Erskine v. Marchant

THE COURT.

This is an appeal from a judgment awarding plaintiff $7,839.46 for breach of contract. The contract, which was in writing and attached to and made a part of the complaint, was made on the seventeenth day of May, 1913, and appointed plaintiff the defendants’ agent for the sale of its calculating machines, called the “Marchant,” for a period of five years, with the privilege of renewing the contract for five years, and with the exclusive right of sale on commission in the state of California, save to certain designated firms, to which the defendants reserved the right to sell its machines. The contract contained a clause that the plaintiff would forfeit all rights under the contract if fifty sales were not made in the state of California during the first year of the agreement. On the third day of August, 1913, defendants notified plaintiff that they had sold their business to a corporation, and that the corporation would not accept the agreement between them and 'the plaintiff. On receipt of a letter from the corporation a few days later, the plaintiff with his attorney called at the office of the corporation, where he was told by some of the officers of the corporation that they would not proceed under the written contract, but that they would permit him to go on selling the Marchant machine and would pay him a commission on such sales as he made. Plaintiff accepted that arrangement upon the express understanding that by so doing he was not waiving his rights under the original contract. Before the repudiation of the written contract plaintiff had sold seven machines, for which he had.received his commission in full

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from defendants. After the repudiation he continued to sell machines for the corporation until April, 1914, selling in all eleven machines, for which he was paid his commissions by the corporation. The evidence showed that between May 17, 1913, and May 17, 1914, eighteen machines were sold by plaintiff and twenty by the Mar chant Company.

Appellants claim that as the contract provided that it should be forfeited if fifty machines were not sold within the first year, and as the combined sales of the plaintiff and the other agents of the corporation did not total fifty machines, the plaintiff’s damages should have been limited to the loss of his commission for the first year of the contract. Inasmuch as the defendants repudiated their contract two months and one-half after it had been executed, they are estopped to claim the benefit of the forfeiture clause for the nonsale of fifty machines.