Morganthaler v. Krieg

California Court of Appeal Oct 24, 1929 No. Docket No. 3900.Published

Before: Thompson

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Holding. The court held that the plaintiff effectively canceled the contract at the expiration of the three-month term as permitted by the agreement, rendering the defendants' cross-complaint for further payments meritless. Although the trial court erred in finding the contract could be canceled at any time, the error was harmless because the notice provided at the three-month mark was valid.

Issues

Whether the contract permitted cancellation at any time or only at the expiration of three months.
Whether the plaintiff's notice of cancellation was effective.
Whether the plaintiff's subsequent payment for services constituted a waiver of the cancellation notice.

Disposition. affirmed

Quotations verified verbatim against the opinion

“The finding that the plaintiff notified the defendants about July 10, 1924, that “the advertising service would not be wanted after the period of three months from the commencement of the advertising” constituted due notice”

THOMPSON (R. L.), J.

This is an appeal from a judgment in favor of plaintiff in an action for declaratory relief and for the reformation of a contract.

The plaintiff was engaged in business at Los Angeles under the firm name of Pioneer Wall Paper Company. The defendants were conducting an advertising business by means of the use of an automatic electric picture projecting machine. May 14, 1924, the respective parties executed a written contract by the terms of which the defendants agreed to advertise plaintiff’s business for a term of three years for a consideration of $6.25 a week, payable on the tenth day of each month. The agreement provided that “this contract shall be irrevocable,’’ and that: “After a payment is thirty days overdue, all subsequent payments hereto shall and thereby do become due and payable hereunder.” The following condition was, however, annexed thereto: “It is mutually agreed that in the event advertiser wishes to cancel contract ... he may do so at any time

[438]

after the expiration of three months. Failure to cancel at that time reverts to the original term as specified in said contract. ’ ’

The complaint alleges that this last-mentioned clause was inadvertently signed through the mutual mistake of the parties; that it was specifically agreed and by the terms of said clause it was mutually intended that said contract for advertising might be canceled by the plaintiff

“at any time

after the expiration of three months” from the inception thereof. The answer acknowledged the execution of the contract in the form alleged, but denied that the clause last mentioned was signed by mistake or that it was intended thereby to permit the cancellation of the document “at any time,” or later than three months from the execution thereof. A cross-complaint was filed setting up the contract and the performance of its covenants on the part of the defendants. A breach of the contract by the plaintiff was also charged, consisting of his failure to pay installments which were deferred for more than thirty days. Pursuant to the terms of the contract the defendants thereupon declared the entire consideration to be due and alleged that no part of this sum had been paid except the first four monthly installments. The cross-complaint then prayed for judgment for the sum of $868.75, together with costs and counsel "fees.

Morganthaler v. Krieg

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THOMPSON (R. L.), J.

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