(182 N.Y.S.)

motors manufactured by the defendant. Plaintiff contracted to buy a certain number of the machines. The plaintiff transferred the exclusive agency to sell in Norway to Schiander & Co., under an agreement with Schiander by which plaintiff was to have $2.28 for each cyclemotor sold. This action is brought to recover this amount upon the cyclemotors plaintiff agreed to purchase.

[1] Schiander opened a credit in the Bank of Commerce in New York, but conditioned the credit upon the furnishing by the defendant of an ocean bill of lading. That was stipulated between this plaintiff and Schiander, but it was not included in the contract between the defendant and the plaintiff. Both by the reading of the contract between the plaintiff and the defendant and by the practical interpretation given thereto by the parties thereafter, all the defendant was required to do was to ship the cyclemotors to some American port and furnish them free alongside boat, with such documents as were necessary to authorize the plaintiff to take the goods and export them, if it chose. In a single instance the defendant offered to get the ocean bill of lading, but that was a single instance only, and was so stated in the offer made. The plaintiff apparently recognized that the defendant was under no such obligation and promised to have the terms of the credit in the Bank of Commerce changed, so as to authorize payment upon the furnishing of an inland bill of lading; but this never was done. The question was submitted to the jury as to whether the defendant had broken its contract by failing to furnish an ocean bill of lading. This was improperly submitted to the jury, because, as a matter of law, under the contract itself and the practical interpretation given thereto by the parties, the defendant was under no such obligation.

[2, 3] Assuming, then, that the defendant was under no obligation to furnish an ocean bill of lading, the question still remains as to whether the defendant violated its contract. Two shipments had been refused by the plaintiff. This authorized a rescission of the contract by the defendant. The defendant, however, did not rescind the contract by reason of that, but demanded thereafter a deposit to cover the expense in case of further refusal to take the goods. That deposit was promised, but was never given. The only right to demand that deposit arose from the fact that the defendant was authorized to rescind the contract for refusal to accept the first two shipments, and neglected to do so upon the plaintiff's agreement to make the deposit. Upon the failure of the plaintiff to have the terms of the credit modified, so as to exclude the requirement that the defendant should furnish an ocean bill of lading, and upon the plaintiff's direction to send the goods to him in New York C. O. D., the defendant sent to the plaintiff at New York, with an inland bill of lading, a sight draft, as it was authorized to do under the terms of the original contract between the parties to the action. This sight draft was refused acceptance, and this authorized the defendant to cancel the contract, and relieved the defendant from all liability thereunder. A careful reading of the correspondence in the case can lead to no other conclusion than that the defendant had performed the agreement upon its

part until the plaintiff had refused to perform its part of the agreement, which fact authorized the defendant to cancel the contract, as the defendant thereafter in fact did.

[4] As the contract was made with plaintiff, and as plaintiff has made default, no liability survives to plaintiff, notwithstanding the attempted transfer to Schiander of the exclusive agency to sell in Norway.

The judgment and order should be reversed, with costs, and the complaint dismissed, with costs. All concur.

(111 Misc. Rep. 627)

NAHOUM v. SLOCUM, AVRAM & SLOCUM TRADING CO.
(Supreme Court, Appellate Term, First Department. May 18, 1920.)

1. Evidence 419 (11)-Consideration for modification of written agreement held not inadmissible as varying contract.

In an action on an agreement whereby plaintiff was to handle for defendant certain commodities for a compensation based on the net profits of the business handled, which was subsequently modified in writing so as to increase the compensation, evidence that before the modification a bona fide dispute had arisen in respect to the financing by defendant of the business, that defendant had committed an actual breach of the first agreement, and that a compromise of the dispute constituted a consideration for the subsequent agreement, was erroneously excluded; such offer not constituting an attempt to vary the terms of the written contract, but being competent to show consideration for the modification.

2. Evidence 442 (1)-Supplementary parol agreement does not vary terms of incomplete written contract.

Where a written contract contained no specific provision in regard to financing the business to which the contract related, an oral understanding that defendant was to finance the business was not contradictory of the writing, but consistent therewith; the writing not expressing the entire arrangement existing between the parties.

3. Contracts 75 (1) -Promise to perform legal obligation insufficient as consideration.

A promise by one party to do that which he is already under legal obligation to perform is insufficient as a consideration to support a contract.

