Oregon Improvement Co. v. Roach — 25 N.Y. St. Rep. 369

Majority

p. 369

The Oregon Improvement Company, Pl’ff and App’lt, v. John B. Roach and William P. McPherson, as Executors of John B. Roach, Deceased, Def’ts and Resp’ts.

(New York Superior Court, General Term,

Filed June 29, 1889.)

Headnote

1. Contract—Estoppel—In pais—Assignment of contract.

The defen lant’s testator, John B. Roach, huiit a steamship under con

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tract for the Oregon Railway and Navigation Company, for the price of $465,000. The company paid $400,000 on account and assigned all its right and title in the ship and in the contract to the Oregon Improvement Company. After the assignment had heen made, Mr. Roach tendered the ship to the navigation company and demanded the balance due, $65,000. When this tender and demand were made, the representatives of both of the companies were present, and it was agreed that, as differences had arisen between the two companies as to which company was entitled to the ship, it was agreed that the improvement company should pay the $65,000 still due, and that the final delivery of the ship should be postponed until their differences should be settled, and that in the meantime Mr. Roach should execute two bills of sale of the ship, just alike, excepting that in one the vendee should be the navigation company and in the other the improvement company, and that these bills of sale should be placed in the hands of Artemus H. Holmes in escrow. Accordingly the bills of sale were executed by Mr. Roach and placed in Mr. Holmes’hands, and Mr. Holmes, with the assent of all the parties, gave a written receipt to Mr. Roach, in which he declared that one of the bills of sale "was “to he delivered to whichever company shall be entitled to receive the same, and the other, upon the cancellation thereof, to be re-delivered to said John Roach, the bill of sale to said improvement company not to he delivered except upon the acquittal of John Roach & Son by the Oregon Railway and Navigation Company, for full performance by them of the contract with the last-named company for the building of said steamship.” A few months afterwards the differences between the said companies having been settled, Mr. Holmes delivered the hill of sale , to the improvement company and the company received the ship from Mr. Roach. The company subsequently commenced this action for $100,000 damages against defendants, alleging that defendants’ testator had not performed his contract for building said ship. Held, (1) That the plaintiff, having accepted the bill of sale from Mr. Holmes, under the terms of the receipt given by him to Mr. Roach, the company was estopped by its conduct from claiming in this action that Roach had not fully performed his contract.

2. Performance of contract—When no claim would pass by the assignment.

(2) If the contract with the navigation company had been fully performed, no claim could pass by the alleged assignment of the navigation company to the improvement company.

3. Same—Receipt—Construction of.

Held, that the words of the receipt given by Mr. Holmes to Mr. Roach, being clear that Roach should be acquitted by the navigation company of his duty under the contract for building the ship, must prevail as showing the intention of the parties; and their meaning cannot be narrowed down to acquitting Roach only of his duty to deliver the vessel.

4. Same—Warranty—Right of action.

. Held, that although it may be true, as the plaintiff contends, that the plaintiff was induced to accept the vessel by a fraudulent representation of Roach's agent, that the vessel as to its draft was in accord with the contract, and that a warranty survived the delivery of the vessel to the plaintiff, and that the present action was brought upon this warranty; and although such representation as to the vessel’s draft may have been such a false representation as would render Mr. Roach liable in an action for damages for false representation, yet this action is not for tort.

5. Same—Judgment—When modified.

Held, the judgment, however, having been entered, that the complaint was dismissed “on its merits,” which was not the case, the judgment should, therefore, be modified by striking out the words, “ on its merits.’»

Holmes & Adams, for pl’ffs and app’lts; Edward Geb-Jiard, Esq., and Dewitt G. Brown, for def’ts and resp’ts.

This is an appeal from, a judgment dismissing the complaint in this action on the merits. I will

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speak of the plaintiff as the Improvement Company, and of the Oregon Railway and Navigation Company as the Navigation Company.

The complaint alleging a contract between plaintiff and defendants’ testator, John B. Roach, who was doing business under the name of John B. Roach and Son, seeks in part a recovery thereon for breach of waranty; the answer contains a denial that John B. Roach ever entered into any contract,with the plaintiff as set forth in the complaint. As there was no evidence in support of the plaintiff’s contention on this issue, there was, as to this branch of the case, no error in dismissing the complaint.

The complaint further alleges substantially that Roach failed to perform on his part a certain contract, in writing, for the building of a ship, duly made and executed by and between him and the navigtaion company ; that on February 21, 1884, the plaintiff duly performed the navigation company’s part of the contract; that the navigation company on said day assigned to the plaintiff all rights and interests acquired or possessed by it by reason of this contract, and that the alleged non-performance on the part of Roach damaged the plaintiff $100,000. I will assume these allegations to constitute the cause of action relied upon by the plaintiff. The defendant admits the contract with the navigation company, and, among other things, alleges that it has been duly performed.

