Hyperlawhypertext legal database Jackson v. Alpha Portland Cement Co. 122 A.D. 345

← Cases

Jackson v. Alpha Portland Cement Co.

122 A.D. 345 Court Third Department, Decision date 1907-11-20 English

Decision Majority — Per Curiam : · Concurring — Kellogg, J. (concurring):

Contents

Majority

p. 345
John H. Jackson, Respondent, v. Alpha Portland Cement Company, Appellant.
Third Department,
November 20, 1907.

Headnote

Contract — when void for lack of mutuality.
A contract whereby, in consideration of a promise by the plaintiff to give preference to a 'cement manufactured by the defendant and to “push" the sales thereof in a certain locality, the defendant agrees to furnish said cement for a whole year at a certain favorable price, is void for lack of mutuality if the plaintiff is not bound to make any sales and no limit is placed upon the amount which the plaintiff may order or sell.
If, however, plaintiff is bound to make sales such a contract would give one party the power to involve the other in financial ruin, dependent upon the rise or fall in the market price. A contract of such nature is void.
Chester and Sewell, JJ., dissented.
Appeal by the defendant, the Alpha Portland Cement Company, from a judgment of the Supreme Court in favor of the plaintiff, entered in the office of the clerk of the county of Albany on the 18th day of September, 1906, upon the report of a referee.
p. 346
Plaintiff for several years has been a dealer in cement and other building materials in the city of Albany, N. T. The defendant is a manufacturer of building cement commonly known as “Alpha” cement. On December 28, 1901, plaintiff wrote defendant a letter asking the best price that the defendant would make on Alpha cement “ during the season of 1902.” Some correspondence followed relative to a .time when the parties could meet to discuss “ the arrangements for 1902.” •, What followed is best- told by quoting from the referee’s report as follows: “Pursuant to the correspondence aforesaid, plaintiff and said Dyer, as such representative and agent of the defendant, met, at the city of Albany, on the 6th day of January, 1902, to discuss the subject mentioned in these letters. During this conversation said Dyer, as said agent- and representative, told plaintiff that he wanted .him to ‘push’ Alpha Cement, and to sell all that lie possibly could in this locality'; and ‘ push ’ it in every way and wherever it was possible to do so, giving it the preference in all cases; and that for so doing the defendant would give the plaintiff five cents better a barrel on said cement than it would to any other dealer therein in the City of Albany. Thereupon defendant did name to plaintiff, in such conversation, a price for such cement which was five cents better than to any other dealer in said City of Albany, which said price is hereinafter stated in a written .communication by defendant to plaintiff. Plaintiff thereupon agreed- with defendant that if it would niake said price, above stated, for said cement for the whole of the year 1902, he would agree to ‘ push ’ the Alpha cement as much as possible during that -time and would give it such preference; and would sell as much thereof as possible in the locality of said City of Albany. * * * At such conversation there was no amount of Alpha Cement specified which plaintiff was to order or sell during the year 1902, but he did agree thereat to sell as much as possible and to ‘ push ’ it in every way and defendant did then and there agree to furnish to plaintiff what cement was necessary for that, purpose, and as plaintiff should order the same. At.the close of said conversation, and on the date thereof, defendant, of its own accord, by its said agent, Thomas M. Dyer, prepared and delivered to plaintiff a Written paper, of which the following is a copy:
p. 347
“ ‘ Albany Club.
“ ‘Mr. Jno. H. Jackson :
“ ‘ Dear Sir.—Confirming our conversation of this date we beg to say in consideration of your giving our brand the preference in your sales of cement during the year 1902, we agree to invoice Alpha to you, during this year, at the following prices f. o. b. Alpha, 27. J.:
“ ‘ In cotton, 95 cents per bbl.
“ paper, $1.05 “ “
“ wood, $1.20 •“ “
“ ‘ Cotton bags chargeable and returnable at ten cents' each f. o. b. Alpha, 27. J.
“‘Yours truly,
« ‘ ALPHA PORTLAND CEMENT CO.
“ ‘ By Thomas M. Dyer.
‘‘ ‘ Albany, N. Y., <oth Jcmuary, ’02.’ ”
The referee also, finds that “During the whole of said year 1902, plaintiff did ‘ push’ the sale of Alpha cement; and did, during that period, sell all that he possibly could of that cement" in the locality of the city of Albany, and elsewhere ; and did ‘ push ’ such sales in every way he could, and "wherever it was possible for him to do so; and did give Alpha cement the preference in all cases respectively, in his business, as he had so promised and agreed to do with the defendant, as aforesaid.”
The referee further finds that “ During the most of said year 1902, defdndant failed, neglected and refused to furnish plaintiff with anything like as much Alpha cement as he could sell and was selling under and pursuant to his said contract with defendant, and notwithstanding the fact that plaintiff was giving to said Alpha Cement the preference in all cases in his said business. By reason of the said failure, neglect and refusal of the defendant to furnish said Alpha Cement to plaintiff under its contract with him and as so ordered by him of it as aforesaid, plaintiff sustained gr’eat loss and damage in his said business,” which damage is found to amount to $6,707.56, for which amount judgment has been entered against the defendant, with costs. From this judgment defendant appeals.
p. 348
Lewis E. Ccurr and P. G. Evans, for the appellant.
Countryman & Du Bois [Andrew J. Nellis of counsel], for the respondent.

