Bagley & Sewall Co. v. Saranac River Pulp & Paper Co. — 41 N.Y. St. Rep. 864

Majority

p. 864

The Bagley & Sewall Company, Resp’t, v. The Saranac River Pulp & Paper Company, App’lt.

(Supreme Court, General Term, Third Department,

Filed November 30, 1891.)

Headnote

1. Warranty—Breach of—Written proposal—Paroi evidence.

In an action to recover the contract price of certain wood pulp machinery, the answer was that the same was purchased under a guarantee as to the quantity and quality of work, which was not fulfilled. The proposition to sell stated: “We will guarantee the above machines to take care of all the pulp provided by 4 Scott grinders, and deliver pulp 50 per cent dry.” The acceptance of this offer was verbal. Held, that paroi evidence was admissible upon the part of the plaintiff to show the capacity of Scott grinders, said capacity being variable and dependent on the power employed.

2. Same—Damages—Too remote.

The defendant offered to show that said machines made a product only forty-five per cent dry; that the manufactured article was thereby made heavier, and consequently the expense of transportation was greater. Held, that such damages were too remote, and were not recoverable in an action for breach of warranty.

Appeal from a judgment entered upon a verdict of a jury, and from an order denying a motion for a new trial upon the minutes at the circuit.

The action was brought to recover the contract price on the purchase of certain machinery used in the manufacture of wood pulp. The defense set up in the answer was that the machinery was purchased by the defendant under a guarantee by the plaintiff as to the quantity and quality of work it would perform, and that the machinery did not fulfill the requirements of that guarantee. The jury rendered a verdict for the plaintiff.

The defendant moved at the trial to set aside the verdict, which the court denied. Judgment was entered upon the verdict, and from that judgment and the order denying a motion for a new trial the defendant appeals.

Brown & Adams, for resp’t.; Weeds, Smith & Conway, for app’lfc

Prior to October 80, 1889, plaintiff had negotiations upon the subject of the purchase by defendant of a machine such as the one in question in the action, and on that day the president of the plaintiff and one Clark, on behalf of the defendant, had a further interview upon that subject, and the plaintiff then presented Clark an offer in writing, of which the following; is a copy:

p. 865

“ Watertown, R Y., October 30, 1883.

“ Saranac River Pulp do Paper Co., Cadyville, N. Y.:

“ Gentlemen—We will furnish F. O. B. Watertown, 2 standard 72 wet machines, knocker screens, each with'six plates, 12x36, for sum of $2,300, or we will furnish two standard 72 wet machines, with new blast screens, for the sum of $2,900. We will guarantee the above machines to take care of all the pulp produced by 4 Scott grinders and deliver the pulp 50 per cent dry.

“ The Bagley & Sewall Co.

“C. H. C.”

The plaintiff proved, under defendant’s objection, that at the time this proposition was made, Clark, who represented the defendant, told the president of the plaintiff, who submitted this proposition, that the defendant expected to make with the Scott-grinders 3,000 pounds of dry pulp per day.

It appeared by evidence offered by the plaintiff that the capacity of Scott grinders for production was from one-half ton to five tons per day, according to the power applied, and that the plaintiff was informed that the one to be used by defendant was guaranteed to grind 3,000 pounds per day. Soon after this negotiation and the submission of the proposition, the proposed terms were accepted by the defendant and the contract was closed upon that basis.

The defendant now insists, as was insisted on the trial, that it was error to allow the plaintiff to prove what was said in the interview at the time the proposition in writing was submitted about the capacity of the Scott grinders or what amount of work it was guaranteed to perform for the defendant

The president of the plaintiff testifies that “the contract was closed upon the basis of the proposition we made to Clark.” The plaintiff also proved, under defendant’s objection, that at the time plaintiff told Clark that if they used blast screens, which was a new device, it would furnish them for $2,900 to take care of the product on the basis of 3,000 pounds each, * * * and Clark stated that 3,000 pounds was all they expected to get and all they agreed to get.

It is clear from the evidence that the offer and its acceptance as proved in this case constitutes the contract between the parties. The plaintiff made the offer in writing and the defendant accepted it by paroi. The minds of the contracting parties must be deemed to have met upon the basis of the offer and acceptance, and it makes no difference that the writing was not signed by both the contracting parties in this case. The plaintiff’s offer in writing having been accepted and acted upon, the writing, so far as it expresses the agreement of the parties, stands as the contract between them. Long v. N. Y. C. R. R. Co., 50 N. Y., 76 ; Hinckley v. N. Y. C. & H. R. R. R. Co., 56 id., 429. If we are right in this conclusion, it follows that the writing, so far as it defines and specifies the conditions of the agreement, is conclusive,, and cannot as to such matters, within well settled rules of law, be varied, modified, or controlled by any prior or contemporaneous

p. 866

oral agreement In Engelhorn v. Reitlinger, 122 N. Y., 81 ; 33 St. Rep., 275 , the court reports the old and well settled rule as follows: “ All prior and contemporaneous negotiations and oral promises in reference to the same subject are merged in the written contract, and the rights and duties of the parties are to be -determined by that instrument.”

But this rule is subject to and must be so construed as to give effect to another equally well settled rule, that when the words used in their application to the instrument of which they are a part are not entirely intelligible, oral evidence of the circumstances attending its execution may, as between the parties, be admissible to aid in its interpretation. Can this qualification of the general rule be applied to the contract under consideration? The language is: “We guarantee the above machine to take care of all the pulp produced by four Scott grinders.”

