SUPREME COURT.

Dominion, Volume 1, Issue 193, 9 May 1908, Page 13

SUPREME COURT.

. RESERVED, JUDGMENTS..-

CONSTRUCTION OF AN AGREEMENT.

' Mr.'. Justice . Chapman yesterday , answered several'.questions .of law: arising in. tho. case •.Herirs?Monfoguie' Kdd.. and •' fflios; ''Andrew H.i -I'ieldj .'of '. ; Nelson,'.versus t itho tfuponga Coal;and: Gold;, Mining.' Company?; of. ..New, Zealand; .Ltd., a claim for £4252 damages for alleged:breach of agreement.. ; . : Under;; the :agreement rin question,■ which was entered into ;in . September 1904, plaintiffs w&re; appointed the solo agents f or: the whole'.of. the '.output of the '-defendant com-pany's-mino'fora/period of. six years/.'the company. ret aining ' only a' general , right of refusal/.to'"supply any particular cases. It was'provided mtor alia, that the 'plaintiffs were to pay for.-all coal 'at f.o.b. rates, and; wore to oe -allowed a. commission of 10 per cent, upon the f.o.b. prices. Under clause 0, the defendant''company might effect sales provided that it allowed' plaintiffs' 5 ■ per pent.'commission, iit tlife rate of-10s.' per ton. • On behalf ' of "plaintiff's it was claimed that ■ sin February '3; 1906, f the:defendant company without endeavouring' to fix any new f.o.b. rates elected to sett the .whole of' its output tinder the provisions of clause 9,' and thereby prevented', the -plaintiffs-V from; performing, their Jiart of the* agreement. •: Further, that .between' Januarjp.'l, -1906 and' September 11, i 906, "; the 'plaintiffs gave defendant orders for coal..totalling £1148, which the company refused ;to /supply,"and- the company supplied •the.v. orders itsfclf in : broach of the agreement.: Subsequently, oil June 12, 1906, the company,: with the- object of cancelling the agreement, vto- impose an arbitrary f.o.b. rate? being . a' rate - in excess of' tho valuorof' the cOal, and then, on.August 23, 1906, 'gave tho plaintiffs notice that it contKA agreement discharged, and that it would jpay tho 6 'per, cent, commission under clause 9 until, August 31, 1906, only. According'to plaintiffs, the agreement could l not v.beHslegally ■ determined .until September 20,. 1903. • For' the defendant, company it was contended; that as the price of coal fluctuated to circumstances, the plaintiffs entered into tho agrcemont, taking the . full jjsk'of. being at any time unable to agree with the company upon the fio.b. rates. The agreement operated as. a contract until August '23, 1906, when, by reason of tho plaintiffs, and tho Company, being finally unable';,to -agree as to the f.o.b. ratos, the agreement'' bccamo abortive, and. was put an end ■ top ,''<Tlicr« wero several alternative defences'to tho action. His Honour antverod the various questions Bubmiited' to him 83.f0110w :— ' (1) "Had " the contract between tho .parties iafty operation to' bind the defendant conipiinyc and;;'if so,''to; what extent'while the ' parties;'* were in; disagreement as' to the f.o;b.-rates provided for in clause 5 of the agreement ?—The agreement. continued in existence, but the'prices-were not fixed, and consequently-clause 5 could not operate Until tho prices were fixed or while parties were

not agreed. The Court was unable furthor to explain the extent of its operation in the absence of specific questions beyond pointing to the provision' as to the Gd. • per ton, and to the general provision for what it was worth that the 'agreement., was to continue for the stipulated term. (2) The defendant company was entitled to sell tho wholo of its output under clause 9 of the. agreement' whilo the, parties wore not in agreement as to. the f.o.b. rates. (3) The plaintiffs wore not entitled to more than tho commission provided for in Clauso 9 in respect of ; any sales mado by the defendant company. ■ ~ ■, , (4) The contract did not disable the defendant 1 company from appointing local agents for tho sale'of its coal under Clause 9 of the agreement, provided the plamtms were paid tho commission expressed by Clause 9 to be payablo.. • , ' • £ ' (5) The rights of the parties had not been altered or; affected by the correspondence between them. 1 „ . Mr. Myers (with him Mr. Ostler) appeared for the plaintiffs, and Mr. Monson (with hrni Mr. Richmond Fell) for the defendants. •.