Willcox & Gibbs Sewing Mach. Co. v. Himes , 97 N.Y. Sup. Ct. 347 ( 1895 )

O’BRIEN, J.

The first question relates to the construction of the written agreement entered into between the parties, and for its discussion a reference to its salient features is necessary. It provided that, upon certain considerations therein expressed, the plaintiff—

“Doth hereby lease unto said lessee” the machines (describing them), “and the lessee hereby agrees to keep and perform all the conditions of the lease, to wit: 1

“First. * * * To pay unto the lessors, as rent for the úse of the machines hereby leased, the following sums or rates for all goods made wholly or in part by the aid of said machines, or any of them, viz.: [Then follow the rates.] But in all cases where the lessee shall make the returns and payments as hereinafter required, according to the following schedule of rentals, * * * the following amounts will be accepted by the said lessor, * * * viz.: [Then follows a schedule.] If, however, returns and payments are hot made according to the provisions of this instrument, then the lessee shall be and is firmly held and bound to pay unto the lessor the amounts first hereinbefore specified; or said lessor may, at its option, demand and collect, and said lessee hereby agrees to pay, the sum of $25 per month for each machine hereby leased during each and every month for which the returns and payments required by this agreement have not been made. * * *

“Second. The said lessee agrees to keep correct record of all goods manufactured,” to be open to the inspection of said lessor, and to make returns monthly for all goods manufactured during the preceding month. “If no goods have been manufactured during said month, the said lessee shall so report.”

“Fifth. * * * But the lessee has the option at any time to surrender said lease and the machines mentioned herein, provided he shall have complied with all and singular the obligations of this instrument, and settled his indebtedness to the lessor thereunder; and upon such surrender of said lease and machines the lessee shall be discharged and released from all and any obligations, agreements, and covenants herein assumed by him.”

It will be noticed at the outset that the contract provided three different modes of payment,—one based upon the articles manufactured at certain schedule prices in the event of the failure of the lessee to make returns; another, the amount shown to be due by the returns when returns were, made; and the third, the sum of $25 a month for each machine leased, as a rental during each month for which the returns and payments have not been made. It was thus in the power of the defendant to make returns, and so limit the amount to which the plaintiff would be entitled. If, however, the defendant failed to make returns, then there were two ways provided by which the plaintiff could exact payment. If it could obtain the information as to the articles manufactured, it could charge the increased rate; or, waiving this, it had the option to exact from the defendant a rental of $25 a month for each machine. The latter was the course followed. In the contract itself it will be found that nothing is said about the use of machines, but it is provided that the $25 is for each machine leased; not, as contended for by defendant, for every machine used. We think the plaintiff’s contention is sound that the construction to be given to this language is the same as that to be given to contracts between landlord and tenant; and in an action for rent it clearly would be unavailing for the tenant to show that while he continued in possession of the premises he did not actually occupy them. So here, while the defendant continued' in possession of the machines, he was liable under the contract the same as a tenant under a lease. Our view as to the construction of this part of the agreement is that, where no goods were manufactured, the defendant could so report, and relieve himself from the payment of rental; but where he did not report, or did not surrender the machines, but retained them, then he was liable to the plaintiff in the sum of $25 a month for each machine retained, whether used in the manufacture of goods or not. This naturally brings us to a consideration of the evidence adduced upon the trial in support of the defense that report was made to plaintiff that no goods were being manufactured upon the machines, and that in December, 1885, an offer to surrender was made, which was not carried out because, at the request of plaintiff, the machines were retained. We think that, if evidence was offered to support this defense from which the jury could have legitimately inferred that the parties to the agreement understood the situation to be the same as it would have been had the defendant returned the machines, then it was error to direct a verdict and refuse defendant’s request to go to the jury upon this question. It will be recalled that early in 1885 defendant made a return covering the period from October 1, 1884,-to December 31, 1884, inclusive, and that upon the face of the return were written the words, “No production.” As no returns were made for the year 1885, it may be that the court would have been justified in directing a judgment from that time down to the month of December, 1885, when, as testified to by the defendant, he had the conversation with the representative of the plaintiff, Mr. Garrett, in which the latter said, “You are not making any returns,” to which the defendant replied, “No, sir; we are not using the machines, and we are going to send them back.” Mr. Garrett then said: “No, don’t do that. We want to keep in with you people,—a few of our friends. We are getting up a new machine, which is going to be a great benefit to the trade, and it will be exclusive. We propose to let you and Mr. McDowell have it, as you have been using our old machines.” Defendant further testified that from that time he never used the machines. It is clear from the agreement that the defendant, by paying what was due up to December, 1885, when this conversation took place, could have surrendered the machines by returning them; and it is equally clear that such surrender and payment could be waived by the plaintiff, and, instead of being sent back, the machines could have been retained by defendant at plaintiff’s request, without his being liable to pay any rent therefor, provided they were not used in manufacturing goods. The defendant having given evidence from which it could be legitimately inferred that the provision of the contract as to the manner of surrender had been waived by plaintiff, followed up, as it was, by an offer of evidence tending to show that he had manufactured no goods by any of the machines after that time, we think a question was presented for the jury as to whether or not the parties to the agreement intended that the defendant should pay any sum whatever after he had. ceased to use the machines, and offered to return them, and had been requested not to do so. As appears by the record, Mr. Garrett, with whom such conversation took place, was in court, but did not dispute defendant’s evidence, nor deny his own authority in the premises; and while, upon this appeal, the latter is called in question, the treasurer and secretary of plaintiff, who was intrusted with the management of the entire business, testified that Mr. Garrett “was manager for a number of years of the hosiery department, as it was called; that is, the department through which those machines are leased and operated. It is a special department of the business through which the machines covered by the agreement put in suit here are leased and put on the market. He had entire charge of that inatter under me. He had authority in that department to a certain extent. He would attend to the making of the leases, and attend to the receiving of the returns and keeping up the records, and generally taking care of that business in detail. Sometimes he would make visits to the lessees on behalf of the company. That was so from 1882 until 1890 or 1891.” We think that, upon such evidence, there was a question of fact presented, and that the jury could infer that, by reason of this conversation, the defendant refrained from surrendering the machines, and that both parties- understood that the situation was the same as it would have been if'he had made the surrender in fact. This being so, the direction of a verdict was error, and there should be a new trial, with costs to defendant to abide the event.