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Schweinburg v. Altman

Supreme Court of New York, Appellate Division

June 9, 1911

EMIL SCHWEINBURG, Respondent,
v.
BENJAMIN ALTMAN, Appellant.

Page 378

APPEAL by the defendant, Benjamin Altman, from a judgment of the Supreme Court in favor of the plaintiff, entered in the office of the clerk of the county of New York on the 9th day of May, 1910, upon the verdict of a jury, and also from an order entered in said clerk's office on the 2d day of May, 1910, denying the defendant's motion for a new trial made upon the minutes.

COUNSEL

Edmund L. Mooney, for the appellant.

William N. Cohen, for the respondent.

SCOTT, J.:

This is an appeal by defendant from a judgment for one year's installment due to plaintiff, as it is claimed, under an agreement for the payment of royalties.

Prior to the year 1901 plaintiff was the agent in this country for the firm of Zoeppritz, Cantz & Ziegler, corset manufacturers, of Cannstatt, Germany. He had the exclusive control of the sale of their products in this country, and owned certain of the trade marks under which their goods were sold. His sole business was selling these goods. He had been engaged in this or a similar business for a number of years and was well known

Page 379

to defendant. In the year 1901 defendant desired to acquire control in this country and Canada of the whole output of the aforesaid German firm, and in July of that year a tripartite agreement was entered into between plaintiff of the first part, the German firm of the second part and defendant of the third part. By this agreement plaintiff transferred to defendant 'the entire and sole control of all grades of corsets made by Zoeppritz, Cantz & Ziegler for the United States and Canada, including all rights of the said party of the first part secured thereby for the United States and Canada; and the said party of the first part hereby agrees that the party of the third part shall become the sole agent of the said firm of Zoeppritz, Cantz & Ziegler for the United States and Canada.' The German firm on its part agreed to ship and sell to defendant all goods he might order for sale in the United States and Canada, and that they would not manufacture and sell any corsets directly or indirectly for or to any one in the United States or Canada. The prices were to remain as theretofore except for new styles, which were to be invoiced at as low a price as possible. There were other conditions in the contract which it is not necessary to recite. The contract contained the following clause as to its duration, which lies at the bottom of this controversy, and is, therefore, quoted at length: 'This contract is to take effect on the first day of November, 1901, and is to continue in force for the term of fifteen (15) years, subject to termination, however, at the expiration of five (5) years by the giving of written notice, by registered mail, one (1) year in advance to the said party of the first part, and to the parties of the second part; and further subject to the right of the said party of the third part to cancel this contract at any time by a written notice, sent by registered mail, to the said parties of the first and second parts, in case a change of customs should take place, by which the present rate of duties in the United States shall be increased to such an extent as, in the judgment of the said party of the third part, the further importation of corsets is proved unprofitable, and, in this case, all outstanding orders shall be delivered and accepted by the party of the third part.

'This contract is to be binding upon the parties hereto, their heirs, executors and assigns forever.'

Page 380

Simultaneously with the execution of the above-mentioned contract plaintiff and defendant entered into a contract for the payment by defendant to plaintiff of a royalty, in annual installments, in consideration of plaintiff's assignment to defendant of the sole control of the goods manufactured by the German firm, and to plaintiff's agreement to give up and liquidate his business.

This agreement can be more conveniently quoted than summarized. It reads as follows:

'MEMORANDUM OF AGREEMENT made and entered into this fifth day of July, 1901, by and between Emil Schweinburg, of the City of New York, in the State of New York, party of the first part, and Benjamin Altman, doing business under the name of B. Altman & Co. of the City and State of New York, party of the second part.

'In view of the party of the first part waiving all his interests and profits of the business hitherto made by him in the United States, by reason of his controlling and selling corsets manufactured by Zoeppritz, Cantz & Ziegler, of Cannstatt, Germany, and in consideration of the party of the first part having transferred the said control for the United States and Canada to B. Altman & Co., as per contract executed this fifth day of July, 1901, the party of the second part agrees to pay to the party of the first part, during the term of said contract, and also for the term to be agreed to at the time of expiration of contract, an annual royalty of Seven thousand Five hundred ($7,500.00) dollars, payable quarterly, and in addition to this amount, a commission of ten (10%) per cent, to be paid to the party of the first part on all purchases made by the party of the second part from Zoeppritz, Cantz & Ziegler, of Cannstatt, Germany, exceeding the annual guarantee amount of One hundred and Fifty thousand marks; the exact amount of commission to be calculated on the actual amount remitted to Zoeppritz, Cantz & Ziegler.

'It is also agreed that whenever the party of the second part should cancel the contract after five years, as stipulated, the annual royalty and commission shall cease.

'The party of the first part agrees that he will not transfer, sell or assign any of the trade ...


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