Srere v. Gottesman

EEARNED EIAND, District Judge (after stating the facts as above). The plaintiffs attempted in the former action to recover upon a repudiation of the contract through the October correspondence, and failed. They necessarily exercised their putative option, arising by virtue of that correspondence, to declare the contract at an end through the defendants’ breach. This they might have done, had there been such a breach. Central Trust Co. v. Chicago Auditorium, 240 U. S. 581, 36 Sup. Ct. 412, 60 L. Ed. 811, L. R. A. 1917B, 580; Johnstone v. Milling, L. R. 16 Q. B. D. 460; Landes v. Klopstock, 252 Fed. 89, -C. C. A.-. But I shall assume, for the purposes of argument, that they failed because the defendants had not repudiated the contract at all by the October correspondence. If so, the effect of the judgment in that action would not put an end to the contract; the plaintiffs had missed their blow and struck in the air. In fact, nevertheless, the defendants had already expressly repudiated the contract, not by the October correspondence, but by the let [219] ter of February 3, 1916. This, if wrongful, gave the plaintiffs a second option, and, I may also assume, the only real one, to treat the contract as terminated by a breach, or as continuing. Had the counterclaim been filed before February 3, 1916, it would not have affected their rights under that letter, but it was not so filed. The second option, the only real one, had arisen before the counterclaim. Now, it must be admitted that the plaintiffs never actually elected to treat the letter of February 3, 1916, as a repudiation; they confined themselves to the October correspondence. If, therefore, they were free to reserve their rights under the letter, the contract was not at an end on February 27, 1917. I think they were not so free, but that, having elected to declare the contract at an end in July, 1916, by filing the counterclaim, that election included, not only the grounds for it which they asserted, but all grounds which they had. The position of treating the contract as wrongfully repudiated was not determined by any wish to establish a fact, but a legal relation. If they might reserve from consideration any of the grounds upon which that relation might stand, they could litigate twice the same “cause of action1'-; that is, the same legal position towards the mutual obligations of the parties. This they may -not do; the judgment in the first action would be a bar. United States v. California & Oregon L. Co., 192 U. S. 355, 24 Sup. Ct. 266, 48 L. Ed. 476; Watts v. Weston, 238 Fed. 149, 151 C. C. A. 225. The judgment, therefore, concluded the plaintiffs from asserting that the defendants were wrong in repudiating the contract. Only in case they were wrong could the contract endure, because a rightful repudiation put an end to it and a repudiation there had been. The contract could not persist after the judgment, and no future deliveries were due under it. Therefore this action will not lie. I direct a verdict for the defendants.