Baker Transfer Co. v. Merchants Refrigerating & Ice Manufacturing Co.

Majority

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Baker Transfer Company, Appellant, v. The Merchants Refrigerating and Ice Manufacturing Company, Respondent.

Headnote

Contracts—implied covenants — contract to deliver ice to customers with no promise-by the manufacturer to f wrnish it.

In an action brought to recover damages for the breach of a written agreement under seal which stated, in substance, that the defendant was engaged in the manufacture of ice and would have an output of from 75 to 100 tons per day, and that the intention was to dispose of this ice and to deliver the same to various customers, and provided that the plaintiff should during the term of two years take the ice from the defendant’s plant and deliver it to the customers; that the plaintiff should provide a large number of horses and wagons, for delivery; that if the plaintiff did not deliver promptly the defendant, might, after notice to the plaintiff of such default on his part, do so and might charge the plaintiff with the cost of so doing; that the plaintiff should receive for delivery a certain sum per ton, and that the defendant might after the-expiration of one year purchase the plaintiff’s horses and delivery wagons, which did not contain any promise upon the part of the defendant that it would furnish to the plaintiff the ice which was to be delivered to the-customers.

Held, that in order to reach a result wdiich the unequivocal acts of the party indicated that they intended to effect, the court would imply a covenant on the part of the defendant to furnish the ice for the purpose of carrying out suck intentions.

Appeal by the plaintiff, the Baker Transfer Company, from a. judgment of the Supreme Court in favor of the defendant, entered upon the dismissal of the complaint directed by the court,, upon-a trial before the court and a jury, on the ground that the complaint did not state facts sufficient to constitute a cause of action.

The action was brought upon a written agreement of the parties, wherein it was recited that the defendant was engaged in the-manufacture of artificial ice in the city of New York, and would have an output of from 15 to 100 tons per day, and that the intention was to dispose of this ice and deliver thé same to. various customers; that the plaintiff, who was engaged in forwarding- and trucking merchandise, agreed to take such ice from defendant’s, plant and deliver the same to various persons in the city, and, when-requested, to store the same in ice boxes or bunkers situated in the buildings of said customers, and to furnish the necessary new

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wagons, properly painted and lettered, with good horses and harnesses, together with the necessary appliances and proper help sufficient to deliver the said ice with reasonable dispatch, and that the defendant would pay the plaintiff on the first day of each month for the ice that he delivered during the previous month at the rate per ton therein specified, and that in case of the failure of the plaintiff properly to deliver the ice as therein agreed the defendant should give written notice to the plaintiff, and that if thereafter the plaintiff was unable to perform the work properly, the defendant should have the right to arrange for the delivery of said ice and to charge any excess of expense, over the price therein agreed upon, to the plaintiff ; that the agreement was to continue for two years from May 1, 1892, and that the defendant should have the option of buying the horses, trucks, harnesses, etc., from the plaintiff after the first year of the term of the agreement. This agreement stated that it was made between the parties, and it was signed and sealed by both of them.

The complaint set out this agreement, and further alleged that pursuant to the agreement the plaintiff purchased the necessary horses, harnesses, trucks and appliances, and fully prepared itself to receive and deliver the ice, and entered upon the performance of the agreement, and that there were and ever since had been, customers sufficient to take the 100 tons of ice daily, and that the plaintiff was fully equipped and prepared to receive and deliver the ice, was ready to do so, and so presented itself to the defendant; that on the 1st day of May, 1892, it began to receive and deliver the icé and continued to do so up to January 1, 1893, but that though there were customers for at least the 100 tons of ice daily and although the defendant had agreed to produce 75 to 100 tons a day for such delivery, it failed to do so and only produced on an average about 25 tons per day for such delivery, and on or about January 1, 1893, stopped producing any ice for such delivery, and the plaintiff was thereafter unable to get any ice for delivery; that the defendant was guilty of a breach of the agreement, and that by reason thereof the plaintiff suffered damages in the sum of $41,550, for which it sought to recover judgment at the trial.

Before any evidence was taken the defendant moved for a dismissal of the complaint on the grounds: First. That while the

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agreement obliged the plaintiff to receive the ice manufactured by the defendant for delivery, and to deliver the same to customers, there was no corresponding obligation imposed on the defendant by the agreement to deliver any ice to the plaintiff, and the plaintiff could not recover damages for the failure of the defendant to deliver that which the contract did not require it to deliver. Second. That the agreement was void for want of mutuality, there being no obligation on the part of the defendant to deliver ice to the plaintiff. Third. That the agreement was void for uncertainty, for the reason that no definite quantity of ice was specified.

The court granted the motion and the plaintiff excepted to such ruling. From the judgment entered on this decision this appeal is taken.

Almet F. Jenks and William F. C. Mayer, for the appellant.

Theron G. Strong, for the respondent.

. The question raised by this appeal is, whether under the facts alleged in the complaint a covenant should be implied on the part of the defendant to furnish the ice for delivery to customers. There is no uncertainty in the agreement as to the quantity of ice; it was 75 to 100 tons daily, at least 75 tons.

