Opinion
July Term, 1897.
William Allen Butler and John Notman, for the appellant.
William Nathaniel Cogswell and William F. Cogswell, for the respondent.
The plaintiff, through the medium of this action, seeks to recover damages for an alleged breach of contract.
It is conceded that on or about the 31st of December, 1887, the parties entered into a written agreement, by the terms of which the plaintiff was appointed the general agent of the defendant for certain specified portions of the States of New York and Pennsylvania, with power to appoint sub-agents in the territory assigned to him, subject, however, to the approval of the defendant. The sub-agents thus appointed were to represent the defendant and prosecute the business of fire insurance in its behalf in the several localities where they resided. They were, however, to be under the immediate supervision of the plaintiff, who became personally responsible for the faithful performance of the duties required of them, and who also assumed the entire expense incurred in their appointment, as well as in the inspection of all risks and in other special work required in the prosecution of the business.
It is not denied that this written contract was fully performed by both parties, and it appears to have been terminated on the 1st day of August, 1895, without fault on the part of the defendant, and solely in virtue of a provision contained therein, which accorded to either party the privilege of terminating the contract upon giving to the other ninety days' notice in writing of an intention so to do.
It is contended, however, by the plaintiff that, contemporaneously with the execution of this written contract, an independent and suppletory oral agreement was entered into between him and the defendant, and it is the damages arising from an alleged breach of this agreement that the plaintiff is seeking to recover.
It appears that at one time the plaintiff represented the Clinton Insurance Company, under a contract quite similar in its terms to the written one subsequently entered into between him and the defendant, and it is claimed by the plaintiff that when the Clinton Insurance Company terminated its contract, it reinsured its risks and then attempted to turn over the plaintiff's sub-agents to the reinsuring company, without regard to his interests, in consequence of which he suffered serious loss and injury.
Shortly after encountering this experience, the plaintiff, through the instrumentality of a gentleman by the name of Foote, obtained an introduction to one Mason A. Stone, who was at that time the secretary, and subsequently the president of the defendant; and thereupon negotiations were entered into with a view of obtaining for the plaintiff an appointment as the general agent of the defendant. Several interviews took place between these parties, in the course of which, as the plaintiff testifies, he informed Col. Stone of the treatment he had received from the Clinton Insurance Company, and a friend of the plaintiff one Nathaniel Foote, testifies that in an interview between himself and Col. Stone he, in that connection, stated to Col. Stone that if he (Stowell) entered into a similar relation with the defendant he wished it understood that in the event of the agreement being terminated without fault upon his part, the company should not interfere with his agents or business, to which Col. Stone replied: "If we make arrangement, and the business proves profitable and satisfactory, we shall not want to make any change; and if not, if the business is not profitable, we shall not want the business nor the manager, either."
But without entering further into the details of these negotiations, it is sufficient to say that they resulted in the execution of the written contract to which reference has been made, and also, as it is claimed, in the separate oral agreement which lies at the foundation of this action.
It is insisted however — and this is the first question which we are asked to consider upon this review — that the evidence relied upon by the plaintiff is insufficient to establish this latter agreement. This contention, we have no hesitation in saying, does not impress us favorably. For, in addition to the evidence to which we have just alluded, the plaintiff testified that during the first interview with Col. Stone he left his contract with the Jersey City company with him to be copied and made the basis of the contract to be entered into between the defendant and the plaintiff, stating to him, however, in that connection, that "I would sign a contract of that kind, on condition if it was terminated, the agencies and the renewals should be left with me, and he (Stone) said it was satisfactory to him, and I said it was satisfactory to me."
It seems quite evident, therefore, that if this evidence is to be believed, the minds of the parties met in a contract the terms of which were substantially those set out in the complaint, and although the evidence of the plaintiff and of his corroborating witness was flatly contradicted by Col. Stone, the issue of fact which was thus clearly defined was submitted to the jury by the learned trial justice, and it can hardly be said now that their verdict, which was in favor of the plaintiff, was against the weight of evidence.
Furthermore, it was made to appear most conclusively that, when the written contract was terminated by the defendant, it endeavored to retain in its service all the sub-agents which the plaintiff had appointed, and to avail itself of all the business which they had obtained, and consequently it must be conceded, we think, that if the oral contract was proven its breach was likewise established beyond all controversy.
And with these facts thus established, we are brought to the consideration of the real question in the case, and one which is of sufficient importance to deserve careful and serious examination. We refer, of course, to the validity of the oral agreement set up in the complaint, and to the right of the plaintiff, in the circumstances of this case, to make its breach the basis of a recovery.
This question was raised during the progress of the trial in a variety of ways: First, by objection to the admission of evidence tending to prove the parol agreement, then by motion for a nonsuit when the plaintiff rested his case, and again by a motion for the direction of a verdict at the close of the proofs. And it is almost superfluous to add that its determination requires a review of the rule which excludes parol evidence when the only effect of its admission will be to contradict, conflict with or vary the terms of a written agreement.