It seems that about February, 1883, a contract, in writing, was made between John B. Roach and the navigation company for the building of a ship in consideration of $465,000. About February 21, 1884, the ship was tendered by Mr. Weld, the representative of Mr. Roach, and $65,000., the balance unpaid on the contract, was demanded.

The facts which occurred at the time of the tender of the vessel, when the representatives of Roach and both companies were present, seem vital to the case. It appears, that at this time $65,000 was due as a balance on the purchase money of the ship, the navigation company having-paid $400,000 on account; that there were accounts to be settled and difficulties between the two companies in regard to the ship ; that the improvement company wanted the vessel and was ready to pay the $65,000 balance, and that the navigation company, in the language of Mr. Holmes, “ would not surrender their rights to the ship unless they were paid by the improvement company for the advances which the navigation company had made to Roach on account of the former payments, and the improvement company was not able to pay at that time, until they finally accommodated their differences, the amounts which the-improvement company so owed the navigation company. But, as to these mutual accounts, there was no question between Roach and the improvement company.

“ The delay was caused solely by the difficulties between

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the two companies, Mr. Roach being ready, and waiting to receive his money. For the reason, so far as Roach was concerned, there were two bills of sale given, and the escrow made.”

As it was undetermined to whom the bill of sale should be delivered by Roach, in order to arrange the matter it seems that it was agreed that Roach should accept the $65,000 from the improvement company, and that he should deliver to Mr. Holmes two bills of sale, duplicates, with the exception that one ran to the navigation company as vendee, •and the other to the improvement company as vendee, and that upon such delivery Mr. Holmes should give to Roach a receipt, “the substance of which had been agreed upon,” and which was as follows: “ The final payments, in full for the S. S. Santa Rosa having been paid to John Roach, I acknowledge to have received this day from said John Roach two separate bills of sale of said steamship, one to the Oregon Improvement Company, and the other to the Oregon Railway and Navigation Company in escrow, and to be delivered to whichever company shall be entitled to receive the same, and the other, upon the cancellation thereof, to be redelivered to said John Roach, the bill of sale to said improvement company not to be delivered, except upon the acquittal of John Roach and Son by the Oregon Railway and Navigation Company for full performance by them of the contract with the last named company for the building ■of said ship.

“ (Signed) ARTEMHS H. HOLMES.”

Prior to the delivery of the papers and the payment of the $65,000, the plaintiffs’ representatives stated in the presence of Roach’s representative, Weed, that they could not pronounce upon the vessel as to its draft and speed conforming with the contract. Mr. Weed then said, that “as to particulars of speed and draft she did conform to the contract,” and thereupon the bill of sale was delivered to Mr. Holmes, and the receipt and a check for the $65,000 were passed to Mr. Weed. Some few months later the two companies having arranged their difficulties, Mr. Holmes delivered the bill of sale to the improvement company and returned to Roach the other bill of sale.

The receipt above referred to seems to me to be in the nature of a contract. From its terms it seems that the bill of sale to the improvement company was not to be delivered ■except upon the acquittal of Roach by the navigation company for the full performance of the contract for the building of the ship. These terms were known to the plaintiff, and having, under the circumstances, accepted the bill of sale from Mr. Holmes, it is estopped by its conduct from claiming in this action that Roach has not fully performed Ms contract with the navigation company.

If that contract be fully performed, no claim against the defendant could pass by the alleged assignment by the navigation company to the improvement company.

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It is claimed that the intention of the parties in making the provision as to the acquittal in the receipt, was that Roach should only be acquitted by the navigation company ®f his duty to deliver the vessel to it, and that the acquittal was an acquittal as to delivery only.

This may have been the intention, but the words of the receipt do not so express it, and these words must prevail as showing the intention of the parties.

The plaintiff contends that Weed’s statement as to the vessel’s draft induced the acceptance; that, as the statement was false, a warranty survived the delivery of the vessel, and that the present action is brought upon this warranty.

I agree with the plaintiff that a false representation at delivery under an executory contract of sale, may cause a warranty to survive an acceptance, but it must be remembered that it was not shown that there was a sale of the vessel by Roach to the plaintiff. The sale of the vessel was to the navigation company. Whatever rights the improvement company had in the vessel were, under the evidence in the case, obtained by assignment from the navigation company.

Weed’s representation that the vessel conformed with the contract as to draft, may have been such a false representation as would render Roach liable in an action for damages for false representation, but this action is not for the tort.

At the trial the defendant moved for a non-suit, and his .motion was granted; the complaint was not dismissed on the merits; the judgment should, therefore, be modified by striking out the words “on the merits,” where they appear therein, and, as so modified, should be affirmed, with costs.

Truax, J., concurs._