4. Contracts ~237 (2) -Compromise held sufficient consideration to support modified agreement.

A compromise of dispute as to whether a contract has been broken, containing relinquishments by one party of any right accruing to him upon the breach of contract, is a good and sufficient consideration of the modification of the original contract, even though a breach had not in fact been committed.

Appeal from City Court of New York, Trial Term.

Action by Julius Nahoum against the Slocum, Avram & Slocum Trading Company. From a judgment dismissing the complaint, plaintiff appeals. Reversed, and new trial ordered.

Argued April term, 1920, before GUY, FINCH, and WAGNER, JJ.

For other cases see same topic & KEY-NUMBER in all Key-Numbered Digests & Indexes

(182 N.Y.S.)

Edwards, Murphy & Minton, of New York City (Harold R. Medina, of New York City, of counsel), for appellant.

Greene, Hurd & Stowell, of New York City (Daniel S. Murphy, of New York City, of counsel), for respondent.

WAGNER, J. The plaintiff entered into an arrangement evidenced in writing with the defendant, a corporation engaged in the export and import business, on October 13, 1916, whereby the plaintiff was to handle for the defendant certain commodities at a compensation to be calculated at 172 per cent. upon the net profits of the business handled by him. A subsequent written agreement was made between them on April 5, 1917, purporting on its face to evidence a modification of the original contract in a number of respects, including a provision with respect to the financing by the defendant of its business properly and to plaintiff's satisfaction, together with a further provision increasing the compensation of the plaintiff to a sum equivalent to 50 per cent, of the net profits. With a view towards showing that the modified agreement was made upon sufficient consideration to uphold its validity, the plaintiff offered oral proof as to a variety of matters, all of which were excluded and rejected, as well as the agreement of April 5th, by the learned trial court, on the theory that the offers of proof attempted to vary the terms of the written contract, and that the subsequent agreement was without consideration, resulting in a dismissal of the complaint.

[1] We are of the opinion that in his rulings in these regards the learned justice fell into error. The plaintiff had endeavored to prove that before the execution of the second agreement a bona fide dispute had arisen with respect to the financing by defendant of the business secured by the plaintiff; and that at the same time the defendant had committed an actual breach of the October agreement, by reason of which the plaintiff had threatened to leave the employ, and that the compromise of the dispute, together with the plaintiff's consent to waive the defendant's breach of the contract, afforded the necessary consideration for the later agreement. We think the evidence was entirely competent for the purposes offered, and should have been received.

[2] An examination of the writing of October 13th discloses on its face no reference whatever to the question of financing the business, although it apparently shows that the parties contemplated the securing of large amounts of business by the plaintiff. A dispute had obviously arisen on that very question by reason of the defendant's failure to finance, which the plaintiff claims was incumbent upon the defendant, though unmentioned in the writing. Since there was a total absence of any specific provision concerning the financing of the business, it would appear that the writing did not, and was not designed by the parties to, express the entire arrangement existing between them, but merely to state a part thereof. The oral understanding, therefore, that it was the defendant's engagement to finance the business, was in no way contradictory to the writing, but was consistent therewith (Cooper v. Payne, 186 N. Y. 334, 78 N. E. 1076), and was

competent as indicating what the dispute and alleged breach of the contract consisted of.

[3] The principle as stated in Carpenter v. Taylor, 164 N. Y. 177, 58 N. E. 53, is elementary that

"A promise by one party to do that which he is already under a legal obligation to perform is insufficient as a consideration to support a contract."

Sec, also, Vanderbilt v. Schreyer, 91 N. Y. 392, where Ruger, C. J., said:

"Pollock states the rule as follows: 'Neither the promise to do a thing nor the actual doing of it will be a good consideration if it is a thing which the party is bound to do by the general law, or by a subsisting contract with the other party.' Pollock on Principles of Contract, 161; Crosby v. Wood, 6 N. Y. 369; Deacon v. Gridley, 15 C. B. 295."

Our decision in Obrentz v. Wesenfeld, 103 Misc. Rep. 664, 170 N. Y. Supp. 966, relied upon by the respondent, went no further.

The difficulty in the case at bar is that, while the second agreement, no less than the first, did not purport to be the entire agreement, in the absence of any recital or indication of the consideration moving from the plaintiff to induce such modification, the plaintiff was denied permission to show by parol evidence what the actual consideration for it was. This was error. As was said in Baring v. Waterbury, 10 App. Div. 1, 41 N. Y. Supp. 612:

"In the absence of any consideration expressed in an agreement as moving to one who is party thereto, it is entirely competent to prove by parol what the consideration was." Di Menna v. Cooper Co., 220 N. Y. 391, 115 N. E. 993; Wheeler v. Billings, 38 N. Y. 263; Studwell v. Bush Co., 126 App. Div. 818, 111 N. Y. Supp. 293.

