
    Francis H. Klauder et al., Appellants, v. The C. V. G. Import Company, Respondent.
    (Supreme Court, Appellate Term,
    December, 1908.)
    Contracts — Interpretation of contract — Compensation and reimbursement in general — Amount of compensation.
    Sales — Interpretation and evidence of contract — Interpretation of contract in general.
    Where the meaning of a proposal by letter, as accepted, was that the plaintiffs contracted to take from defendant’s assignor six automobiles, one of them immediately and the other five at various subsequent times; that the plaintiffs were to deposit $500 on account of the purchase price of each of the five cars, the balance payable upon delivery, and were to be allowed a discount of five per cent, upon the price of the five ears; but, if after having been allowed the five per cent, on one or more of the first five cars on the assumption that all would be taken it should happen that the plaintiffs did not accept delivery of all, they were to credit the - seller with half the discount which had been previously allowed upon the machines actually taken in the expectation that at least five machines would be sold and delivered; and there is no express provision as to the liquidation of damages in case of a breach of the contract, the provision for the readjustment of commissions or discount left the seller perfectly free to enforce the agreement of purchase and sale by ordinary remedies with the ordinary measure of damages.
    The plaintiffs duly deposited with defendant’s assignor the sum of $500 for each of the five machines to be delivered in the future and the sixth machine was taken, delivered and paid for, but the five machines were never accepted. To the complaint, in an action to recover the amount deposited less two and one-half per cent, upon the agreed price of the five machines not delivered, the defendant interposed a separate defense and counterclaim in which it set up the agreement between the parties, the ordering of the six automobiles, the acceptance and delivery of one of them and payment therefor and the deposit of $500 for each of the other five machines, and further alleged the performance of all the conditions precedent on defendant’s part and that plaintiffs had refused to accept delivery of the remaining five machines and demanded judgment for the balance of the purchase price. The plaintiffs replied that in and by the terms of the agreement they were not compelled to take any machines or to respond in damages for their failure so to do other than to allow the defendant an amount equal to two and one-half per cent, of the price of the cars not taken as and by way of liquidated damages; that, accordingly, plaintiffs had made an allowance to the defendant of a certain sum being two and one-half per cent, of the purchase price of the five cars not taken by deducting such amount from the amount of plaintiffs’ claim against defendant, as fully appears from the complaint. The defendant demurred to the defenses to the .counterclaim contained in the reply. Held, on appeal, that a judgment sustaining the demurrer will be affirmed.
    Appeal by the plaintiffs from an interlocutory judgment, entered in the office of the clerk of the City Court of the city of New York, on the 25th day of September, 1908, sustaining the demurrer of the defendant to the first separate defense contained in the plaintiffs’ reply to the counterclaim set up in the amended answer.
    Hibbard & Lesinsky (Edward M. Shepard, of counsel), for appellants.
    Henry Hoelljes (Walter Carroll Low, of counsel), for respondent.
   Giegerich, J.

On or about October 19, 1906, the plaintiffs entered into an agreement with the defendant’s assignor, the terms of which were embodied in a letter written by the latter to the former. The letter reads as follows:

“ Mess. Frascis H. Klauder & William J. McGraw,
“ Trading as Messrs. F. H. Klauder Co.,
“ 710 Penn. Bldg., Phila., Pa.:
Gebtlemen.—We hereby agree to allow you on the price of the first five cars that you purchase from us a discount of 5$, on the sixth to the ninth 7í$; above this number 10$. This discount to bear on the price of the Chassis only and to be retroactive; but not to apply to any sale of our town car.
“We further agree to allow you a commission of 5$ on the sale of any stock car made for us, exception being made for the sale of cars during the show when only 3$ will be allowed. For the price of the bodies we will make special arrangements with you according to the orders you may place.
“ It is understood that in case of strike on the other side we are allowed a delay of sixty days extra in our deliveries. Under ordinary conditions we will allow you after the first month’s delay a rebate of 1 $> per month. This rebate never to exceed 3$. If for any reason the F. Klauder Company should not take the delivery of the six cars herein ordered, they agree to refund 2-¿$ in the price of the cars taken to the C. G. V. Company.
“To make this contract you will deposit with us on signing $500 on each Chassis ordered; the balance on price of car to be paid on delivery.
“ We will authorize you to entitle yourselves our representatives in Philadelphia.
“We agree to deliver to you
“ One 20 H. P. in December • $5,50-0
“ One 20 H. P. in February 5,500
“ One 20 H. P. in April 5,500
“ One 30 H. P.. in Hay 7,000
“ One 30 H. P. in July 7,000-
“ One 30 H. P. with body taken immediately.
“ We will allow you ten per cent on spare parts.
“ It is understood that all the chassis except the one given for immediate delivery are to be of the 1907 model.
“ This contract will expire October 1st, 1907.
“ O. G. V. Import Oo.,
“ Gaston E. Eiieims.”

