Gallery v. Prindle
14 Barb. 186
N.Y. Sup. Ct.
1851
Check Treatment
By the Court, Welles, J.

The order in question looks to a future expected balance to be due from the defendant to Hill-man &• Hinchcliff, and the acceptance is an agreement to pay out of such expected balance. If no such balance should ever be found to exist, most clearly no liability of the defendant could arise out of the acceptance. The acceptance, which must be taken with reference to the terms of the order, and in connection with it, is an agreement to pay the plaintiffs out of such balance, and of necessity is conditional—that is, an agreement to pay provided there should be a balance. The expression, “ after deducting the amount you have advanced us,” &c. taken in connection with the whole instrument, and the circumstances of the case, is to be understood with reference to the time when the balance should be struck or ascertained, and is to have the same effect as if the words had been “ after deducting the amount you will have advanced us.” This perhaps is not the strict grammatical construction, but it seems to me it is manifestly what the drawers and acceptor understood and intended.

The inquiry then arises, what balance the parties to the order had reference to, upon what account it was to arise, and when *191it was to be ascertained. Looking at the contract of the 7th of April, 1846, we find that a balance was contemplated to be due from the defendant to Hillman & Hinchcliff, upon the winding up of their business under the contract, and not before. All that the defendant was bound to pay until then, was ten cents a yard on the cloths delivered. The cloths were to be delivered every Saturday night as they were manufactured, and the ten cents a yard advance was to be made upon such delivery. This would produce no balance, and was evidently not what the parties intended in the order by a balance that was thereafter to become due to the drawers. ■ The order in terms negatives such an idea, for it speaks of the balance to become due from the sales of cloths. Going back to the contract, we see that just such a balance was provided for. It is a balance on the proceeds of sales of the cloths, after deducting the cost of the wool, transportation, commissions and advance of ten cents a yard, insurance, &c. The nature of the transactions of the parties under the contract I think repels the assumption that they were to have settlements, and strike balances from time to time during the year, or at any time until the whole contract should be closed; or that any money was to be paid by the defendant before that time, beyond the ten cents a yard upon the cloth. It was a contract running through the year, requiring the daily performance of important duties by both parties. It required large advances to be made by the defendant, for which he was to have the cloths as security, without restriction of time or mode of sale; and as the defendant’s advances would, of necessity, always be in advance of his receipts, it is unreasonable to suppose that the agreement contemplated a balance due Hillman & Hinchcliff before the close of the year, or that any settlement was to be had until after the sales of all the cloths. To provide against unreasonable delay in the disposition of the cloths by the defendant, he was at liberty to sell at auction.

In July previous to the date of the order, it appears the parties to the contract, the defendant and Hillman <fc Hinchcliff, apprehended the defendant might sustáin losses under the contract, and to secure him against them, Hillman & Hinchcliff *192executed a chattel mortgage on their machinery. When they drew the order they made direct reference to the property held by the defendant under the mortgage, and the balance out of which they required the defendant to pay the plaintiffs is one which should remain on the proceeds of sales of cloths, together with the property mortgaged. This fact is a strong confirmation of the view taken, that the fund upon which the order was drawn was what should finally remain in the defendant’s hands, after all the property he had received, or should thereafter receive; from the drawers, under the contract, together with that embraced in the mortgage, should be converted into money, and his claims upon it deducted.

[Monroe General Term, June 3, 1851.

Welles, Taylor and Johnson, Justices.]

This leads to the inquiry whether there was, at the close of the sales of the cloths received by the defendant, a balance due to Hillman & Carpenter, the latter having been substituted in the contract in the place of Hinchcliff.

The case shows that the total amount of receipts by the defendant, on sales of cloths received under the contract, was $7853,15. That the goods mortgaged were sold under the mortgage in May, 1847, and produced $1389,06. This, added to the last sum, amounts to $9242,21. The defendant’s account for wool, money advanced, commissions, &c. under the contract, without including the last item, Avhich is for a note against Mill-man & Hinchcliff, amounts to $9455,02—showing a balance of over $200 in his favor.

If the foregoing views are substantially correct, the contingency has never arisen upon which the defendant’s liability under his acceptance of the order depended, and consequently the report of the referee against him must be set aside, and a new trial ordered before the same referee, with costs to abide the event.