to perform the duties which he assumed under his part of the contract to
take charge of the defendants' business, and was incompetent, that they
(the defendants) could then discharge him without regard to the proviso in
the contract," as the plaintiff might be incompetent for the position of man-
ager and yet not incompetent to discharge the duties of salesman;
That the court properly declined to charge that if the plaintiff "was
incompetent for the first year, that the defendants had the right to discharge
him," where the only evidence of incompetency related to the position of
manager.
Semble, that if the plaintiff was competent for neither of the positions
named in the contract, the defendants could have discharged him without
assigning reasons. RUNYON . DOHERTY..
4. Subscription—the continuance of work in one of the departments of
a seminary not presumed to be at the subscriber's request — effect of the pay-
ment of a part of the amount subscribed.] The president of a theological
seminary, in making an appeal for assistance for the German department
of the seminary, stated that the "English department of the seminary, hav-
ing its own heavy burdens, cannot any longer make up this deficit, and a
great curtailment, if not an absolute close, of the German work is threatened
if money from other sources cannot be obtained," and annexed to such
appeal the following: "Subscription. We, whose names are here sub-
scribed, promise to pay, within six months from the time of our subscrip-
tion, the sum set opposite our names, to Professor H. M. Schaffer, for the
work of the German Department of the Rochester Theological Seminary
in training young men for the gospel ministry."
Held, that the mere fact that the German department, which had been in
existence for forty one years before the appeal was made, was continued
after one Joseph Wild had signed the subscription as follows: "Jos. Wild,
$5,000,” raised no presumption that such continuance was in pursuance of a
request made by Wild;
That the fact that Wild paid $1,000 of his subscription before his death
did not create a liability upon the part of his estate for the remaining $4,000,
in the absence of evidence that the corporation maintaining the seminary
had made any change in its plans involving new duties and obligations based
upon the subscription as a whole. HULL v. PEARSON.....
5. Restraint of trade-protection against a ruinous competition is not
illegal.] In an action brought to recover damages for the breach of a contract
by which the defendants agreed to purchase from the plaintiff, 250,000 envel
opes daily, at prices to be fixed by the Standard Envelope Company, which
was controlled by the defendants, and by which the plaintiff covenanted not
to sell envelopes at a less price than that at which the defendants had cove
nanted to purchase, it appeared that the Standard Envelope Company was
not organized for the purpose of stifling competition, but only for the pur-
pose of protecting the envelope trade against a ruinous competition, and to
insure a living profit to the people engaged therein; that there were nineteen
competing concerns who were able to keep the price within the range of fair
dealing, and that the prices of envelopes were not raised beyond the point
necessary to yield a reasonable profit. It further appeared that the contract
did not operate in restraint of the plaintiff's production, as 250,000 envelopes
was the full capacity of his plant and as he had never been able to sell that
number.
Held, that the court was authorized to submit to the jury the question
whether the steps taken, or which might have been taken, under the con-
tract, operated in restraint of trade or were inimical to public policy; and
that a verdict in favor of the plaintiff would not be disturbed.
COHEN v. BERLIN & JONES ENVELOPE Co....
6. Proof competent under a denial of the performance of a contract·
negotiations and conversations competent in determining its construction.]
an action brought to recover the price for equipping the defendant's factory
with an automatic sprinkling system, under a written contract which con-
sists of a proposal on the part of the plaintiff and an acceptance by the
defendant, and which provides that the system shall be so constructed as to
"drain back to central points," the defendant, under an answer denying the
performance of the contract, is entitled to introduce proof that the system did
not and would not drain to central points or at all, and evidence of negotia-
tions and conversations between the parties leading to the written contract,
offered by the defendant with a view to showing the situation of the parties
with reference to the property and the purpose for which the contract was
made, is competent where it appears that the situation of the parties bears on
the interpretation and construction of the contract.