The plaintiffs duly deposited with the defendant’s assignor the sum of $500 for each of the five cars to be delivered in the future, in all $2,500, and the sixth car, which the agreement provided was to be taken immediately, was duly delivered and paid for. The five cars just' mentioned have never been accepted. The present action is brought to recover the $2,500 deposited as above stated, less two and one-half per cent, upon the agreed price of the five cars not delivered, the defendant having assumed the obligations of its assignor upon the contract.

To the complaint the defendant interposed a separate defense and counterclaim, in which it set up the agreement between the parties, the ordering by the plaintiffs of the six automobiles therein mentioned, the'acceptance and delivery of one of them and payment therefor, and the deposit of $2,500 already mentioned. The defendant further alleged the performance of all conditions on its part and that the plaintiffs had refused to accept delivery of the remaining five cars; and judgment was asked for the balance of their purchase price.

To this separate defense and counterclaim the plaintiffs replied, setting up, in turn, a separate defense thereto as follows :

“ Sixth. That in and by the terms of the agreement Exhibit A, plaintiffs were not compellable to take any ears or to respond in damages for their failure so to do, other than to allow the defendant an amount equal to two and one-half per centum in the price of the cars not taken as and by way of liquidated damages.
“Seventh. That accordingly plaintiffs have made an allowance to the defendant of the sum of Seven Hundred and Sixty-two and 50/100 ($762.50) Dollars, being two and one-half per centum of the price of five cars not taken, by deducting such sum from the amount of plaintiffs’ claim against defendant as fully appears from plaintiffs’ complaint herein.”

The defendant demurred to this separate defense contained in the reply, and from the judgment sustaining the demurrer the plaintiffs appeal.

The learned counsel for the appellants, while conceding that there was a valid executory contract of purchase and sale of the five cars in question, insists that the parties have provided their own remedy for the breach, and that it is to be found in the provision of the agreement that “ if for any reason the E. Klauder Co. should not take the delivery of the six ears herein ordered, they agree to refund 2i\fo in the price of the cars talcen to the" C. G. V. Co.; ” but, as this construction of the agreement would lead to the extraordinary conclusion that the fewer cars the plaintiffs took the smaller would be the liquidated damages, even to the extent that, if they took none and broke their contract entirely, there would he no damages, he asks us to interpolate the word ■“ not ” into the contract, so that the two and one-half per cent, would he payable upon the agreed price of all cars not taken.

Under the construction of the contract contended for, the separate defense in the reply might be good; but, as a much more natural meaning can be gathered from the contract as it stands, I do not think we would be warranted in adding words to it to help out a doubtful construction and one which, without much interpolation, would lead to most unnatural consequences. Schoonmaker v. Hoyt, 148 N. Y. 425; Christopher St. R. Co. v. Twenty-third St. R. Co., 149 id. 51; Bedell v. Edgett, 120 App. Div. 451.

The meaning of the proposal as accepted was that the plaintiffs engaged to take the six machines, one of them immediately and the other five at various times in the future; that they were to deposit $500' upon account of the purchase price of each of the five cars, and were to pay the balance on delivery; that the purchasers were to be allowed a discount of five per cent, upon the price of the five cars mentioned' in the agreement for future delivery, seven and one-half per cent, on the sixth to the ninth car and ten per cent, on all further cars ordered, but that, if, after having allowed the five per cent, on one or more of the first five cars on the assumption that all would be taken, it should happen that the plaintiffs did not take delivery of all of them, they were to credit the sellers with half the discount which had been previously allowed them upon the cars actually taken, in the expectation that at least five cars would be sold and delivered. Nothing is expressly said in the agreement as to the liquidation of damages in case of its breach, and I do not think this provision can be fairly construed as amounting to such a liquidation. In my view, it is merely a provision for the readjustment of commissions or discount, and leaves the sellers perfectly free to enforce the agreement of purchase and sale by the ordinary remedies and with the ordinary measure of damages. Upon any other theory, it would be difficult to explain the requirement of a deposit of $500 on account of each of the five machines, which was several times the amount of the two and one-half per cent, refund provided for.

Counsel for the appellants further argues that the utmost that can he said is that, since this defense in the reply set forth no facts not already in the pleadings, it was mere surplusage and should have been reached by motion to strike out and not by demurrer. If, however, the defense was insufficient in law upon its face, the defendant was clearly entitled to demur to it (Code Civ. Pro., § 493) ; and none of the cases cited by counsel for the appellants is it all inconsistent with that conclusion.

The judgment should be affirmed, with costs, with leave to the appellants to amend within six days, on payment of costs in this court and the court below.

Hendrick and Ford, JJ., concur. .

Judgment affirmed, with costs, with leave to appellant to amend within six days, on payment of costs in this court and court below.  