196 A.D. 7 | N.Y. App. Div. | 1921
Lead Opinion
I am of opinion that the evidence presented a question of fact with respect to whether the plaintiff’s breach of the contract in failing to make installment payments when due was so material as to justify the defendant in refusing to proceed further, which was properly submitted to the jury, and that, the court erred in setting aside the special and general verdict in favor of the defendant thereon and in directing a verdict in favor of the plaintiff, and that the exceptions thereto require a reversal. The action is by a domestic corporation, a buyer, against a foreign corporation, the seller, for breach of a contract in writing made by brokers for the parties on the 20th day of February, 1919, by which the defendant agreed to sell and deliver to the plaintiff 3,000 pieces, containing about sixty yards to the piece, of first quality grey cloth at the price of nine cents per yard, 250 pieces to be delivered weekly commencing May first, F. O. B. mill, and payments to be made in installments for each delivery within ten days after delivery. The defendant delivered four of the installments of 250 pieces each, the first on May first and second, the second on May eighth, the third on May fifteenth, the fourth on May twenty-second, and at the same times forwarded to the, plaintiff invoices therefor. The payment for the first ■ installment fell due on May twelfth owing to the fact that the eleventh was Sunday, which was after the delivery of the first two installments; but payment therefor was not made until May fourteenth, the day before the delivery of the third installment. Payment
It was shown that the defendant on May 29, 1919, when the contract called for the delivery of the fifth installment of the goods, had them manufactured at its mill and ready for delivery and that it sold them in the market at eighteen and one-half cents per yard on July twenty-third; and sold the other goods, in so far as it manufactured them, for that price on that date, and that there was a ready market for them at a price in advance of the contract price at all times after
The only theory on which the recovery can be sustained is that the defendant’s acceptance of payment for the first installment two days after it was due and its delivery of the third installment the next day and the delivery of the fourth installment," when the plaintiff was three days in default with respect to payment of the second installment, as matter of law, constituted a waiver of the provisions of the contract with respect to the time for the payment of all subsequent installments. That, I think, does not follow. (Gardner v. Clark, 21 N. Y. 399.) Defendant thereby of course waived the breaches that had occurred prior to the delivery of the third and fourth installments (Pipe & Contractors Supply Co. v. Mason & Hanger Co., 181 App. Div. 317; McDowell v. Starobin Electrical Supply Co., Inc., 190 id. 676), and no longer had the right arbitrarily to terminate the contract on account thereof and before that could be done, it would have been necessary for the defendant to have demanded payment for
On the trial' the complaint was amended by alleging a waiver by accepting the payments of the overdue installments and by not giving notice to plaintiff fixing a time for payment and notifying it that the contract would be canceled if payments were not so made. There was no waiver by accepting what was past due and it cannot be held as matter of law that defendant was under an obligation to give such a notice. Notice or its equivalent is only required in cases of rescission. (Pers. Prop. Law, §§ 142, 146, as added by Laws of 1911, chap. 571; Rubber Trading Co. v. Manhattan Rubber Mfg. Co., 221 N. Y. 120.) The defendant did not plead rescission but merely justification under subdivision 2 of section 126 (as added by Laws of 1911, chap. 571) for not proceeding further, or in other words for not performing in so far as it had not performed. (See Williston Sales, p. 980; Daley v. People’s Bldg., etc., Assn.. 178 Mass. 13; Anvil Mining Co. v. Humble, 153 U. S. 540.). The plaintiff made no attempt to explain its delay in making the payment until after the defendant ceased to make deliveries and claimed that the contract had been terminated; and the explanation then made was wholly insufficient, as matter of law at least, to justify or excuse its failure to pay as required by the contract. In view of the provisions of subdivision 2 of section 126 of the Personal Property Law, as construed in Helgar Corporation v. Warner’s Features (222 N. Y. 449), I am of opinion that a question of fact was presented as to whether plaintiff’s breaches of the contract were so material that the defendant was justified in refusing to proceed further with the contract.
The judgment and order should, therefore, be reversed, with costs to appellant, and the special and general verdicts
Page and Merrell, JJ., concur; Clarke, P. J., and Smith, J., dissent.
