Ambler v. Sinaiko

168 Wis. 286 | Wis. | 1919

Lead Opinion

Winslow, C. J.

The findings of the court to the effect that in October the defendants ordered the plaintiff to stop all shipments of coal until further orders, and that during the first part of November they ordered two cars under the first contract and three cars under the third, which were never delivered, and that no further orders to ship were given before November 20th, when defendants declined to pay and thus (as plaintiff claims) breached the contracts, are sufficiently supported by evidence and cannot be disturbed.

But the defendants claim that, even conceding these findings to be true, there was no default on the first contract because it was a separate and independent contract, that only one carload of coal had been delivered under it, and that on August 31st the defendants’ payments of $400 in September and $500 in October more than paid for all the coal delivered in July and August, and hence that there was nothing due on this contract in November and no breach by the failure to pay at that time.

This contention seems now to be made for the first time. We discover no traces of it in the trial record. The great difficulty with it is that it is quite clear that the parties themselves never treated their transactions as separate transactions, but all as one continuing and continuous deal. Both parties kept their books in that way. Their accounts were simply running accounts upon which payments were made from time to time, not to be applied to any particular shipment or contract but upon the account generally. The so-called separate contracts were considered and treated simply as parts of the general deal, as items in one continuing transaction. The correspondence shows that no claim of separate contracts or of rights arising therefrom was made even when the plaintiff was most insistent in his demands for payment of the whole October balance on November 20th. When the letter sent on behalf of the defendants by their banker on November 22d was written there was an excellent opportunity to make this claim with force, but it is clear that there was no such thought. Had they then said to the plaintiff, “You contracted to sell us twelve cars of stove coal, you have sent but one, for which we have paid, we are not in default on this contract, and we demand that you continue to ship coal under it notwithstanding our failure to pay under other contracts,” the proposition might have been difficult for the plaintiff to meet; but it is evident from that letter as well as from other letters in evidence and the accounts kept by the parties that the formal contracts were regarded by both parties as incidents. of one long transaction, rather than as separate transactions by themselves, as orders rather than as independent contracts. We know of no reason why they should not now be treated as the parties chose to treat them, especially when the contention is first made in the court of last resort.

Treating the case on this basis, we have a case of sale of goods with delivery as well as payment to be made in in-., stalments, and we squarely meet the question whether defendants’ failure to pay the amount due on November 20th justified the plaintiff in declining to make any further deliveries, or whether the plaintiff was required to go on and fill its contracts notwithstanding defendants’ default.

On this question the authorities are not in entire accord. For a review of the cases see Quarton v. American L. B. Co. 143 Iowa, 517, 121 N. W. 1009, 32 L. R. A. n. s. 1, and note. In this court see Campbell & Cameron Co. v. Weisse, 121 Wis. 491, 99 N. W. 340, also German American Bank v. Webster M. Co. 144 Wis. 314, 128 N. W. 48. In this state the matter is now unquestionably governed by the uniform sales act (sub. 2, sec. 1684t—45, Stats.), which provides in substance that, where there is a contract for the sale of goods to be delivered and paid for in instalments and there is a defective delivery of or failure to- pay for an instalment, the question whether the breach is so material as to justify, the injured party in refusing to' go on with the contract and suing for his entire damages at once depends in each case “on the terms of the contract and the circumstances of the case.”

Applying this rule to the present case, there seems to us to be no doubt that the refusal of the defendants to’ pay the amount due on November 20th was so material as to justify the plaintiff in his refusal to make further deliveries. A mere neglect to pay an instalment for a time might not be sufficient, but here there was more. As we read the letter of November 22d, it was a plain refusal to make any further payments on coal until all the coal contracted for had been delivered — although much of it was not yet due to be delivered. That the plaintiff so understood the letter there can be no doubt. This is clearly shown by his reply of November 22d, in which he says:

“We are this morning in receipt of a letter from the First National Bank of Madison, Wisconsin, advising that you have deposited $1,000 with them to be remitted when we ship you five cars of Pocahontas mine-run coal, eleven cars of Franklin county coal, four cars of White Star lump coal.”

Later in the same letter the plaintiff says:

“The money you owe us is long past due, and now you propose, not to give it to us so we can use it in our business, but to deposit it where it is of no use to us, and hold it out on us until possibly April 1st.”

This shows that the plaintiff construed the letter as a refusal to pay any further monthly instalments until all the coal had been delivered under all the orders.

So far as appears from the evidence the defendants never notified the plaintiff that he had construed the letter of November 22d wrongly; apparently they were content to have it so construed. This was practically a repudiation of all provisions of the contracts requiring payments in monthly instalments. It was not mere neglect or refusal to pay one instalment, but a refusal to be bound by one of the material provisions of the contract in the future while insisting on full performance by the plaintiff. Such a breach must be regarded as a material one, which justifies refusal to further perform on the part of the other party. .

There is another well established principle which seems decisive of the case, namely, the principle that, where one party to an executory contract deliberately declares that he will not perform on his part, the other party may at his option treat the contract as terminated. Woodman v. Blue Grass L. Co. 125 Wis. 489, 103 N. W. 236, 104 N. W. 920. That is, in effect, what the defendants did here when they declined to pay anything until all of the coal had been delivered.

By the Court. — Judgment affirmed.

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Dissenting Opinion

Eschweiler, J.

