of the contract and to forego its right to revert to fluctuating payments, after the expiration of the terms of the fixed royalty method of payment, i.e., at the end of the years 1936 and 1937. Plaintiff therefore contemplated in 1938 receiving a fixed sum for the balance of the term its patent had to run -- approximately five and one-half years.
Attention is directed to the specific character of the language used in the letter of A.L. Otto Company of March 12, 1938, wherein in part it wrote: "You have asked that the arrangement for the calendar year 1937 be extended through the year 1938 but in order to avoid the necessity for reopening this matter each year we have in turn suggested that we might come to some understanding covering payments until our patents expire in August 1943. " [Emphasis supplied.]
It is to be observed that here was the heart of a new agreement in which a certain definite obligation for payment of a new sum of money was to be undertaken over a period until "our patents expire in August of 1943."
This proposal found unqualified acceptance on the part of Orange Screen Company as is evidenced in several writings, as for instance, when it wrote on March 17, 1938: "The points as you have outlined them coincide with my understanding and if you feel it necessary to consummate the agreement in a more legal form, you are of course at liberty to do so, without expense to us." And on April 8, 1938:
"I think it would be best for us to continue on the basis of the agreements reached in our recent correspondence and we are willing to settle the matter on the basis of the understanding as outlined and without the use of a more formal agreement.
"We will adhere to the spirit of the agreement and will make payments promptly on the 10th of each month and our understanding is that the present payments will continue until the last expiring Otto patents under the agreement namely, August 1943." [Emphasis supplied]
It is plain that neither party to the contract contemplated its termination prior to its expiration in August of 1943. It is true that both parties intended to be bound by their original agreement except for the different method of paying royalties and an incidental change concerning bills to be created by or through defendant's attorney and they so specifically state in their agreement of 1938, but they did not intend that the right of the defendant to terminate the contract at its will should continue to exist. Such a right would be inconsistent with and repugnant to the terms of the new agreement and must be disregarded as such. The intention of the parties at the time of entering the 1938 agreement must prevail. Plaintiff consented to receive less than he might anticipate under the existing contract under ordinary circumstances in return for a fixed sum to be paid promptly in installments until August of 1943. This is distinctly shown by the agreement itself which unqualifiedly obligates defendant to pay a fixed sum of money each year in monthly payments as an annual installment. Defendant agreed to pay this fixed sum for the continued use of the rights it obtained to use plaintiff's patent and inventions in its manufacture and sale of metallic screens. Both parties intended to be bound by whatever provisions of the 1926 agreement were consistent with their new agreement of 1938. The record leaves no doubt that a new agreement was effected whereby a fixed sum was agreed upon for the balance of the contract. A right to terminate at will without more could not possibly be consistent with such an arrangement, for it would defeat the intent and purpose of plaintiff seeking to obtain a fixed sum for the remainder of the period left to run while he still was possessed of the right to insist on a compliance with the terms of the original agreement.
The use of an acceleration clause in the 1938 agreement, (absent in the 1926 agreement), although it does not add to the determination of the intent expressed by the parties, is entirely consistent with the intent plaintiff expressed to get a fixed sum of money, and no less, within the time specified.
Acquiescence on the part of the plaintiff in defendant's belated payments, and acceptance thereof, may be evidence of waiver of a breach of the contract, but can only relate to breaches that have already occurred. Failure to pay on time under an acceleration clause gives rise to a new breach for each installment. Plaintiff rightfully contends that such failures are separate and distinct although recurring breaches. It is necessary for defendant to show that the breach occurring on February 1, 1942, was waived by plaintiff. The evidence is to the contrary as to plaintiff's actions subsequent to that date.
Plaintiff's letters to defendant concerning breaches prior to February 1, 1942, were careful to attempt to indicate that at no time did plaintiff intend to waive the operation of the acceleration clause as to any breach that occurred in the past or as to any breach that may occur in the future. The letter of February 6, 1942, informing defendant that the check for the February 1, 1942, payment "has not yet come to hand" certainly cannot be construed to be a waiver of any of plaintiff's rights. At most defendant is being warned that plaintiff has not received the check, whatever the reason, and that he is in danger of having the acceleration clause invoked.
A further contention of defendant is that it was excused from performance of the contract because it became impossible to perform the contract on January 27, 1942, when the government made it unlawful to use aluminum for the uses to which defendant intended to apply it. Defendant claims its stock was frozen and that it had to sell goods on hand at a loss. Ordinarily conditions arising from a state of war and acts of the legislature and the executive branches of the government do not constitute excuses for nonperformance of contracts. 17 C.J.S., Contracts, § 463. There may be cases where such performance may be excused where direct intervention such as actual seizure of goods by the government prevents performance, but such is not shown to be the situation here. The financial difficulties complained of by defendant are of a temporary nature for the state of war might cease to exist at any time. In the case of Lloyd v. Murphy, 142 P.2d 939, brought to our attention by the defendant, decided by Judge White of the District Court of Appeal of California for the Second District, Division One, a lessee was excused from performance of a lease under which the use of the premises was restricted to the sale of new automobiles when the federal regulation prohibited the sale of new automobiles except under greatly restricted and limited conditions. This case was cited by the Supreme Court of New Mexico in Wood v. Bartolino, 48 N.M. 175, 146 P.2d 883, 888, by Judge Brice as being "opposed to the great weight of authority." In the Wood case the lessee of a filling station was not excused from the payment of rent on the theory that government restrictions upon the sale of automobiles, tires, tubes and gasoline rendered the use of the leased premises impossible and impractical. War is bound to produce certain economic casualties and losses. When they occur they must be sustained by one party or the other and there is no purpose in shifting the burden.
Plaintiff's motion for summary judgment is granted and defendant's motion for summary judgment is denied.