Stern v. Rosenheim

| Md. | Jun 23, 1887

Dissenting Opinion

Bryan, J.,

delivered the following dissenting opinion :

Sigmund Rosenheim sued Lazarus Stern for breach of contract of employment. The defendant made a written contract with the plaintiff to employ him as a travelling salesman for- the term of one year at a salary of eighteen hundred dollars, payable in equal monthly instalments. It was stipulated in the contract that if the sales made by the plaintiff should exceed the sum of thirty thousand dollars during the year, he should receive an additional ■ compensation of ten per cent, on the amount of such excess, and it was also stipulated that the defendant should have the right to annul the contract at the expiration of six months. The plaintiff entered into the defendant’s service on the first of April, 1886, and continued to discharge his duties until the twenty-eighth day of August of the same year, when he was dismissed by the defendant. It was shown that the defendant in May agreed to advance the plaintiff fifty dollars a month on account of commissions to be earned under the contract, and that he had paid him two hundred and twenty-five dollars on this account, and also that he had paid him six hundred and seventy-five dollars on account of salary. There was evidence tending to show that while in defendant’s employment he had made sales amounting to $13,937.27 ; and that he had procured orders from customers to the amount of $300 or $400, which were sent by them to defendant by mail, and that defendant sold and forwarded the goods in accordance with said orders. The defendant offered evidence tending to show that plaintiff’s sales were about $13,000, and that about the fifteenth of September, he obtained employment as a salesman for a New York house, and that he incurred an expense of about forty dollars in securing this new employment.

The compensation to the plaintiff accrued proportionally and progressively and was payable in monthly instalments. When it was agreed that the plaintiff was to be advanced fifty dollars a month on account of commissions, it must have been recognized by both parties that some portion of the commissions might be earned monthly. If the sales exceeded thirty thousand dollars, in the course of the year, commissions were payable on the excess. The monthly commissions would be chargeable on the excess over one-twelfth of this amount.

Eo sufficient reason was alleged or shown for the discharge of the plaintiff. If he had been permitted to remain in defendants’ service until the expiration of six months as agreed in the contract, he would have earned nine hundred dollars in salary, and commissions oh such sales as he effected for his employer. The defendant is bound to make him compensation for such loss as he caused by breaking the. contract, provided it can be estimated with the certainty which the law requires. The loss of salary is readily computed by a very simple calculation. But it has been said in many cases that damages cannot be recovered for loss of profits, because they depend on uncertainties and contingencies, which make their amount merely conjectural and speculative. This, however, is by no means universally the case. The value of an established business may be ascertained with reasonable certainty,«although it may depend entirely on the profits which accrue from its successful prosecution. In .actions of tort the jury are always permitted to assess damages for injury or destruction to business. Strasburger vs. Barber, 38 Md., 103. Although the rule of damages is held to be more liberal in actions of this description, than in cases ex contractu, yet there is no reason for refusing a recovery when such injuries are caused by a breach of contract, if the evidence supplies the requisite means of ascertaining them. In Hamill vs. Foute, 51 Md., 429, the evidence furnished no rule or standard for estimating the amount of the sales which the plaintiff alleged that he might have made. In the present case the proof shows the sales actually made by the plaintiff during the time he was in the defendant’s service. It is also shown that the defendant agreed to advance to him fifty dollars a month on sales to be made in the future. This advance showed his opinion of the plaintiff’s services in influencing trade ; and the sales actually made were satisfactory proof of his ability to make them. It was on the power to make sales that his usefulness depended. This was in reality the plaintiff’s business; it was the kind of industry by which he earned his livelihood. The successful prosecution of it required acquaintance with buyers, tact, skill, industry, and those other personal qualities which make up efficiency of character. But the practical palpable proof of its pecuniary value is found in the results accomplished. And the injury done to the plaintiff by breaking up his engagement is adequately measured by the results which he was prevented from accomplishing. If tested in this way the recovery must be measured by the same rule which prevails in cases where any other business is broken up or injured. This Court has held that a plaintiff in an action ex contractu, may recover as damages the value of the professional practice which he had lost by a breach of contract. Warfield vs. Booth, 33 Md., 63. It was a case where one physician had sold to another the goodwill of his practice, and afterwards in violation of his agreement, had resumed his practice and thereby caused loss of business to the plaintiff. In Railroad Co. vs. Howard, 13 Howard (S. C.,) 307, the Circuit Court in an action of covenant instructed the jury to allow, by way of damages, such profit as they might find the plaintiff had been deprived of by the termination of the contract by the defendant. In reviewing this ruling the Supreme Court say : “Wherever profits are spoken of as not a subject of damages, it will he found that something contingent upon future bargains or speculations, or states of the market, are referred to.” And the opinion concludes as follows : “We hold it to be a clear rule that the gain or profit, of which the contractor was deprived by the refusal of the company (defendant) to allow him to proceed with and complete the work, was a proper subject of damages.” This case was not similar to the present one in any of its details; but I refer to it because it recognizes and maintains the principle, according to which profits are to he admitted, or rejected in considering the question of damages.

The instruction which was given to the jury, as prayed by the plaintiff, required them to deduct from the amount to be allowed him such sum as he earned, or might have earned hy due and reasonable diligence during the interval between his dismissal and the expiration of the six months, and I think it was substantially correct. It is true that it requires the jury to find that the defendant had the right to annul the contract of employment at the end of six months. The defendant objected in the Court below to the form of the instruction in this particular. He was, however, in no respect injured by it. It was rather injurious to the plaintiff, because it made his recovery dependent on the finding as a fact by the jury that the defendant had a right to rescind the contract; when this right admitted of no question whatever, and ought to have been positively declared as matter of law. The defendant’s prayer being contradictory to the plaintiff’s, was properly rejected.

(Piled 23rd June, 1887.)

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Lead Opinion

Stone, J.,

delivered, the opinion of the Court.

A majority of the Court think upon a fair construction of the contract between Stern and Rosenheim, that the plaintiff’s right to commissions only began when he had sold the $30,000 worth of goods. He was engaged for a year at a fixed salary, with the further promise that if during that year he sold over $30,000 he should have a commission on the excess. But the contract gave the defendant the right to discharge him at the end of six months. Unless he had sold $30,000 worth of' goods while in the service of the defendant, we do not think he was entitled to any commissions.

But if we concede that if he had remained in the employ of the defendant for six months only, he would have been entitled to commissions on all over $15,000 worth of goods, we think his right to commissions could only exist on the amount he actually sold.

That the plaintiff could not claim an allowance for commissions on goods that he might have sold, if he had been allowed to remain for the full period of six months. What he might have sold for the period between 28th August and 1st October, is entirely speculative and conjectural, and depends upon too many contingencies to be allowed as the basis of a recovery of damages.

We, therefore, think that the Court, was in error in allowing the jury to take into consideration the amount of goods that he might have sold, and the judgment should be reversed. As it appears that the plaintiff had actually received the amount of money due to him as salary for the six months, this case will be reversed without awarding a new trial.

Judgment reversed, without awarding a new trial.