Seed v. Johnston

63 A.D. 340, 71 N.Y.S. 579, 1901 N.Y. App. Div. LEXIS 1610

• Court: Appellate Division of the Supreme Court of the State of New York
• Decided: July 1, 1901
• Status: Published

Opinions

Woodward, J.:

On the 1st day of February, 1900, the defendants, as parties of the first part, entered into a written agreement with the plaintiff, as party of the second part, reciting, among other tilings, that “ whereas the said parties of the first part are desirous of securing the advice, knowledge and experience of the said party of the second part, together with the use of his name, &c.; now, therefore, this agreement witnesseth that, for and in consideration of the payment to the said party of the second part for the rest of his natural life, of the sum of six hundred dollars per annum, payable in equal monthly installments of fifty dollars, * * * the said party of the second part agrees to and with the said parties of the first part, to give his advice and to lend his skill and knowledge to the said business so purchased- by the parties of the first part so far as the same may be necessary or required to' the benefit and advantage thereof.” On the 12th day of May, 1900, it is claimed that the defendants discharged the .plaintiff from their employ, although it does not appear from the contract, or from the testimony, that the plaintiff was ever in the employ of the defendants in the sense that he could be discharged from such employment, as he was only “ to give his advice and to lend his skill and knowledge * * * so far as the same may be necessary or required,” and unless he was called upon there was nothing for him to do under this contract, one of the considerations of which was the use of plaintiff’s name in the carrying on of the business which the defendants had purchased from the Hero Fruit Jar Company, and which had been conducted by the plaintiff. Subsequently, and on the 22d day of May, 1900, the plaintiff brought an action against these defendants to recover for one month’s compensation under the contract, resulting in a judgment in his favor. In July the plaintiff recovered another judgment for fifty dollars under the contract, and the testimony in the latter action was submitted to the same court in the present action, resulting in the judgment appealed from. - On the second trial defendants’ counsel moved to dismiss the action on the ground that the first action was' a bar to a recovery in the second, but this motion was denied, and defendants did not appeal. Defendants’ counsel made a similar motion upon the trial of the present action, ■ which motion was likewise denied, and we are asked on this appeal to’ hold that the plaintiff, having recovered damages for the breach of the contract against the defendants, cannot sustain a second action upon the same contract for the same breach. Without going to the length suggested by the plaintiff, that this question is, by the denial of the former motion and the acquiescence of the defendants, res adjudicada,, much support for which may be .found in Lorillard v. Clyde (122 N. Y. 41), we are of opinion that under the terms of the contract between the parties a new cause of action arises at the expiration of each and every month, and that the plaintiff has a right to recover in the present action. (Zimmerman v. Erhard, 83 N. Y. 74, 78, and authorities there cited.) It is a well-established proposition of law that if a contract provides for payment by installments, due at different times, the installments may, of course, be successively sued on as they become payable (Wells Res Adj. 203), but each action should include every installment due when it is commenced, unless a suit is, at the time, pending for the recovery thereof or other special circumstances exist. (Lorillard v. Clyde, supra.)

