Sanders v. Pottlitzer Bros. Fruit Co.

Headnote

1. Contract—Minds of parties must meet on every material provision.

To constitute a valid, binding contract, the minds of the parties must have met on every material provision, whether of primary or secondary consequence, contained in it.

3. Same—Acceptance by mail.

To constitute a binding acceptance by mail such as to create or complete a contract, it is necessary that such acceptance should not only be deposited in the proper office, but that it should be also properly addressed, and it is incumbent upon the party claiming the benefit of such an acceptance to establish these facts.

Appeal from judgment in favor of defendant, entered upon report of a referee.

Action to recover damages for breach of contract by the nonacceptance of ten car loads of apples. The answer denies the making or existence of any contract between the parties.

The following is the opinion of the referee :

M. H. Peck, Referee—The foundation of the plaintiffs’ cause of action is an alleged contract for the sale and delivery of a quantity of apples by the plaintiffs to the defendant in the month of November, 1891. The existence of any contract is expressly controverted by the defendant in its answer. This being an affirmative proposition alleged upon the part of the plaintiffs, the responsibility rests upon them to establish the existence of the contract I am -wholly unable, upon the evidence in this case, to determine that the' plaintiffs have complied with this requirement. The necessary elements entering into the formation of a contract of this character have been so frequently adjudicated that it is quite unnecessary to occupy any space in the citation of authorities. So far as any questions involved in this litigation are concerned the whole subject is fully discussed, with abundant citation of authorities, in note 1 of the appendix, vol. 3 of the eighth edition of Addision on Contracts.

■ It is not seriously contended on the part of the plaintiffs that

any contract was entered into between these parties, unless it was 'Consummated by the defendant’s telegram of November 4, 1891, but it is strenuously insisted that this telegram operated as forming a complete and binding contract between the parties. I am unable to assent to this proposition. It is utterly antagonistic to the action of the parties themselves. It is entirely plain that throughout these negotiations the parties mutually contemplated and intended that their contract, when finally consummated, should be evidenced by some formal written instrument, specifying distinctly its term and provisions. The negotiations originated in an offer in writing submitted by the plaintiffs to the defendant on the 28th day of October, 1891. The prominently material specifications contained in this offer were, the quantity of apples to be delivered, the price, and the time of the delivery. All other matters were collateral to these and regarded as of secondary importance as matters of detail, and when the defendant stipulated for a change in one of these more important particulars, it made no reference to these secondary considerations. That these matters of detail were not regarded by either party as conclusively settled by this acceptance is apparent from the fact that the contract subsequently submitted by the defendant to the plaintiffs for execution contained at least three specifications in this behalf not theretofore adverted to by either party in their negotiations.

In the defendant’s telegram of October 31, 1891, the plaint’ffs are directed, if the proposition is accepted, to “ mail contract.” When the plaintiffs finally concluded to -accept defendant’s proposition they said in their telegram, “Will accept conditions if satisfactory. Answer and will forward contract.” Precisely what is meant by the words “ if satisfactory ” is not very apparent, but it is sufficient to say that they indicate, in this connection, some subject matter for the determination of the defendant. In the telegram of November 4, 1891, which, according to the plaintiffs’ contention, completed a contract between the parties, the defendant says : “ Send contract as stated in our message.” This is the telegram which the plaintiffs contend concluded the negotiations and closed the contract, and made it effectual and binding upon the parties. But the plaintiffs evidently did not so regard it or treat it. They did not then, in accordance with their present position, respond: “ You must please remember that the con tract for the apples is now fully and legally made between us by crossing of telegrams, and our minds have met.” On the contrary, in compliance with the direction contained in the telegram, they transmitted to the defendant the contract in writing, according to their understanding. That the minds of the parties had never previously met upon the details of this contract is quite apparent" from this document, which commences with the words, “We understand,” and concludes with the words: “Answer if this is correct statement, and forward us the draft and oblige.” In still further illustration of the proposition that neither party regarded the telegram of November 4, 1891, as the completion of the contract between them, is the fact that immediately upon the receipt of the plaintiffs’ contract the defendant returned the same, together

with the draft of a contract as prepared by it, under date of November 7, 1891, and the plaintiffs, after making certain alterations therein, signed the same and returned it with the draft attached to the bank specified in the defendant’s communication. This contract and draft attached reached the bank on the 14tli day of November, 1891. Contemporaneously with the mailing of the same the plaintiffs sent a letter addressed to the defendant, which was received by the defendant on the loth day of November, 1891. It is undeniably true that this letter was misdirected to Lafayette, Illinois, instead of Lafayette, Indiana, the place of business of the defendant. The direction upon the enclosure containing the contract and draft transmitted to the bank does not affirmatively appear. The interval of time between its mailing and its -receipt by the bank, taken in connection with the ordinary period of transmission by due course of mail, and the receipt of the letter by the defendant, creates a strong inference that the enclosure to the bank was misdirected in a similar manner.

