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Important Omnibus Action : Straker versus Lehwess—Judgment.

7th December 1905
Page 4
Page 4, 7th December 1905 — Important Omnibus Action : Straker versus Lehwess—Judgment.
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Which of the following most accurately describes the problem?

The case, Straker Steam Vehicle Company Lehwc.-,ss, was

called on for judgment at 10.30 a.m. in Court Number 4 of the Chancery Division on Thursday last. Mr. Justice Swmfen Lady

delivered his reserved judgment as follows In this action the plaintiffs seek to enforce an agreement, dated October 28th, 1904, made between the plaintiffs and the defendant, as varied by a document, called a protocol, entered into in Brunswick on November 2nd, 1904, and to restrain the defendant from interfering with their having the full benefit and advantage of that agreement. Also they seek for damages consequential on the defendant having prevented them from having the full benefit and advantage of the agreement in question. It appears that, in the months of March and April, 1904, the defendant obtained from a Mr. Bussing, a motor manufacturer at Brunswick, certain contracts or options. They are contained in two documents, dated March reth and April 6th. By the first document Bussing made to the defendant an offer to deliver a particular chassis, the price to be reduced should the defendant give a further order for at least ten more. Dates were specified for the delivery of the chassis, and the terms of payment were

also set forth. The next letter is dated April 6th, and the important portion: of that is in the postscript. In this Missing wrote : " Should you give me, within three months, an order for ten lorries, then I will appoint you my sole agent for England and the British Colonies." Defendant entered into negotiations with the plaintiffs for them to make an offer to have the benefit of the option contained in that postscript. An agreement was entered into in September, but it was superseded by an agreenient dated October 28th, 1904, between the same parties. That document recites the letter and the postcript, and then goes on to state that the defendant agrees to assign, and the plaintiffs to take over, the benefit and burden of the letter and postscript of April 6th, and that the plaintiffs are to pay defendant L'fioo, to be increased to L:i,060 in certain eventualities, which afterwards, admittedly, took place. The plaintiffs were willing to carry out the foregoing agreement, but, at an interview on November 2nd, Bussing refused to give his consent to the proposed transfer from defendant to plaintiffs. Thereupon the plaintiffs' representative and the defendant's agent went to a notary at Brunswick to see what was to be done. The defendant alleged in his pleadings that on that occasion a verbal agreement was come to with Mr. Squire, one of the directors of the plaintiff company, that the agreement of October 28th could not be carried out without Biissing's consent, and that the protocol put in was prepared to carry out that verbal agreement. Defendant, however, had not attempted to prove this allegation ; and I have, therefore, only to construe the written agreement. Before I do that, however, I will refer to what further took place between the parties, which led up to this action. It appears now that in March and April, zees, the defendant had been writing to Bussing letters regarding the plaintiffs which, I think it is only fair to the defendant to say, no attempt has been made to justify in this court. The defendant was not called. The letters I indicate were quite unjustifiable, and they point to a course of dishonest and fraudulent conduct impossible to justify. The defendant having arranged for this sale, under which he was to receive ,e,t,000, proceeded to take away from his purchaser, and secure for himself, the benefit of what he had sold. First, he wrote to Bussing, on March 29th "I am perfectly disgusted with the way in which they "—:the plaintiffs1—" are carrying out their engagement as to the ten cars. Unfortunately, I am convinced that they do not intend to buy any more from you, but are going to copy your car without paying you a license." Further on the letter stated : "They "—(the p1aintiffs1—" are going to make a chassis similar to yours, and will try to keep you from doing any business in this country. This is unsatisfactory to you and to me." This was followed by a further letter on April 29th. By that date defendant had learned that plaintiffs did intend, and wcre on the point of, ordering many more chassis, although he had previously informed BUssing that they did not intend to buy a single one beyond the first ten, but there was et) foundation for the defendant's statement. In this second letter defendant wrote : " I am pleased to see that they "—(the plaintiffs)—" have decided to order eighteen cars. Unless they are prepared to make you some reasonable offer for the license, I hope you will not treat with them. I am connected with a powerful concern, and I beg you therefore not to make any final deal in case my friends may be able to make you a better offer." These letters clearly showed that behind the backs of the plaintiffs, and without their knowledge, the defendant, wits endeavouring to secure for himself and his company this license. There are other letters equally discreditable to the defendant which I do not think it necessary to go through. At any rate, about this time—April or May—the plaintiffs had placed an order with Bussing for eighteen cars, and defendant was endeavouring to prevent Bussing from carrying this out. The position of Bussing was this: "T do not wish to be drawn into the dispute—I cannot make it