But it is suggested that this question is res adjudicata as to the plaintiff; that the original recovery was for wages under the contract ; that a second action was brought for damages for breach of the contract, and that the third action, being for a breach of the same contract, is barred by the former judgment. While it is not to be questioned that a former adjudication of the same question between the same parties for the same cause of action would constitute a bar to the present action, this rule, although a salutary one, is of a technical character, and a case must be brought strictly within it to give it effect. (Secor v. Sturgis, 16 N. Y. 548, 560.) This is a Municipal Court case, and in these courts the pleadings may be, and usually are, informal; and with a view 'to substantial justice courts of review have attached far more consequence to the conduct of the parties, and the proofs made by them upon the trial, than to their allegations. (Campbell v. Butts, 3 N. Y. 173,175; Code Civ. Proc. § 3063.) The judgment now before us was rendered upon the evidence in the former trial, and the pleadings were oral and informal, the return of the learned justice reciting that “ on the 8th day of August, 1900, the plaintiff appeared by John H. Webster, his attorney, and complained of the defendants for breach of contract, and that the defendants appeared by Darlington & Jenkins, their attorneys, and- answered said complaint. Defendants plead that the judgment for services in the judgment of July 20th on the contract is a bar to all further recovery under the claim, which pleadings were filed, and the said action was thereupon adjourned to the 29th day of August, 1900 ; that on the said 29th day of August, 1900, the parties again appeared in person and by their respective counsel and proceeded to the trial of said action, before me, without a jury, and agreed that the action be submitted on the testimony taken on a previous trial of this cause on July 13th, 1900, and briefs to be filed.” It will be observed that while the justice says that tfye plaintiff complained of a breach of contract, the defendants do-not plead that ,a judgment for a breach of the contract had already been rendered, but plead that the judgment for services in the judgment of July twentieth on. the contract was a bar, thus indicating that the defendants did not understand that there had been a-judgment determining the ultimate rights of the plaintiff under the-contract, but that the plaintiff had merely recovered for his services under the contract which were due at the time the action was-commenced. The authorities are agreed that “ each default in the-payment of money falling due upon a contract, payable in instalments, may be the subject of an independent action, provided it is. brought before the next instalment becomes due,, but each action ‘ should include every instalment due when it is commenced.” (Lorillard v. Clyde, supra, and authorities cited at p. 45.) The only record now before us of the evidence in the present case is that-found in the stenographer’s minutes of the previous trial, in which the plaintiff was awarded fifty dollars and costs, this being one-month’s installment of the money due under the contract, and it affords the only record as to the questions of law. raised, aside from the return of the justice already set out. In opening the case on the-thirteenth of July (the present case coming to trial on the twenty-ninth of August), counsel for defendants asked the plaintiff’s counsel to define the nature of the action brought by him; whetheiit was for wages due or whether it was. for breach of contract./ Plaintiff’s counsel replied that it was for a breach of contract, but this language is to be understood in the light of the evidence-which followed, the, trial proceeding upon the theory that the plaintiff was merely demanding the fifty dollars due under the terms of" the contract for one month, it being denied by the plaintiff that he was an employee in the ordinary sense of that word, but that he-was to give his advice, knowledge, etc., when called upon by the-defendants, the purpose of the contract being to gain to the defendants the use of plaintiff’s, name in carrying on the business, as well as such experience, etc., as the latter possessed, whenever the defendants should call for the same. It appears from the evidence that the plaintiff, a man seventy-five years of age, had conducted the-. business of selling filters in the city of New York for a period of more than, eighteen years; that he had customers all over the United States, and that the business was known as the Seed Filter Company. Joseph H. Seed, the plaintiff, becoming embarrassed, sold the business conditionally to the.. Hero Fruit Jar Company, to which he was indebted, and subsequently the latter company, with the consent of Mr. Seed, sold the property to the defendants, the contract set out above being entered into for the purpose of retaining to the business the good will, customers, etc., which had become ' attached to the establishment while under the ownership and control of the plaintiff. The plaintiff, on cross-examination, testified in reference to the matters in mind in entering into the contract: “ I had a half dozen things; I considered one of the most important things was independent of that, being introduced with the trade for one thing; having thorough knowledge of the business and the advice I could give, being most trustworthy, was another.” He also testified that he had been paid all that was due him under the contract except the amount for which he was suing, the previous judgment or judgments having been paid, and that the reason they agreed to pay him fifty dollars per month was for the use of his name and advice. He is corroborated in this' by one of the defendants, who testifies that “ he was also to use his skill among the trade in trying to get them to buy goods of us, and he was to give his knowledge and information that we wanted in any way.” The same witness, in response to the question, “ Mr. Seed, under the agreement, gave you the use of his name?” answered,“ Fes, sir,” and it subsequently appeared in evidence that the defendants-used the name of the Joseph H. Seed Filter Company, and that they received and made use of the letters which came either to' Mr. Seed personally or to the Seed Filter Company, and that these letters came in answer to advertisements in which the name of Mr. Seed was used. “ We had the use of his name,” says one of the defendants, “ because it was established so many years; now it is the Seed Filter Company, Johnson and Shinn, proprietors.”

It is evident from this that the contract was not merely oné of employment, which could be terminated by the so-called discharge of the plaintiff; it was a continuing contract for the use of the name of the plaintiff in carrying on a business which he had estabfished, and a new cause of action arises at the end of each month, which cannot he defeated by the application of the rule of res adyudioata under informal pleadings, in which the defendants have not raised the question. So far as the pleadings of the defendants are disclosed,'they insist that the action is barred by a previous recovery for services; there is no suggestion on their part that the action was for a breach' of the contract, in which the issue of its value to the plaintiff was or could.be tried, but construing the contract to be single and indivisible, they urge that a recovery of a part of the claim is a bar to all further recovery, and this, as we have already pointed out, is not supported by the facts as they appear in evidence, or by the law governing contracts of this character. The rule is stated in Reynolds v. Ætna Life Ins. Co. (160 N. Y. 635, 651) that “The conclusive character of a judgment as a bar extends only to the identical issues which were tried in the former action. They must be the same in each action, not merely in name, but in fact and in substance, and the party seeking to avail himself of a former judgment as conclusive evidence or as a bar in a subsequent action must show affirmatively that the question involved in the second was material and determined in the former, as a former judgment would not operate as an estoppel in a subsequent action as to immaterial and unessential facts, even though put in issue and directly decided. It is final only as to facts litigated and decided,which relate to the issue, and the determination of which was necessary to the determination, of that issue.” (See cases cited at p. 652.) That the question of the damages suffered by the plaintiff, assuming the contract to have been repudiated on the part of the defendants, has never been in issue is clear, both of the former actions having been instituted and prosecuted to judgment upon the theory that the contract was still in effect, and that the recovery was merely of an installment then due. At the close of the evidence in the second trial, which is the same as that now before us, defendants’ counsel moved to dismiss the complaint on the ground that Seed had not fulfilled his contract. Counsel for plaintiff stated : “We sue for services from the twenty-second day of May to the twenty-second day of June.” Counsel for defendants then moved to dismiss the complaint on the ground that the other action was a bar -to this, and plaintiff’s counsel responded: “ The action is for breach of contract for the amount due from the 22nd of May to the 22nd of June.” The justice reserved decision and decision on the motions, and subsequently rendered a decision • for the plaintiff for the amount of one month’s compensation under the contract.

