Menke v. Willcox

275 F. 57 | S.D.N.Y. | 1921

LEARNED HAND, District Judge

(after stating the facts as above). [1, 2] The defendants knew of the contract some time during April, the exact day being unknown, and took no action upon it for over three months. It is possible that this was more than a reasonable time, and, if so, had they eventually adopted it, the plaintiffs conceivably might have been released; but the mere inaction of receivers, where they do not enjoy any benefits from assets cum onere, is never of itself an adoption, though it may endanger their right to adopt. In order to be bound, they must positively indicate their intention to take it over. Peabody Coal Co. v. Nixon, 226 Fed. 20, 140 C. C. A. 446 (C. C. A. 8). That intention may be indicated by remaining in enjoyment of the asset without dissent. Link Belt Machinery Co. v. Hughes, 174 Ill. 155. 51 N. E. 179. But in such cases it is only because an assent may in fact be so implied. Indeed, the receiver may perform some part of the contract himself, experimentally, without becoming bound. Butterworth v. Degnon Contracting Co., 214 Fed. 772, 131 C. C. A. 184 (C. C. A. 2).

[3] On the 7th of August, therefore, the receivers were free to adopt or renounce the contract as their interests dictated. Their letter of that date did neither one nor the other. It merely requested that the order be canceled, which would have relieved them of any decision at all, and Farrell’s estate of any claim for damages. In so far as it indicated anything at all as to their own position, it was a renunciation. Besides, the printed matter at. the beginning of the letter, which expressly warned the recipient that the receivers would not adopt any contract of Farrell unless they “expressly and specifically” so stated, forbade the letter from being taken as an adoption.

The plaintiffs argue that, even so, the language of the letter presupposes an earlier adoption of the contract. To read it so is to ignore the receivers’ patent purpose. They wanted the estate to be free from the contract altogether, and did not by implication concede that they had themselves theretofore adopted it, which would in fact have been untrue. All that they had done, meanwhile, was to ascertain whether they could resell the goods, a course they had a right to adopt, though at the risk of a termination by the plaintiffs before they might decide. Hiis suggestion of the defendants the plaintiffs rejected by their letter of August 10th, erroneously assuming that the defendants’ letter of August 7th was either an adoption or the evidence of prior adoption. To this interpretation of their letter, however, the defendants did not accede, for on the 13th they answered that they had not elected to execute the contract.

It is urged that the result is unjust to the plaintiffs, but this is incorrect. They had it always in their power to require the receivers to elect, and, this being a commercial contract, the time given would have been very short. Instead, they probably supposed that the receivers’ Brazilian agents could place the goods so advantageously that they would adopt the contract, which was a good bargain for the seller. Having failed in this anticipation, they now attempt to hold the receivers who never suggested in any way that they would adopt. I can see no injustice in the failure of this attempt.

Verdict for defendants.