[4] Moreover, the evidence proffered tended to show that the modification was the result of a dispute as to whether the original contract had been broken and of a subsequent compromise based thereon. If that were established, it is well settled that the relinquishment by the plaintiff of any rights accruing to him upon the breach of the original contract by the defendant would constitute a good and sufficient consideration for the modification (Lawrence v. Heylman, 89 App. Div. 620, 85 N. Y. Supp. 789; Melville v. Kruse, 174 N. Y. 306, 66 N. E. 965; Emery v. Wilson, 79 N. Y. 78), even though the plaintiff might have been mistaken as to the validity of his claim that the defendant had committed a breach, if he acted in good faith, of which there is no evidence to the contrary in this record. See Wahl v. Barum, 116 N. Y. 87, Jackson v. Volkening, 81 App. Div. 36, 80 N. Y. Supp. 1102, and White v. Hoyt, 73 N. Y. 505.

"It is not necessary to uphold a promise based upon the surrender or composition and compromise of a claim that it is a valid claim, one that could be enforced at law. A promise made upon the settlement of disputes, and to prevent a litigation, is made upon good consideration."

It follows that the judgment should be reversed, and a new trial ordered, with costs to appellant to abide the event.

FINCH, J., concurs.

GUY, J., concurs in the result.

(192 App. Div. 83)

(182 N.Y.S.)

ZIVITZ et al. v. MARYLAND CASUALTY CO.

(Supreme Court, Appellate Division, First Department. May 28, 1920.) 1. Insurance 318-Burglary policy held not invalidated by removal of iron shutters by insured's landlord under orders of municipal authorities.

Where policy against burglary provided that it should become void "if the condition or circumstances of the risk are changed without the written consent of the company," the policy did not become ipso facto void upon removal of iron shutters of premises occupied by insured, by insured's landlord, under the direction of public authorities.

Insurance 146 (3)-Policy providing for a forfeiture must be clear and unambiguous.

Policies prepared by insurance companies must not be so construed as to work a forfeiture, unless by clear and unambiguous language readily understandable, not by judicial officers or trained, experienced members of the bar, but by business men of average intelligence, who have occasion to require such insurance, it appears that it was so intended.

3. Insurance 318-Insured held not required under burglary policy to give notice of removal of iron shutters by insured's landlord under orders of municipal authorities.

Under policy providing that it should become void "if the conditions or circumstances of the risk are changed without the written consent of the company," and providing that insurer should have the right to inspect the premises at all reasonable times, and by notice to insured suspend policy until premises were made reasonably secure, insured was not required to give insurer notice of the removal of iron shutters by insured's landlord under orders of municipal authorities, without participation therein by insured.

Clarke, P. J., and Merrell, J., dissenting.

Appeal from Appellate Term, First Department.

Action by Nathan Zivitz and Morris Hartmann, çopartners, etc., against the Maryland Casualty Company. From a determination of the Appellate Term (178 N. Y. Supp. 211), affirming a judgment for plaintiffs on a directed verdict, and an order denying a motion to set aside the verdict and for a new trial, defendant appeals. Affirmed. Argued before CLARKE, P. J., and LAUGHLIN, SMITH, PAGE, and MERRELL, JJ.

James J. Mahoney, of New York City (George J. Stacy, of New York City, on the brief), for appellant.

Max D. Steuer, of New York City (Jerome A. Strauss, of New York City, of counsel, and Milton S. Cohn, of New York City, on the brief), for respondents.

LAUGHLIN, J. The recovery was on a policy of insurance against loss from burglary, issued by the defendant to the plaintiffs on the 27th day of February, 1917. By the terms of the policy the defendant agreed, among other things, to indemnify the plaintiffs for a period, including the date of the loss in question, "for direct loss by burglary of any of the merchandise described in the schedule" thereto annexed, "occasioned by its abstraction from within the premises actually occupied by the assured and described in the schedule." The premises occupied by the plaintiffs and described in the schedule

For other cases see same topic & KEY-NUMBER in all Key-Numbered Digests & Indexes 182 N.Y.S.-21