The defendant refused to accept the draft, or the contract, as modified by the plaintiffs, both upon the ground of the delay in acceptance and of the material alteration of the contract as submitted by it to the plaintiffs for execution. Under these circumstances it is quite impossible, in my judgment, to determine this issue in favor of the plaintiffs. It is entirely, clear that the minds of the parties have never met as to the specific terms and provisions of any contract between them with reference to the sale and delivery of the property in question. It is quite too late after the transactions referred to, indicating with unmistakable certainty that from the outset to the conclusion the parties mutually contemplated and intended the reduction to writing of any contract between them, which should contain distinct and explicit provisions as to the details of their agreement, for the plaintiffs now to insist that all these negotiations subsequent to the defendant’s telegram of November 4th, are merely surplusage, and that such telegram definitely settled the question of the execution of the contract, as well as its terms and provisions. See Hough v. Brovm, 19 N. Y., Ill; Op. Earl 0., 44 id., 85.

It may be conceded that, on the assumption that the contract was fully consummated by the telegram of November 4th, the fact that the parties contemplated the reduction of it thereafter to writing would not impair or destroy the binding force of the contract thus made. But that is not this case. It is to be observed that the apples were to be shipped by the plaintiffs from points in Wyoming and Livingston counties, in this state, for transportation by rail to the defendant at Lafayette, in the state of Indiana. The whole responsibility of this shipment rested with the plaintiffs, in the absence of the defendant or any of its officers or emplo)res, all of whom were non-residents, and not expected to participate actively, or by way of supervision in such shipment. They were to be shipped and transported in midwinter, and manifestly in such manner as to be protected from injury by the elements during their transmit to the place of destination. The original offer submitted

by the plaintiffs contained no provision in this behalf, except that the apples were to be shipped in refrigerator cars. That neither party understood this to. be a sufficient protection is manifest by their subsequent conduct. The three additional specifications heretofore referred to as contained in the contract submitted by the defendant all relate to this feature of the transaction. They are:

First: That the fruit should be well protected from the frost, and well hayed.

Second : That if, in the judgment of the plaintiffs, it was neces-

sary or prudent that the cars should be fired through, the plaintiffs should furnish the stoves for that purpose, and the defendant pay the expense of the man to be emplojmd in looking after the fires to he-kept and maintained in the cars. And

Third: That the plaintiffs should line the car in which the fruit was shipped.

The plaintiffs made no objection to these provisions, but distinctly acquiesced in the same as legitimately forming a portion of the contract to he executed by and between the parties. They, however, assumed to make a material modificationof one of these provisions which necessarily would impose upon the defendant an additional charge and expense.

" I am strongly inclined to the opinion that the provision thus-attempted to be modified created no new obligation on the part of the plaintiffs, but was necessarily involved by implication in their agreement to ship the apples, when construed in the light of the surrounding circumstances. But, be this as it may, the defendant so understood it, and therefore declined to accept the contract as thus modified.

The minds of the parties refused to meet upon this question. To constitute a valid, binding contract, the minds of the parties-must have met upon every material provision, whether of primary or secondary consequence, contained in it. It is entirely clear that the evidence docs not establish that any such result was ever attained by these parties.

And it is utterly impossible to treat the contract as having been finally perfected by the telegram of November 4th without entirely ignoring and repudiating their own action and obvious understanding in the premises. The natural and reasonable inference is, that if the plaintiffs then entertained the view subsequently expressed with reference to this question, they would promptly have said to the defendant": “ Our contract is fully and completely made, and nothing further is required by way of writing or otherwise in that behalf.”

To constitute a binding acceptance by mail such as to create or complete a contract, it is necessary that such acceptance should not only be deposited in the proper office, but that it should be also properly addressed, and I suppose that it is incumbent upon the party claiming the benefit of such an acceptance to establish these facts. The evidence in this case leaves the question very much-in doubt as to whether the latter condition was complied with on the part of the plaintiffs in sending forward the contract and draft. The inference is quite strong that this enclosure, as

well as the letter addressed to the defendant, was misdirected, which caused the unusual delay in its transmission. But, inasmuch as it is not contended on the part of the plaintiffs that any contract was created by these transactions, the consideration of this question is rendered unimportant and immaterial.

The conclusion thus reached upon the principal question at issue, adverse to the claim of the plaintiffs, renders also unimportant any consideration of the point made by the defendant’s counsel that the plaintiffs have failed to prove any such performance on their part as entitles them to maintain this action, even upon the assumption that they had satisfactorily established the making of the contract alleged in the complaint.

The question is not entirely free from difficulty, but upon the-whole case as presented by the evidence I think the defendant is right in its contention. This conclusion necessarily results in the dismissal of the plaintiffs’ complaint.

I have not regarded it as either necessary or proper to encumber the record by setting forth in my report the various letter.; and telegrams introduced in evidence. The whole case rests upon evidence of this description. It is merely evidence, and none tireless so because in writing, bearing upon the issuable fact as to the existence of the alleged contract.

Besides, by the course of proceeding adopted upon the present trial, these several documents are set forth fully, and at large in -the minutes of the testimony in the order, in which they" are-severally introduced, and substantially in chronological order.