This rule is one of long standing. Generally speaking, there is nothing vague or ambiguous about it, and so thoroughly has it been incorporated into the jurisprudence of this State that we are admonished by the court of last resort that it is no longer "a proper subject of discussion." ( Englehorn v. Reitlinger, 122 N.Y. 76.) But simple and well settled as is this rule, its application is not infrequently attended with some difficulty, in consequence of the many exceptions to its full operation which the proper administration of justice seems to require, and it is only by the aid of the exception which excludes collateral undertakings from the operation of the general rule just stated, if at all, that the plaintiff is able to prove and maintain his cause of action.
If we correctly apprehend the plaintiff's attitude, he does not seek by the terms of an oral agreement to vary or modify in any manner the written contract entered into with the defendant; neither does he claim that the written contract is so vague or incomplete as to require explanation; but he does insist that, contemporaneously with the execution of the written contract, he and the defendant made another agreement, which, although not reduced to writing, was collateral and suppletory to the first; that there was an adequate consideration therefor, and that, consequently, he is entitled to recover any and all damages which he has sustained by reason of its breach by the defendant. The importance of determining the soundness of the plaintiff's position in respect of this question is thus made apparent at a glance, for if this parol contract may be regarded as collateral and suppletory to the written one he is doubtless correct in his conclusion. ( Lewis v. Seabury, 74 N.Y. 409; Chapin v. Dobson, 78 id. 74; Eighmie v. Taylor, 98 id. 288; Dodge v. Zimmer, 110 id. 43; Hutzler v. Richter, 13 App. Div. 592. )
A brief analysis of the case as it is disclosed to us by the record may, therefore, prove the best solvent of the problem with which we are here confronted. Upon the theory that the verdict of the jury represents the actual facts of the case, it may be assumed that an agreement was entered into by these parties, in terms substantially as stated by the plaintiff. It is equally certain that this agreement was supported by a sufficient consideration, for the plaintiff testifies that he signed the written contract upon condition that the defendant would agree, in the event of its termination, not to interfere with his sub-agents. It related to the same subject as the written contract, it is true, but its provisions are not so closely connected with the principal transaction as necessarily to form a part of it, while without it the written contract is complete and entire. If, then, there is nothing in the oral agreement which conflicts with the written contract, it would seem clear that all the elements necessary to a valid collateral undertaking have been established. In this connection it is proper to advert briefly to the 10th article of the written contract, which, so far as it bears any relation to the one we are now considering, reads as follows, viz.: "And it is hereby further understood and agreed by and between the parties hereto that this contract may be terminated at any time by either party giving ninety (90) days' notice thereof, and without any liability on the part of the said Company, beyond the commission aforesaid, actually earned at the closing up of said Agency * * *."
And it is argued that the oral agreement necessarily extends the defendant's liability beyond that contemplated by the provision just quoted, and that, consequently, it must be in conflict therewith. So far from this being the case, however, we are of the opinion that article 10, when considered in connection with the oral agreement, furnishes satisfactory evidence of the fact that the two contracts, instead of conflicting with, are really independent of, each other. For it is to be observed that either party, upon giving ninety days' notice to the other, was at liberty to terminate the written contract at any time. This could have been done arbitrarily, and, as provided in article 10, without incurring any liability. And if the defendant had been content to confine itself to the exercise of this privilege no complaint could or probably would have been made by the plaintiff. But the difficulty is that the defendant did more than merely terminate the contract; it undertook to control the agents which the plaintiff had appointed, and thereby to secure to itself pecuniary advantage. As to whether it might do this without incurring any liability the original contract is silent. And right here is made to appear the distinctive feature of the parol agreement, which was designed to furnish the plaintiff protection against, and redress for, any such interference.
This, it seems to us, is sufficient of itself to sustain the plaintiff's claim that the parol contract is collateral to, and independent of, the written one; and if so it was not only proper to prove it by parol, but when thus proven the plaintiff was just as much entitled to recover for any breach of its terms as he would have been had it been reduced to writing. ( Thomas v. Scutt, 127 N.Y. 133-140.)
The only remaining question to which our attention has been directed relates to the subject of damages. From the very nature of things it was difficult, if not impossible, to determine precisely what should be the measure of damages in such a case as this. Here was a contract proven; there was no question as to its breach; neither was there any doubt that the plaintiff had sustained considerable pecuniary injury in consequence thereof. In these circumstances the learned trial justice, after calling attention to the subject-matter of the contract, its conditions and the consequences which resulted from its breach, permitted the jury to say what was its actual value to the party injured. This, it seems to us, was a reasonable and proper rule to adopt. It enabled the jury to speculate somewhat as to the amount of damages to which the plaintiff was entitled, but it appears to be now well settled that a party shall not be permitted to escape all liability for violating a contract, simply because his liability cannot be accurately determined in dollars and cents. ( Wakeman v. W. W. Mfg. Co., 101 N.Y. 205.)
Our conclusion of the whole matter is, that the action can be maintained; that it was tried upon the correct theory; that the record discloses no reversible error, and consequently, that the judgment and order appealed from should be affirmed.
All concurred, except GREEN, J., dissenting, and FOLLETT, J., not sitting.
Judgment and order affirmed, with costs.