189 A.D. 843 | N.Y. App. Div. | 1919
Lead Opinion
This action was brought to recover damages claimed to have been sustained by plaintiff pursuant to defendant’s breach of a contract in writing between the parties as follows:
“ Peter Cooper’s Glue Factory
. ‘ Gowanda, New York, December 9th, 1915.
“ Messrs. Oscar Schlegel Meg. Co.,
“Ill East 12th Street,
“ New York City, N. Y.:
“ Gentlemen.— We are instructed by our Mr. von Schuckmann to enter your contract for your requirements of ‘ Special BB ’ glue for the year 1916, price to be 9c. per lb., terms 2% 20th to 30th of month following purchase. Deliveries to be made to you as per your orders during the year and quality same as heretofore. Glue to be packed in 500 lb. or 350 lb. barrels and 100 lb. kegs, and your special Label to be carefully pasted on top, bottom and side of each barrel or keg.
“ This contract is contingent upon fires, strikes, accidents and other causes beyond control of the parties hereto.
“ We take great pleasure in entering this contract and assure you this continuation of your business is greatly appreciated.
“ Yours very truly,
“ PETER COOPER’S GLUE FACTORY,
“ W. D. Donaldson,
Sales Manager.”
“ WDD/SIJ-D.
The plaintiff was a jobber exclusively, handling glues, shellacs, paints and chemicals. It bought only for retailing to the trade and did not manufacture or use any of these articles in its own business. It sent out salesmen to solicit orders and when “ BB Special Glue ” was ordered by a customer a requisition covering the same would be sent to defendant who would fill the order. The plaintiff dealt in none of the glue from its own stock but filled the orders of its customers as it received them by calling upon defendant to deliver the goods under the contract between the plaintiff and defendant. Therefore, the plaintiff’s requirements of Special BB Glue for the year 1916 were the amounts of orders received therefor from its customers to whom its salesmen had sold such goods. This method of doing business, and the meaning of the term “ requirements ” as used in the contract, were concededly well known to defendant, which had theretofore done business under the same system with the plaintiff, to which it had sold goods as far back as 1910. The contract in question is similar in general terms to the contract between the parties for the year 1915 which also
Under these conditions plaintiff not unnaturally sought to reap a legitimate advantage from its contract and by soliciting the trade received orders for the last three months of 1916 which, as has been said, aggregated 126,100 pounds. In the meantime the defendant was furnished by plaintiff with requisitions for orders for 79,891 pounds of glue which it has failed to deliver under the contract, and upon the trial these requisitions were produced by the defendant upon notice and received in evidence. At no time during the receipt of these orders did the defendant repudiate the contract or disavow the same, nor did it object to, or question, the good faith of the orders. Plaintiff repeatedly demanded performance of the contract and defendant’s representative with whom the original contract was made promised repeatedly as late as the month of December, 1916, to ship glue to cover the requisitions and said that the glue was on the way. Instead of repudiating the contract, the defendant undertook to place an arbitrary limitation upon the same, by saying it would give the plaintiff as a jobber ten per cent more than it had purchased during
The defendant now claims that this contract lacked mutuality and, therefore, was unenforcible. I do not think this contention can be sustained. Both parties were dealing with full knowledge that the plaintiff required no glue for use in any manufacturing business of its own, but desired and agreed only to purchase such glue as it might be able to sell through its salesmen to customers. The course of dealing between plaintiff and defendant kept defendant constantly advised of this fact and it knew that the plaintiff kept no stock of goods, but as soon as it received an order for glue it notified the defendant thereof and had the order filled by defendant. In other words, plaintiff’s requirements which, under the contract, defendant was to supply for the year 1916, were its requirements for the amount of glue which during that time it might be able to sell to customers. The recovery herein is based upon the loss which plaintiff sustained by reason of defendant’s failure to fill orders which plaintiff had so obtained from customers and of which the defendant had been promptly notified. The defendant had not protected itself against any abnormal variation in price during the year nor had it fixed any limitation upon the amount of glue which it would furnish the plaintiff, if it received orders from its customers therefor. The only proviso in the contract which the defendant cared to insert was that the contract was contingent upon fires, strikes, accidents and other causes beyond the control of the parties. A rising market could have been guarded against by the defendant by inserting in the contract a clause fixing the maximum amount which the plaintiff might be entitled to receive thereunder; but instead the defendant made an absolute contract at a fixed price for the entire year to deliver as much glue as plaintiff might be able to sell to customers during that period. If the plaintiff had taken orders for this quality of glue and had failed to buy the amount to fill such orders from the defendant, the defendant could have held the plaintiff under the contract and