Does this language necessarily import all that can be produced ; the maximum amount capable of production, or the medium or the minimum amount ? To'hold that it meant the maximum, would seem to require the interpolation into the agreement of ¡some positively qualifying word not found in the text of the -agreement; and the same may be said of the medium or minimum. The smallest amount mentioned was one-half ton. The largest amount was five tons per day. There is, therefore, an apparent obscurity or ambiguity in the wording of the written offer, which, we think, justified the admission in this case of evidence tending to show what the parties intended and understood to be the production by four Scott grinders. In Schmittler v. Simon, 114 N. Y., 176 ; 23 St. Rep., 160 , upon the subject of the admis.sibility of oral evidence to interpret a writing, the court says: “ For the purpose of construing the instrument, no words can be added to or taken from its provisions; but when the words used in their application to an instrument, of which they are a part, are not entirely intelligible, oral evidence of the circumstances attending its execution may, as between the parties, be admissible to aid in the interpretation, in its application of the language used;” in this case a draft somewhat ambiguous in terms, in which the ■drawee is named as executor, with directions to charge against the drawer of his “ mother’s estate.” It was held that paroi evidence was competent to show against what fund the draft was drawn. Schmittler v. Simon, supra; Fish v. Hubbard, 21 Wend., 651 ; Field v. Munson, 47 N. Y., 221 .

Within the principle of these cases, we think the evidence offered in this case was competent, and that the objection to its reception was properly overruled. The same reasons apply to the ■evidence of correspondence between the parties; they were competent as bearing upon questions of production as understood and agreed between the parties.

Nor do we see any error in the charge of the trial judge as bearing upon that question or his refusals to charge. The defendant insists that the court erred in excluding evidence offered by it on the question of damages. The proposition was that by reason of the machine failing to fulfil the terms of the guarantee, in.

p. 867

not making the pulp fifty per cout dry, the weight of the manufactured article was increased and in consequence of such increased weight the expense of transporting the pulp was greater, and that that difference constituted an element of damage, to be-recovered in the action. This evidence was, I tkmlq properly excluded by the judge.

The ordinary rule for the measure of damage on a breach of warranty is the difference in value between the article as recommended and as it really was. The defendant elected to retain the machine and not return the same, and under the circumstances of this case, if there is a breach of warranty, must make its claim for damages under this rule, and, as we think, cannot recover for remote consequential damages which it may claim to have sustained by the use of the machine. When a sale of goods is made in good faith, with warranty of quality, a vendee is not bound to rescind the contract, but may retain the goods and rely upon the warranty. Brigg v. Hilton, 99 N. Y., 517 . This is what the defendant has done in this case and it can invoke only the ordinary rule applicable to damages in breach of warranty.

That rule is stated above. Muller v. Eno, 14 N. Y., 597 ; Voorhees v. Earl, 2 Hill, 288 ; Cary v. Gruman, 4 id., 625.

Various requests to charge on the question of damages wez’emade by the defendant and refused by tlze court and propositions were charged to which the counsel for the defendant excepted, but we find no error in the charge for which we should interfere with the judgment The jury found with the plaintiff upon the question of guarantee of capacity of the machine and as the case is here upon a bill of exceptions, no questions of fact are open for our consideration. On the whole case we see no error for which the judgment should be reversed.

Judgment affirmed, with costs.

The acceptance of this written proposition being oral, the declarations of the defendant accompanying that acceptance azzd defining such of the terms of the proposal as would be unintelligible without definition are part of the acceptance and thus part of the contract.

The written proposition with guaranty “ to take care of all the pulp produced by four Scott grinders ” requires evidence of the productive capacity of such grinders in order to make the contract intelligible. The evidence shows that such grinders are of different capacities. If the parties fixed a capacity as the basis of their agreement, proof of that fact affords us the measure of the capacity refeired to in the written proposal. The declarations of the defendant during the negotiations stating that capacity upon which the plaintiff relied in making the proposal are the best evidence of it as between the parties. Such declarations do not vary the writing; they interpret it.

In Corse v. Peck, 102 N. Y., 513 ; 2 St. Rep., 493 , the oral testimony did not interpret the writing: it varied it from a contract “ to run steadily” to a contract to “ run often enough to deliver 500,000 brick a month.”

p. 868

In Engelhorn v. Reitlinger, 122 N. Y., 76 ; 33 St. Rep., 275 , the oral testimony offered was not to interpret the contract but to introduce a new condition into it. These cases are not in conflict with the ruling in this case; they serve to illustrate its propriety. There was no error in the exclusion of evidence by the defendant touching the increased freight charges the defendant was obliged to pay because of the failure “ to deliver the pulp 50 per cent dry.” This seems to have been one factor tending to show actual damages, and it was accompanied with offers of evidence tending to show that the guaranty of such dryness was made with reference to the location of the defendant’s mills with respect to facilities of freight transportation. The actual production was forty-five per cent dry, and plaintiff gave evidence tending to show that that was more economical from a business point of view than fifty per cent dry.

The defendant did not offer to show that the net result of all the advantages and disadvantages of the forty-five per cent dryness was a loss, but simply offered to show a fact which, without the addition of other related facts, did not appear to be material.

I therefore concur in affirmance.