Ehrenworth v. George F. Stuhmer & Co.

• Decision Date: 08 June 1920
• Citation: 128 N.E. 108,229 N.Y. 210
• Parties: EHRENWORTH v. GEORGE F. STUHMER & CO., Inc.
• Court: New York Court of Appeals Court of Appeals

229 N.Y. 210

128 N.E. 108

EHRENWORTH

v.GEORGE F. STUHMER & CO., Inc.

Court of Appeals of New York.

June 8, 1920.

Action by Solomon Ehrenworth against George F. Stuhmer & Co., Incorporated. From a judgment of the Appellate Division of the Supreme Court, Second Department (181 App. Div. 939,167 N. Y. Supp. 1097), which reversed by a divided court a judgment for the plaintiff entered on a verdict for the plaintiff for the jury and dismissed the complaint, plaintiff appeals.

Judgment and order of the Appellate Division reversed, and verdict and judgment thereon reinstated.

Hiscock, C. J., and McLaughlin and Crane, JJ., dissenting.

Appeal from Supreme Court, Appellate Division, Second Department.

Joseph Gans, of New York City, for appellant.

Harry W. Kouwenhoven, of Brooklyn, for respondent.

ELKUS, J.

[1] The judgment upon the verdict in favor of the plaintiff having been reversed on the law and the complaint dismissed by the Appellate Division solely on the ground that the contract alleged by the plaintiff lacked mutuality, we are required to examine the evidence, taking the view most favorable to the plaintiff. Melcher v. Ocean Accident & Guarantee Corp., 226 N. Y. 51, 123 N. E. 81;Faber v. City of New York, 213 N. Y. 411, 107 N. E. 756.

In 1907 the plaintiff was a dealer in bread with an established trade or route for the delivery or sale of bread in that part of the borough of Brooklyn in the city of New York which is popularly known as Brownsville and East New York. At that time George F. Stuhmer and Emil S. Brykozynski were copartners engaged in business in Manhattan, N. Y., in baking and selling bread, including a particular kind of black bread known as ‘pumpernickel.’

The plaintiff claims that in 1907 he entered into an agreement with the copartnership of Stuhmer & Co. by which it was agreed that he was to sell this particular kind of black bread, manufactured by the then copartners of Stuhmer & Co., exclusive of all other black bread, and that, in consideration of the plaintiff's refraining from selling any other black bread to his customers along his established route, Stuhmer & Co. were to sell and furnish him with as much of such black bread as the plaintiff would require for his customers, as long as the plaintiff and Stuhmer & Co. remained in business, at a price of at least one cent per loaf below the market price to wholesalers and two cents per loaf below the market price at which it was customary to sell at retail, and also that Stuhmer & Co. would not sell such bread to any person other than the plaintiff within this territory; Stuhmer & Co. would supply the plaintiff with as much bread as he required at such prices. This contract was to last as long as the plaintiff and the copartnership were to be in business.

This conversation embodying the contract took place in the early spring or summer of 1907. Brykozynski, with whom the plaintiff had his conversation, told the plaintiff he would have to consult his partner, and thereafter he was told he would receive such a contract if the plaintiff would agree not to sell any other black bread on his route. To this plaintiff assented, and thereupon, in pursuance of the terms of this contract, business was begun between the plaintiff and the defendant.

In 1908 the copartnership of George F. Stuhmer and Emil S. Brykozynski was incorporated under the name of George F. Stuhmer & Co., Inc., under the laws of the state of New York, and this corporation took over all the assets of the copartners and assumed all its liabilities, including the agreement with the plaintiff, and the copartners own all, or substantially all, of its capital stock and were and are its officers and managers.

