Crary v. Jones & Dommersnas Co.

Mr. Justice Freeman delivered the opinion of the court. The apparent ground upon which the Superior' Court canceled the contract in controversy and restrained appellant from manufacturing saws thereunder is, that the latter made no report such as the contract provides for in response to the request made by appellee of date December 8, 1904. It is contended in ■behalf of appellant that appellee had waived a report under oath for the quarter preceding January 1, 1904. In the written request referred to appellee said, “We desire a report showing what has been done under your contract with the company up to December 1, 1903.” In the contract appellant had agreed to make full and true returns under oath upon the tenth days of January, April, July and October in each year, of sales made, but he was under no contract obligation to make at that time nor at any time a return up to December 1, such as appellee called for. If he made due return under oath on the tenth of October, 1903, or if such return under oath had been waived by appellee, he was under no contract obligation to make any further return until the tenth of January, 1904. If that return also had been made or waived, appellee had no contract right to require a return under oath until the tenth of April following. In any event, appellant was strictly within his contract right in regarding appellee’s request for a report showing what had been done under the contract up to December 1, 1903, as a mere informal request for information and in replying as he did that “the only statement we have to make is that the royalties had been paid up to January 1, 1904.” That this reply was in good faith and at least without apparent intention to give offense would seem to be indicated by the context of the letter which invited appellee’s new president to a friendly call, suggesting that it would be “to our mutual advantage to become acquainted with each other. ’ ’ Subsequently appellee’s new president and secretary did call on appellant and asked to see his books. Appellant is said to have replied that he had no books to show him. In refusing also to show his books appellant seems to have been acting within his rights. The contract gave appellee no authority to inspect appellant’s books of account, and such a demand would not in all probability be favorably regarded by any business man, especially when made by one who had a suit pending against him. Without further notice or parley appellee, on the thirteenth of February, 1904, notified appellant that appellee had elected to terminate the contract and directed bim not to manufacture thereafter or sell any of the patented devices referred to therein. So far as appellee then knew, appellant had made all due returns prior to the election of Mr. James g,s president of the company. The latter testifies that this may have been done, and that his predecessor Mr. Dommersnas had then “attended to all the business of the company just as I do now.” Appellant, however, testified and the fact is not questioned, that it had not been customary for him to make returns under oath and he had not done so, that the appellee had received his reports not under oath without any question, that the question as to returns under oath was never raised, that he had always paid appellant the amount due it under the contract, that he had paid these amounts to Dommersnas, then appellee’s president, and that he had never had any business dealings with reference to the contract with any other officer of complainant prior to January 1, 1904. Notwithstanding this uncontradicted testimony it is declared by appellee’s .counsel that there is an entire absence of any evidence tending to show that appellee waived the making of reports under oath. This is the material question in the case. It is axiomatic that forfeitures are not favored by the law, nor regarded by courts with any special favor. King v. Radeke, 175 Ill. 72-77; Flicek v. High Court C. O. of Foresters, 90 Ill. App. 314-352; Palmer v. Ford, 70 Ill. 369-377. As said in the last cited case: “The party who insists upon a forfeiture must make clear proof and show he is entitled to make such declaration. It is a harsh way of terminating contracts and he who insists upon making such declaration cannot complain if he is held to walk strictly within the limits of the authority which gives the right.” In order to enforce the forfeiture sought, appellee must show a clear right. This it does not do. It is clearly apparent from the unquestioned evidence that appellee had for nearly two years been in the habit of receiving royalties from appellant in accordance with the' contract upon unsworn reports which it had accepted without question. It is no doubt true that under the terms of the contract appellee had a right to require thereafter that the returns should be under oath and it was appellant’s duty to so make them. But it was also within appellee’s power to waive such sworn returns, and that it did so for the period prior to the first of January, 1904, is manifest. We are at a loss to understand the assertion that there is an entire absence of evidence of waiver of sworn returns on the part of appellee. In support of such claim we are referred to Penn. Coal Co. v. Ryan, 107 Ill. 226-234. In that case it was claimed the appellant had waived the right to insist on payment of money as the contract provided because the contract had never been canceled for appellee’s default. The court held that “not having canceled the contract, the appellant simply occupies the same position it would occupy had the cancelation clause been omitted.” It must suffice to say that the case affords no support for the contention that appellee had not waived returns under oath. It is argued that appellant deliberately refused to comply with the contract when requested to make return of sales as provided therein. As above stated, appellant was under no contract obligation to make return at the time appellee asked for a report showing what had been done up to December 1, 1903, nor for that period. All royalties had been paid up to January 1,1904. Appellee had asked for and received payment in advance for that last quarter, on an estimate of what the sales and royalties thereon would probably be. The evidence shows that this estimate .was within one dollar and twenty cents of what the royalties on sales for that quarter actually proved to be. Appellee had receipted ‘ in full for. royalty account to January 1, 1904.” That this involved a waiver of any report for that quarter seems too clear for argument. Of what avail would a sworn statement of sales for that quarter have been when the parties had expressly agreed to settle and had settled for all such sales in advance, upon an agreed estimate of what they would be? Could there be, unless by express written instrument, a more definite and effectual waiver of further claims under the contract for that quarter? In fact, however, the request referred to did not purport to ask for a return under oath such as the contract provided for, and apparently was not so intended by appellee nor so regarded at the time by either party. We are unable to concur in the view expressed by the master that it was the duty of appellant “to make a written statement to said company on or prior to January 10, 1904, as to the amount of saw frames manufactured and sold by him for the three months prior to January 1st.” It follows that the decree based on such finding must be deemed erroneous. In view of this conclusion it is not necessary to consider other questions presented in the briefs. For reasons indicated the decree of the Superior Court will be reversed and the cause remanded with directions to dismiss the bill. Reversed and remanded with directions.