Dissenting Opinion
The action is brought by a purchaser against the seller to recover damages for the breach of a contract- to sell some cotton grey cloth. The contract provided for the sale of 3,000 pieces, of which 1,000 pieces were delivered. Thereafter the defendant refused to make further deliveries and the plaintiff sues to recover his damages as the difference between the contract price of the goods in question and the market price which the plaintiff was required to pay in order to procure the same. The defendant justifies its refusal to deliver the balance of the goods contracted for on the ground that prompt payment was not made for the installments which were in fact delivered. The facts of the case show that upon the first installment delivered the payment was due upon May twelfth and was made upon May fourteenth. Upon the second installment delivered the payment was due upon May nineteenth and was made upon June thirteenth. Upon the third installment delivered payment was due upon May twenty-sixth and was paid upon June twenty-sixth and upon the fourth installment payment was due upon June second and was made upon June twenty-sixth. The fourth installment was delivered upon May 22, 1919. At that time the amount of the second installment was three days overdue. The fifth installment was deliverable under the contract upon May twenty-ninth. At that time the plaintiff had not paid the bill for the second installment which was ten days overdue, nor for the third installment which was three days overdue. Although upon June twenty-sixth payments had been made in full for all the installments delivered and a demand was made for further deliveries, the defendant refused to make further deliveries and for damages caused by this refusal this action is brought.
At no time did the defendant give any notice to the plaintiff that the contract was abandoned or rescinded and its
At the close of the evidence the trial judge submitted to the jury two specific questions which they were directed to answer: First, “ Was the breach of contract on the part of the plaintiff so material as to justify the defendant in refusing to proceed further in delivering goods under the contract on and after May 29, 1919? ” Second. “ Irrespective of your answer to the former question, and assuming that the plaintiff is entitled to recover, what is the amount of the damages which the plaintiff is entitled to recover? ” The jury answered the first question in the affirmative and as to the second question assessed the damages at $8,737. It was stipulated that after the answer to those specific questions the court might direct a general verdict as upon a reserved motion made by both parties for a directed verdict. The court thereupon directed a general verdict in behalf of the plaintiff for the amount specified in the answer to the second question submitted to the jury.
Whatever may have been the rule under former decisions of the courts of the State, section 126 of the Personal Property Law (as added by Laws of 1911, chap. 571) now states the conditions upon which a party has the right to refuse further to perform a contract. Under subdivision 2 the rule is stated: “ Where there is a contract to sell goods to be delivered by stated installments, which are to be separately paid for, and the seller makes defective deliveries in respect of one or more installments, or the buyer neglects or refuses to take delivery of or pay for one or more installments, it depends in each case on the terms of the contract and the circumstances of the case whether the breach of contract is so material as to justify the injured party in refusing to proceed further and suing for damages for breach of the entire contract, or whether the breach is severable, giving rise to a claim for compensation, but not to a right
There is not the slightest evidence in this case which would justify finding that the delay in punctual payment was material. There is no need of the vendor shown, by reason of which the few days’ delay in payment will cause embarrassment. There is not the slightest pretext of any fact justifying a finding of willful neglect on the part of the vendee. Moreover, the fourth installment was delivered while the bill for the second installment was three days over due. This was clearly a waiver of strict performance on the part of the plaintiff, and while a waiver acts in presentí, only, the court will not thereafter enforce a forfeiture without some notice of intention on the part of the vendor thereafter to require strict performance. This rule is forcibly stated in the case of Rathbone v. Forsyth (171 App. Div. 26). That case arose upon the right to declare the principal amount due upon a mortgage for failure to pay an installment, and the rule of law held was that “ Acceptance of a payment by a mortgagor, after the right to a forfeiture exists, prevents an election to take advantage of the default, unless timely notice is subsequently given that strict performance of the terms of the contract will be required.” Authorities were therein cited to show “ That where a party intends to insist upon a forfeiture he must do no act inconsistent with that right, and that if the forfeiture is to be enforced on account of a nonpayment of money, an acceptance of money after a right to the forfeiture exists prevents the election to take advantage of the default until timely notice is given that strict performance is required.” (See, also, Pipe & Contractors Supply Co. v. Mason & Hanger Co., 181 App. Div. 317.)
Without any evidence of the materiality of the plaintiff’s breach of the contract other than the few days’ delay in the making of the first four payments, and without any notice of an intention to require strict performance of the contract, after strict performance had been once waived by delivery of
Clarke, P. J., concurs.
Judgment and order reversed, with costs, special and general verdicts reinstated and judgment directed thereon in favor of defendant, with costs.