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May 28, 1957

Della M. GRATTAN, Violet Grattan, Gloria Grattan and Irene Grattan, doing business as D. M. Grattan Co., Plaintiffs,

The opinion of the court was delivered by: WEINFELD

The defendant Societa Per Azzioni Cotonificio Cantoni, hereafter called Cantoni, moves to dismiss the first cause of action on the ground of res judicata.

Judgment is sought thereunder on a quantum meruit basis for commissions allegedly earned by the plaintiff as 'the defendant's agents and sales representatives' in securing orders, contracts and agreements for the sale of defendant's merchandise from August 7, 1953 to May 31, 1954. The complaint demands judgment for $ 125,000 representing 5% of alleged sales of $ 2,500,000.

The question at issue is whether the foregoing cause of action was determined in a prior litigation between the same parties in the Supreme Court of the State of New York wherein judgment was rendered upon the merits in favor of the defendant and against the plaintiff.

 At the outset it is noted that the judgment entered in the State Court does not contain a specific provision dismissing a quantum meruit claim against the defendant. However the defendant contends that there was such a disposition by the Court.

 Of necessity we turn to the record in that suit. Where there is doubt as to the scope of a judgment the Court has the power to search the record to determine whether an issue was in fact litigated and disposed of upon the merits in the action which gave rise to the judgment. *fn1"

 The facts with respect to the prior action are as follows: The defendant is an Italian corporation which, starting about 1950, sold one of its products to Amity Silk Corporation, hereinafter called Amity, a domestic corporation. In October, 1953 plaintiff commenced an action in the Supreme Court of the State of New York against Amity for commissions in connection with Amity's purchases from Cantoni for the period up to August 7, 1953.

 In July, 1954 plaintiff started a second action in the Supreme Court of the State of New York against Cantoni. *fn2" In essence the second suit picked up where the first one against Amity left off. Recovery was sought of commissions on goods sold by Cantoni to Amity for the period commencing August 7, 1953, and referred to as the 1954 season. The complaint alleged that in and about 1950, Cantoni had engaged the plaintiff as its agent to market its products in the United States and agreed to pay it a 5% commission on all sales; that in consideration of Cantoni's downward adjustment of the sales prices on goods sold to Amity, the latter agreed to pay plaintiff its commissions.

 The complaint then alleges that on or about August 7, 1953 Amity severed its relations with the plaintiff; that Cantoni, upon being advised of the severance of such relations agreed to pay the 5% commissions upon all textiles ordered by Amity from Cantoni for the 1954 season; that the orders so placed totalled more than $ 1,500,000 and commissions of 5% thereof, or $ 75,000, were demanded.

 The foregoing actions by plaintiff against Amity and Cantoni were consolidated for the purpose of trial and were tried before Acting Justice Geller of the Supreme Court of the State of New York, without a jury.

 The Court in its opinion *fn3" and decision *fn4" referred to the claim for commissions on purchases of goods made by Amity up to August 7, 1953 as the 'Amity commission claim' and to the claim for commissions on sales made for the 1954 season by Cantoni to Amity as the 'Cantoni commission claim'. The Court found that the plaintiff had failed to sustain the claims against Amity and Cantoni based upon an express contract to pay commissions for the respective periods up to August 7, 1953 and thereafter for the 1954 season; specifically that the plaintiff 'has failed to establish * * * that * * * a year to year contract existed or was made with either or both of the defendants'. *fn5" Accordingly it concluded 'that the causes of action * * * described as the Amity commission claim and the Cantoni commission claim, as amended by Grattan on the trial, must be and they are dismissed.' *fn6"

 However the dismissal upon the merits of their claims did not conclude the matter. The Court manifested deep concern that litigation amongst the parties might be resumed anew, since under New York law where a party alleges and fails to sustain a claim upon an express contract, the judgment of dismissal may not bar a new and subsequent action on a quantum meruit basis to recover for the services rendered. *fn7"

 Mindful of the possibility of a resumption of litigation, Justice Geller's opinion indicates that he was determined, so far as legally possible, to dispose of any potential claims based upon the same operative facts which had been presented to him during the course of the trial. *fn8" Thus he specifically stated:

 'Since parties and their counsel have the right, with which courts do not usually interfere, to make and present the issues in their own way, the court would not normally be concerned with the repercussions of its finding that Grattan has failed to establish the contract ultimately relied upon by it as the foundation for its Amity and Cantoni commission claims. Grattan has not, in its briefs or otherwise, requested (in the event its alleged contract with Cantoni and Amity be not established) that the court pass upon its right to any recovery in this action in quantum meruit so far as the Amity and Cantoni commission claims are concerned. And, of course, no such request has been made by either of the defendants. However, because of the full record and unusual situation here presented, the court has felt obliged to consider these matters.

 'At the time of the termination of Grattan's services in August, 1953, unpaid commissions, at the rate of 5% on orders placed by Amity with Cantoni and filled, amounted to $ 19,883.07. There is no doubt about the fact that Cantoni's prices to Amity were fixed so that they would be net to Cantoni and that the prices so fixed contemplated Amity's payment of a 5% commission to Grattan. Similarly, in August, 1953, at the time of the termination by Amity of Grattan's services, orders theretofore placed by Amity with Cantoni were outstanding (with little or nothing of consequence further to be done by Grattan thereon), which were subsequently filled, at prices which contemplated Amity's payment to Grattan of a 5% commission amounting to $ 17,197.79. The dismissal, therefore, of ...

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