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Wells v. Alexander

56 N.Y. Super. Ct. 542 24 Jones & S. 542 Court N.Y. Super. Ct. Decision date 1889-04-15 English

Contents

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MARGARET WELLS, Respondent v. FRANCIS ALEXANDER, et al., Appellants.

Headnote

Contract—Proposal and acceptance do not constitute. Implication of promise, duty or obligation, when it does not arise. Contract, notification limiting delivery as a condition precedent effect of; construed, as ceasing to be operative by a voluntary act.
Plaintiff, through her agent, made to defendants by letter dated December 31, 1887, a proposition to furnish three of their steamers (naming them) with coal to be delivered alongside a specified pier, for the year 1888, from January 1st to December 31st, for $3.05 per ton. Defendants replied to this by letter dated January 4, 1888, saying “we beg to accept your offer of 31st ult." The letters are given in full in the opinion. Defendants were the owners or charterers or operators, of the steamers specified in the letter of December 31st, which were used by them in operating a line running between the port of New York and ports in Mexico and Cuba. Up to June 25,1888, defendants bought from plaintiff all the coal they required for the specified steamers and paid therefor ; on that day they retired from business and sold, conveyed and delivered, all their steamship property, including the three specified ones, and therefore ceased to operate them.
Held, (1) That the letters were a mere proposal and acceptance and did not constitute a contract.
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(2) Assuming that the letters constituted a contract, it was a contract to furnish upon notification by defendants, when and in what quantities coal was needed or to be delivered; and in the absence of such notification there was no consideration to defendants for any supposed promise on their part to receive the coal unless there was an implied promise on their part to give the notification.
(3) There was no implied promise to give the notification, the giving of it being simply a condition precedent to any duty or obligation to deliver the coal arising from which a promise to give it cannot be implied.
(4) If notification was given, a liability would arise for the amount specified in the notice at the price named in the proposal; it would amount • to an order for the delivery of a specific quantity on the terms proposed.
(5) Assuming that the letters constituted a contract, it imposed no duty, obligation or right either to deliver, receive or demand coal upon the specified vessels going into the hands other than those of defendants. Only such coal as would be needed for the object in view when the arrangement, viz.: that of supplying the vessels of defendants while in their hands, fails within the scope of purview of the contract.
Before Sedgwick, Ch. J., Truax and Dugro, JJ.
Decided April 15, 1889.
Appeal by defendants from judgment for plaintiff, entered upon an order sustaining demurrer to a defence set up in the answer.
Statement of the case bX the Court.
The complaint alleges, that at all times referred to in the complaint, the defendants were copartners doing business in the city of New York and were the “proprietors or operators of a line of steamships; that the plaintiff entered into an agreement with the defendants by which the plaintiff promised and agreed to furnish defendants for the use of certain steamships then owned or operated by them, with such quantities of pea coal as might be required for said vessels during the year 1888, to be delivered" alongside the same at Pier 3, North river, in the city of New York, for the sum of $3.05 a ton, and in consideration thereof defendants promised
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and agreed to purchase from plaintiff, at said rate, all coal necessary for the use of the said steamships during said year; that ever since the date of said agreement, said steamships have been making and are still making regular trips, and have required and used and still require and use large quantities of coal; that plaintiff has duly performed all the terms and conditions of said agreement on her part and “ has been and still is ready and willing to furnish coal in accordance Avith said agreement and has duly notified defendants thereof and duly tendered such coal to them, but the defendants have refused and still refuse to receive and pay for the same ; that by said refusal of defendants to perform the terms of their agreement, plaintiff has been damaged in the sum,” etc.
The answer, denying that they ever entered into the contract aA7errerl in the complaint, or any contract for the supplying of coal as mentioned in the complaint, alleged for a second and distinct defence, that on and before the 4th day of January, 1888, they were the owners or charterers and operators of the steamships “ City of Alexandria,” “ City of Washington” and “ Manhattan,” which steamships were used by them in the operation of a line running between the port of New York and ports in Mexico and Cuba. That on or about the 31st- day of December, 1887, these defendants received from the said Joseph K. Wells, mentioned in said complaint, a letter of which the following is a copy :
“ Dec. 31, 1887.
Messrs. F. Alexandre & Sons,
New York.
