118 Misc. 448 | N.Y. App. Term. | 1922
Lead Opinion
After plaintiff had demurred to a defense,. both §ides moved for judgment on the pleadings. The learned trial justice held that the complaint was good, and that the defense
As the complaint, as drawn, was ambiguous, and left in doubt whether the pleader intended to rely upon an anticipatory breach, or upon full performance except for a waived tender of delivery, plaintiff’s counsel, at our request, by informal written stipulation that is to be deemed a part of his brief and binding construction of his pleading, has removed the ambiguity and declared unequivocally upon an anticipatory breach.
On April 20, 1920, the plaintiff and defendants agreed in writing, the former to sell, and the latter to buy, nineteen cases of turkish towels, at agreed prices, to be delivered in May, June and July, 1920. At the time the contract was made five cases of towels were delivered to and physically received by the defendants. On May 6, 1920, the defendants notified plaintiff “ that they would not accept said goods (the entire order being here referred to) or pay therefor, or carry out the terms of said contract on their part.” On November 3, 1920, plaintiff brought suit in the City Court against the defendants for the “ agreed price and reasonable value ” of the five cases of towels delivered to defendants before their repudiation. That action resulted in a judgment for the plaintiff. The plaintiff, continues the pleader, would at all material times have been ready and willing to perform “ but for the defendants’ aforesaid cancellation, notification, and refusal.” The present action is for damages, in respect of the fourteen undelivered cases of towels, caused plaintiff by defendants’ breach by means of their repudiation and refusal to perform, prior to the time fixed for performance in the contract.
Two objections to the complaint are urged by defendants. The first is that the contract is entire, and that the City Court action and its result barred any further claim upon or under it. That objection would seem (Pakas v. Hollingshead, 184 N. Y. 211) to be well taken, but we are met by two cases in this court which appear to sustain plaintiff's contention that he may thus split his claim. Rusch v. Klausner, 117 N. Y. Supp. 1074; Peruvian Panama Hat Co. v. Marcus, 164 id. 821. We prefer, therefore, to pass on to less debatable ground, and so I shall proceed to consider the second objection of the defendants, which is, that the complaint should have contained an allegation that plaintiff, upon being advised by defendants that they would not perform, gave defendants the notice required by section 146 of the Personal Property Law. That section reads: . “ When seller may rescind contract or sale. Where the goods have not been delivered to
On behalf of plaintiff it is contended that the statutory provisions quoted refer only to such a true rescission by the seller as would result in the complete abandonment of the contract, leaving the parties in the same legal situation as if the agreement had never been made: On behalf of defendants it is contended that the statute was intended to refer to such a case as this, where the injured and innocent seller desires to elect not merely not to go farther toward performance, but also to save his right to hold the breaching buyer for damages sustainable from that breach. The argument for plaintiff is, thus, that he was not required to give any notice; while the argument for defendants is that plaintiff cannot recover without proving and, therefore, pleading that such a notice was given.
In so far as concerns the need of a notice, the case is treated on both sides, and properly, I think, as if it were on the same footing with one wherein no delivery of any part of the goods had been made; and the matter of notice is discussed as if we were dealing with the simple question whether a seller, to take advantage of an anticipatory breach in order to sue the buyer for damages, must give the notice referred to in section 146.
If the situation were unaffected by section 146 of the Personal Property Law, the plaintiff, upon his receipt of defendants’ notification that they would not perform, could have done one of three things: 1st. He could have ignored the notification and proceeded to perform, in which case he would have been under the duty of being in readiness to deliver the goods at the agreed times, nothing being excused of him but the actual tender that was, in effect, waived by the defendants’ notification. 2d. He could have at' once ceased performing, in which case he could have sued at once, or at any time before the Statute of Limitations should run against him, for damages due to the anticipatory breach (the quantum of damage being affected in certain cases by the stage of performance reached at the time of the anticipatory breach). Pers. Prop. Law, § 145, subd. 4. 3d. He could have rescinded, i. e., he could have treated the contract as if it had been canceled, or as if it had never been made; in which case he would have been under no duty of giving any notice to the defendants.
