United Press Ass'n v. National Newspapers' Ass'n

• Decision Date: 06 September 1915
• Docket Number: 6111.
• Citation: 227 F. 193
• Parties: UNITED PRESS ASS'NS v. NATIONAL NEWSPAPERS' ASS'N.
• Court: U.S. District Court — District of Colorado

227 F. 193

UNITED PRESS ASS'NS v. NATIONAL NEWSPAPERS' ASS'N.

No. 6111.

United States District Court, D. Colorado.

September 6, 1915

Tyson Dines, Jr., of Denver, Colo., and Glendy B. Arnold, of St Louis, Mo., for plaintiff.

Jno. T. Bottom, of Denver, Colo., and Frank M. Lowe, of Kansas City Mo., for defendant.

LEWIS District Judge.

The plaintiff is a New York corporation; its business is the gathering of news throughout the United States and other countries, preparing news reports thereon and selling said reports, with the privilege of publishing the same, to newspaper publishers throughout the United States.

The defendant is a Colorado corporation, and owns and publishes the Kansas City Post at Kansas City, Missouri.

In 1909 plaintiff and defendant entered into a written contract by which the plaintiff agreed to furnish and the defendant agreed to take for its newspaper at Kansas City the Full Day and Saturday Night news reports at a named consideration to be paid weekly in advance. The reports were to be brought into Kansas City and delivered over telegraph or telephone lines, and the defendant further bound itself to provide a suitable room in the office of the Kansas City Post for the plaintiff's operator, and also to furnish to the plaintiff free of charge the local news which might be gathered by the defendant within twenty-five miles of said office.

The life of the contract extended to November 1, 1914. The contract was executed on both sides to the mutual satisfaction of the parties, barring an occasional complaint by each, until the 7th day of February, 1911. On that day the defendant wired Mr. Lee, plaintiff's vice-president, as follows:

'We desire to notify you that we do not find the United Press service satisfactory nor according to your representations to us. You will therefore discontinue the daily service after this week. We would like to contract with you for your Saturday Night service alone.'

On the same day Mr. Lee replied, expressing surprise at the notice and saying, 'We feel that your contract obligations should be fulfilled;' that he believed the service valuable to the Post and to discontinue would represent a serious loss to the plaintiff. On February 11, 1911, F. G. Bonfils, acting for the defendant, notified the plaintiff's local agent, who had charge of the plaintiff's office in the building and rooms where the Post was printed, that the defendant had determined that it would no longer take the plaintiff's day service; that it would like to make a new arrangement by which the plaintiff would furnish the defendant the night service (Saturdays), but that if the new arrangement could not be made plaintiff would have to vacate its office with the Post, concluding:

'We request a definite and positive answer, and would ask that you take time to obtain such answer in full from your company and, until that time, the matter will be left open.'

On February 14, 1911, Mr. Lee for the plaintiff wrote Mr. Bonfils, representing the defendant, acknowledging receipt of Mr. Bonfils' letter of the 11th, addressed to the local agent at Kansas City. Mr. Lee again expressed surprise at the attitude of the defendant, and refers to an interview which he had recently had with the manager of the Post, in which it had been suggested that the defendant had expressed a desire to discontinue the plaintiff's service, and says that the plaintiff does 'not feel justified in altering the terms of our agreement'; urges that the agreement be kept, points out the advantages to both parties in keeping it, and closes:

'If you can suggest some more equitable adjustment of the matter, we will, of course, be pleased to give it every consideration.'

The controversy was then dropped. The plaintiff's agent remained at his office in the Post and received and delivered to the defendant news reports sent by the plaintiff, and the defendant gave the plaintiff's agent at the Post access to the local news which it had gathered. But the defendant did not make the weekly payments stipulated for in the contract. While matters were in this condition and on March 10th, 1911, Mr. Lee, who was then at Kansas City, sent a letter on the part of the plaintiff to the defendant in which he called attention to the clause of the contract requiring the weekly payments to be made in advance, stating that the defendant was then in arrears for five weeks ($875), ending the next day,

'and we notify you that unless arrearages are paid up and your weekly payments in advance begun on March 13th, 1911, we will consider your default as a breach by you of the contract, and will proceed to collect the amount then owing for service actually rendered, and the damages accruing to us on account of the failure on your part to carry out the contract.' The arrearages were not paid as demanded, and on March 13th, the plaintiff gave up its office with the Post, took its receiving agent away and took out its facilities for receiving and delivering to the Post its news reports.

Thereafter on March 22, 1913, plaintiff brought this action to recover the $875 and damages claimed to have accrued to it for the alleged breach of the contract on the part of the defendant. The defendant's answer admits the indebtedness of $875 and the plaintiff is, of course, entitled to a judgment for that amount without more; but the defendant denies that it broke the contract; alleges that the service rendered by the plaintiff was poor and inefficient and not in accord with what it conceived was the obligation of the plaintiff under the contract, and then alleges:

'That notwithstanding said frequent complaints, said failure on the part of plaintiff to comply with the terms of its contract continued until on or about the 11th day of March, 1911, when plaintiff surrendered and abandoned the contract sued on and discontinued its service to defendant of both day and Saturday night service, removed its wires and operator from the office of this defendant, and thus terminating by its own unlawful acts the contract upon which the petition in this cause is founded.'

The first question then for consideration under the pleadings and proof is whether the conduct of the defendant was such as to operate as a breach of the contract on its part and thus constitute a basis for an action for damages.

1. There is no doubt that the defendant's telegram of February 7th, and letter of February 11th, to the plaintiff were declarations of renunciation on its part, and if the plaintiff had accepted them as such they would have been equivalent, for the purposes in hand, to a breach by the defendant; for an accepted renunciation operates as a breach. No man can complain if he is taken at his word. But the plaintiff did not accept the renunciation. It entered into a discussion as to the advisability for such action from the standpoint of each of the parties; it continued to render the services required of it under the contract for more than a month thereafter, and accepted performance, in part, on the part of the defendant. A renunciation of the obligations of a contract by one of the parties must be unequivocal and of the contract and its obligations in its entirety, in order to operate as an anticipatory breach. When that has been done the other party has an option open to him which he must exercise before he is entitled to maintain an action for damages as for breach of the contract; i.e., he must accept the renunciation, and then he can sue. If he does not desire to take his adversary at his word and accept the renunciation he may treat it as inoperative and keep the contract open; i.e., he may reject the renunciation; and in that event he cannot sue as for a breach of the contract. If the contract remains open it is open for all purposes and for the benefit of all parties. Its obligations on each party for performance stand unaffected by prior notice of renunciation and its rejection. In support of this principle it is hardly necessary to cite more than Roehm v. Horst, 178 U.S. 1, 20 Sup.Ct. 780, 44 L.Ed. 953, s.c., 84 F. 565, in which the authorities, English and American, are exhaustively reviewed. For additional authority in support of the proposition see Marks v. Van Eeghen, 85 F. 853, 30 C.C.A. 208; GaNun v. Palmer, 202 N.Y. 483, 96 N.E. 99, 36 L.R.A. (N.S.) 922; Roeblings Sons Co. v. Fence Co., 130 Ill. 660, 22 N.E. 518.

A very early declaration of the rule is found in Hochster v. De La Tour, 2 E. & B. 678, to which many of the authorities in this country refer. It was later said by Lord Campbell, Chief Justice, speaking for the Court of Queen's Bench, in Avery v. Bowden, 5 E. & B. 714:

'According to our

...