Gents.—We propose to furnish your steamers City of Alexandria, City of Washington and Manhattan with strictly free burning pea, delivered alongside. Pier 3, North River, for the year 1888, commencing January 1st, to Dec. 31st, for the sum of three dollars and five cents ($3.05) per ton. We also agree to furnish any
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other steamers of jour line with same coal and at same price at any time you wish. If through any cause we are unable to deliver pea coal we will deliver you other sizes at an equitable adjustment of price.
Yours very respectfully,
Jos. K. Wells,
Agt.”
That on the fourth day of January, 1888, these defendants answered said letter as follows:
“ New York, Jany. 4, 1888.
Mr. Jos. K. Wells,
Dear Sir.—We beg to accept your offer of 31st ult. to furnish our steamers City of Alexandria, City of Washington and Manhattan with strictly free burning pea coal, delivered alongside Pier 3, North Eiver, for the year 1888, commencing Jan. 1st, for the sum of $3.05 per ton of 2,240 lbs. Also to furnish any other steamer of our line with same coal at same price if we wish it. If, through any cause you are unable to deliver pea coal you will deliver us other sizes at an equitable adjustment of price.
Yours truly,
F. Alexandre & Sons.”
Which answer was duly received by said Joseph K. Wells.
That thereafter, and until the 25th day of June, 1888, these defendants purchased from the said Joseph K. Wells, as the agent of some person or persons to these defendants unknown, such quantities of coal as they required for use in the said steamships, and duly paid for the same. That on the said 25th day of June, 1888, these defendants having determined to retire from the business of operating steamships, sold and conveyed unto the New York and Cuba Mail Steamship Company all their steamship property, charters and business including all the right, title and interest of these defend
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ants in the three steamers above mentioned, and forthwith delivered the same to the said New York and Cuba Mail Steamship Company, and ceased to operate the said steamships or any of them. That since then these defendants have not required or used or purchased any coal for the operation of the said three steamships. That as these defendants are informed and believe, the three steamships aforesaid are the steamships referred to in the complaint of the said plaintiff, and these defendants are advised and believe that they were under no obligation after the said 25th day of June, 1888, to receive from the said Joseph K. Wells, or any principal represented by him, any coal for use in said steamships or any or either of them.
The plaintiff demurred to this defence “ on the ground that it is insufficient in law upon its face, in not stating facts sufficient to constitute a defence.”
The court below sustained the demurrer with leave to defendants to amend the answer upon payment of costs. A judgment was entered on. this decision, from which this appeal is taken by the defendants.
Carter, Rollins & Ledyard, attorneys, and Lewis Cass Ledyard, of counsel for appellants, argued :—
I. The view adopted by the court below was that this correspondence created a contract on the part of the respondents to purchase all the coal which might be required for the three steamers mentioned during the year 1888. This, it will be observed, is equivalent to holding that it was an undertaking by them to purchase not only what they might require during the year for these steamers, but what any one else might require for them in case the respondents themselves did not operate them throughout the period. In other words, the ruling amounted to holding that the respondents contracted to continue to operate the steamers during the year. Such a view seems to be wholly erroneous. Knowlton v. Sewall, 10 Allen 34 .
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II. Upon no other construction can the plaintiff recover. And this for the reason, that upon any other view of the defendants’ undertaking, it would be wholly incapable of enforcement for want of a consideration. Chicago and Great Eastern Railway Company v. Dane, 43 N. Y. 240 ; Campbell v. Lambert, 36 La. An. 35; The H. & T. C. R. R. Co. v. Mitchell, 38 Texas 85 .
III. In reference to the authorities relied upon by the plaintiff, it may be said that they are chiefly cases falling within one of the following classes: First.— Where a contract has been made, admittedly valid, the obligation of which is in no way doubted, and its performance by one of the parties has become impossible by reason of some act of his own, of course, he is still bound by his contract, and if its performance has become impossible, must respond in damages for the breach. Second.—Where a contract has been made, admittedly valid, the obligation of which is in no way doubted, and its performance by one of the parties has become impossible by reason of causes not within his control, still his obligation continues. Impossibility of performance is no defence; it was his business to provide against it in the contract. Third.—Where- a contract has been made, admittedly valid and binding, and the thing which forms the subject of the contract has perished, that also is a contingency which the parties are bound to provide against in their contract. But in none of these cases is the contract itself in question. The question in all of them, was whether the happening of the event which gave rise to the dispute was an excuse for non-performance. No such question is involved in this case. We do not set up the sale by the defendants of their steamers, as ah excuse for non-performance. We say that either they were never under any obligation to perform at all, or else, that the fair and reasonable construction of their contract, is that it should endure only so long as their ownership of steamers should continue.