What then, if anything, did section 146 of the Personal Property Law add to the plaintiff’s rights or duties? Professor Williston
Without commenting upon the possible value of the section, under Professor Williston’s construction of it, in respect of total rescission for the reasons given in the section other than that of repudiation, I am unable clearly to see how, in respect of repudiation, the section has, under that construction, any practical meaning. The injured seller, in such a case, would be doing a seemingly idle thing in giving a notice that he intends to call the contract off. As a practical matter, he need do nothing at all, for he is amply protected by that fundamental rule of the law of contract that prevents a defaulting party from recovering against the other party. In so far, then, as concerns a seller who receives an unequivocal repudiation, the section would seem to mean something else than that the seller must give a notice that if the buyer sues him, the seller will avail of his right to defeat the buyer by relying upon the buyer’s own default. Statutes are to be construed as practical rules of conduct. What, then, does the statute mean,
It seems to me to be very plain that the precise point we are dealing with here was necessarily disposed of in the Rubber case. It is suggested that if the point were involved at all, the treatment of it was by way of dictum. Even were that the case, I should be inclined to consider a dictum from such a source binding upon us in the absence of precise adjudication by the same court to the contrary. But I think my short summary shows that the question was squarely raised, and necessarily decided. It must be obvious that Judge Cardozo, in using the terms “ abandoned ” and “ rescinded,” did not mean to refer to the complete abandonment for all purposes which, as I have pointed out, was the intention ascribed to section 146 by Professor Williston. There was no question of complete abandonment in the case. The plaintiff was relying upon the right it would have had at common law to cease performance, and sue for damages due to an anticipatory breach." It is, therefore, quite apparent that the Court of Appeals has taken a different view of the section from that entertained by Professor Williston; and that, in this state, at least, a seller who wishes to elect to desist from performance and yet hold the buyer for damages, must, upon repudiation by the buyer, notify the buyer of the seller’s election so to hold him. As no notice of election is pleaded here, I am of the opinion that the complaint is defective.
Order denying defendants’ motion for judgment on the pleadings reversed, with ten dollars costs, and motion granted, with ten dollars costs, with leave to plaintiff to plead over within-six days on payment of costs. Order granting plaintiff’s motion to sustain demurrer reversed, without costs, and motion denied, without costs.
Concurrence Opinion
With some hesitation, and even reluctance, I have concluded that Mr. Justice Mullan is correct in his view of section 65 of the Uniform Sales Act, the section designated in New York as section 146 of the Personal Property Law.
The draftsman of the act, Professor Williston, points out that this section is new, in the sense that no such section is found in the English statute; and also that it in express terms relates to a total rescission. It appears to be his view that the words “ totally rescind ” clearly refer, not to a termination or annulment, so far as performance may be required of the party offended by the
References in our appellate courts to this section, however, are such as to show that it has not been there regarded as referring to a true rescission. The interpretation to the effect that it does not relate to a true rescission leaves no meaning, which I can perceive, to the word totally. Rather it is indicated that this word should be disregarded in order that the section may have a more useful application. In any event" Professor Williston’s opinion of it seems to be authoritatively rejected in New York.
According to the construction of this section which we are now adopting, on the occurrence of an anticipatory breach by the vendee, the seller must signify what his position is going to be, under penalty of losing his right to recover on 'the theory of an anticipatory breach. Usually he may reject the suggestion implied from the breach on the other side, that further performance cease, and proceed with the contract; though the Sales Act would seem as a practical matter to greatly limit his right to that alternative in certain cases. See § 145, subd. 3. He may give notice that he will “ accept the breach ” and hold the buyer for the resulting damages. Presumably, he may do that by signifying his intention other than by formal notice, as by commencing an action to recover damages. But he may not remain silent and subsequently recover as for an anticipatory breach.
My reluctance to adopt this construction of section 146 has been due to the fact that it is in many respects, both theoretically and practically, unsatisfactory.
