the proper time, they had failed to ■ exercise the option, they would have lost the right of election, and the plaintiff could have elected for himself. The rule is, that if a party is bound to make an election, by performing one or other alternative by a certain time, and suffers the day to pass, without performing either, he loses his election, and the other party may elect for himself (2 Pars, on Con. 169). As where the condition of a bond was to pay six hundred . dollars in one year or four hundred in six months, &c., and the obligor failed to do either, he lost his right to elect, and the obligee could recover the larger sum (McNitt v. Clark, 7 J. R. 465; Smith v. Sanborn, 11 Id. 59).

The option of the defendants continued until the debt was payable, and its payment was demanded. If when such demand was made, they failed to make their election to pay either in coin or currency, then, probably, the plaintiff could elect for himself; and the election might be evidenced by his action to recover judgment for the agreed price in currency, unless he was concluded by his previous acts.

In November, 1865, the plaintiff presented to and left with the defendants, sundry bills for advertising during the months from March to October inclusive, and a portion of November. Those bills were made out on the basis of four and'óne-half cents in coin, and

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the demand of payment then made was for such money.

Thus the plaintiff, as regards those bills, elected, so far as he could or has the right to elect, to receive payment in gold instead of currency. Besides, there was some evidence, contradicted, it is true, that in the preceding June or July, the parties, by agreement, fixed the rate of gold for future .and past advertisements.

The fact, however, of the presentation of such bills by the plaintiff, and their receipt without objection by the defendants, is sufficient to show the understanding of the parties. ¡Neither seem to have contemplated any other than the four and a half cents in gold ; and I think the plaintiff must be concluded by such understanding.

The. defendants had the right, after that, to believe that gold would be the medium of payment. They were parties to the alleged agreement fixing the rate of gold; they received the bills, drawn payable at the gold rate, without objection ; and thus elected, as far as they could, or were bound to elect, to pay at such rate.

Certainly the plaintiff cannot, after having, in effect, agreed to the gold rate, claim now to recover the currency price, upon any ground of a waiver of election by the defendants. Even if upon this contract, there was any .time before suit brought when they were bound to elect between the gold and currency price, they must be deemed to have made such election, both when they agreed as they say they did, with the plaintiff, on the rate of gold, as a satisfaction of the contract, and when they received the bills rendered at the gold price, without objection. And the proofs of their having so elected, especially that derived from their acquiesence in the bills rendered, are equally potent, to estop the plaintiff from considering it an open question

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The referee therefore erred, as I think, in estimating the plaintiff’s claim at the currency price. He should have calculated it at the rate of four and a half cents in gold.

The contract, therefore, being payable in gold, the damages, under the authority of Butler v. Horwitz, cited in Quinn v. Lloyd, 1 Sweeny, 253 , 257, should be assessed at the sum found to be due, in gold, and judgment entered in coin at that amount, unless, under an • amended complaint, the plaintiff can establish a right to recover in currency, the rate alleged to have been agreed upon, as the value of gold in currency, namely, one hundred and forty per cent.

Another error of the referee, was, in allowing for any advertising after the termination of the contract by the notice of February, 1866.

The plaintiff’s written proposal was to insert the advertisements “ during the year 1865,” and the defendants accepted the proposal only to that extent. There was no direct evidence of an extension of the time into any part of the succeeding year. But be that as it may, by the notice of February, 1866, all right to continue the advertisements terminated. The contract was revocable by either party, and when either party saw fit to rescind, he left himself merely exposed to an action for damages. But for all purposes of further execution, the contract was at an end, when the notice of February was given; and for any advertising after that day, the defendants are not responsible. And although the measure of damages for a breach of the contract, might be the contract price, until the advertisements could be stopped, yet such damages, without an amendment of the complaint, at least, could not be recovered in this action.

It would not be proper for this court to reverse any finding of fact of the referee, which has been found upon conflicting evidence, merely because we might

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think such finding was not supported by the clear weight of the evidence. We have not, therefore, undertaken to disturb any of his findings of fact, except so far as such findings are unsupported by evidence, upon the construction which we have put upon -the contract, and the respective rights of the parties. Upon such construction the referee should have found for the gold instead of the currency price. And he should have confined the recovery to a period anterior to the revocation of the contract.

As we cannot adjust the amount to which, upon the principles we have stated, the plaintiff may be entitled, there must be a new trial.

We have not found it necessary to examine the other questions raised by the exceptions in this case, both as respects decisions of the referee, admitting or excluding evidence, or other findings of fact.

Except such questions as we have here determined, another trial will not be controlled by the judgment of this court.

Judgment reversed, order of reference vacated, and new trial granted, with costs of the appeal to the appellants, to abide the event of another trial.

Cases cited

M'Nitt v. Clark 7 Johns. 465 N.Y. Sup. Ct. at 467 p. 139, p. 140