Shields v. Pettee — 4 N.Y. Super. Ct. 262

Majority

p. 262

Shields and others v. Pettee and Mann.

Headnote

Where goods are sold “ to arrive” by a specified ship, the contract is conditional 5 and if they do not arrive, the contract is at an end.

So where a sale was made of pig iron No. 1, on board the Siddons, which vessel was then at sea on her way to this port; and she arrived with pig iron consigned to the seller, but which was not No. 1; it was held, that it was a sale to arrive, and the article never having arrived, neither party was bound by the contract.

On a sale of goods, if the buyer on receiving a part of the quantity sold, finds they are not of the kind or quality which his contract entitles him to, he is not at liberty to retain such part, and claim damages for the non-delivery of the entire quantity. Nor can he require the delivery of the residue, retaining a claim for damages. He must either receive the article as it is, or he must return the portion delivered, and then enforce his claim for damages. He can recover no damages, if he refuse to return the part delivered.

Nov. 25 ;

Dec. 23, 1848.

Assumpsit for a quantity of Gartsherie pig iron sold and de livered. The defendants pleaded the general issue, and gave notice that they would claim a recoupment of damages in respect of a part of the iron delivered, because of its not being No. 1, as called for by the contract, but of inferior quality. Also for damages for the plaintiffs non-performance of the same contract.

At the trial, the plaintiffs proved a bought and sold note signed by a broker in metals, as follows :

New York, July 19, 1847.

Sold for Messrs. G. W. Shields & Co.

To Messrs. Pettee & Mann.

150 tons Gartsherie pig iron, No. 1, at $29 per ton, one-half at 6 months ; one-half cash, less 4 per cent.

On board Siddons.

Thos. Ingham, Broker.”

They also proved that the ship Siddons was at sea when the contract was made, which both parties understood, and she arrived about the 28th July, 1847. On her arrival, this kind of

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iron had advanced about $2 per ton, by the 4th of August to $3 per ton, and by 7th August, to $3 50 per ton, beyond the contract price. The Siddons had on board a single lot of Gartsherie pig iron, consigned to the plaintiffs, G. W. Shields & Co., containing 150 tons and a fraction over. They immediately commenced delivering it to Pettee &. Mann from the ship, and up to the 7th of August, P. & M. had received between 66 and 67 tons. The latter then declined to receive any more of the shipment as Gartsherie iron No. 1, they alleging that it was not No. 1, but of an inferior quality. They offered to refer it to some suitable person to say whether it was No. 1, and if he found it to be such, they would take it as No. 1. In their note to this effect, P. & M. said they had not refused to take the iron, and they asked the fulfilment of the contrect, annexing a copy of the broker’s sold note. Prior to this note, Shields & Co. had sent one of the same date to P. & M. saying they had received a message from P. & M. to the effect that they did not consider the iron as No. 1, and could not pay for it as such, although they had received more than one-third of the shipment. Shields & Co. then offered P. & M. the balance of the shipment in compliance with their contract, provided they would receive and pay for it as No. 1 pig iron. To this the answer before stated was returned. On receiving the answer, Shields & Co. wrote a note to P. & M., of same date, (August 7th,) stating that they understood-P. & M.’s note to be a refusal to receive the remainder of the iron as No. 1; declining the reference ; and informing them, if they persisted in the refusal of the iron at the price agreed upon, Shields & Co. would feel at liberty to sell it to other parties.

On the 10th August, Shields & Co. repeated this notice to P. & M. in a note, and informed P. & M. they should sell the iron on that day, if the former did not receive the remainder at once, on the terms in the contract. No answer being made to this, Shields & Co. presented a bill to Pettee & Mann for the iron delivered, made out at the contract price, and requested payment in cash and note, as therein stipulated. P. & M. declined to pay the bill, still demanding a fulfilment of the contract.

Shields & Co. thereupon, on the 17th of August, wrote a note

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to P. & M. stating their refusal to pay for the iron delivered, and demanding a return of the iron. Shields & Co. then stored the residue of the shipment, and subsequently sold it as No. 1 iron; and they then brought this suit to recover the value of the iron received by the defendants. On the part of the defendants, evidence was given to the effect that the iron so delivered to them was not No. 1 Gartsherie pig iron, but was a mixed lot, composed of Nos. 1, 2 and 3. There was counter evidence on this point on the part of the plaintiffs.