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Wilcox, Adams & Macklin, attorneys, and George Bethune Adams, of counsel for respondent, argued:—
I. The correspondence set forth in the answer establishes a valid and binding contract on both parties. Fitzhugh v. Raymond, 49 Barb. 645 ; Utica Water Works Co. v. City of Utica, 31 Hun, 431 et passim ; Broom’s Legal Maxims, p. 623. It is not denied that the steamers continued, after the 25th of June, to require and use coal, and this obviates the necessity of any discussion as to the construction of the contract, if they had ceased to require and use coal after that date by reason of any superior force, destruction by the elements, for instance. It is doubtful, under the decisions in this state, if even such destruction would have relieved the defendants, because they should have provided against such a contingency in the contract. Tompkins v. Dudley, 12 n. Y. 107; Booth v. Spuyten Duyvil Roll. M. Co., 60 Ib. 492, et passim. The mutuality of the contract, with respect to mentioned steamers, stands forth conspicuously, and it is well settled that where mutuality appears a construction which would render the contract unilateral or optional would be unreasonable, and should not be adopted excepting on very clear grounds. Bushnell v. Chatauqua Nat. Bk., 10 Hun 380 ; and see Barton v. McLean, 5 Hill 256 ; Richards v. Edick, 17 Barb. 260 . The privilege extended to and accepted by the defendants of calling for coal for their other steamers at their option, "was alone a sufficient consideration to support an obligation on their part to receive coal for the mentioned steamers, even if the plaintiff was not obliged to furnish coal to the latter. The evident consideration for this option was the agreement to purchase coal for the mentioned steamers at the price and for the period specified. It matters not whether the option was exercised or not. To hold the contract invalid would deprive the plaintiff of the consideration therefor. The plaintiff, however, was bound to furnish the mentioned steamers and the defendant bound to
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receive and pay. Justice v. Lang, 42 N. Y. 494 ; Mason v. Decker, 72 Ib. 596 ; Butler v. Thomson, 92 U. S. 412 . The option was an additional consideration. But even if there was want of mutuality, and the option was not a sufficient consideration, a consideration was imported into the contract by the acts of the parties under it. Parsons on Contracts, vol. 1, 450; Commercial Bank v. Nolan, 7 How. (Miss.) 508; Kennaway v. Treleavan, 5 M. & W. 501; Fishmongers’ Co. v. Robertson, 5 Man. & C. 131; Phelps v. Townsend, 8 Pick. 392 ; Yard v. Eland, 1 Ld. Raym. 368; Cabellera v. Slater, 25 E. L. & E. 285; S. C. 24 C. B. 300 ; L’Amoreux v. Gould, 3 Seld. 349; Mozley v. Tinkler, 1 C. M. & R. 692; Loughran v. Smith, 11 Hun 311 . There is a line of cases cited and relied upon by the defendants in the court below, and probably will be on the appeal, where clearly no mutuality existed in the papers set up as contracts, and it was held, of course, that neither party was bound. Those cases are, The Chicago and Great Eastern Railway v. Dane, 43 N. Y. 240 ; Campbell v. Lambert, 36 La. An. 351; H. T. C. R. R. Co. v. Mitchell, 38 Tex. 85 ; Knowlton v. Sewall, 10 Allen 34 .
II. Contract rights cannot be terminated nor abridged by a voluntary transfer of interest in the subject matter. The defence seems to proceed upon the theory that a restriction or limitation can be implied from the terms of the contract. The plain intent is, that the coal should be supplied for the year and no restriction whatever appears. Under such circumstances no restriction can be implied. Lyon v. Hersey, 103 N. Y. 264 ; Coyne v. Weaver, 84 Ib. 390 ; Gifford v. First Presbyterian Society of Syracuse, 56 Barb. 114 . There being no limitation expressed in the contract, the only question that remains is, could it be terminated by the voluntary act of the defendants in selling the steamers ? The authorities are uniform in deciding that it could not. Some of the cases adjudged are: Rudge v. Thomas, 3 Bulst. 202 (1690); Charnley v. Winstanley, 5 East
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266 (1802); Ford v. Tilley, 6 B. & C. 325 (1827); Price v. Williams, 1 N. & W. 6 (1836); Stirling v. Maitland, 5 B. & S. 840 (1864); McClearly v. Edwards, 27 Barb. 239 ; Denison v. Ford, 7 Daly 384 . The nearest approach to the defendants’ contention seems to be in the principle found in Taylor v. Caldwell, 3 B. & S. 826, 32 L. R., Q. B. 164, and Howell v. Coupland, L. B,., 9 Q. B. 462, on appeal 1 Q. B. D. 258, but to make those cases similar to the defendants’ contention here, it would have to appear that the defendants there were prevented from performing the contract by their voluntary act. The principle that a breach can be excused for such a reason as the perishing of the subject matter, has not, however, been followed in New York. Tompkins, v. Dudley, and Booth v. Spuyten Duyvil Bolling Mill Co., supra.