It is certain, therefore, that the only breach of the contract which has been before the court, either in the first, second or third action, is the breach of the contract to pay the sum of fifty dollars monthly. There has been a recognition of the contract as an existing instrument, controlling the relations between the parties, and the second" •action, like the present one, was merely for an installment then due ; it was in the second case “ for services from the 22nd of May to the 22nd óf June,” and in the present action it is for services from the twenty-second of June to the corresponding day in July, and beyond this there has been no adjudication. The defendants are still making use of Mr. Seed’s name in their business; they have had all of the advantages of a smooth transition of their business from the original ownership of the plaintiff to the present time, and it is hardly to be doubted that a court of equity would protect them in the use and enjoyment of the name and good will of Mr. Seed in its relation to the business of these defendants, under the terms of the contract, if the plaintiff should undertake to make use of it in another employment. The defendants have not shown affirmatively that any other issue has been tried or determined; the former judgment was not introduced in evidence and is not in the record. The only evidence before us of a former trial is found in the stipulation in reference to the use of the evidence and in the informal pleadings of the defendants that a former judgment for. services was a bar to the present action. This is certainly an intangible foundation on which to apply the rule of res adjudieaía, for it must be regarded as the established law of this State that a judgment is not conclusive in a second action unless the same question was at issue in the former suit, of which the court had competent jurisdiction, and the subsequent action is between the same parties or their privies. (Reynolds v. Ætna Life Ins. Co., supra.) The controlling issue in the second action was whether the sum of fifty dollars for the month between May twenty-second and June twenty-second was due and had not been paid; that in the present action was whether a like sum was due and unpaid for the month between June twenty-second and July twenty-second. The rule is that in order to bar the second action the circumstances must be such that the plaintiff might have recovered in the first for the same cause alleged in the second. (Jex v. Jacob, 19 Hun, 105, 110, citing Stowell v. Chamberlain, 60 N. Y. 272, 276; Hymes v. Estey, 116 id. 501, 509.)

In Johnson v. Meeker (96 N. Y. 93), instructive upon the principle here involved, the court say (p. 99): “We think the former-recovery was no bar to the present action. The recovery in the 'former action was for six months use of the barge which was due at the time, and no recovery could have been had for the four installments which subsequently became due. As the claim in this action was not due at the time of the commencement of the former, it is not apparent how it can be barred thereby. The claim here is distinct and different from that for which the former recovery was obtained.”

In Webb v. Buckelew (82 N. Y. 555, 559) the court, after discussing the justification for making judgments conclusive evidence or a bar to further litigations between the same parties, say that “ without such actual determination on the merits, evidenced by a record which cannot be contradicted, the reason of the rule does not apply, and the evidence ceases to be effective.” In the case now before us the matter relied irpon as res adjudicata is not evidenced by a record of any kind, and, as we have pointed out, the issues were different upon each trial, though arising under the same general contract. (See Secor v. Sturgis, 16 N. Y. 548, 554, 558 ; Campbell v. Consalus, 25 id. 613, 616, and authorities there cited; Griffin v. Long Island R. R. Co., 102 id. 449, 452; House v. Lockwood, 137 id. 259, 269 ; Zimmerman v. Erhard, supra; Unglish v. Marvin, 128 N. Y. 380, 386; Beach v. Crain, 2 id. 86, 96.) In the latter Case the court say : “ Bqt the evidence in both actions may be in part the same; yet the subject matter essentially different, and in such case there is no bar. For example, if money be awarded to be paid at different times, assumpsit will lie on the award for each sum as it becomes due. So,- on an agreement to pay a sum of money by instalments, an action will lie to recover each instalment as it becomes due, * * * yet in each of these examples the evidence to support the different actions is in part the same.” (See Reformed Protestant Dutch Church of Westfield v. Brown, 54 Barb. 191, 199.)

It seems clear, then, that the plaintiff, under all of the authorities, has a right of action for each month’s compensation under his contract as it falls due ; that a judgment in one action is not a bar to a subsequent action for the same amount due for another period, and that without the record showing that all of the issues which might have been tried have been disposed of, there can be no application of the rule of res adjudicate/,. It is for the defendants to show that an issue involving the value of the Contract to the plaintiff has been tendered and tried before they can invoke this rule, and this fact must be shown by the record, and must not be left to be gathered from inferences based upon no better facts than are now before us.

„ The judgment appealed from should be affirmed, with costs.

Goodrich, P. J., and Sewell, J., concurred; Jenks, J., concurred in result.