70 N.Y.S. 80 | N.Y. App. Div. | 1901
The judgment appealed from should be modified by including therein the item of $2,500 damages not covered by the direction of a verdict by the trial court, and as so modified affirmed, with costs of the appeal to the plaintiff.
The action was brought to recover damages for the violation of a contract between the parties, dated June 4,1895, whereby the plaintiff was appointed manager for the defendant to effect insurance, and with authority to appoint sub-agents under him, subject to approval by defendant, in and for New York State (excepting Metropolitan district) and the State of Pennsylvania (excepting Allegheny and Philadelphia counties), and such other territory as might at any time be designated by defendant, upon the terms and conditions therein specified, which need not be recited here in detail. It was agreed that the contract might be terminated at the end of five years, or by mutual consent previous to that time, and without any liability on the defendant’s part beyond the commissions actually earned at the closing up of the said agency, and then the contract closed with the following clause, upon which this action .is founded, viz.: “ It is hereby further understood and agreed that in case the said Company shall be dissolved and retire from business before the termination of five years from the date hereof, then said Company shall have the right to terminate this contract upon the conditions that all local agencies and the business of said agencies shall be handed over and transferred to said C. L. Stowell by said Company; and that ninety (90) days’ notice on the part of said
The- business was carried on satisfactorily by the parties under this contract from its date, June 4, 1895, until April 4, 1899, when the defendant entered into a contract with the Fidelity Fire Insurance Company of Baltimore, whereby the Fidelity Company reinsured from April 1, 1899, all outstanding policies and risks of defendant,. and assumed all liability under all policies written by defendant prior to May 1, 1899, and defendant agreed to pay the Fidelity Company forty per cent of the gross pro rata premiums, on all policies in force April 1, 1899, to be paid in full not later than May 1, 1899, and whereby it was agreed that the defendant might and should continue to issue its policies and do business in its own name until May 1, 1899, but all business so done, or policies so written, should be on account of, for the benefit of and under the direction of the Fidelity Company or its duly authorized agent, and the defendant further agreed to retire from business on the 1st day of May, 1899, and to wind up its business and affairs, and to dissolve itself as an active going concern as soon thereafter as may 'be; and agreed to transfer and deliver to the Fidelity Company all its good will, right, title and interest in and to -its business, daily reports, indorsements, registers and books of record, and it was further agreed that all reinsurances and contracts or policies of insurance which defendant had theretofore effected with other companies for the purpose of reducing its liability should be transferred to the Fidelity Company, and defendant agreed to execute any and all proper instruments of transfer or assignments of the same, but in ease any company so reinsuring objected to such transfer then defendant agreed to cancel such reinsurance and pay to the Fidelity Company the unearned premium thereof.
It appears from a letter written by plaintiff, put in evidence by defendant, that April 2, 1899, the Fidelity Company, by night message, notified plaintiff that it had reinsured defendant and directed plaintiff -to continue writing defendant’s policies conservatively, etc., 'and send dailies to Pittsburgh, and that the Fidelity Company would see plaintiff shortly regarding general agency. The dates of the- contract and of this letter and message do not quite harmonize, but that is perhaps not very material. The. Fidelity
At the close of the evidence the courts upon a request by the defendant for a direction of a verdict, reserved his decision, and submitted to the jury two questions as to damages, viz.:
“First — What "sum of money is a fair compensation to the plaintiff for the damages he sustained by the neglect and refusal of the defendant to continue the business of insurance as provided by the contract between the plaintiff and defendant during the period of ninety days from the first day of May, 1899 ? ” To which the jury answered, $469.98.
“Second—What sum of money is a fair compensation to the plaintiff for .the damages he sustained by the neglect and refusal of the defendant to comply with the provisions of the contract which required the defendant upon the termination thereof to hand over and transfer to the plaintiff all existing local agencies and the business of the agencies which the plaintiff had appointed under the contract?” To which the jury answered, $2,500.
Upon the rendering of this verdict the court denied defendant’s motion- for a direction of a verdict for defendant, and denied a motion made by plaintiff for a direction of a verdict for both items of damages, and directed a verdict for the first item of damages alone, $469.98.
We-think the court committed no error in directing a verdict for the first item of - damages, $469.98. The contract was broken, and the plaintiff was, therefore, entitled to recover such damages ■ as he sustained. The damages covered and included prospective commissions on business he might have done if he had been permitted to continue in the business, according to the terms of his contract, but such damages were allowable, under the decisions of the courts of this State. (Wakeman v. Wheeler & Wilson Mfg. Co., 101 N. Y. 205 ; Dickinson v. Hart, 142 id. 183 ; United States Trust Co. v. O’Brien, 143 id. 284 ; Crittenden v. Johnston, 7 App. Div. 258; Stowell v. Greenwich Ins. Co., 20 id. 188 ; More v. Knox, 52 id. 145.)
The contention of the defendant seems to be that, by reason of the uncertainty as to prospective commissions being earned under the contract, the contract should be so construed as not to cover or allow for such unearned commissions, as not being within the contemplation of the parties, and this contention is based upon an English case (Matter of English and Scottish Marine Insurance Co., L. R. [5 Ch. App.] 737), and a United States Circuit Court of Appeals case (Pellet v. Manufacturers’ & Merchants’ Ins. Co., 104 Fed. Rep. 502).
We- do not regard these cases as Well considered, and they seem to be. in conflict with the rule adopted in this State, that prospective profits of a contract may enter into the question of damages for breach of such contract.
Moreover, this court, in Stowell v. Greenwich Ins. Co. (supra), gave a construction to a contract very like this one which permitted a recovery based, among other things, upon prospective commissions, and we are not inclined now to change the decision we then made. While that case was reversed in the Court of Appeals on another ground, this question remains undisturbed. (See 163 N. Y. 298.) There was no material disagreement on the trial as to the amount of damages for this breach, if they were allowable at all, as the court stated to the jury, without objection or exception by defendant.
The more serious questions arise as to the second item of damage, $2,500. The agreement of the defendant was that, if the company should be dissolved and retire from business, all local agencies and the business of said agencies should be handed over and transferred by defendant to plaintiff. This agreement meant something. The parties contemplated that there was a real value in the business of these local agencies, as there undoubtedly was, and it was the duty of the defendant in good faith to keep this agreement and do what it could to effect the purpose of securing to the plaintiff the valuable interest' in this business. The defendant did nothing whatever in the performance of this duty, but, on the contrary, did whatever it could do to deprive the plaintiff of such business and its benefits. It secretly, without consulting plaintiff, entered into the agreement
The judgment should, we conclude, be modified so as to' include the item of $2,500 damages, and as so modified be affirmed, with costs of the appeal to plaintiff. ■
All concurred, except McLennan, J., who dissented.
Judgment appealed from modified by including therein the item of $2,500 damages, not covered by the direction of the verdict of the Trial Term, and as so modified affirmed, with costs of the appeal to the plaintiff.