The most striking feature of this section is that it is intended to confer some right or privilege on the seller in the instances of breach by the buyer' to which it relates. It is a seller’s section. It would not, on its face, appear to have been adopted because it would be helpful to a repudiating buyer. But if its purpose be to prevent the seller from “ occupying an equivocal position ” (Wells v. Hartford Manilla Co., post) it will frequently fail to accomplish its purpose; for it will apply only where the' seller proceeds on the theory of an anticipatory breach. It will not apply where the seller’s intention is to rely on performance by his side, to tender, so far as he may be required, according to the agreement or the acts of the parties, to tender.
As a result of the present interpretation of the section, the application to practical affairs, by lawyer or layman, of the doctrine of anticipatory breach is to become even more confusing and perilous than it has been. In this state, for example, that doctrine has been extended but to a few classes of contracts. Now we are
This construction of the section will offer one more barrier or technicality in favor of an offending buyer, in certain cases, and against the just claims of the seller whom his breach has damaged. There will be one more pitfall for the honest merchant.
It is to be noted that this construction of the statute will lead to further necessity for construing it. What will be its application where there is but a very short period between the breach and the date for performance? May the seller fail to perform and thereafter give notice within a reasonable time? What will be its application where subdivision 3 of section 145 applies? Where, by reason of that subdivision, both parties must know that the buyer’s repudiation will force the seller to “ accept the breach ” must the notice be given nevertheless? In a jurisdiction where the doctrine of anticipatory breach is not accepted, will this section have no meaning?
But I have decided to concur with the construction adopted by Mr. Justice Mullan. What has already been said in our appellate courts precludes us from adopting the construction of it which its language favors and which Professor Williston ascribes to it. For the same reason, at least, we are precluded from disregarding it entirely. We might say it is not mandatory in its nature; that it was intended to permit a seller to anticipate a change of mind, on the buyer’s part, before the time for performance. But that would not be a strong position to take; for, as indicated from the opinion of Mr. Justice Mullan, we are seeking a meaning, outside the language of the section, because there seems to be little accomplished by telling a seller he may “ totally rescind.” Equally as well could it be said little would be accomplished by telling him he could notify the buyer that the buyer would be taken at his word.
By the Uniform Sales Act it is sought to make the law of sales the same in the various states. To secure uniformity a choice must be made between divergent views as to the law and as to what the law should be. The section under consideration may be considered as adopting, to some extent at least, the doctrine of Johnstone v. Milling, L. R. 16 Q. B. Div. 460, discussed in Wells v. Hartford Manilla Co., 76 Conn. 27, where at page 34 we find the following:
“ In the last case cited, [that is in Johnstone v. Milling, supra] Lord Esher gives an interesting summary of the result of the English cases and the theory which underlies them. * * * ' The other party may adopt such renunciation of the contract by so
“ These limitations contained in the rule prevent a party to a contract from occupying an equivocal position with respect to it. The contract remains a subsisting one until the parties have mutually elected to treat it otherwise, and have given unmistakable evidence of such an election. A renunciation does not create a breach; there must be an adoption of the renunciation. The renunciation must be so distinct that its purpose is manifest, and so absolute that the intention to no longer abide by the terms of the contract is beyond question. The acquiescence therein must be as patent. There must be no opportunity left to the-promisee to thereafter insist upon performance, if that shall prove more advantageous, or sue for damages for a breach, if events shall render that course the more promising.”
As we are precluded from giving the section the interpretation naturally flowing from its language, it would appear to be the most logical course to hold that it was intended to make general, in relation to contracts for the sale of goods, the rule just referred to, to the effect that a seller, who would rely on an anticipatory breach, must declare his position.
Were it not for what has been indicated in our higher courts, I would say that the section should be read according to its language; that we may not disregard the emphatic word “ totally ” because we do not think the seller requires the remedy of true rescission. Some one else might consider such remedy to be worth while and worthy of express statement in a uniform sales statute. A seller desiring certainty of position might feel that he would obtain it by a total or true rescission and that it would be an advantage to have a statutory provision to back him up. Furthermore, a statute is properly interpreted according to its language. It is not usually proper to blue pencil it and distort its meaning because it does not appear very useful. But we seem to be precluded from giving to the language of this statute its natural meaning.
If the interpretation of section 65 of the Uniform Sales Act,
Gut, J., dissents.
Orders reversed.
