274 A.D. 184 | N.Y. App. Div. | 1948
This is an appeal by defendants from a 'judgment in favor of plaintiffs against both defendants for the sum of $57,114 and interest, which it has been held that defendant La Commercial Industrial Mexasturca (hereinafter called Mexasturca) agreed to pay for Mexican customs duties on the shipment of 3,173 tons of reinforcing steel bars from Tampa, Florida, to Vera Cruz, The defendant Marcelino San Miguel has been held as a guarantor for Mexasturca.
The transaction has been involved in some confusion due to the nature of the contract and of the guaranty. The contract has at times been asserted by plaintiffs to have provided for a sale of these steel bars to Mexasturca, and at other times to have been for a shipment on consignment. The latter theory is the one which was finally adopted at the trial, and on which plaintiffs have been allowed to recover. The basis of the recovery is that, although Mexasturca was not obliged to pay to plaintiffs for this steel unless it elected to do so, or sold the steel to others in Mexico, nevertheless it contracted unconditionally to pay the customs duties on the importation thereof into that country. The court charged the jury: “ Mexasturca was obliged, under the terms of that written agreement, to pay the Mexican duties on the steel. This had nothing to do with whether Mexasturca was to buy the steel or not. Mexasturca was not obliged to purchase the steel, but under the written memorandum it was obliged to pay the Mexican duty.”
Thus we are not confronted with the question, which often arises where the consignee becomes insolvent, or where the goods have been lost or damaged, whether the transaction was a bailment or a sale. Here, in spite of previous contentions to the contrary, the plaintiffs have conceded that it was a bailment. After the defendant Mexasturca refused to buy the goods, plaintiffs proceeded to sell them to another party, recognizing that title had not passed to the defendants but remained in themselves. All claims for damages by reason of alleged breach
These goods could not be cleared through the customs at Vera Cruz unless the duty were paid by someone. Actually the duty was paid by the third party to whom the steel was eventually sold (at a reduced price), after Mexasturea had refused to become responsible for this steel.
The decisive issue in the action (although that question was not submitted to the jury) is whether the defendant Mexasturea agreed by this contract to pay the Mexican duty, irrespective of whether it elected to become responsible for the purchase of the merchandise.
In Burritt Co. v. Palmer-Marcy Co. (236 N. Y. 135) the court held that a question of fact was presented to resolve an ambiguity in a written contract upon a question of sale or consignment. Here, although the question is a narrower one, it nevertheless is one of fact concerning whether, under a contract for a shipment on consignment, the consignee agreed to pay the import duty regardless of whether it purchased or disposed of the goods. The contract is ambiguous concerning whether the promise to pay the duty, like the promise to pay the purchase price of the goods, was intended to he conditional upon the exercise by Mexasturea of its option to reject on the one hand, or, on the other, to purchase or assume responsibility for the sale to others of the subject of the shipment.
In discussing the subject of consignments for sale, a textbook writer has said that “ Where goods are sent to a consignee for sale (the usual form of transaction with a commission merchant or factor), there is no sale to the commission merchant. He merely acts as agent of the owner. When the factor sells the goods to a third party, the title is transferred from the original owner directly to the third party, and at no point in the transaction does it vest in the factor or commission merchant. * * * On a consignment no title passes. The consignor continues to own the goods. The consignee holds them as a bailee. If they are sold, the consignee holds the proceeds in the same manner.” (Mariash on Sales, § 9.) Such a relationship as
■ In this case the contract provided as follows:
“ It is agreed that Luis C. Varela and his financing associates will ship on consignment to La Commercial Industrial Mexasturca, S. A., Mexico, D. F., the above mentioned 3,173 tons approximately of reinforcing steel bars on consignment and on the following prices and terms:
“ Terms: 50% of the total cost of the material c.i.f. Vera Cruz to be paid 60 days from date of invoice, the balance of 50% of the total, 90 days from the date of invoice.
Prices: On size %" the price will be $64.26 per net ton, 2000 lbs.
%" the price will be $60.02
7s" the price will be $55.78
1" the price will be $55.78
1%" the price will be $55.78
“ These prices are in accordance with análisis made for the sale of these reinforcing steel bars, copy which is herewith attached, and which forms part of this agreement.
“ La Commercial Industrial Mexasturca, S. A., Mexico, D. F., will pay for the Customhouse duties in Mexico.
“ It is further understood and agreed that from the profits obtained from the sale of this material, the sum of $5,000.00 additional to the 6% included in the c.i.f. prices will be paid to the Pioneer Credit Corporation.
“ From the balance of profits obtained on said sale, 10% is to be paid to Mr. Hernán Henriquez and the balance of 90% will be divided between La Commercial Industrial Mexasturca, S. A., Mexico, D. F., and Mr. Luis C. Varela.”
It is noted that the clause that Mexasturca “ will pay for the Customhouse duties .in Mexico ” is no more absolute in form than the agreement to pay the purchase price, viz., “ Terms: 50% of the total cost of the material c.i.f. Vera Cruz to be paid 60 days from date of invoice, the balance of 50% of the total, 90 days from the date of invoice ”; followed by an enumeration of the specific prices on the various diameters of the reinforcing steel bars.
The testimony is that Mr. Hernán Henriquez, who is mentioned in the agreement as entitled to receive 10% of the profit, took no part in the transaction, and that the agreement was modified orally so as to provide that the entire profit, after payment of the sum of $5,000 to Pioneer Credit Corporation, should be divided evenly between Luis C. Várelo and Mexasturca.