out." And he gave notice to the plaintiffs that the position must be cleared up by June 26th. Before that date arrived, it now appears, the defendant and his agent, Frenzel, saw Bussing on June t4th, ieth and reth, and made a conditional arrangement with him that in the event of plaintiffs not clearing up the matter by June 26th, Frenzel was to have the eighteen chassis at a price mentioned. Meantime, the matters in dispute had come before the courts, and on June 7th an interlocutory order was made by me. That matter was taken to the Court of Appeal, and, at the suggestion of the Court, on July r3th an order was made to the effect that the defendant, having vested his entire beneficial interest in the option in the plaintiffs, they, on giving security that he be paid the unpaid portion of the frepoo, be protected from defendant selling, or attempting to sell, the motor vehicles made by Bussing. The matter shortly after came before me again in reference to the eighteen chassis. The defendant was asked to confirm the order for these, having regard to an admission by him in the Court of Appeal. He refused to confirm the order. I then decided that it was not necessary to confirm the order which had beer, previously given—that it would only produce confusion to give a fresh order for chassis which were then under construeticn. There was no provision in the order of the Court of Appeal to compel the plaintiffs to order chassis through the defendant—the order was that the defendant had to give any orders ti Bussing which the plaintiffs might request him to give. The question now to be decided is, what are the legal rights of the parties with regard to the agreement of October 28th, 1904, and the protocol of November and, of the same year? What was the true construction of the protocol? On the one side it was said that it simply upheld the agreement—that the defendant was to remain liable for the ten chassis, but in every other respect the agreement remained. On the other side, it was contended that the protocol cancelled the agreement in substance. It appears the German notary advised that, until some payment had been made to Biissing, there was nothing to assign, but when an order was given and payment made there was something to assign, and that it could he assigned without the consent of Bessing. Thereon, according to the plaintiffs' view, a cheque was handed to Lehwess, who paid it to Bussing. This was done in the name of the defendant, acting for the plaintiffs. The only evidence given as to the proper English translation of the protocol was tendered on behalf of the plaintiffs. The defendant pleaded that the document cancelled the agreement, but called no evidence in support of that plea. The two witnesses called for the plaintiffs denied most emphatically the construction put upon the document by the defendant. The first, in cross-examination, stated that the word cancelled" was not in the German document at all, and that the word upon which the other side laid stress did not mean cancelling the previous document. Mr. etaib, the second witness, said that the contention that the protocol meant that the agreement should be cancelled was absolutely, without foundation, and that the agree ment still existed. In cross-examination he admitted that a particular German word in the protocol meant, according to the dictionary, " to desist from, to quit " ; but he pointed out that the word had various meanings, lie was firmly of opinion that the agreement had not been cancelled, but had been modified to some extent. In my judgment, the true interpretation is this: 'I he agreement is not cancelled, but modified to this extent, and this extent only, all liability for the first ten lorries was to be taken over. Under the order of the Court of Appeal the only interest defendant had in the matter was with respect to the £1,000. Under all the circumstances of the case, the order I will make is, in substance, the order which the plaintiffs asked for ; that is to say, T declare that, by authority of the agreement of October 28th, and the protocol of November 2nd, the plaintiffs are entitled to all the rights and interests of the defendant derived. from the letter of April 6th, 1904, subject only to the payment of Zr,000, or so much thereof as remains unpaid. An injunction will issue to restrain the defendant front selling or attempting to sell in England or the British Colonies otherwise than with the consent of the plaintiffs the motor vehicles manufactured by Missing. I think the words " during the continuance of the agreement" should be put into the foregoing injunction. They will accordingly be inserted. There will also be an injunction to restrain the defendant, during the continuance of the said agreement, from representing or stating that the plaintiff company is not entitled to the rights and interests they hold under the agreement. There remains the question of damages. Although the plaintiffs have shown that they are entitled to damages, I am unable to assess the damages. There will, therefore, be a declaration in favour of the plaintiffs, and an injunction against the defendant, with costs. Further, there will be an inquiry as to the damages to which the plaintiffs are entitled, the costs of that inquiry to he reserved. Counsel for defendant asked for liberty to apply to take the money lodged in court out when the last chassis was delivered. After a short discussion his T.ordship said : I find that, of the Z600 paid into court, £320 is now due. When the final chassis is delivered the defendant will be entitled to draw the residue on application in Chambers.

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People: Squire, Swmfen Lady

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