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99 Mass. 53

Weed v. Draper

Massachusetts Supreme Judicial Court

Decided January 15, 1868

Massachusetts Supreme Judicial Court · decided 1868-01-15

<p>W. and D. made a written contract, the first clause of which stipulated that D. should build without expense to W. six machines under a patent owned by W., and, whenever either should sell “ a machine out of said six or other machines D. may build under said patent,” W. should have a share of the proceeds, and D. the balance; and another clause fixed a minimum price per machine. The second clause provided that D. should build “ any number of said machines more than six that W. may order, if W. does not order more than tuelve at any one time; ” and it was agreed that, in event of such order, D. should build “ two of them each month thereafter, until the whole order is filled.” A further clause provided that either might terminate the contract on four months* notice to the other; “ but, when notice is given, all orders up to the end of that time which have been given are to be filled,” “ and all machines not completed to be completed; ” and, if such notice should be given by W., “ all machines which W. orders, together with any others which D. may have built or may be building at the time notice is given, to the number of six, are to be taken by W., and paid for” at a certain rate; but "if notice is given by D., then for all machines ordered or built or being built at the time the contract terminates, D. is to take the same and pay W. therefor” a certain sum “ apiece, or deliver the same to W. within one month after the termination of the contract, by W.’s paying D. therefor for each machine ” a certain sum. And finally it was agreed that, if W. is not paid the snms above stipulated by D. on the sale of each and every machine, then W. shall have the right to terminate this contract at once, without notice.” Four of the six machines being finished, and the two others partly built, D. wrote to W. that after finishing the six a new arrangement would he necessary on account of the advance in price of material and labor. W., a few days later, gave D. an order for twelve additional machines. D. soon afterwards gave W. a formal notice for termination of the contract in four months; and then finished the two machines; and refused to build any of the twelve. Part of the six finished were sold, and the proceeds divided under the contract; and part remained unsold in D.’s hands. Held, 1. that the clause relating to termination of the contract by either party on four months’ notice did not apply to the six machines stipulated for in the first clause, and that D. was under no obligation to pay W. anything on account of either of them until after its sale; 2. that D.’s agreement to take “ all machines ordered or built or being built” at the time the contract should end by notice from himself did not embrace the twelve machines ordered by W. but never begun to be built; but 3. that W. could hold D. liable in damages for failing to build two machines per month up to the end of the four months in partial execution of such order.</p>

Cited by 1 later decisions — most recently January 1870

1 state decisions

Good law ✅— No negative treatment on recordhow we know

Decided 1868-01-15

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Wells, J.

¶1The contract provides for the manufacture and disposal of six machines; and for a further continuance of the business under orders from the plaintiff, or by the voluntary undertaking of the defendants. The stipulations in regard to sales, division of the proceeds, the rights of the respective par *59ties and their relation to the business during its continuance, extend to the whole manufacture, whether of the first six machines or of any subsequently built. The difficulty arises out of the clause relating to the termination of the contract and providing what shall be the rights of the respective parties thereupon.

¶2We are satisfied that this clause, providing for a termination of the contract by either party, relates wholly to the subsequent business continued under orders or otherwise, and does not affect the agreement for the first six machines. That could be rescinded only by the plaintiff, upon failure of the defendants to make payment for sales, under another clause.

¶3Upon the report, we think we must take the fact to be established that the defendants made their letter of June 22 the formal notice of termination; and that their previous communications were merely intimations of their purpose to do so. Also that the personal interview after the plaintiff’s letter of May 18 rendered that letter equivalent to an order for twelve additional machines.

¶4We are unable to give any force to the limitation of orders to the number of twelve machines, inasmuch as the provisions for termination limit the time for closing the business to the period of four months, and the defendants were under no obligation to construct more than two machines each month.

¶5The defendants having given the notice to terminate the contract, the question is, What obligations did they thereby assume?

¶61. As to the six machines, their obligations are not changed. Those were absolutely provided for, and the defendants owe nothing on account of them until they are sold.

¶72. Of the twelve machines ordered, none were built and none were “ being built at the time the contract terminated.” The provision is, that “ for all machines ordered or built or being built” the defendants are to “ take the same and pay said Weed therefor $140 apiece.” This language seems to imply the then present existence of some specific article, capable of being taken and paid for. In the other alternative, which the plaintiff might elect to enforce upon such termination, the plaintiff was himself *60■to take the machines “ ordered or built or being built,” and the defendants were to “ deliver the same to said Weed, built in a complete and workmanlike manner and ready for immediate nse, within one month after the termination of the contract.” As the defendants were only bound to construct machines at the -,ate of two each month, this provision could not have been mderstood, nor intended, to apply to an entire order of twelve machines, without regard to the progress that might have been made in their construction at the time the provision should become operative.

¶8Taking the whole clause together, we think that the provision to take and pay for machines must, in each instance, be understood to apply to machines then in actual existence. The terms “ ordered or built or being built ” serve to extend the provision to machines begun as well as those' completed within the time, and to machines undertaken by the defendants under the permission given in the contract, as well as those expressly ordered by the plaintiff. The bare order of the plaintiff, in no part executed by the defendants, cannot be construed as twelve machines to be taken and paid for by them; neither can it be treated as so many machines as the defendants might or ought to have constructed before the termination of the contract.

¶93. But the plaintiff is entitled to damages for the breach of the contract to construct the machines so ordered, at the rate of two in each month from the date of such order to the termination of the contract. Although the report states that there was no evidence as to the value of machines, nor that they could have been sold if manufactured ; yet, as the case does not seem to have been tried in view of the construction of the contract which we have adopted, it seems proper that the plaintiff should have the opportunity to prove his damages. The provisions in regard to termination give the plaintiff certain advantages, or would have done so if the defendants had complied with its requirements on their part, which may bear upon the question of damages for its breach by them; and the plaintiff is entitled to whatever benefit this may give him in considering the question of the damages. Exceptions sustained

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