National Contracting Co. v. Vulcanite Portland Cement Co.

192 Mass. 247 | Mass. | 1906

Knowlton, C. J.

The first of these cases is an action brought to recover damages for a "refusal of the defendant to furnish to the plaintiff a quantity of Portland cement according to the terms of a contract in writing made by the parties. The second is an action by the defendant in the first action to recover from the plaintiff in that action the price of cement delivered under this contract. The cases were heard before an auditor who found for the plaintiff in the first action, whom we will hereinafter call the plaintiff, and he allowed, in diminution of the plaintiff’s claim, the amount due for cement delivered to the defendant in the first action, who will hereinafter be called the defendant. The case was afterwards tried before a judge without a jury, no evidence being introduced except the auditor’s report, and such evidence, documentary and oral, as either party chose to offer of that which previously had been received by the auditor. The judge reversed the decision of the auditor and found for the defendant, holding the plaintiff liable for the price of that which was delivered and not paid for. The contract signed by the parties was silent as to the time of payment. The legal effect of the contract was, therefore, to make the price of the goods payable on delivery. Fessenden v. Mussey, 11 Cush. 127. Stephenson v. Cady, 117 Mass. 6. Morton v. Clark, 181 Mass. 134. Both the auditor and the judge found that the parties subsequently, by their conduct in regard to the various shipments made and bills rendered and payments of the bills, impliedly agreed with each other that the writing should be modified in its legal effect in this particular, and that the terms of payment should be cash in thirty days after the delivery of each shipment. All the bills were made with a statement to this effect, and the plaintiff never objected to it, but acted in a way to indicate that it adopted this modification of the contract proposed by the defendant. We are of opinion that this finding was well warranted by the evidence.

By the contract the defendant agreed to furnish all the Portland cement that the plaintiff might require for building sections fifty-two, fifty-three and'fifty-four of the high level sewer, Boston, for $1.50 per barrel. The fair interpretation of the contract is that the cement was to be furnished from time to time upon orders, as needed, within a reasonable time after the receipt of the orders. The contract was dated November 7,1901. Cement was ordered and delivered under the contract from time to time after that date, the last shipment being in June, 1902. On May 28, 1902, the defendant wrote to the plaintiff that, on account of a failure to obtain completion of its mill, number three, by May first, as it had expected to, it was extremely short of cement and much behind with its orders, and it asked for one month’s notice of shipments required in the future, and intimated that for a time it would not be able to fill orders promptly. On May 31, 1902, the defendant had orders from the plaintiff for thirteen hundred barrels, then unfilled. From that time the defendant failed to send all the cement ordered, and thus caused the plaintiff some inconvenience ; but up to July 18 the plaintiff did not attempt an enforcement of its rights in this particular, and tried to get on as well as possible with siich performance as the defendant was able to give. In the meantime the plaintiff was considerably behind in its payments, but the defendant made no serious complaint about it, although the judge found as a fact that it did not waive its legal right to payment according to the modified contract.

The crisis came when, on July 18, the defendant being much behind in its shipments and the plaintiff being much behind in its payments, the plaintiff wrote to the defendant, demanding prompt shipments in accordance with its orders, and stating that on the defendant’s failure to fill the orders promptly, it should buy in the market and charge the defendant with the excess above the contract price. The market price of cement had risen considerably after the date of the contract. To this letter the defendant replied on July 21, demanding payment of so much of the account as was overdue, with prompt remittances in the future. In this letter the defendant stated that it would make no more shipments until it received payment for the two items which were then overdue. The plaintiff answered this letter on July 23, 1902, demanding the filling of its orders for cement, stating that it had already been obliged to buy elsewhere at considerable expense in order to go on with the work, and declining to pay the overdue account, and proposing to hold the money as security for damages already suffered and that might afterwards be suffered from the defendant’s breach of the contract. As a result of the attitude thus taken by the respective parties these actions were brought.

Up to the time of the writing of the defendant’s letter of July 21, demanding payment of the overdue account and refusing to deliver any more cement until this should be paid, the plaintiff made no claim upon the defendant for damages caused by the delay in filling orders, and it does not appear that the plaintiff had suffered any substantial damages. Upon the evidence, the judge might well find that the plaintiff waived any claim that it might have made on account of the defendant’s default up to that time. Of course it had a right to insist upon perfect performance in the future; but the plaintiff’s failure to pay for the cement when the bills were due left the defendant with a right to insist at any time that these payments should be made. Such payments might be demanded as a condition precedent to the delivery of any more cement. Eastern Forge Co. v. Corbin, 182 Mass. 590, 593. National Machine & Tool Co. v. Standard Shoe Machinery Co. 181 Mass. 275, 279. Stephenson v. Cady, 117 Mass. 6. Wilkinson v. Blount Manuf. Co. 169 Mass. 374. The defendant made its demand, and stood on its right to have pay before making any more deliveries. The plaintiff sought to hold the money as security for damages from possible breaches of the contract by the defendant in the future.

We think it quite plain that the plaintiff could not lawfully do this. It could not be known that there would be any breach of the contract of the defendant in the future if 'the plaintiff made the payments then due and afterwards paid promptly. One who contracts for the purchase of goods by instalments cannot lawfully demand performance of the contract, and at the same time withhold payments due for instalments already received in order to protect himself from anticipated breaches of the contract by the seller. Stephenson v. Cady, 117 Mass. 6, 9, 10. Spaulding v. Backus, 122 Mass. 553. Wiley v. Bunker Hill National Bank, 183 Mass. 495. The technical insolvency of the plaintiff, because of large advances of money by the corporation that owned most of its capital stock, did not affect the defendant’s rights in this particular." So far as appears, this condition did not interfere with the plaintiff’s performance of its contracts, made in the usual course of its business. Hobbs v. Columbia Falls Brick Co. 157 Mass. 109. Jewett Publishing Co. v. Butler, 159 Mass. 517. Spaulding v. Backus, 122 Mass. 553. Wiley v. Bunker Hill National Bank, 183 Mass. 495.

Upon the findings of the judge, the first request of the plaintiff for a ruling was rightly refused. The second, third and fourth requests of the plaintiff were also rightly refused. The matters referred to in them were all proper for consideration on the question whether the parties, after the making of the contract, by the new arrangement impliedly agreed that the payments might be made at the expiration of thirty days’ credit. If, as the plaintiff argues, under a contract calling for cash on delivery, the effect upon the rights of the parties of delivering goods without payment at the time might be different as to future performance without payment of the goods already delivered, from the effect of such deliveries without payment when payments are'due under a contract giving a specified credit, then the change in the time for payment was material. If the law is the same when the contract calls for cash on delivery as when the sales are on credit, these matters, did the plaintiff no harm.

The rulings given in accordance with the defendant’s requests are covered by what we have already said. In both cases the entry will be

Exceptions overruled.