The judge, with the assent of the parties, reserved the questions of law arising in the case for the consideration of the court at bar, with leave to adjust the amount of the recovery, and submitted two questions of fact to the jury, which they answered by finding that the iron delivered to Pettee & Mann was not No. 1; and that the difference in value at the time of the delivery, between No. 1, and the iron so delivered, was one dollar per ton. The questions of law were now argued on a case.

W. M. Evarts, for the plaintiffs.

I. The contract was for the sale of a certain description and quality of iron on board the “ Siddons,” then at sea. This is equivalent to a sale “ to arrive,” and is contingent upon the arrival of the subject matter of sale. (Chitty on Cont. 4th Am. Ed. 351 and notes; Smith’s Merc. Law, 518-9, and note; Russell v. Nicoll, 3 Wend. 112 ; Boyd v. Siffkin, 2 Campb. N. P. 326.)

II. By the contract, delivery and payment were to be simultaneous acts, and the refusal of the defendants to receive and pay under the contract, relieved the plaintiffs from any obligation to deliver under it.

III. The defendants, if their objection to the fulfilment of the contract was valid, had a right to return the portion of the iron delivered, or to require the plaintiffs to take it away; the plaintiffs offered to receive it back, and demanded its return. The defendants refusing to return, retaining and using it, yet disclaiming it as in pursuance of the contract, must pay for it on a quantum valebat, viz., at $31 50 per ton, the value found by

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the jury. (Chitty on Cont. 341 and 352, and notes ; Oxendale v. Wetherell, 9 B. & C. 386; Mavor v. Pyne, 3 Bing. 285; Roberts v. Beatty, 2 Penn. 63 ; Corning v. Colt, 5 Wend. 253 .)

IY. If not liable upon the principle and at the rate of a quantum valebat, the defendants are liable for the quantity received at the contract price, without deduction, and without recoupment of damage. (Corlies v. Gardner, 2 Hall, 345 .)

I. The defendants being entitled to the iron only under the express contract, must pay for it either at the express contract price, or upon a new implied contract according to its value.

2 The further delivery of the iron arrived was prevented solely by the refusal of the defendants to receive and pay for it according to the contract, the plaintiffs always being ready and offering to deliver; there was, therefore, no defect or breach of contract on the part of the plaintiffs.

3. As the sale was contingent upon the arrival or non-arrival of the subject of sale, if it did not arrive the sale could not take effect, and there was no default. If it did arrive, the defendants were in default in not receiving and paying under the contract.

Y. The rise in the market is the sole cause of the difficulty. The iron which arrived, though inferior to the contract grade, on arrival was worth $>2 50 per ton above the contract price, The plaintiffs, in good faith, were willing to complete the (to them) losing contract. The defendants, contriving for greater-gain out of a (to them) gainful contract, attempted to avoid either accepting or repudiating the plaintiff’s performance. Their cunning has over-reached itself, and the law raising a new implied contract, effects complete justice between the parties.

J. L. White, for the defendants.

I. By the evidence it is clear that the plaintiffs themselves failed to perform the contract declared upon.

The sale was of iron of a particular kind, and on board of a particular vessel. On the arrival of the vessel, the defendants were notified that the iron purchased by them had arrived and would be landed in a day or two, and they were requested to attend to it. After they had received a part of it, they dis

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covered it was not No. 1, and they so notified the plaintiffs, but offered to take the lot as No. 1, if a competent person, to be selected by the plaintiffs, should so pronounce it. This the-plaintiffs declined, and insisted upon defendants taking it as No. 1. The jury, on the evidence, found that the iron was not No. 1, and it • is clear the plaintiffs failed to deliver the iron named in the contract of sale. And yet they sue for a breach of the agreement by .the defendants. This entitles the defendants to recoup the damage sustained by them because of the non-delivery. (Ive s v. Van Epps, 22 Wend. 155 ; Van Epps v. Harrison, 5 Hill, 63 ; Battuman v. Price, 3 ibid. 171 .) The price which defendants agreed to give was 029 per ton. The iron No. 1, was worth 03 50 per ton more, and this the defendants lost, by the failure of the plaintiffs to deliver the iron; which, on 150 tons, is 0525.

Sixty-six tons were delivered to defendants of the iron which came on board the Siddons, and for this the plaintiffs charged the contract price for No. 1, viz. 029 per ton.

Allowing to the plaintiffs the contract price for the sixty-six tons delivered, 01914; and deducting by way of recoupment the 0525, and the judgment must be for 01389.

If, however, the plaintiffs are not to be held to the price of the iron delivered,- as fixed bp themselves, but are allowed to charge for its market value, the amount of their claim would be 02079, from which deduct 0525, and the balance would be 01324.