The counsel in the argument of the appeal have not raised any question of practice or of form, and have in effect, made the matter to be decided, the same as if on a trial it appeared that the only arrangement between the parties was such as would be proven by the existence of the facts alleged by the defence in the answer to have existed.

Attention is to be given first to ascertaining what were the relations of the parties formed by ,the correspondence between them.

The letter of plaintiff began, “ We propose to furnish,” etc. The answer of defendants was, “We beg to accept your offer,” etc. As the latter was a reference to the former, and as if it referred to something other than the former, there would be no aggregatio mentium, it must be taken that what was termed by defendants, “ your offer ” meant “ your proposal.” The proposal was accepted. This means no more than, that the proposal was assented to. As a proposal is necessarily unilateral, merely accepting it implies no engagement on the side of the party to whom it is addressed beyond this, that

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the party addressed, implies that he agrees to be bound by the terms of what is proposed. If there is. not to be found in those terms a binding engagement, the party accepting is not bound.

In Justice v. Lang, 42 N. Y. 493 , it was held that a verbal promise to buy was sufficient consideration to support a written contract to sell. In the same case on a later appeal, 52 N. Y. 323 , it was held that under the circumstances of that case, whether such prondse was made was a question for the jury. It was held that the testimony of the plaintiff that he “ accepted the contract ” would not necessarily show that he had made the verbal promise. Such testimony was equivocal. “In one sense he accepted it when he put the paper in his pocket and carried it away, and in another sense he may have accepted it as a voluntary promise or proposal to sell and deliver the arms, leaving it optional with him to accept or refuse them, and in still another sense by consenting to its terms and agreeing to' abide by and perform it as the vendee named in it.” In the case cited the memorandum signed by the defendant was, “We agree to deliver,” etc.

In the present case, the sense in which the acceptance was made, is determined by the fact that it was only a proposal that was accepted.

In Butler v. Thomson, 92 U. S. 402 , the memorandum was signed by a broker common to both parties. The form was “ Sold for A. B. to C. D.” certain goods, etc. The court held that this was a contract of the defendants to buy, because there could be no sale without a buying and therefore the word “sold” comprised the buying. This reasoning would not be applied to a proposal because that could occur without a purchase or a promise to purchase.

In Pordage v. Cole, 1 Saund. 319, the head note is, “If it be agreed between A. & B. that B. shall pay A. a sum of money for his lands, etc., these words amount to

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a covenant by A. to convey the land; for agreed is the word of both.”

