Patton v. Royal Baking Powder Co. — 10 N.Y. St. Rep. 333

Majority

p. 333

Henry Patton, as Assignee of Oscar F. Hawley, etc., App't, v. The Royal Baking Powder Co., Resp't.

(Supreme Court, General Term, Second Department,

Filed July 1, 1887.)

Headnote

1. Contract—Adoption of by general assignee—effect.

One Hawley agreed to furnish all the boxes the defendant might require for one year, from a certain date, at a specified price, with a proviso, in the event of a failure by Hawley at any time to keep the defendant fully supplied with boxes, in accordance with the condition of the contract, which authorized the defendant to supply its wants in the open market, without notice. And Hawley undertook to pay upon demand to defendant, any difference in the cost of the boxes so purchased above the price specified in the contract. Hawley made a general assignment to the plaintiff before the expiration of the year, who elected to carry out Ms assign- or’s contract. About three months before the end of the year the plaintiff ceased the delivery of the boxes, under the contract, and defendant was compelled to purchase such boxes as he needed, at an increased cost. This suit was brought to recover the price of certain boxes furnished under said contract by the plaintiff, and the defendant set up for a counterclaim the amount paid during said three months, by reason of the increased cost of the boxes. Held, that the counterclaim was proper; that by the adoption of the contract the plaintiff assumed its burdens and its obligations, as well as its advantages and benefits.

3. Same—Compliance with terms of—Meaning of in the open market.

On the failure of the plaintiff to furnish the boxes, the defendants entered into a contract with a third party to supply them. Held, a sufficient compliance with the terms of the contract. That there was no open market, as the boxes had to be manufactured to order, and were an article not kept in stock.

Appeal from a judgment in favor of defendant, entered upon the verdict of a jury at the Kings county circuit, and, from an order denying a motion for a new trial.

Jackson & Burr, for app’lt; Platt & Bowers, for resp’t.

The complaint in this action sets up the sale and delivery of packing boxes by the plaintiff to the defendant, and demands judgment for their value.

The "answers alleged the sale and reception of the boxes under a written contract between the defendant and one Oscar F. Hawley, by which he agreed to furnish all the boxes the defendant might require for one year from the first day of January, 1885, at certain specified prices, with a proviso in the event of a failure by Hawley, at any time to keep the defendant fully supplied with boxes, in accordance with the condition of the contract, which authorized the defendant to supply its wants and requirements in the open market without notice. And Hawley undertook to pay upon demand to the defendant any difference in cost of the boxes so purchased above the prices specified in the contract.

Then the answer avers the assignment of the contract by Hawley to the plaintiff, who accepted the same, entered upon its completion and claimed the right to deliver the boxes under the same, and did actually deliver all the boxes-for which he claims to recover in this action.

Then the charge in the answer is that about the first of October. 1885, the plaintiff ceased the delivery of boxes under the contract, and the defendant, between, that time and the close of the year, was compelled to purchase such-boxes in the open market at an increased cost of $2,124.18 above the prices at which they were to be delivered under the contract, and that amount was set up for a counterclaim in this action.-

The answer specifically admitted the allegations of the complaint, and the questions involved sprung from the counterclaim of the defendant.

The answer plainly manifested the true and important facts, and the chief contention upon the trial, and likewise upon this appeal, was whether the counterclaim of the defendant could be allowed to off-set the claim of the plaintiff in this action.

The plaintiff was the general assignee of Hawley for the benefit of his creditors, and it was his contention that the counterclaim of the defendant could not be sustained and permitted as an off-set against him as such assignee.

If that proposition exhibited the true position of the plaintiff, it would remain without an answer and shield him from the counterclaim of the defendant, because it was an unliquidated claim for damages. But the assumption cannot be indulged.

Upon the trial of the action the defendant introduced testimony tending to show the adoption of the contract by the plaintiff after he became the assignee, and the commencement of its execution and performance with the assent of the defendant. The contract then had about three months, of life, and the claim of the plaintiff is asserted and founded

p. 335

upon the boxes so delivered by him in the continuous execution of the contract, and the counterclaim of the defendant grew out of the same contract, and is set up as an off-set against a claim asserted by the plaintiff thereunder. It was less in amount than the plaintiff’s claim, and was set up for the reduction thereof only.

