Otis F. Wood, Appellant, v. Lucy, Lady Duff-Gordon, Respondent
[NO NUMBER IN ORIGINAL]
Court of Appeals of New York
222 N.Y. 88; 118 N.E. 214; 1917 N.Y. LEXIS 818
November 14, 1917, Argued December 4, 1917, Decided
PRIOR HISTORY: Appeal from a judgment entered April 24, 1917 upon
an order of the Appellate Division of the Supreme Court in the first judicial department,
which reversed an order of Special Term denying a motion by defendant for judgment in her
favor upon the pleadings and granted said motion.
DISPOSITION: Judgment reversed, etc.
SYLLABUS: Defendant is a "creator of fashions" whose favor helps a sale,
and manufacturers of feminine apparel are willing to pay for a certificate of her
approval. She entered into an agreement with plaintiff employing him to turn this vogue
into money. He was to have, for the term of one year, and thereafter unless terminated by
a written notice, the exclusive right, subject to her approval, to place her indorsements
on the designs of others and in return she was to have one-half of all profits and
revenues derived from any contract he might make. Plaintiff claims that he kept the
contract and that the defendant broke it, by placing her indorsement on articles
without his knowledge and withholding the profits, and sues her for the damages. Defendant
demurs to the complaint on the ground that the agreement lacks the elements of a contract
in that plaintiff does not bind himself to anything. Held, upon examination of the
contract, that although plaintiff does not promise in express terms, such a promise is
fairly implied. Defendant gave an exclusive privilege and plaintiff's promise to pay
one-half of the profits and revenues resulting from the exclusive agency and to render
accounts monthly, was a promise to use reasonable efforts to bring profits and revenues
into existence, and, hence, the demurrer cannot be sustained.
OPINION BY: CARDOZO
The defendant styles herself "a creator of fashions." Her favor helps a sale.
Manufacturers of dresses, millinery and like articles are glad to pay for a certificate of
her approval. The things which she designs, fabrics, parasols and what not, have a new
value in the public mind when issued in her name. She employed the plaintiff to help her
to turn this vogue into money. He was to have the exclusive right, subject always to her
approval, to place her indorsements on the designs of others. He was also to have the
exclusive right to place her own designs on sale, or to license others to market them. In
return, she was to have one-half of "all profits and revenues" derived from any
contracts he might make. The exclusive right was to last at least one year from April 1,
1915, and thereafter from year to year unless terminated by notice of ninety days. The
plaintiff says that he kept the contract on his part, and that the defendant broke it. She
placed her indorsement on fabrics, dresses and millinery without his knowledge, and
withheld the profits. He sues her for the damages, and the case comes here on demurrer.
The agreement of employment is signed by both parties. It has a wealth of recitals. The
defendant insists, however, that it lacks the elements of a contract. She says that
the plaintiff does not bind himself to anything. It is true that he does not promise in so
many words that he will use reasonable efforts to place the defendant's indorsements and
market her designs. We think, however, that such a promise is fairly to be implied.
The law has outgrown its primitive stage of formalism when the precise word was the
sovereign talisman, and every slip was fatal. It takes a broader view to-day. A promise
may be lacking, and yet the whole writing may be "instinct with an obligation,"
imperfectly expressed (Scott, J., in McCall Co. v. Wright, 133 App. Div. 62;
Moran v. Standard Oil Co., 211 N. Y. 187, 198). If that is so, there is a
contract.
The implication of a promise here finds support in many circumstances. The defendant gave
an exclusive privilege. She was to have no right for at least a year to place her
own indorsements or market her own designs except through the agency of the plaintiff. The
acceptance of the exclusive agency was an assumption of its duties.... We are not to
suppose that one party was to be placed at the mercy of the other ( Hearn v.
Stevens & Bro., 111 App. Div. 101, 106; Russell v. Allerton, 108 N.
Y. 288). Many other terms of the agreement point the same way. We are told at the outset
by way of recital that "the said Otis F. Wood possesses a business organization
adapted to the placing of such indorsements as the said Lucy, Lady Duff-Gordon has
approved." The implication is that the plaintiff's business organization will be used
for the purpose for which it is adapted. But the terms of the defendant's compensation are
even more significant. Her sole compensation for the grant of an exclusive agency is to be
one-half of all the profits resulting from the plaintiff's efforts. Unless he gave his
efforts, she could never get anything. Without an implied promise, the transaction cannot
have such business "efficacy as both parties must have intended that at all events it
should have" (Bowen, L. J., in The Moorcock, 14 P. D. 64, 68). But the
contract does not stop there. The plaintiff goes on to promise that he will account
monthly for all moneys received by him, and that he will take out all such patents
and copyrights and trademarks as may in his judgment be necessary to protect the rights
and articles affected by the agreement. It is true, of course, as the Appellate Division
has said, that if he was under no duty to try to market designs or to place certificates
of indorsement, his promise to account for profits or take out copyrights would be
valueless. But in determining the intention of the parties, the promise has a
value. It helps to enforce the conclusion that the plaintiff had some duties. His
promise to pay the defendant one-half of the profits and revenues resulting from the
exclusive agency and to render accounts monthly, was a promise to use reasonable efforts
to bring profits and revenues into existence....
The judgment of the Appellate Division should be reversed, and the order of the Special
Term affirmed, with costs in the Appellate Division and in this court.