II. It is claimed that we cannot recoup, because 1st. The iron was sold to arrive. 2d. The iron sold did not arrive ; and 3d. That for this reason the contract fell through. This position he evidently rests mainly on the authority of Russell v. Nicoll, ( 3 Wend. 112 .) That case differs materially from this. There, cotton was sold to arrive ; but it was not then shipped, was not on its way, the time of arrival was limited, and the sellers were to have possession after the arrival, to have it reweighed, fee. The plaintiffs were non-suited because the contract was entire for the delivery of five hundred bales, and they had not proved the arrival of all; and besides, the contract was

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conditional, depending upon the contingency of arrival by a time certain.

In this .case, no time was fixed for the arrival. But the plaintiffs sold No. 1 iron on the Siddons, and the Siddons arrived. In the case referred to, the cotton was to be delivered on its ar rival. The contingency of non-arrival was there provided for. The sale in question was not of iron on arrival, but of iron on board the Siddons, no matter where she was. The time designated for delivery was not fixed at. a future time or place, as far as there could be a delivery, the iron was delivered when the sale was made. In the case of Russell, the argument of counsel, and the opinion of the court, rest on the fact that the cotton was to be delivered on its arrival ; and as it did not arrive, the defendants were protected by their contract. In this case, the sale was absolute, with a warranty that the iron was on board the Siddons ; and when she arrived, she had not the iron sold. Nothing was to be done by the plaintiffs, before the title to the iron passed to the defendants; and this is the test, whether the contract be executory or executed. (Defreeze v. Trumpet, 1 J. R. 274.) In every sale, there is a warranty of title to the thing sold, and in this case the quality was warranted also. The iron was sold as No. 1, and so specified in the contract of sale. This sale, then, did not “ fall through,’/ but was complete when made, depending on no contingency of arrival, and leaving for the plaintiffs nothing to do in relation to the subject matter of the sale. It was a sale of iron in transitu, where it was then, and not where it was to be thereafter. If this view be the correct one, (and the terms of the contract and the evidence show no other,) then the defendants may recoup their damages, as the plaintiffs sued on the agreement, and this cannot be prevented by an abandonment of the special counts, and a resort to the general counts. ( 22 Wend. 156 ; 4 ibid. 492.) As the iron delivered was retained, the defendants should undoubtedly pay for it; and the plaintiffs should compensaté them for their damage arising from the non-delivery of the iron sold to them.

On fully considering

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this case, we are satisfied the plaintiffs ought to recover for the iron delivered, without deduction, on two grounds.

First. The contract between the parties, was equivalent to a contract to sell and deliver iron to arrive; that is, it was an agreement to deliver Gartsherie pig iron No. 1, if any iron of that description arrived in the ship Siddons on the voyage she was then making. It is well settled that such a contract is conditional, and that if the ship be lost, or if the subject matter of the sale do not arrive in the ship, the contract is at an end. In this case the ship arrived, but there was no consignment of this pig iron No. 1 on board. Therefore as the law is settled, neither of these parties were bound to fulfil the broker’s sale, or entitled to demand its fulfilment.

iSecojid. We are also clearly of the opinion, that the plaintiffs can recover on another ground. Assuming the contract to have been obligatory, the defendants on finding the iron they were receiving was not No. 1, were at liberty to continue to receive it as a fulfilment of their purchase, or they could have repudiated the delivery and brought their action for damages. But they could not do both. They had no right to receive a part of the goods, retain such part, and refuse to receive the residue. They were bound to affirm or to rescind the contract, in toto. It was their duty either to have received the balance of the shipment, or on finding.it was not what they had contracted for, to have returned what had been delivered to them and claim damages for a violation of the agreement.

It would seem that they desired to obtain the iron, and to claim damages also. This they could not do. They were bound to take their position, and either to receive the goods, or to abandon the part performance made, and resort to their claim for damages.

In either view of the case the contract was virtually at an end, and the plaintiffs are entitled to recover the market price of the iron delivered to the defendants, without any deduction.

Judgment accordingly.

Cases cited

Russell v. Nicoll 3 Wend. 112 N.Y. Sup. Ct. p. 264, p. 266
Corning & Norton v. Colt & Nowland 5 Wend. 253 N.Y. Sup. Ct. p. 265
Ives & M'Carty v. Van Epps & Shattuck 22 Wend. 155 N.Y. Sup. Ct. p. 266