The adoption of the contract and the assumption of its performance by the plaintiff was claimed by the defendant, and the testimony was sufficient to carry the cause to the jury, and the charg-e of the court shows the theory upon which it was presented to that body. Among other instructions of the same import the charge contained the following directions: “As I have already said to you there was no legal obligation upon the part of this assignee to fulfill that contract; the moment the property was delivered to him he might have said I will do nothing further with this contract; I will leave it alone; but he did go on making these deliveries and the fact for you to determine is whether he simply made those deliveries intending to keep up and maintain the status between these parties until the creditors could determine whether they would permit the assignee to adopt the contract and fulfill it; whether that was his intention and known to be by the defendants (because they knew that Hawley had made this assignment) and acquiesced in by them; or did he by his actions adopt the contract, make himself a party to it and take the benefits that he could derive from the contract and assume its obligations. Unless he did the latter he is not liable in this action.

Before you can say that this counterclaim is a just and legal claim against him you must be satisfied that he adopted the contract, that he made himself a party to it, that he assumed its obligations and took its benefits.”

In relation to the breach of the contract, the charge was this, after a recitation of the testimony upon that subject: “ If you find those two facts that there was an adoption by the assignee of the contract, and having adopted it there was a refusal on his part to perform it, then you have the elements of a claim in favor of these defendants against him, and it will be for you to go on and determine what the amount of that claim is.”

The charge taken together laid a heavy burden upon the defendant, but it was successfully borne and the jury found in its favor. If we therefore now assume, as we must, that the jury found the facts required by the charge to be for. vl before a verdict could be made in the defendant’s favor,then a plain case is presented for the allowance of the counterclaim in reduction of the claim of the plaintiff.

The counterclaim arose out of the same contract and transaction set forth in the complaint as the foundation of the plaintiff’s claim, and its allowance is manifestly just and right.

By the adoption of the contract the plaintiff became

p. 336

entitled to all the benefits its performance and fulfillment might afford and he also became responsible for the liabilities its violation or breach might involve. He assumed its burdens and its obligations as well as its advantages and benefits.

This examination seems to demonstrate the legal right of the defendant to the allowance of its counterclaim as an offset to the demand of the plaintiff, so far as it extends, and that is the main question presented by this appeal.

The practice adopted seems to have been the result of certain stipulations of the parties, and the figures are somewhat obscure, but we do not examine either, because they present only irregularities at most and not errors.

The two questions answered by the jury in the defendant’s favor seem to be decisive of the case and the answers returned were plainly dictated by the testimony.

There is no force in the objection raised by the plaintiff to the failure of the defendant to go into the open market to procure the boxes which the plaintiff failed to furnish. The best answer to be made to the objection is that there was no open market for boxes into which the defendant could go to purchase. Packing boxes must be manufactured to order, and they are not kept in stock on sale like ordinary articles of merchandise or different kinds of grain.

The exceptions of the plaintiff have all received careful attention without a discovery of error.

Our conclusion is in favor of the affirmance of the judgment with costs.

Pratt, J., concurs.

Barnard, P. J., concurs, with the following opinion: Whatever may be the legal difficulty arising from the relation of the parties, there is no justice in this appeal. One Hawley agreed with the defendants “to furnish all the boxes that may be required by parties of the second part for one year from Jan. 1st, 1884.”

The agreement was partially executed when the contractor failed and assigned all his property to the plaintiff for the benefit of his creditors. • Patten filed his bond and duly entered upon his duties as assignee. The asssignee elected to execute the contract and gave notice of his inability to carry it on “for the present.” The contract with Hawley provided that on default to deliver boxes, the defendant could supply their want “by purchase on the market.” The difference in price to be paid by Hawley. The defendants then entered into a contract with one Smith for the supply by him for the remainder of the year, and the difference between the rate agreed to by Hawley and Smith is not disputed The boxes as ready-made boxes had no Open market. They had to be constructed for special use both as to size and material. The agreement with Smith was therefore the only open market. The defendant was justified in

p. 337

contracting for the remainder of the term. The notice gave no limit for the disability on the plaintiff’s part to execute the contract, and the rate reduced by the contract, for the term, some five per cent. The case in brief then is- Hawley sold the boxes before the failure; the assignee continued to execute the contract after the failure. His complaint for goods sold as assignee is both proven and admitted. The assignee elected to carry out his contract and made default occasioning considerable loss to the defendants. As assignee he was not bound to execute the same and it is questionable if he had the power. He therefore assumed individually to carry out the contract and as between himself and the defendant he is individually holden. If he, by the assent of the creditor, can throw the loss upon the assigned estate that is a question in which the defendants have no interest. There really is no question of either off-set or counterclaim. What is due on the contract taken together ? The plaintiff as assignee cannot recover any more. The apparent personal charge against the assignee is not real. The assignee claim was larger than the damages. The plaintiff took judgment for a sum under a stipulation to correct it after this suit was tried, and the defendant’s claim for damages was established. The judgment against the plaintiff individually is under the stipulation only a reduction of his claim as assignee. The judgment should be affirmed with costs.