Electrical Products Corp. v. Ziegler Drug Stores, Inc.
| Citation | 15 P.2d 1078,141 Or. 117 |
| Parties | ELECTRICAL PRODUCTS CORPORATION v. ZIEGLER DRUG STORES, Inc. |
| Decision Date | 10 November 1932 |
| Court | Supreme Court of Oregon |
Department 2.
Appeal from Circuit Court, Multnomah County; Louis P. Hewitt, Judge.
Action by the Electrical Products Corporation against the Ziegler Drug Stores, Inc. From a judgment in favor of plaintiff defendant appeals.
Reversed and remanded with instructions.
See also, 10 P.2d 910.
John C. Veatch, of Portland (Joseph, Haney & Veatch and James P. Powers, all of Portland, on the brief), for appellant.
Ralph B. Herzog, of Portland (Herzog, Fulop & Kenin, of Portland on the brief), for respondent.
On April 29, 1929, plaintiff, an Oregon corporation, entered into a written contract with defendant, an Oregon corporation, whereby plaintiff agreed to install and lease defendant a certain advertising device known as a "Claude Neon Sign," and to maintain and service said sign for a period of 60 months, from date of installation for the sum of $1,050 to be paid at the rate of $17.50 per month. This contract contained, among others, the following clause: "(4) It is expressly recognized that said sign is expressly designed and to be constructed for the individual and distinctive uses and purposes of Lessee; and it is agreed that in case Lessee shall be in default in the payment of rent for a period of fifteen days, or shall abandon or be evicted from the premises where said sign is to be installed, or shall transfer lessee's interest in said premises, or become bankrupt, or shall otherwise default hereunder or become guilty of a breach hereof, Lessor may, upon notice to the Lessee, declare this lease and all rights of Lessee hereunder immediately terminated; and thereupon, in addition to all sums theretofore due and payable hereunder, ninety (90) per cent of the amount of all installments of rent herein provided to be paid during the remainder of the term hereof shall become immediately due and payable to Lessor as liquidated damages for such breach of this agreement, and Lessor shall have the right to apply the balance of any deposit by Lessee then in Lessor's possession upon the total amount that shall have become due hereunder, and to take possession of said sign and hold the same free from any claim or interest from Lessee; except that if within fifteen days after Lessor's repossessing said sign Lessee shall pay to Lessor the remainder of the unpaid installments of rental provided for herein and any other sums in respect of which Lessee may be in default hereunder, and the expense occurred by Lessor in removing and reinstalling said sign, Lessee shall be entitled to the use of said sign as herein provided during the remainder of the term hereof."
The defendant complied with all the conditions of the contract until October 1, 1930, when it defaulted in the payment of its monthly rental and ceased to pay any further installments. Thereafter, because of said default, plaintiff declared the lease and contract terminated under said clause (4), and brought this action on said contract as his first cause of action to recover the rentals then due, and 90 per cent. of all sums to become due thereon, amounting to $698.50. Said contract contained a provision for attorney fees for plaintiff in the event it should prevail in any suit or action it might institute thereon. It therefore prayed for judgment for the amount claimed, and $100 attorney's fees.
Said contract also contained the following covenants:
The defendant admits that it was delinquent in the payment of rent and that the plaintiff canceled the contract. It set up as a separate answer and defense and by way of counterclaim, certain matters that are not material to this appeal.
Plaintiff united with his first cause of action, and separately stated fourteen other causes of action on contracts identical with the one in the first cause in all respects except as to location of premises, dates, and amounts.
The answer to each of these causes of action is to the same effect as that to the answer to the first cause.
The cause was tried by the court without a jury and findings made for the plaintiff in the full amount of its claim on its fifteen causes of action, with $2,000 attorney's fees.
The theory upon which plaintiff presented its case was that clause (4) of the contract provides that in case of default or breach of any of its terms, the plaintiff may cancel the contract and recover 90 per cent. of all sums to become due thereon as liquidated damages. The question therefore presented for our consideration is the...
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