218 A.D. 322 | N.Y. App. Div. | 1926
The action was brought to recover damages for breach of contract. The plaintiffs entered into a written contract with the defendant for the sale of 7,500 bags of Argentine granulated sugar, each bag containing about 150 pounds of sugar, at twenty-one and three-tenths cents a pound, less two per cent thereof, F. O. B. New York city; shipments of sugar to be made by steamers from the Argentine Republic — during July, 1920, 2,500 bags; during August, 1920, 2,500 bags; and during September, 1920, 2,500 bags. If shipments were prevented upon the dates mentioned, the buyers were to accept delivery when made.
The proofs show that the plaintiffs purchased in the Argentine, in time for shipment according to the sales contract, something over 13,000 tons of sugar; that shipments of this sugar were made from Argentine to the plaintiffs in New York; that notice of the arrival of the sugar was given to the defendant and a request made for directions as to where the defendant desired the sugar to be delivered. The defendant gave no shipping directions, but delayed action and never actually accepted or refused the sugar. The matter continued in that way until at last, in January, 1921, the plaintiffs gave the defendant notice that the sugar must be accepted on or before February third, otherwise plaintiffs would resort to legal action. The sugar was not accepted. The plaintiffs proved the market price of the sugar on February 3, 1921, and the verdict directed is for the difference between the contract price and the market price on that date.
The complaint, in addition to the usual facts presented in a complaint upon a breach of contract, contained other facts, to which I will later refer. The answer contained some denials and then set up three separate defenses; the first of which was, in effect, that the claim upon which this action was brought belonged to the United States government; second, that the plaintiffs were not the real parties in interest, and third, the Statute of Frauds. (See Pers. Prop. Law, § 85, as added by Laws of 1911, chap. 571.) The latter defense is made the subject of the appellant’s first point.
The contract involved is printed as an exhibit annexed to the complaint. It contains all the essential elements of a contract.
“ At Twenty-one and 30 /100 (21.30c) Cents per pound, less 2%, duty paid, F. O. B. New York City, net landed weights.
“ Should various estimated charges used in arriving at the above price prove less than expected, credit voucher for the difference will be rendered the buyer.”
It is the contention of the appellant that the price of the sugar was not fixed and determined by this clause, but was left open as a matter of future computation. The contention of the respondents is, mainly, that this action was not brought upon an oral contract, of which a memorandum in writing had been signed by the parties, but that the action was upon a written contract and, therefore, the Statute of Frauds has no application. This contention, in my estimation, is entirely erroneous. The character of a document cannot be changed by applying a name to it, and by calling this a contract the plaintiffs cannot make it a legal contract if it lacks any essential element to constitute a legal contract. The only difference, as I understand it, between an action brought upon an oral contract, of which a memorandum in writing has been signed, and one brought upon a written contract is, that where the action is brought upon an oral contract evidence of the contract, in addition to the memorandum, may be given; while if the action is brought upon a written contract the contract in writing cannot be helped out or elaborated by the oral negotiations. In either case, however, the written document must contain all the essentials of a contract. Therefore, in this case, if the written contract does not contain a provision fixing the price, the contract is not enforceable under the Statute of Frauds. In this situation no evidence of the understanding of the parties can be given. The only oral evidence admissible is evidence to place the court in the same situation as the parties were at the time the contract was made, so as to enable the court to construe the contract as made. This was the position taken by the trial court and all evidence as to the understanding of the parties excluded. At the time of the trial the judge announced his views during colloquies with counsel and by directing a verdict in favor of the plaintiffs. A motion was entertained to set aside the verdict; the judge received briefs and denied the motion, with an opinion in which he said: “ The contract contains two independent enforcible provisions; one is for the sale of goods to which the statute is applicable, and which meets all the requirements thereof; the other a promise of plaintiffs to give defendant a credit voucher under certain conditions subsequent, the terms of which are not all stated in detail, but as to which, however, the statute has no
I agree with the conclusion reached and the reasoning by which it was reached.