The paper of January 6,1902, standing by'itself lacks mutuality in that the plaintiff did not bind himself to make any sales of cement and hence constitutes no valid contract binding on either party. (Chicago & Great Eastern R. Co. v. Dane, 43 N. Y. 240 ; Commercial Wood & Cement Co. v. Northampton Portland Cement Co., 115 App. Div. 388 ; Rafolovitz v. American Tobacco Co., 73 Hun, 87 .) Respondent, however, insists that such writing is but part of the agreement and that it must be construed in connection with the correspondence and conversations between the parties. Acceding to the respondent’s contention in this respect and construing the' arrangement of the parties in the light of all the facts as found by the learned referee, we are of the opinion that such arrangement is too indefinite and unreasonable to be enforced and that it is, therefore, for such reason void. Although defendant was to furnish the cement at a fixed and definite price during the entire year regardless of the fluctuations in the market price, no limit was placed on the amount which plaintiff should order or sell. But he agreed “ to sell as much as possible and to ‘ push ’ it in every way ” and to give defendant’s brand the preference. ' It is evident that if the price of cement materially rose in the market, plaintiff by giving defendant’s brand the preference and offering it for sale at less than the market price could sell without limitation. On the other hand', if the ■ price fell in the market it became plaintiff’s corresponding duty to make the same effort in behalf of defendant and to undersell all other dealers, thus giving the defendant the same advantage which he could claim for himself if the market price advanced. In either case there was no limit to the amount of sales which the contract required. In the one case the result might prove financially disastrous to the defendant and in the' other case financially disastrous to the plaintiff.

The case is materially unlike Ellis v. Miller ( 164 N. Y. 434 ) where the agreement as to quantity was limited, the court saying: We think the obligation of the plaintiff is confined within the limit

Concurrence

p. 349
stated,” viz., to sales of goods amounting to $1,020: So in Wells v. Alexandre ( 130 N. Y. 642 ) the contract was to furnish coal for the steamers of a certain line. There, although the contract as to quantity was in a certain sense indefinite, it was nevertheless limited, by the requirements of such steamers and it was held that the maxim cerium, est quod cerium reddi potest applied.

There is here no opportunity for the application of such maxim. The opportunities of the parties for the exploitation of their own interests at the expense of ea'cli other áre as boundless as the demands which might be made for cement stimulated and quickened by the desire to procure the same at an abnormally low price. To place a logical construction on this arrangement we must hold that one of these parties had the power to involve the other in financial ruin and which of the two would be ruined would depend on the fluctuations of the market price. Such a contract we hold to be void.

All concurred (Kellogg, J., in result in memorandum), except Chestee and Sewell. JJ., dissenting.

I concur in reversal. I think there was a valid verbal contract to furnish cement to the plaintiff f. o. b. Alpha at five cents less than to any other Albany customer, and that the writing related only to the proposed contract to be made in January for supplying plaintiff’s regular customers during that year.

Judgment reversed on law and facts, referee discharged’, and new trial granted, with costs to appellant to abide event.

Cases cited