The court has found that the orders in question were received by plaintiff and transmitted to defendant under the contract. The plaintiff’s good faith in soliciting these orders and their validity have not been successfully attacked. Having a valid and enforcible contract with the defendant, obtained without any unfair "dealing on its' part, but as the result of the deliberate judgment of both parties thereto, the plaintiff had a right in the absence of any notification from the defendant that it could not or would not fill all its orders to proceed legitimately in good faith to solicit orders from the trade for this quality of glue and to expect the filling of these orders by the defendant. The defendant had no right to arbitrarily limit the amount which plaintiff should receive under the contract, and it was, therefore, properly held liable for the damages which the plaintiff sustained.
The situation presented by this case is similar to that which was before the Court of Appeals in New York Central Iron Works Co. v. U. S. Radiator Co. (174 N. Y. 331). There also the parties had left the contract open and indefinite as to
The judgment appealed from should be affirmed, with costs.
Merrell and Philbin, JJ., concurred; Clarke, P. J., and Page, J., dissented.
Dissenting Opinion
In my opinion the alleged agreement upon which the cause of action was predicated lacked mutuality of obligation, and if the construction put upon the contract by the majority of the court be accepted the contract was too indefinite and uncertain to constitute a valid and binding contract between the parties to this action. The alleged agreement consists of the letter of the defendant to the plaintiff dated December 9, 1915, quoted
The prevailing opinion correctly states that “both parties were dealing with full knowledge that the plaintiff required no glue for use in any manufacturing .business of its own, but desired and agreed only to pinchase such glue as it might be able to sell through its salesmen to customers.” The opinion, however, further states: “ If the plaintiff had taken orders for this quality of glue and had failed to buy the amount to fill such orders from the defendant, the defendant could have held the plaintiff under the contract and recovered the damages which it sustained by reason of plaintiff’s failure to order such glue from the defendant.” This presupposes that if the price of this quality of glue fell below nine cents a pound the plaintiff would continue to solicit the trade and take orders for this quality of glue. It was under no obligation to do so. The sale of this particular glue was not its business exclusively, nor does it appear to have been a substantial part of its business until under the stimulus of advancing prices, it made special effort to secure orders. It can well be assumed from the strenuous efforts to make a large profit at the expense of the defendant, when prices more than doubled, that if prices had fallen, effort would have been made to prevent loss by refusal to solicit or fill orders. In such an event defendant could not have recovered against the plaintiff, for the reason that the plaintiff did not agree to sell this glue, nor to push its sale. That the plaintiff had no orders and, therefore, no
In the prevailing opinion it is stated that “ the plaintiff’s requirements of Special BB Glue for the year 1916 were the amounts of orders received therefor from its customers to whom its salesmen had sold such goods.” When the price rose from nine cents to twenty-four cents a pound and no quotations were obtainable for the year 1917, the opinion says: “ Under these conditions plaintiff not unnaturally sought to reap a legitimate advantage from its contract and by soliciting the trade received orders for the last three months of 1916 which, as has been said, aggregated 126,100 pounds.” To my mind a construction that would put the defendant entirely at the mercy of the plaintiff cannot be the proper interpretation of its meaning. And further that so interpreted the contract would be void for indefiniteness and uncertainty. If such a construction is possible then the plaintiff can speculate on the contract, and if its “ requirements ” are an unlimited supply, that is, all it could sell at the advanced price, it is common business experience that with a handsome profit certain, every effort would be made to reap the benefit by stimulating its sales, the plaintiff thereby securing a large profit and the defendant suffering
In some of the cases a distinction is sought to be drawn between contracts for requirements, where the subject thereof is an article incidental to the business of the purchaser or where the purchaser is under contract to resell, and where the purchaser buys to sell again as a principal part of his business (Crane v. C. Crane & Co., 105 Fed. Rep. 869), the theory being that the amount in one case is made certain or capable of an approximation to certainty as to the requirements by reference to a standard or measure, while in the latter there is no such standard or measure by which the amount of the requirements could even be approximated in advance and, therefore, the contract is too indefinite and uncertain to be enforcible.