The parties have cited many cases, but none of them are in point. This point must be disposed of by determining whether the plaintiffs agreed to reduce the price or whether they agreed to give the defendant a credit voucher, which should be applicable to future dealings between the parties. The authorities cited by the appellant all bear upon the question of the necessity of the price being fixed in the contract. There can be no controversy about this question. It has been decided too many times. The only question in this case is, was the price contingent upon certain expenditures which the plaintiffs were to make, or was there a separate agreement by the plaintiffs to give the defendant a credit voucher applicable to future business dealings between them? In my estimation the contract, in so far as the price is concerned, is the same as if the defendant had agreed to pay twenty-one cents for the sugar and then had added a provision that if it sold the sugar for a lower price than had been discussed in their negotiations it would be entitled to a credit voucher, equal to the decrease in price. Under such a contract I think the price at which the goods were sold would be a fixed price, binding upon both parties. If later the goods were sold at a lower price than was anticipated, the seller would be entitled to credit for the amount. In this case I think the plaintiffs are entitled to maintain their action for a breach of the contract, and the defendant is entitled to a credit voucher for the amount which the “ estimated charges ” exceeded the actual expenses.
“ Fifth. That the said agreement in writing contained the following paragraph, to wit: ‘ Should various estimated charges used in arriving at the above price (i. e. 21.30 cents a pound) prove less than expected, credit voucher for the difference will be rendered the buyer.’ That it was the purpose and intent of the said paragraph that the purchase price of the said seven thousand five hundred bags of sugar specified in the said agreement in writing should be the actual total cost of the said sugar, including all expenses, duty, disbursements and obligations incurred in connection with purchasing the said sugar and bringing it to New York City and making shipment and distribution thereof to the defendant, plus one cent a pound to compensate or repay the plaintiffs, and one cent a pound to compensate or repay the American Trading Company, a Maine corporation, for their respective time, trouble and services rendered in purchasing and bringing the said sugar to New York City and in selling and distributing the same.
“ Upon information and belief, that the said actual total cost of the said sugar, including all expenses, duty, disbursements and obligations incurred, as later ascertained and determined, was less than the estimated amount thereof at the time of the execution of the said agreement in writing by the defendant and the plaintiffs, so that pursuant to the provisions of the said agreement in writing the defendant became entitled to a credit as against the said specified purchase price of twenty-one and 30/100 cents (21.30c) a pound, of 1.36 cents a pound; that is to say, the agreed purchase price of the said sugar specified in the said agreement in writing, as calculated and ascertained pursuant to the said paragraph, was reduced to the sum of 19.94 cents a pound F. O. B. New York City, net landed weights, which said sum thereupon became and was the agreed purchase price of the said sugar specified in the said agreement in writing.”
The plaintiffs, several months after the service oi the amended complaint containing this provision, moved at Special Term for leave to serve a further amended complaint. The motion was denied. The motion papers, the opposing affidavits and the opinion and order were introduced in evidence. The purpose of the motion was to omit from the complaint the allegations by which it was alleged that the price was subject to change by reason of the decrease in the expenses incident to the purchase and shipment of the sugar. The opinion of the court shows that the court held
The appellant further claims that the pleadings were before the court and were evidence in the case, and that the construction placed upon the contract was contrary'to the evidence If the provision in the complaint had contained facts which were in favor of the defendant and no evidence to the contrary had been introduced, the appellant’s contention would be right. The provision in question, however, contained no facts; merely the pleader’s construction of the contract. With this provision stricken from the complaint no question of fact arose. The court was called upon to construe the contract. The construction, of course, related to a question of law and not of fact. Therefore, the appellant’s contention in that regard is not well founded.
The appellant contends that the provisions of the agreement are not separable, and he cites cases to show that, if a part of one entire contract is unenforceable under the Statute of Frauds, then that the whole contract is unenforceable; that a party should not be permitted to separate the parts of an entire contract and recover on one part, the other being unenforceable. The error in this reasoning is that it assumes all of the provisions of this writing to relate to one contract. The trial court construed the writing as containing two contracts; one to pay a fixed price for the sugar and the other an agreement to give the credit voucher depending upon subsequent events. When the argument assumes this to be one contract, it begs the question. The question is, was it one contract? If it was one contract the argument of appellant is applicable, but if the agreement contained two contracts the contract sued upon is undoubtedly valid and the argument does not apply.