The intention of the transaction, as disclosed by this agreement, was clearly, as has been stated, that these 3,173 tons of steel bars were to be shipped to Mexasturca on consignment, that Mexasturca was given the option of purchasing them at the prices stated, in which event at least plaintiffs were to bear the cost, insurance and freight to Vera Cruz, and Mexasturca was to meet all charges or expenses accruing after arrival at Vera Cruz, including the customhouse duties into Mexico, that Mexasturca would endeavor to resell these bars, in which event it would first pay to plaintiff Pioneer Credit Corporation $5,000 out of profits on the resale arising after deducting all of the items mentioned in the u análisis ” hereinbefore enumerated, and that the balance of such profit would be divided equally between Mexasturca and said Luis C. Varela. In carrying the deal into effect, as the testimony indicates, it was contemplated that before obligating itself to take this steel off from plaintiffs’ hands, Mexasturca would obtain a purchaser or purchasers who would, it was hoped, buy as nearly as possible at Mexican ceiling prices, thus realizing an anticipated profit of $87,760.39 after payment of the Mexican duties and all other expenses, which would be divided (after payment of $5,000 to Pioneer) by Mexasturca and Varela, share and share alike.
The transaction in practical effect is similar, in some respects, to one with a commission merchant or factor where the latter
We think that it is not so clear that the trial court was warranted in instructing the jury, as matter of law, that Mexasturca was obligated unconditionally under the terms of this written agreement to pay the Mexican duties on this steel. The contract leaves open for determination, as a question of fact, whether that was the intent of the instrument, or whether payment of the import duties by Mexasturca was conditioned, like the obligation to pay the purchase price, on making an election to purchase the steel. The expression et ci.f.”, as it is used in this contract, does not necessarily signify that plaintiffs are to defray no more than the cost, insurance and freight regardless of whether Mexasturca chose to buy the goods. This abbreviation is contained in the terms of sale, along with the
Insofar as the personal guaranty by defendant Marcelino San Miguel is concerned, that would, at the most, stand or fall with the principal obligation. The undisputed testimony is o that Mr. San Miguel, who spoke English with difficulty, drafted his own form of guaranty in Spanish, which he signed after it had been translated accurately into English. He guaranteed by this document to plaintiff Pioneer Credit Corporation, that Mexasturca “ will pay you for all the quantities of steel that they dispose of this lot once the material has been landed in Mexico with all the required documents in proper order and that any quantity that said company fails to pay within the terms agreed upon, which are indicated below, will be paid by myself, on request. The terms agreed upon for payment are 50% at 60 days, balance 90 days.” Limitation of this guaranty to “ all the quantities of steel that they dispose of this lot ” indicates, clearly, that he envisaged the transaction as being on consignment, and did not intend in signing that paper to obligate himself for the import tax or other expenses, but only to guarantee payment to Pioneer of the selling prices of steel disposed of by Mexasturca after it had been landed in Mexico. This has been admitted by plaintiffs’ counsel on the argument. On the following day, March 24,1945, at the instance of Pioneer, San Miguel signed a supplemental guaranty, in English, which he and his witnesses testified was requested solely in order to bind his estate, in event of his death, to the same obligation which had just been described that he signed on March 23, 1945. He testified that he did not require any Spanish translation, but relied on the representation made to him by the president of Pioneer that the English words which he signed had that meaning. Actually the English words which he signed purported to bind him, his executors and administrators, to be responsible for all of Mexasturca’s liabilities by reason of this transaction.
The trial court submitted to the jury whether the said supple
The trial court also submitted in general terms, whether the steel bars that were shipped were in conformity with the contract. Mexasturca’s manager testified that the reinforcing steel bars that were shipped were not corrugated, and that many of them had been cut by an acetylene torch, and had been welded together. He also testified that they were cut into different lengths of from fifteen to forty feet. No contractual specification of length has been shown, nor any prohibition against welding, but the “ análisis ” in Spanish which defendants contend was annexed to the contract, called for corrugated steel. The English “ análisis ” contained no such requirement. The issue of whether there was a breach of contract, therefore, appears to have resolved itself into a question of whether the English or the Spanish “ análisis ” was the one which was annexed to the contract. The jury by their verdict signified that they found that the English “ análisis ” was thus annexed.
The defendants’ counsel appears not to have excepted to the instruction to the jury that under the terms of the contract there was an absolute obligation on Mexasturca to pay the import duties, but it has been held (Newborn v. Peart, 219 App. Div. 249) that the Appellate Division may review such a ruling without an exception, as a question of fact, if there has not been a fair trial. In the case cited, the court said: “ The case was submitted to the jury upon an erroneous theory and there should be a reversal in order that the real issue may be decided by a jury. (Coble v. Potter, 155 App. Div. 716; Levine v. Rosenschein, 134 id. 157.) ” (P. 251.) (See, also, Alden v. Knights of Maccabees, 178 N. Y. 535, 541.) A motion for new trial is no longer necessary, in such a situation, now that the Appellate Division may review the facts on an appeal from the judgment. (McKellar v. American Synthetic Dyes, 229 N. Y. 106; see Civ. Prac. Act, § 608.) The facts in this case are complex and confused, nor did counsel for the defendants aid the trial court by bringing this point sharply to his attention. It can hardly be said that the point was not raised, however, inasmuch as a good deal of the testimony and argument for the defendants is directed toward that issue without bringing it into definite focus.
Since there is to be a new trial, mention should be made of the counterclaim by defendant Mexasturca for the sum of $9,484 paid by it in unloading charges for this steel, which, at one time,
The judgment appealed from should be reversed, and a new trial granted, with one bill of costs to the appellants to abide the event.
GI-lennon, J. P., Cohn, Callahan and Shientag, JJ., concur.
Judgment unanimously reversed and a new trial granted, with one bill of costs to the appellants to abide the event. Settle order on notice.