McCaull-Dinsmore Co. v. Jackson, 189 P. 771

McCaull-Dinsmore Co. v. Jackson

189 P. 771 | Mont. | 1920

MR. JUSTICE HOLLOWAY

delivered the opinion of the court.

This action was brought to recover damages for an alleged breach of contract. The defendant prevailed in the lower court, and plaintiff appealed from the judgment dismissing his complaint.

The facts of the case are not in dispute. On August 4, 1916, plaintiff and defendant entered into a contract by the terms of which plaintiff agreed to purchase from defendant, and defendant agreed to sell and deliver to plaintiff, 3,000 bushels of wheat at $1.16 per bushel, payable on delivery on board the cars at Norris, Montana, delivery to be made within forty days from the date of contract, and the grain to be shipped to plaintiff at Duluth. It was further understood between the parties, as a part of their agreement, that upon delivery the railway company would issue its bills of lading and deliver them to defendant, who should attach to them a sight draft on plaintiff, and forward them through his bank and its correspondents to Duluth, where the draft would be paid upon presentation.

The only form of bill of lading issued by the railway company contained a “loss and damage exemption clause,” and this fact was known to the parties, and the contract was made with reference to it. On August 31, 1916, plaintiff sent to defendant the following letter:

“Helena, Mont., August 31, 1916.

“To Our Friends:

“Business houses the country over are preparing for conditions that will be forced upon them when the threatened railroad strike goes into effect, Monday next, September 4th. In *560order to protect ourselves, from this date on we will accept drafts attached to bills of lading with delay in transit clause only. We will not honor drafts attached to bills of lading that have loss and damage exemption clause in them.

“Yours very truly,

“The McCaull-Dinsmore Co.”

This letter was received by the defendant about September 4 or 5, after the strike order had been revoked, and the danger of the strike of the railway employees averted. Upon receipt of the letter, defendant made inquiry to ascertain whether a bill of lading without the loss and damage exemption clause would be issued, and, having determined that it would not be, he waited for several days, and then sold the wheat to another buyer at an advanced price, and notified plaintiff that he would not make delivery to it.

Two questions only are presented by the appeal: (1) Did the buyer’s act in sending to the seller the letter of August 31 warrant the latter treating the contract as at an end? and (2) if a termination of the contract was admissible, could it be effected without first giving notice to the buyer?

While transactions of this character are sometimes treated [1] by the authorities under the heading “Rescission by Mutual Consent,” the terms are somewhat confusing, since the element of “mutual consent” is wanting. Rather they should be considered from the standpoint of a repudiation by one party of the contract in whole or in part, which excuses the other party from performance or tender of performance. However, regardless of the designation, the rule of law which governs the transactions is well settled, and is stated succinctly in 6 R. C. L. 1012, as follows: “Where one party repudiates in advance his obligations under the contract and refuses to be longer bound thereby, communicating such repudiation to the other party, the latter party is excused from further performance on his part.” The same principle is announced in 35 Cyc. 240, as follows: “The failure of the seller to. perform is excused when performance is prevented by the acts and conduct *561of the buyer, as, for example, by acts or conduct preventing the seller from obtaining the goods to fulfill his contract, by acts and conduct indicating an intent to abandon the contract and refuse performance thereof, or by the failure.of the buyer to perform conditions imposed on him by the contract.” (Slauson v. Albany R. Co., 60 N. Y. 606; McCargar v. Langlois, 81 Vt. 223, 69 Atl. 739; Eastern Forge Co. v. Corbin, 182 Mass. 590, 66 N. E. 419; O’Neill v. Supreme Council A. L. of H., 70 N. J. L. 410, 1 Ann. Cas. 422, 57 Atl. 463; Providence Coal Co. v. Coxe Bros. & Co., 19 R. I. 380, 582, 35 Atl. 210; McCormick v. Tappendorf, 51 Wash. 312, 99 Pac. 2.)

Counsel for appellant find no fault with the rule, but insist [2] that the facts do not bring this case within it; that the letter of August 31 was not a repudiation of any material provision of the contract, but only a warning notice to become effective in the event that the then impending strike materialized, and since it did not materialize, and the strike order was annulled before defendant received the letter, he was not justified in refusing to deliver the grain. To this contention the answer may be interposed that the reservation contained in the letter was not made contingent upon the strike going into effect and was not limited to the duration of the strike. The letter states distinctly that “from this date on * * * we will not honor drafts attached) to bills of lading that have loss and damage exemption clause in them.” It is true the letter refers to the threatened strike; but, if it was the intention of plaintiff to limit the operation of the notice to the duration of the strike, appropriate language to express that intention might have been employed, or, if it was the purpose to have the notice effective only in the event that the strike materialized, in all fairness it would seem that the duty to recall the letter within a reasonable time after the strike order was annulled rested upon the plaintiff, the party who injected the element of uncertainty into the transaction. Under the circumstances, the defendant was left to place upon the letter the interpretation which the language fairly war*562ranted, and in reaching the conclusion that it expressed a determination no longer to be bound by the provision for the payment of the draft we think the defendant was fully justified. It cannot be said that the provision of the contract thus affected was not a material one. Under it the defendant was assured that the grain would not be delivered to the plaintiff at Duluth until the draft was paid, and in this arrangement defendant found his only security for the purchase price of his grain. If he had shipped the grain under the conditions imposed by the letter of August 31, he would have been compelled to wait until the grain was delivered in Duluth before he received the whole or any part of the purchase price, and even then would have been without security, other than the personal liability of the plaintiff.

If this was a ease of technical rescission, it is doubtless [3] true that the obligation would rest upon the defendant to notify the plaintiff before he put it out of his power to comply with the contract; but if the act of the plaintiff amounted to a repudiation of a material provision of the contract, and we -think it did, then there was no duty imposed upon the defendant to give notice, and notice, if given, would have been without effect. (Wood, Curtis & Co. v. Seurich, 5 Cal. App. 252, 30 Pac. 51.)

We find no error in the record. The judgment is affirmed.

Affirmed.

Associate Justices Hurly, Matthews and. Cooper concur. Mr. Ghief Justice Brantly, being absent, takes no part in the foregoing decision.