The question, as I understand it, is not dependent for its solution upon the character of the business of the purchaser, but rather whether there is anything whereby the very indefinite and uncertain word “ requirements ” can be made approximately definite and certain — something within the knowledge of both parties, so that their minds met in a
Where a contract is made by a jobber or wholesale dealer for goods that he is to sell, but for which he has no present contract of resale, and the contract is for his requirements, it must mean for his regular and ordinary business purposes. In the case of Jenkins Co. v. Anaheim Sugar Co. (supra) the plaintiff only demanded that the defendant should furnish the amount that in previous years had been sold during the period covered by the contract. This would be one test, and if the amount demanded under the contract was greatly in excess of that amount, the question would be whether the orders were in excess of the purchaser’s reasonable needs and were justified by the conditions of the business. (New York Central Iron Works Co. v. U. S. Radiator Co., supra, 335.) While in such a case the amount of the purchaser’s requirements is uncertain, and more difficult of forecast than in the case where the article was for incidental use, yet it can be determined with reasonable approximation. Therefore, such a contract is not void for uncertainty. But the purchaser is limited to demand such as he requires to meet orders received
The facts in this case show, conclusively, in my opinion, that the plaintiff was not acting in good faith but was using the contract speculatively and not as was contemplated by the parties. The plaintiff had been buying this quality of glue from the defendant for several years. In November, 1910, a contract was made for 100 barrels, or 50,000 pounds. During the year 1911 the plaintiff took 14 barrels, or 7,000 pounds. In January, 1912, a contract was made for the plaintiff’s “ requirements for the current year, approximated at 100 barrels.” Only 63 barrels were ordered. In February, 1913, a contract was made for the plaintiff’s “ requirements for the balance of the year 1913, approximated at 100 barrels,” and 60 were ordered. In January, 1914, a contract was made for the plaintiff’s requirements “ approximated at from 50 to 75 barrels ” and 60 were ordered. In March, 1915, the contract was made for the plaintiff’s requirements “ for the balance of the year 1915,” and 70 barrels were ordered. In the 1911 contract the price was eight cents a pound. In 1912, eight and one-quarter cents a pound. In 1913, nine cents a pound. In 1914, nine and one-half cents a pound. In 1915, nine and one-half cents a pound, and in 1916, nine cents a pound.
The defendant filled the plaintiff’s orders to the extent of 64,659 pounds, which was nearly double the highest amount ordered in any previous year, and more than double the average of the amount sold for the preceding four years, but refused to make further deliveries. The defendant all through its dealings has treated the plaintiff with great fairness and consideration. It did not hold the plaintiff to its contract in the year in which the contract called for the sale of 100 barrels, although it could have recovered substantial damages. Nor did it in 1916 refuse to deliver to plaintiff when the reasonable requirements of its business as tested by previous years had been reached, but let it have double the amount and it was not until the purpose of the plaintiff became evident under the guise of the contract, to perpetrate an evident and unconscionable fraud did the defendant refuse to be further imposed upon. Therefore, if the contract was not void for mutuality or for uncertainty, the defendant was entitled to judgment upon the last-mentioned grounds.
I am, therefore, of the opinion that the judgment should be reversed and judgment ordered for the defendant.
Clarke, P. J., concurred.
Judgment affirmed, with costs.