Lehner v. Adam Hat Stores, Inc., 9837

• Decision Date: 09 July 1958
• Docket Number: No. 9837,9837
• Citation: 143 A.2d 313,88 R.I. 88
• Parties: Bennett LEHNER v. ADAM HAT STORES, Inc. Ex.
• Court: Rhode Island Supreme Court

Page 313

143 A.2d 313

88 R.I. 88

Bennett LEHNER v. ADAM HAT STORES, Inc.

Ex. No. 9837.

Supreme Court of Rhode Island.

July 9, 1958.

Abraham Marks, Providence, for plaintiff.

Thomas W. Pearlman, Providence, for defendant.

CONDON, Chief Justice.

This is an action of assumpsit which was tried before a justice of the superior court sitting without a jury and resulted in a decision for the defendant. The case is here on the plaintiff's bill of exceptions to such decision and to certain rulings on the admission of evidence.

The plaintiff brought his action to recover the sum of $1,000 which he had paid to defendant in accordance with a written agreement entered into between them on June 20, 1955, in the city of New York. Such agreement reads as follows:

'Dated: June 20, 1955

'Received from Bennett Lehner residing at 5 Sweetfern Road, Warwick, Rhode Island ($1,000.00) Dollars as deposit for the purchase of Adam Hat Store #86 located at 55 Asylum Street, Hartford, Conn. subject to the following:

'1. Buyer agrees to purchase fixtures in store excluding signs and hat display fixtures for the sum of $16,000.00 payable $5,000.00 upon the signing of the contract and the balance in equal monthly payments together with interest at the rate of 4 1/2% per annum, over a period of five (5) years commencing on or about July 31, 1955.

'2. Buyer agrees to purchase the furnishing merchandise upon the premises at 62 1/2% of the retail price, payable 50% upon the signing of the contract and the balance in 6 equal monthly payments, together with interest at the rate of 4 1/2% per annum, commencing as of July 31, 1955, or one month from the delivery of the possession of the premises whichever comes earlier.

'3. Buyer agrees to enter into a lease with Adam Hat Stores, Inc. for the remaining period of the lease terminating February 1, 1957 with the minimum annual rental of $4,800.00 with an additional rent of ^*% of the gross sales in excess of $4,800.00. Lease shall be subject to the approval of the overlandlord. Occupancy will be delivered on or about 1955. Buyer agrees to give three (3) months as security for the full and faithful compliance with the terms of the lease.

'4. Buyer agrees to enter into the Adam franchise agreement for a period of five (5) years and to pay the annual fee of $1,200.00 therefor in each and every year during the term of the agreement as therein provided, or at the buyer's option the annual fee may be deducted from the hat bonus.

'5. Buyer agrees to enter into the customary Adam agency agreement for a period of five (5) years or the term of the lease whichever is longer.

'6. The above transaction is subject to approval by the company of the buyer's credit rating.

'7. In the event the Buyer shall fail to consumate [sic] this transaction for any reason whatsoever Buyer liability shall not exceed the sum of $1,000.00 representing the deposit herein and thereupon this agreement shall cease and terminate. In the event the Seller is unable to consumate [sic] this transaction for any reason whatsoever, the sole obligation of the Seller shall be to refund the Buyer's deposit, and upon making the refund, this agreement shall wholly cease and terminate, and neither party shall have any further claims against the other by reason of this agreement.

'Adam Hat Stores, Inc.

By [signed] William H. Robbins

'I (we) consent and agree to the foregoing:

[signed] Bennett Lehner'

Sometime thereafter and before October 27, 1955, defendant forwarded certain written instruments to plaintiff to be executed. Such execution was necessary to consummate the transaction of June 20 in accordance with the written agreement. However, by letter of October 27 plaintiff withdrew from the agreement and requested defendant to return his deposit. Prior thereto he had refused to execute the instruments on the ground that they were 'not written as agreed.'

The defendant by letter of November 10, 1955, informed plaintiff that it was ready and willing to complete the transaction and that if he did not execute the instruments by November 19 it would consider him in default. The plaintiff replied by letter of November 21 that he no longer desired to operate the store. On December 1, 1955, defendant notified plaintiff that by reason of his withdrawal from the agreement it had sustained considerable damage and was compelled to offer the store for sale again on the open market.

The defendant thereafter found another purchaser but at a much lower price than plaintiff had agreed to pay. It claimed that it had suffered a loss greatly in excess of plaintiff's $1,000 deposit and, therefore, refused to refund it. The plaintiff claimed the right to a refund and alleged as ground therefor lack of mutuality in the agreement thus depriving it of validity as a binding contract.

The trial justice in construing the agreement recognized that it did not contain any express promise by defendant to sell, but he nevertheless held that the agreement constituted a valid contract because defendant's obligation to sell could be reasonably inferred. He further construed paragraph 7 of the agreement to mean that plaintiff's liability for failure to perform was limited to $1,000 but that defendant was entitled to retain only so much thereof as it could prove it suffered in damages by reason of such failure. However, after weighing the evidence he concluded that defendant had shown such damage to the extent of the deposit.

The plaintiff has expressly waived exceptions numbered 1, 2, 3, 4, 5, 6, 7, 10, 11, 12 and 14. He has prosecuted a separate exception to each ruling of law and finding of fact in the trial justice's decision and these are numbered 15, 16, 17 and 18 in his bill of exceptions. It is neither necessary nor desirable to prosecute separate exceptions to the decision of a trial justice sitting without a jury. Dubee v. Feinstein, 61 R.I. 214, 200 A. 528. We shall treat them as though there was but a single exception to the decision based on the grounds that such decision is against the law and the evidence and the weight thereof.

In our opinion the decision was not against the law. Looking at the agreement as a whole to find the intention of the parties, we think it is reasonably clear that defendant impliedly promised to sell in consideration of plaintiff's expressed promise to purchase. Certainly the provisions of paragraph 7 are predicated on such an assumption; otherwise why provide therein against the sellers' inability to consummate the transaction if it was under no obligation to sell. This agreement was drawn by defendant and entered into at its office in New York City. If plaintiff had brought his action there and contended that the agreement was as one sided as he contends here he would not, in our opinion, prevail. It has been held in New York that an intention to make a wholly one-sided agreement is not to be readily inferred. Moran v. Standard Oil Co., 211 N.Y. 187, 105 N.E. 217. In that case the court laid special stress on the use of the word 'agreement' saying in 211 N.Y. at page 197, 105 N.E. at page 220: 'The very word 'agreement' connotes a mutual obligation. * * * There may be a 'promise' to serve without a promise to employ, but there can be no 'agreement' for service without mutuality of rights and duties.'

That court has also held that an obligation although not expressed in the written instrument may be implied. City of New York v. Paoli, 202 N.Y. 18, 22, 94 N.E. 1077, 1078. 'In reading a contract,' the court said, 'we are not, necessarily, limited to its exact words in interpreting its obligations; we are to consider what its language implies as the intention of the parties.' And in supplying the words which it held were required to make such intention effective the court, 202 N.Y. at page 23, 94 N.E. at page 1078, gave this...