Foster v. Holbrook-Armstrong Iron Co.

ViNje, J. The argument on behalf of the defendant in support of the demurrer is in substance that the contract is an entire one calling for services yet unperformed and that by its terms the commission was not earned until the motors were manufactured and paid for; that it was through no fault of the defendant that the Velie Motor Vehicle Company breached its contract, and therefore it is not responsible for the condition that rendered performance impossible. The fact that defendant afterwards settled with the Velie Company, it is claimed, can in no way affect plaintiffs’ right to recover in this action, for as far as it appears from the complaint the $20,000 paid in settlement may have been no more than sufficient to reimburse defendant for the actual expenses in preparing to execute the contract. Had there been a complete performance of the contract on .the part of the plaintiffs, and they had sued to recover commissions on motors manufactured but not paid for, there would be force in the objection that commissions were not due. But no such situation presents itself. Here there was a breach of contract, and if the defendant occasioned such breach or by its conduct sanctioned it and made it its own, «then damages accrued at once, and the question as to when payments would become due if the contract had been performed becomes immaterial. It is true that under the allegations of the complaint the defendant in no wise brought about the Velie Company’s breach of contract. But defendant knew that plaintiffs had 1 a substantial pecuniary interest in its performance and that it was liable to plaintiffs if without their consent it did anything to adversely affect such interest. What it did'do in settling with the Velie Company was to render it impossible for plaintiffs to perform and to earn the compensation to which full performance would have entitled them. The defendant, however, presumably reaped the full benefit of the contract when it settled with the Velie Company; for its ac451 ceptan.ce of tbe $20,000 was tbe acceptance of tbe equivalent of performance. And settlement having been made with full knowledge on tbe part of tbe defendant of its liability to plaintiffs under its contract, witb tbem, tbe presumption arises that it considered tbe $20,000 sufficient to discharge such liability as well as to reimburse it for its own loss. By settling witb tbe Yelie Company defendant rendered performance on tbe part of plaintiffs impossible. Such act alone creates liability. Ketchum v. Zeilsdorff, 26 Wis. 514. Moreover it is a general rule of law that mere failure of a third party to do something that is essential to performance does not release the promisor. Cobb v. Harmon, 23 N. Y. 148, 5 L. ed. 436; Wareham Bank v. Burt, 5 Allen (87 Mass.) 113; Stone v. Dennis, 3 Port. (Ala.) 231; Van Etten v. Newton, 15 Daly, 538. See, also, Danenhower v. Hayes, 35 App. D. C. 65, 33 L. R. A. n. s. 698 and cases cited in note. Here tbe promise on tbe part of the defendant was to pay six per cent, commission to plaintiffs upon their securing a contract from tbe Velio Company and performing certain engineering services. Tbe plaintiffs secured tbe contract and stood ready to render tbe engineering services. They bad performed as fully as performance was possible. Under such a contract it was tbe defendant, and not tbe plaintiffs, which became responsible for performance on tbe part of tbe Yelie Company. Tbe complaint states a cause of action and tbe demurrer was properly overruled. Plaintiffs are entitled to recover tbe stipulated commission of six per cent, on 1,000 motors at $210 each, less tbe reasonable value of services unperformed by them which would have been required bad there been a full performance of tbe contract. To tbe extent of tbe value of such services consideration has failed and tbe recovery should be lessened thereby. By the Court. — Order affirmed.