Brown v. American Bank of Commerce

• Decision Date: 10 June 1968
• Docket Number: No. 8445,8445
• Parties: James B. BROWN and George Mossman, Partners, d/b/a Albuquerque Data Processing, Plaintiff-Appellee, v. AMERICAN BANK OF COMMERCE, Defendant-Appellant.
• Court: New Mexico Supreme Court

Page 751

441 P.2d 751

79 N.M. 222

James B. BROWN and George Mossman, Partners, d/b/a Albuquerque Data Processing, Plaintiff-Appellee, v. AMERICAN BANK OF COMMERCE, Defendant-Appellant.

No. 8445.

Supreme Court of New Mexico.

June 10, 1968.

[79 NM 222] Albert T. Ussery, Juan G. Burciaga, Albuquerque, for appellant.

Marron & Houk, Dan A. McKinnon III, Ralph M. Marron, Albuquerque, for appellee.

OPINION

CHAVEZ, Chief Justice.

Appellant American Bank of Commerce, hereinafter referred to as 'Bank,' appeals from a judgment in favor of plaintiffs-appellees, James B. Brown and George Mossman, partners, d/b/a Albuquerque Data Porcessing, hereinafter referred to as 'ADP.'

The complaint alleged that the Bank was obligated, under the terms of an agreement dated February 28, 1963, to have certain work performed by ADP; that the Bank failed to use the services of ADP as was required; and that, as a result thereof, ADP was damaged in the amount of $4,714.32. The Bank answered, denying the allegations of the complaint. The cause was tried to the court on the parties' stipulation and the trial court granted judgment to ADP in the sum of $4,714.32.

The parties entered into an agreement dated February 28, 1963, and a supplement thereto dated March 1, 1963. The pertinent provisions of the February 28, 1963, contract provide:

'WHEREAS, Bank desires to have ADP prepare and deliver completed report of demand deposits, savings deposits, General Ledger and installment loans of depositors of the Bank, customers or other persons in some way connected with Bank and to furnish Bank such information as shall be requested by Bank from time to time, and

'WHEREAS, ADP has all proper and adequate facilities to accurately, without error or omission, produce reports of demand deposits, savings deposits, General Ledger and installment loans of depositors of Bank and information as shall be requested by Bank as to customers or other persons in some way connected with Bank.

'NOW THEREFORE, in consideration of the mutual covenants hereinafter contained and the sums to be paid by Bank to ADP, it is agreed as follows:

'1. Bank shall key punch all daily activity including all items received in connection with its demand deposits, savings deposits, General Ledger and installment loans and will produce one key punch card for each item received by Bank. Key Punch cards shall be ready and available for pick up by ADP each day. The key punch of said cards shall be at the sole expense of Bank.

'2. ADP shall call for and pick up said key punched, activities cards in batches with proof tape attached for each batch, daily, except Saturday and Sunday, at 11:00 o'clock a.m., Mountain Standard Time and return said batches with proof tape attached together with completed reports of demand deposits, savings deposits, General Ledger and installment loans of depositors of Bank and such other information as to customers of Bank or other persons in some way connected with Bank as shall be, from time to time, requested by Bank, in writing at 1:00 o'clock p.m. Mountain Standard Time, each day except Saturday and Sunday. * * *

'* * *

'3. At the close of each month or at such other time during the month as Bank shall request, ADP shall prepare the monthly statements for all depositors in the form specified by Bank and such other reports covering savings accounts, installment loans, and such other reports as Bank shall request in writing. General ledger items will be summarized in the manner accepted by members of the Certified Public Accountant profession in the vicinity of Albuquerque, New Mexico as to prior month's balances, activity and new balances.

'* * *

'6. Bank shall pay to ADP for the performance of the foregoing work, 2 1/2cents per item for each item completed by ADP each month, to and including the 20,999th item and for all items in excess of said number Bank shall pay to ADP the sum of 1 1/2cents per item. Said sum shall be paid monthly on or before the 10th of the month following the date of completion and delivery of the items to Bank. The number of items each month shall be computed from 8:30 o'clock a.m. Mountain Standard Time on the first day of each month until the same time and date on each subsequent month of each year. Bank shall pay to ADP a minimum sum of $375.00 each month for the service performed.

'* * *

'7. ADP shall provide a means for adequately, properly and without error or omission, providing Bank the service hereinabove provided for at such time as ADP shall be unable to do so with its own equipment and shall avoid failure to complete the service as herein required. ADP shall be liable for all damages of any nature whatsoever reasonably suffered or incurred by Bank, directly or indirectly as a result of the failure of ADP to provide the service herein provided for. In establishing damages, it is not necessary for Bank to have judgment taken against it or that suit be filed in any court and Bank may compromise claims for damages which may be made against it. ADP shall be liable to, indemnify, and hold Bank harmless on account of such compromised claims. * * *

'* * *

'11. This Agreement shall terminate at midnight on the 180th day following the date that notice in writing shall be deposited in the United States Mails at Albuquerque, New Mexico by one of the parties, directed to the other party at the address and in the manner hereinafter stated.'

The trial court found as fact the matters stipulated by the parties as follows: That the agreement was in effect and being performed by ADP when the Bank commenced business, and during the period in which items in sufficient amount to pay ADP a compensation of $375 monthly, or more, were not being grnerated by the business of the Bank, it paid to ADP monthly $375; that on December 2, 1965, the Bank wrote and delivered to ADP a letter stating that the contract between the parties would be terminated effective May 31, 1966, and that after March 31, 1966 the Bank would process all items on its own equipment and pay ADP only the sum provided for in paragraph 6 of the agreement, which was $375 monthly; that, in response to said letter, ADP advised the Bank by letter dated December 21, 1965, that cancellation of the agreement was accommodated by its terms, but reduction of the amount payable after March 31, 1966, was not accommodated by the agreement and that, therefore, ADP would expect payment on a per item basis, as provided for in the agreement, to the date of effective termination; that from the period March 11 to May 31, 1966, the Bank processed 393,002 items; and that had these items been processed by ADP it would have resulted in net receipts to ADP in the sum of $4,714.32. The court also found, in accordance with the stipulation, that the Bank installed its own electronic data processing system which was different from the system under which ADP was operating; that the system used by ADP was grounded upon key punch cards; that under the system initiated by the Bank, it no longer had use or used key punch cards, but rather was grounded upon the use of tapes; that in the judgment of the Bank, the system initiated by the Bank was more efficient and less costly than the system used by ADP; and that the reports which the Bank system offered were of greater benefit to the Bank.

The trial court concluded that the agreement contained a provision that the 'Bank shall pay to ADP a minimum sum of $375.00 each month for the service performed,' and required payment to ADP of the...