What then were the terms proposed ? The plaintiff was to “ furnish ” three steamers with coal for the year 1888. The subject matter of the proposal, on a view favorable to the plaintiff, was the supply of coal to the steamers for their successive voyages. It was not the obligation of the plaintiff that the coal should be u furnished ” in one mass for the whole year. It could not have been meant that it was a privilege of plaintiff to deliver the whole on the 1st of January or the 31st of December. The intention at least was that there should be successive deliveries from time to time. As' the plaintiff would not know the several amounts, or the times when coal would be needed, it was to be implied thaf the obligation was to furnish coal when notified by the defendants, when and in what quantities coal was needed or to be delivered. This notification was, therefore, a condition of the creation of plaintiff’s duty to furnish the coal. No such notification was given., Therefore there was no obligation on the part of plaintiff to furnish coal and no consideration to defendants for any supposed promise on their part to “ receive” the coal unless it may be that there was an implied promise by defendants to notify plaintiff. There was no such express promise.

Undoubtedly, if notification was given, the defendants would be liable for the amount specified in the notice at the price named in the terms of the proposal. L’Amoreux v. Gould, 7 N. Y. 349 ; Thayer v. Burchard, 99 Mass. 508 : Great N. R’way Co. v. Witham, 9 L. R. C. P. 507.

I do not think there is any implied promise by defendants to give the notice in question. Thayer v. Burchard, supra; Bailey v. Austrian, 19 Minn. 535 ; Burton v. G. N. R. Co., 9 Exch. 507. The case is not different from that of a bare condition in a grant on which no action to perform the condition lies.

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In Booth v. Cleveland Rolling Mill Co., 74 N. Y. 15 , the court did not hold, that the ground of the implied promise was any condition contained in the instrument, but that the clause is an agreement signed by defendants that the defendants “ are to proceed at once to make said rails,” etc., could not be interpreted as conditions “and evinced a promise to proceed at once,” etc.

In New England Iron Co. v. Gilbert El. R. R. Co., 91 N. Y. 153 , the court did not hold that a statement of a - condition on which there was to be performance on plaintiff’s part implied a promise by defendant to give the notice, but said that it appeared from other covenants, that there was an intention manifested that the defendant should do certain things in which the plaintiff acquired by the contract an interest. Upon that the court did. not definitely hold that there was an implied• promise to do the things or give the notice. It said “ although the defendant does not in express terms undertake to do the act or give the notice which shall set the plaintiff in motion, a promise to do so or at least a promise that the plaintiff shall have the building of the railroad, if that enterprise is prosecuted by the defendant, is clearly to be implied from the covenants and stipulations which were inserted,” etc. From this it would seem, that the latter kind of promise was to be implied, there being some doubt as to the former kind of promise. That case as presented did not make it necessary to determine what would be the measure of damages in the case of a promise not to give work to another, unaccompanied with a valid promise to give it to the plaintiff.

In this case, there is only the condition and nothing else to show an implied promise. The only thing in which the plaintiff could have the interest pointed at in New England Iron Co. v. Gilbert El. R. R. Co., supra, was the payment of the purchase price, and this could not affect the nature of the obligation upon which that price was to be paid.

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In Quick v. Wheeler, 78 N. Y. 300 , the agreement by defendant was to pay the plaintiff 4i cents per foot for from 6 to 15 thousand feet of timber of same kind, etc., and delivered at the place aforesaid during the winter, etc. The agreement was. signed by both parties. The court said “ There was no mutuality. There was not the consideration which mutual promises give a contract. The plaintiff did not bind himself to sell and deliver the tie timber. Hence this contract can be treated only as a written offer on the part of the defendant to take and pay for the timber upon the terms stated.”

In Jones v. Kent, 80 N. Y. 585 , the obligation of the vendee to pay the consideration stipulated for by the vendor, was made the ground of the implied promise •that the court held was made by the vendee, it being the case of property delivered to vendee.

As notice or demand was not given or made, my opinion is that the plaintiff was not held to furnish any coal, and that defendants were not held to pay for any coal that had not in fact been demanded or received.

By the answer, it appeared that the defendants had sold the steamers and did not need any coal for them after June 25, 1888. In view of the conclusion, that the obligation of the defendants to pay depended upon whether they had given a notice or made a request or demand, it is not necessary to examine the matter which would be only an examination of the reason why the defendants ceased to give orders.

The counsel, however, have given a part of their argument to this subject in a certain way.

