201 A.D. 794 | N.Y. App. Div. | 1922
The plaintiff seeks to recover the amount which he claims is due him under a contract whereby the defendant, in consideration of the plaintiff’s agreement to impart certain valuable information, to wit, a way or method of increasing the profits of the defendant’s product, known as “ Bon Ami,” and the reason why this could be done without injuring defendant’s trade, promised to pay to the plaintiff one-half of the profits accruing therefrom. The plaintiff claims that he imparted this information; that he informed the defendant of a way or method by which such profits could be increased and that the defendant adopted the plan so suggested and put the same in operation and that thereby the defendant’s profits were increased to the amount of $131,364, and asked judgment for one-half thereof. The court at Trial Term, after taking proof of the making of the alleged contract and the subsequent increase in the price of the defendant’s product and the quantity sold during the year, directed a verdict for the plaintiff for one-half of the increased price upon the quantity of goods sold. The information which the plaintiff imparted to the defendant was this: Bon Ami was then being sold to the general store trade — the grocers — for ten dollars per gross and the grocers retailed it for ten cents per package. This resulted in a profit of forty-four per cent to the grocers. The plaintiff suggested that this price to the grocers could be raised to ten dollars and fifty cents or ten dollars and eighty cents per gross and the product sold at retail for ten cents per package, whereby the profit to the grocers would be reduced from forty-four per cent to thirty-three and one-third per cent, if the last-named price was put in operation. The plaintiff explained that he had satisfied himself that this could be done by actual experience in relation to a similar but not competing product; that it had been done in the face of keen competition and that the increase in price did not affect the sales. Shortly after the plantiff gave the defendant this information the defendant increased its price one dollar per gross. The trial court has held that this increase is conclusive evidence of the acceptance of the plaintiff’s idea and information and would permit no proof to be offered to show that the increase was made necessary by other factors and was not the result of the information imparted by the plaintiff.
The first question which presents itself upon this appeal is, does any consideration exist for the agreement by defendant to pay plaintiff one-half of its increased profits? The plaintiff, according to his complaint, was to impart to the defendant valuable information and this information was to suggest a way or method of
There is a further reason why the judgment in this case i .nnot stand. The plaintiff’s recovery is dependent upon his plan being adopted and put into operation. The court’s attitude at Trial Term was that any increase in price thereafter adopted by the defendant must necessarily be in execution of the plaintiff’s plan. In other words, after listening to the plaintiff’s statement of his plan the defendant was thereafter debarred from increasing its price without paying the plaintiff one-half of such increase. The defendant was not permitted to give testimony to the effect that an increase in price was under consideration before the plaintiff made his suggestion. It was not permitted to show that the increase in price was not the result of the adoption of the plaintiff’s scheme but was the result of commercial conditions which necessitated an increase of price. It is the universal experience of all persons, whether engaged in commerce or not, that the increase in cost of raw materials and the increase in the cost of labor has necessitated an increase in the selling price of nearly all manufactured products. The defendant, unless tied hand and foot by the plaintiff’s proposition, was entitled to increase its price as manufacturing conditions required. It would be absurd to hold that after such a proposition had been received it was unable to increase its prices without paying the plaintiff one-half of such increase. Such a holding would absolutely fetter a manufacturer so that he could not conduct his business in his own way without paying tribute to the person who suggested to him that an increase in price would result in increased profits.
Blackmar, P. J., and Kelby, J., concur; Rich and Kelly, JJ., vote to reverse upon the law and the facts, and to grant a new trial, because of the rejection of evidence on the question whether the information furnished by plaintiff was a proximate cause of the increase of defendant’s profits, and because it was error to direct a verdict.
Judgment reversed on the law and complaint dismissed, with costs.