The appellant claims that plaintiffs failed to establish a cause of action, since they neither pleaded nor proved (a) that they tendered the sugar to defendant, or (b) that a tender was either excused by circumstances or waived by defendant and that they were ready and able to perform. The proofs in the case, as I have stated, showed the purchase of a quantity of sugar much greater than necessary to comply with the contract in question. This sugar was shipped to the plaintiffs in New York. The plaintiffs gave notice of its arrival and asked shipping directions. The proof further shows that the plaintiffs, during this time, had in their possession a quantity of sugar very much greater than was necessary to fulfill the contract. The defendant took samples of the sugar; never made any complaint as to its quality or condition. It, however, gave no shipping directions to the plaintiffs. The rule is well settled that a vendor of property cannot put the vendee in default and recover for a breach of the contract without tendering delivery, alleging and proving it. (British Aluminium
The next point urged by the appellant is, that the title to any claim against the defendant is vested in the United States government and not in the plaintiffs. The contention of the appellant in this respect is that the plaintiffs and the American Trading Company were acting in this transaction as agents of the United States government. It is alleged in the complaint that the plaintiffs and the American Trading Company purchased 13,902 tons of sugar, of which the sugar sold to defendant formed a part, “ at the request and under the direction and as agents of the Department of Justice and the Department of State of the United States Government.” That this sugar was distributed under the direction of the same departments and as agents therefor by the plaintiffs “ for the purpose of reducing the high price of sugar.” The complaint then alleges that Congress passed a joint resolution directing the United States Sugar Equalization Board “ to take over, liquidate and adjust the transaction involving the purchase of the said Argentine granulated sugar in such manner as it may deem equitable and proper.” A copy of the resolution is annexed to the complaint and marked “ Exhibit B.” (See 42 U. S. Stat. at Large, 1224, chap. 67.) The complaint then continues: that the United States Sugar Equalization Board did take over, liquidate and adjust the transaction, and did, by an instrument in writing duly executed, duly release, transfer and set over to said American Trading Company and tó the plaintiffs any claims, rights of action or demands which it had, or might have, against the defendant by reason of the foregoing. The contention of the appellant is that the United States Sugar Equalization Board was an agency of the United States government (Federal Sugar Refining Co. v. U. S. Sugar Equalization Board, Inc., 268 Fed. 575; De Ronde & Co. v. U. S. Sugar Equalization Board, Inc., 299 id. 659), and that being an agency of the government the Sugar Board was an agent with delegated powers and the sole source of such powers was the United States Constitution or an act of Congress. The defendant claims that there were no such powers granted to the United States
The history of this transaction, so far as I am able to gather it. from the briefs and the case itself on appeal, is as follows: Congress passed an act August 10, 1917, known as the Food Control Act of 1917 or the Lever Act (40 U. S. Stat. at Large, 276, chap. 53), which authorized (§2) the President to enter into voluntary arrangements or agreements, to create and use any agency or agencies, to accept the services of any person, without compensation, to co-operate with any agency or person, to utilize any department or agency of the government, and to co-ordinate their activities so as to avoid any preventable loss or duplication of efforts or funds. This very act, I think, indicates that relations should be established between the government and private persons, or corporations, other than that of a legal agency. The President was authorized to co-operate with any agency or person. In this instance, the relation was a co-operation between the Departments of Justice and State with the plaintiffs and the American Trading Company, and not their appointment as agents in the legal sense of that term. Under this act, apparently, the United States Sugar Equalization Board was incorporated. The capital of this company was owned and controlled by the United States government. It was incorporated in July, 1918. (See, also, 41 U. S. Stat. at Large, 386, chap. 33.) It had no immediate connection with the purchase of the sugar. The sugar was purchased by the
The second defense, that the plaintiffs were not the real parties in interest, of course, depends upon the same facts and is disposed of by the same reasoning.
The four oh point urged is, that the trial court erred in excluding the testimony of the witness Von Glatz. Von Glatz was the broker through whom all the negotiations were carried on. The defendant sought, by this witness, to prove conversations he had tyith the plaintiffs and with the defendant as to the clause in the written memorandum, “ should various estimated charges,” etc., but che trial court refused, over defendant’s exceptions, to receive such testimony, unless it was limited to the meaning of the words “ credit voucher.” There is no question about the correctness of the court’s ruling in that respect. The meaning of this clause was a question of law for the court’s determination. The negotiations of the parties were superseded by writing. Either party to the transaction had the right to give evidence showing the situation of the parties, so as to enable the court to stand in their places when construing the contract. This is for the purpose of enabling the court to determine from the language used, in the contract what the parties meant. What they previously said has no bearing upon this question, as what they previously said is not the contract which they made. No claim is made that any mistake was made in drafting the contract; therefore, what they intended is of no consequence. It was the court’s province to determine the meaning of what they wrote.
I recommend that the judgment and order be affirmed, with costs.
Present — Kelly, P. J., Rich, Jaycox, Manning and Kapper, JJ.
Judgment and order unanimously affirmed, with costs.