N. Y. & N. H. SPRINKLER CO. . ANDREWS..
Proof as to the importance of a certificate of the board of fire under-
writers.] Where the proposal forming a part of the contract provides that
the contract price shall be payable after a certificate of approval shall have
been issued by the New York board of fire underwriters, the defendant may
(assuming that, on the face of the contract, the procurement of the certificate
was not an essential feature of the contract or an indispensable prerequisite
to the plaintiff's recovery) show, by the situation of the parties and their
negotiations, that the certificate was a substantial part of the thing contracted
for. Id.
8. Petition for the lighting of a district outside the limits of an incorpo-
rated village — names may be withdrawn before a contract is awarded — if
reduced to less than twenty-five the contract is void.] Taxable inhabitants of a
town who have presented to the town board a petition for the lighting of a
district "outside of the corporate limits of any incorporated village in said
town," under chapter 255 of the Laws of 1892, as amended by chapter 309 of
the Laws of 1896, may, before the contract has been awarded or executed,
withdraw their names from such petition, and if, by reason of such with-
drawals, the names remaining upon the petition are less than the twenty-
five required by section 2 of said statute, the town board has no power to
award or execute the contract. SUBURBAN EL. Co. v. TOWN OF HEMPSTEAD. 355
9. An assignment of such contract without consent avoids it.] The
assignment of such a contract, without the consent of the town board, oper-
ates, under chapter 444 of the Laws of 1897, to relieve and discharge the
town from any and all liabilities and obligations growing out of said con-
tract, notwithstanding the fact that the assignment is made to a corporation
of which the original contractor is the president and manager, and that the
town had the benefit of the performance of such contract. Id.
10. The inclusion in such lighting district of a part of an incorporated
village avoids it.] The fact that a lighting district named in a resolution of
the town board embraces parts, however small, of the territory of an incor-
porated village, renders the contract invalid. Id.
11. Agreement between two railroad companies to construct a road for
joint use- - either company may run cars of a leased road over it.] The Coney
Island and Brooklyn Railroad Company, which had a right to construct and
operate its railroad upon a certain portion of Neptune avenue, in the town
of Gravesend, which right was quite independent of, and not subordinate to,
any right possessed by the Coney Island and Gravesend Railway Company
in said street, entered into an agreement with the latter company to construct
and maintain, at their joint expense, a double-track railroad upon said
street, the agreement providing that said tracks so constructed were to be
used jointly by the parties to the agreement, and that "in such joint use of
the said tracks each of the parties hereto shall have the privilege of operat-
ing as many cars over said track as in the conduct of its business it may
deem necessary and proper."
Held, that the Coney Island and Brooklyn Railroad Company was enti-
tled to operate cars of a railroad company leased by it, over the tracks con-
structed and maintained in accordance with the agreement, where such use
of the tracks would not deprive the Coney Island and Gravesend Railway
Company of the same use if it chose to enjoy it.
CONEY IS. & G. R. Co. v. CONEY IS. & B. R. R. Co........
12. Contract for the sale of several chattels - when entire recovery for
its breach.] A contract embraced in a letter, stating "I have sold you a
spider phaton for $475, a brougham for $450, a sleigh for $175, total, $1,100,
with the understanding that, upon resale by you of the spider phæton, you
are to pay me at once $550 cash, or, on sale of the brougham, $500 cash.
The balance of the money ($550 or $600, respectively) to remain with you
and be used up either in the purchase by me of carriages or repairs thereof,"
is a contract for the sale of the three vehicles for $1,100, and not a sale of
each vehicle separately; and where the vehicles are delivered and the phaton
has been sold by the vendee, on account of which he has paid only $300.80,
the entire sum of $1,100 becomes due and payable, and the vendor is enti-
tled, in an action to recover damages for the breach of the contract, to
recover such sum of $1,100, less the amount actually paid.
13. Guaranty of a bond· - not discharged because part of its consideration
is represented by a credit instead of by cash.] Where two corporations enter
into a contract by which one of them agrees to advance to the other the
sum of $25,000, for the payment of which the latter at the same time
executes and delivers a bond reciting the advance of that sum, which is the
consideration for the giving of the bond, the fact that a portion of the
loan is made in the form of a credit, given by the obligee to a third party,
for a debt of $3,000 then presently due by the obligor to such third party
who has advanced that amount to the obligor in expectation that the loan
would be made, and who is indebted to the obligee in an amount greater
than the $3,000 credit, does not constitute such a modification of the contract
between the corporations as will discharge parties who have guaranteed the
payment of the bond. AMERICAN COPPER Co. v. LOWTHER..