One side took the position, that as the defendants needed no coal for the steamers after they were sold, they were absolved from the contract, or rather that the contract did not contemplate the furnishing any coal after that time. If this is correct it would be because the contemplation of the parties was, that such coal should be furnished as the defendants needed for

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the steamers. The other side took the position that whether the defendants needed the coal for the steamers or not, they were bound to take as much as the plaintiff was bound to furnish, and that was as much as the steamers should be supplied with to enable them to make the regular trips of 1888.

The question is, again, what are the implications of the contract. Parsons says, vol. 2, (5th ed.) 515: “Thegeneral ground of a legal implication is, that the parties to the contract would have expressed that which the law implies, had they thought of it, or had they not supposed it was unnecessary to speak of it because the law provided for it.” In Russell v. Allerton, 108 N. Y. 288 , in the contract to be construed, was a clause “ charterers to approve the ventilation.” It was necessary to determine whether they might make or not make an approval at their pleasure. The court held that they could not. It was said “ To give the words in question” that meaning “is to place the plaintiff in a matter purely of business, wholly at the mercy of others with whom they were contracting. Could the plaintiff have intended any such results or could the defendant have expected such action on the part of the plaintiff ? ” It was held that under the clause the charterers were hound to approve such devices as would secure ventilation to a reasonably sufficient extent, under the circumstances.

It seems that parties about to make an arrangement as to coaling vessels for a year, would not think that the owner would keep vessels for the sake of having them coaled, or that he would need coal after he had sold them. There would not be among business men the idea, that coal to be bought to he used by the buyer upon vessels would be needed or would be bought for vessels after they had been sold. I therefore think that by the language used, the parties to this arrangement did not mean that the plaintiff should “ furnish ” coal to the vessels after the defendants had sold them and needed no more coal for them. Of course a person can

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buy more coal than he will need for any specified purpose, and a contract for that is valid. He is not held to the purchase until a construction of the contract shows that such was its meaning. The language of this contract is so undefined, so uncertain, that construction is called for, and that is, that the steamers were to be furnished so long as the steamers remained in the circumstances that existed at the time of the making of the arrangement. The important circumstance now referred to is, that the steamers were owned and managed by the defendants.

The case of Whelan v. Ansonia Clock Company, 97 N. Y. 295 , follows the case of Niblo v. Binsse, 1 Keyes 476. Niblo’s assignor had contracted to put certain heating apparatus into a house. Before the work was done the house was burned. The plaintiff sued for the work already done. The defence was, that the contractor had failed to do all the work he contracted to do. This was held to be no defence because, as the court decided, the contractor’s failure was caused by a default of the defendant. “If one party agrees with another to do work upon his house, the law implies that the employer is to have the building in existence upon which the work contracted for may be done.” In the cited case there was no doubt as to the extent of work the contractor agreed to do. In the present case, it has-been said that the true interpretation of the contract did not call upon the plaintiff to deliver, or the defendants to buy coal for the ships wdien they ceased to be under the ownership or management of the defendants. In Tompkins v. Dudley, 25 N. Y. 272 , it was held, that if by contract the completion of a house is a condition precedent of the payment of money as compensation, there is no obligation to pay the money unless the house be in fact completed. And though the house was burned, the condition was not performed.

In Booth v. Spuyten Duyvil Rolling Mill Co., 60 N. Y. 490 , it was. held, that if a party unqualifiedly

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contracts to deliver 400 tons of rails he must perform his contract or be liable for a non-performance, although his rolling mill, in which he would make the rails, be burned.

In Dexter v. Norton, 47 N. Y. 62 , it was held, that when specific property is the subject of a contract of sale with future delivery, title not vesting in the vendee, and before the day of delivery it is burned without fault on the part of vendor, the latter is not bound to a delivery or liable in damages. The reason for this is, that the obligation to deliver is subject to an implied condition that the property sold remains in existence. There is no implied contract by the vendor that it shall exist.

I am of opinion, that the contracts of the parties did not imply that the coal to be “ furnished ” to the steamers, was such coal as would be needed for them, if they went into other hands than those of defendants.

The judgment below should be reversed "with costs to abide event, and that defendants should have judgment on the demurrer with costs.

Truax, and Dugro, JJ., concurred.

Cases cited