The general rules of law relating to implied covenants are well settled and have been frequently stated by the courts. (Booth v. Cleveland Mill Co., 74 N. Y. 21 ; Jugla v. Troutett, 120 id. 27 ; Genet v. D. & H. C. Co., 136 id. 608, 609 ; Jacquin v. Boutard 89 Hun, 437 , and eases therein referred to.)

In Booth v. Cleveland Mill Co. (supra) it was said by Allen, J.: “ There is no particular formula of words or technical phraseology necessary to the creation of an express obligation to do or forbear to do a particular thing or perform a specified act. If from he text of an agreement and the language of the parties, either in the body of the instrument or in the recital or references, there is manifested a clear'intention that the parties shall do certain acts, courts will infer a covenant in the case of a sealed instrument, or a promise if the instrument is unsealed, for non-performance of which an action of covenant or assumpsit will lie.”

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In Jugla v. Troutett (supra) Bradley, J., said: “‘When any act ■of the parties or either of them is essential to cany out the intention of the parties appearing by the provisions of a contract, the stipulation for the performance of such act will be deemed within its provisions-as effectually as if actually expressed.”

And in Genet v. D. & H. C. Co. (supra) Finch, J., said: “ I know very well that implied promises are to be cautiously and not hastily raised. * * * They always exist where equity and justice require the party to do or to refrain from doing the thing in question. Where the covenant on one side involves some corresponding obligation on the other; where, by the relations of the parties and the subject-matter of the contract, a duty is owing by one not expressly bound by the contract to the other party in reference to the subject of it. In this court we have thrown some safeguards about the doctrine to secure its prudent application, and have said that a promise can be implied only where we may rightfully assume that it would have been made if attention had been drawn to it, and that it is to be raised only to enforce a manifest ^equity or to reach a result which the unequivocal acts of the parties indicate that they intended to effect.”

In Jacquin v. Boutard (supra), which was an action brought to recover damages for the breach' of a contract whereby the defendants employed the plaintiff in their business, among other things, to sell goods as their agent, the General Term of the Supreme Court in this department held that, although there was no express promise in the ■contract that the defendants should furnish the plaintiff with samples and price lists of their goods, yet such promise should be implied from the facts and circumstances surrounding the execution of the contract and the conduct of the parties thereunder, citing Booth v. Cleveland Mill Co. and Genet v. D. & H. C. Co. (supra) and other cases. Parker, J., said “that the failure of the promise sought to be implied to appear in the contract was not an intentional omission, but a mere inadvertence. * * * While the courts hesitate to imply promises in formal contracts, it will be done where otherwise the manifest intention of the parties would be defeated.”

These are some of the latest expressions of the courts upon this subject and may well be relied upon as correctly stating the principles to be applied in this case; and, in view of these principles,

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we think that the trial court was clearly in error in holding that no covenant on the part of the defendant to furnish the ice to the plaintiff could be implied. The agreement, in form, was mutual, and signed and sealed by both parties. It stated that the defendant was engaged in the manufacture of ice, and would have an output of from 75 to 100 tons per day, and that • the intention was to dispose of this ice and deliver the same to various customers. It further provided that the plaintiff should take the ice from the defendant’s plant and deliver it to the customers; that the plaintiff should incur great expense in providing horses, wagons, harnesses, etc., in preparation for the special work of taking and delivering the ice ; and that if plaintiff failed promptly to take and deliver the ice as agreed, the defendant might itself arrange to have it delivered and that plaintiff should be liable for any excess in the expense thus incurred, over and above the prices agreed to be paid plaintiff under the agreement; that the price to be paid plaintiff for such delivery should be fifty and seventy-five cents per ton, and that the term of the agreement should be two years, with the option to the defendant after one year to purchase the horses, wagons, etc., from the plaintiff, and thus by implication terminate the agreement.

The intention of the parties is very apparent from the language of the agreement itself. The defendant was to manufacture 75 to 100 tons of ice per day, and plaintiff was to take and deliver all of it to customers. There is no suggestion in the agreement, express or implied, that the plaintiff should take or deliver less than the whole amount of ice manufactured. How •could such an intention be carried out unless the defendant furnished the ice to plaintiff so to deliver. The furnishing of the ice by the defendant was essential to carry out this intention, and, therefore, the court should imply a covenant to perform this act. The covenant on the part of the plaintiff involved a corresponding obligation on the part of the defendant to furnish the ice. In view of the relations of the parties and the subject-matter of the contract, a clear duty was owing on the part of the defendant to deliver the ice. This was understood and assumed. Upon no other hypothesis is it conceivable that the plaintiff would have covenanted as he did. The covenant must be implied to reach a result which the

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unequivocal acts of the --parties indicate that they intended to effect.

Sufficient reasons thus appear why the covenant contended for should be implied in this agreement, and it does not seem to be necessary further to consider the facts or discuss the law of the case.

Our conclusion is that the judgment should be reversed and a new trial ordered, with costs to the appellant to abide the event. '

Van Brunt, P. J., Barrett, Rumsey and Ingraham, JJ., concurred.

Judgment reversed and new trial ordered, with costs to appellant to abide event.