(dissenting). In this case there is no evidence of the parties ever having, at any one time, made any agreement as to- their subsequent dealings and fixing their respective rights and liabilities. The orders are all separate and independent,' never referring to others or to any prior arrangement, with different provisions as to price, quantities, and times of delivery, and some differences as to times of payment; the plaintiff asserting at times that payments are to- be on the 10th, the 15th, or the 20th, respectively, of the month following deliveries, and all particular provisions as to times of payments had at times been waived.

I think these orders were separate and independent contracts as a matter of law, and that the method of payments from time to- time did not alter their legal character.

Evidently a cancellation of or refusal to accept under any one order by defendants could not legally have justified plaintiff in refusing to ship under other then outstanding orders.

In Mr. Proudfit’s letter of November 22d stating the deposit of the $1,000, he expressly refers to shipments “due them under their existing contracts.’1 This would seem a fairly reasonable notice to- plaintiff that what he, plaintiff, considered merely separate orders in the course of one- transaction, were, in the estimation of defendants, of the dignity of separate contracts. There were either orders under one contract or separate contracts. I think the defendants through Mr. Proudfit notified the plaintiff concisely and accurately that they claimed rights under several independent contracts.

The letter of plaintiff of November 23d, declaring his intention to call all transactions at an end, was written at a time of a rising market, as would appear from the testimony and findings herein, even without resort to common knowledge as to the then situation. This fact, I think, is entitled to great weight in considering the acts of the parties. In this letter plaintiff expresses his surprise upon three grounds, and those, with the statement that there was then due and unpaid $1,011.38 (only $11.38 more than the deposit with the Madison bank), are the only grounds upon which it can be claimed from the letter itself he based his right to refuse .to' make any further shipments; and these grounds, which were also asserted by plaintiff in his verified reply, were as . follows: (1) That the order for five cars of Pocahontas had been canceled by defendants. This assertion was found by the court to be false. (2) That the order for four cars of White Star had also been canceled by defendants. This assertion was also' found by the court to' be false. (3) That the eleven cars of Franklin county coal demanded by defendants were part of an order of eighteen cars, of which eleven had been shipped, leaving nine instead of eleven, and this order was subject to1 delivery between June, 1916, and March 31, 1917, and that there remain four months to complete the order, and in effect claiming that he had until the end of that period to hold all deliveries.

By this letter, therefore, plaintiff expressly repudiated any ■obligation td ship either of the respective orders of five cars •of Pocahontas and four cars of White Star for reasons which the court has found were not supported by the facts and therefore false, and in effect claimed the right to withhold delivery on the other.

If the transactions between the parties were in effect one contract, as held by the majority, then there seems here to have been a positive, definite declaration, based upon mistake if not falsehood, of a refusal of recognition of a substantial part of such contract and such as would warrant defendants to consider it an intention by plaintiff to abandon the contract. It should be noted that nowhere in this letter does •plaintiff consent, even if the $1,011.38 is paid, to recognize any rights in defendants under either of these two orders.

Under any consideration of the relationship between the . parties I think it is evident that the defendants had the right .to demand delivery of some if not all of these several orders and to have until the 20th of the month following delivery to pay for the same. The plaintiff took the position, however, that there were no such orders in existence any longer. If the defendants ought to have immediately answered this peremptory letter of plaintiff and explained any misunderstanding, if such there was as to whether plaintiff was correct in surmising that the money was to' be withheld until-April 1st, the same rule would require plaintiff to.promptly notify defendants, and before the time limit set of November 27th had expired, that if defendants did pay they would be recognized as having rights under these two orders.

That the breach must be substantial to warrant a seller in taking the position assumed by plaintiff is the law of this state by the statutes and decisions cited in the majority opinion.

Many authorities hold, and with good reast a vs*™. must be a further showing of intention to abandon-a.contract. West v. Bechtel, 125 Mich. 144, 84 N. W. 69; Welsh v. Michigan M. Co. 161 Mich. 16, 125 N. W. 692; Empire R. M. Co. v. Morris, 77 N. J. Law, 498, 72 Atl. 1009; Quarton v. American L. B. Co. 143 Iowa, 517, 121 N. W. 1009, 32 L. R. A. n. s. 1.

If the amount of coal to be delivered as indicated in Mr. Proudfit’s letter was unreasonable in view of any contingencies of transportation or mining, or for any 'reason, the plaintiff in honesty and good faith should have said so. The mére making of an unwarranted claim for performance during the life of a contract is not such a breach as would warrant cancellation. Nat. C. Co. v. Hudson River W. P. Co. 192 N. Y. 209, 216, 84 N. E. 965; 13 Corp. Jur. 658.

The tone of Mr. Proudfit’s letter inviting, not repelling, suggestions from plaintiff on the subject, the deposit of the $1,000, more than the amount ($914.28) ultimately found due the plaintiff, the demand for more coal under the orders, absolutely .inconsistent with an intention to abandon; the rising market under which the defendants would so naturally and reasonably hold onto rights secured to them at prices lower than then existing; and on the other hand the absolute repudiation by ^plaintiff of any liability as to the then existing valid orders on mistaken if not false grounds; the rising market where plaintiff would profit by breaching his obligation, all presented such a situation that I think the court should have said that the plaintiff was in default and liable.

I am authorized to state that Justice Owen concurs in this dissent.