134
4. Contract that work shall be "artistically and financially satisfac
tory' the decision must be made in good faith.] Under a contract of employ-
ment fixing the employee's salary at forty dollars per week for the first four
weeks, and providing At the end of that time if your management of our
press work is artistically and financially satisfactory, your salary will be $50
per week thereafter. This arrangement to be for one year under same
conditions," conceding that the employer is the sole judge as to whether the
employee's management of the press work is " 'artistically and financially
satisfactory," this power must be exercised in good faith, and the employer
cannot discharge the employee before the expiration of the year, for the
purpose of reducing expenses, and arbitrarily say that the employee's work
was not artistically and financially satisfactory. SUMMERS v. COLVER......
15. Street paving contract — agreement to put in a sham bid —
-a contract
based thereon is void as against public policy.] Where, after the bids for a
street paving contract have been asked for, a party who has on hand blocks
of stone which he wishes to dispose of and who intends to put in a bid, in con-
sideration of a second party's agreeing to take such stone from him at a speci-
fied price, puts in a sham bid by which the second party is enabled to obtain
the contract, such a transaction must be regarded as contrary to public policy
and void, and the agreement cannot be made the basis of a recovery against
the successful bidder, where the latter refuses to take the entire quantity of
stone. BAIRD . SHEEHAN....
Guaranty of an indebtedness for goods to be sold — when given to
a firm it does not survive its dissolution.] The life of a writing, by which a
corporation agrees to guarantee bills for merchandise which may be sold by
a firm to a third person, ends with the dissolution of the firm, and does not
extend to goods thereafter sold by one of the partners to such third person.
FRIEDLANDER 0. N. Y. PLATE GLASS INS. Co......
17. Officers of the corporation which gave the guaranty cannot extend it by
parol estoppel.] Such liability cannot be extended, nor can an estoppel be
created in favor of such partner, by parol, by the statements of an officer of
the corporation. Id.
18. Contract authorizing the printing from the vendor's plates of books
to be sold at a specified price - sale of plates to another party by a receiver of
the vendor -the purchaser restrained from selling a better edition at a less
price-contract in restraint of trade monopoly.] A corporation owning
the copyright of a prayer book sold a set of plates (for printing in one
APP. DIV.-VOL. XXXVIII. 83
color only), and authorized the vendees, subject to certain restrictions, to
publish the work from that set of plates, covenanting that it would not
sell a set of plates to any other publisher without the consent of the vendees ;
the agreement contained a provision that the retail price for plainly bound
copies should be one dollar and twenty-five cents, and fixed the discounts to
be allowed to the trade. Subsequently a receiver of the corporation sold the
remaining sets of plates and the copyright of the prayer book to a company hav-
ing full notice of such agreement, and the latter proceeded to publish from
plates printing in two colors a finer book than that published by the former
vendees, and to sell the same at a price much less than that fixed in the
agreement between the vendor and the first vendees.
Held, that the agreement made by the vendor, though technically a per-
sonal one, imposed an obligation upon all who acquired the plates with
notice of such agreement, and that the first vendees were entitled to an
injunction restraining the second vendee from selling its publications at less
than the stipulated price;
That while the agreement only fixed in terms the prices at which "plainly
bound copies" might be sold, it was not contemplated that the parties
should be at liberty to sell handsomer editions of the publication for a less
price than that stipulated for the "plainly bound copies;"
That the principle upon which contracts in restraint of trade are declared
void had no application to an agreement fixing the price of copies of the
volumes of a single copyrighted book.
Semble, that if all the publishers of copyrighted books upon a certain
subject were to combine and agree not to sell any publication on that sub-
ject except for a stipulated price, the contract would be in restraint of trade
and void. MURPHY . CHRISTIAN PRESS ASSN. PUB. Co....