The plaintiff, immediately after making the agreement, ordered 50 or 60 loaves of bread and paid a deposit of $5, which thereafter was increased to $50, and the plaintiff claimed he received a receipt for such $50, which was not produced, which it is claimed stated upon its face that it was security for the contract above specified. The plaintiff and the copartnership and later the defendant carried out the provisions of this agreement from its inception in 1907 to March, 1915. During this time the business transacted increased rapidly, so that in March, 1915, the plaintiff was purchasing and receiving from the defendant 3,000 loaves of black bread of the kind specified each week.

In the meantime the defendant had moved its bakery to the borough of Brooklyn. In March, 1915, the defendant caused an advertisement or a statement to be inserted in the weekly grocery paper in Brooklyn that it intended to sell black bread directly. It also caused agents to be sent to customers of the plaintiff agreeing to deliver such bread direct. When the plaintiff expostulated and claimed that this was a breach of their contract, Mr. Stuhmer, one of the defendant's officers, said they intended to send their own wagons and sell and deliver their own bread, and after that the defendant refused to deliver bread to the plaintiff at the prices specified.

It appears by the uncontradicted evidence that, at the time the contract was made, Stuhmer & Co., the copartnership, were carrying on a small business, using a few ovens, which increased during the eight years of the business between the plaintiff and the defendant to a very substantial enterprise. The plaintiff corroborated his testimony as to his contract, not only by the course of dealing during all the years, but also by the testimony of a witness (Nathan Ehrenworth) that the plaintiff had been offered $3,000 for his business, and upon this being communicated to the defendant or one of its officers that the defendant, after being informed of this, advised the plaintiff through the witness not to sell the same because he had the contract in question, and that he would make far more money by carrying out his contract than by disposing of his route.

The contract was also corroborated by the testimony of the wife of the plaintiff, who appears to have been helping the plaintiff in his business and who, after the contract was broken, had a conversation over the telephone with Stuhmer, the president of the defendant, in which she reproached him for breaking the contract with her husband, referring at some length to the terms of the contract. According to her, Mr. Stuhmer did not deny the making of the contract nor his breach of it, but simply said he could get more money by selling the bread direct, and when reproached that he had made the contract he said he could not help that, but that the company decided to take the bread away from the plaintiff and send their own wagons. At the end of the conversation, Mrs. Ehrenworth testified that Stuhmer said that his company might give the plaintiff a few hundred dollars because of their breach of the contract.

One Katz, who was also in the bread business, testified that while the plaintiff was purchasing and receiving the black bread from the defendant he endeavored to purchase such black bread from defendant to sell in East New York and Brownsville, but that Stuhmer said to him that he could not do this because he must sell altogether through the plaintiff.

On the part of the defendant, both Stuhmer and Brykozynski, who had been the copartners of the copartnership of Stuhmer & Co. and who were the substantial owners of the corporation, testified, denying the making of the contract, but conceded that business had been transacted between the plaintiff and the defendant substantially as claimed by the plaintiff, although without any agreement therefor, the purchases being ordinary ones, and also conceding that they did not sell through any peddler, except the plaintiff, in Brownsville and East New York. Mr. Stuhmer denied emphatically the conversation with Mrs. Ehrenworth except that he admitted that he had told her the defendant was willing to pay several hundred dollars to plaintiff.

The plaintiff proved his damages to be $45 per week loss of profits. This was disputed, it being claimed that the profits were gross and not net profits, and testimony was taken to show the reduction which should be made therefrom.

It appears that the bread in question was labeled ‘Stuhmer's bread,’ and it was asserted without contradiction that the bread had become widely known throughout the specified district by that name and had a substantial market, and the plaintiff offered testimony showing that no other bread could be purchased to take its place. It appeared that at one time during the course of dealings between the parties a competitor delivered to the customers another bread called ‘steam bread,’ but after much effort and informing the trade of the difference between the two breads this competition was shown to be without merit.

All the elements of a contract are present. Stripped of all verbiage, it is quite clear that the defendant's predecessor and the defendant were desirous of obtaining a market for the particular kind of bread known as ‘pumpernickel,’ or black bread, which they manufactured, and considered that plaintiff would be able to create and...