19. Contract in restraint of trade.] The principle upon which con-
tracts in restraint of trade are declared void has no application to an agree-
ment fixing the price of copies of the volumes of a single copyrighted
book. Id.
20. Monopoly.] Semble, that if all the publishers of copyrighted
books upon a certain subject were to combine and agree not to sell any pub-
lication on that subject except for a stipulated price, the contract would be
in restraint of trade and void. Id.
21. Contract to pay debts "out of the proceeds of sale" of property con
veyed to the promisor — liability of the promisor thereunder the fact that a
creditor holds a mortgage to secure his claim is immaterial.] One Denike, who
was engaged in the erection of fifteen houses, being financially embarrassed,
conveyed such houses to William Herod, one of his creditors, who agreed as
follows:
"I hereby agree, for and in consideration of one dollar to me in hand paid
by Thomas S. Denike, receipt of which is hereby acknowledged, to pay all
claims for materials and labor furnished and delivered for the erection of
fifteen buildings in course of erection
and all notes given to (by)
said Thomas Denike out of the proceeds of sale of said fifteen houses and
lots, and after paying all indebtedness to said William Herod due from
said T. S. Denike, then to divide any surplus between Herod and Denike.
In consideration of the above the said Denike agrees to deed said fifteen
houses and lots to said William Herod, subject to all mortgages and incum-
brances and liens, and, paying them, to divide, as above, any balance.
WILLIAM HEROD,
"THOMAS S. DENIKE."
Held, that the contract was not ambiguous; that Herod's liability was lim-
ited by the terms of the contract to the payment of the claims for materials
and labor out of the proceeds of the sale, and that his promise was not an
original and absolute one to pay all such claims;
That, hence, it was necessary for a person seeking to recover from Herod
the value of materials furnished to Denike before the execution of the con-
tract, to allege in his complaint a sale of the property or that the defend-
ant had not used due diligence to dispose of the same.
Semble, that the foreclosure by the materialman of mortgages given to
him by Denike as collateral to the debt, and the entry of a judgment for defi-
ciency, did not operate to deprive him of his character of a materialman.
BRUMME v. HEROD...
Bill of sale of goods to be shipped — damages for a failure to deliver
goods of the quality ordered.] Under an instrument which reads:
To the Abe Stein Company.
About 85,000 Teintsin goat skins, firsts, 1 to 2 lbs. avg., expected to arrive
from China, at 22 cts. per lb. Goods to be shipped immediately by steamer
or steamers to New York.
Skins to be of the usual good quality of this province; any question
of quality to be decided by selling brokers, and their decision to be final and
binding on both parties," accompanied by an arrangement between the
parties that the usual condition of no arrival, no sale," holds true," a failure
on the part of the vendors to deliver goods of the quality required by the
contract entitles the buyer to the damages resulting from such failure.
ABE STEIN Co. v. ROBERTSON.......
Contract to accept a draft of a third person drawn against merchandise
sold what letter is an approval of the acceptance · chen the acceptors are not
mere guarantors — they are not bound to inquire as to the quality of the mer-
chandise drawn against - when liability under the contract arises laches in
the sale of the merchandise.
Money paid over by a bank upon the faith of a bond conditioned to
repay money withdrawn from the obligor's bank account by its authorized agent,
if it were not collected from the agent by the bank- the bond is a primary obli-
gation and not a mere guaranty of collection.
See THIRD NAT. BANK v. TRAVELERS' Ins. Co.....
Contract for lighting the town of Jamaica — it is void where it is to be
executed only after the consolidation of the town in the Greater New York.
See HENDRICKSON v. CITY OF NEW YORK...
Marriage settlement
wife after the husband's death.
See BORLAND . WELCH.
- construed not to cover property acquired by the
Partnership-construction of a clause authorizing surviving partners
See LOWENSTEIN v. SCHIFFER
Prospective partner — not liable to one advancing money to the enterprise.
See MCLEOD . MINER..
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