145 N.Y.S. 218 | N.Y. App. Div. | 1913
On October 3, 1906, the defendant, a manufacturing corporation organized under the laws of New York, having its factory and principal office at Newark, Wayne county, N. Y., entered into a contract in writing with the plaintiff, also a New York corporation, located and having its principal office at the city of Buffalo, whereby the defendant agreed to manufacture for and sell to the plaintiff 25,000 Yacuo Sanitary Carpet Cleaners of a style and in accordance with a sample furnished by plaintiff. For said cleaners plaintiff was to pay defendant two dollars and twenty:three cents each, to be paid within thirty days after delivery of the manufactured article. Work upon the manufacture of said sweepers was to be undertaken at once, and delivery was to be made as soon as practicable and in the exercise of due diligence as fast as ordered by plaintiff, and all of said carpet cleaners to be delivered within one year after such delivery should commence, with allowance for delays resulting from strikes or other unavoidable causes. All patterns, dies and directions necessary to manufacture said cleaners were to be furnished by plaintiff.
In further consideration of defendant’s undertaking said manufacture, plaintiff therein agreed to deposit with defendant the sum of $10,000 as a continuing guaranty and indemnity to defendant against losses or damages incurred by reason of any violation or infringement of any patent, and also as security for the performance of said contract by plaintiff. Said $10,000 was to be deposited as follows: $6,000 upon making of the contract, and the balance of $4,000 by payment of sixty-two cents extra upon the first 6,452 cleaners delivered, making the price for first 6,452 cleaners $2.85 each. Upon full performance of
Pursuant to said contract the defendant entered upon the manufacture of said cleaners, but for some reason not disclosed by the record before us, said contract was not completed within the time specified, and on February 18, 1908, the parties entered into a second contract, also in writing, extending performance of the original contract until April 1, 1909. By said second contract plaintiff agreed that on or before the 18th of June, 1908, it would make good its partial default by depositing with defendant the balance of the $10,000 provided by the original contract. Except as to curing said default and the extension of the time for performance said second contract reaffirmed the contract as originally made.
Plaintiff failed to keep its part of the contract as so modified, by neglecting to make good the deficiency in the $10,000 deposit, and matters appear to have drifted along until December 24, 1908, when the parties entered into a final agreement in writing apparently settling and adjusting all matters between them.
After reciting the making of the original contract between the parties of October 3, 1906, the default of plaintiff in making the full deposit of $10,000 as required by the contract, and that the defendant then had on hand goods, wares and merchandise purchased by it in anticipation of the completion of said contract, in a sum not exceeding $12,000, and the desirability of terminating the contract and adjusting the differences between the parties arising out of a partial performance of the contract, and to that end to adjust and satisfy all differences and claims between the parties and to release each other from all liability arising from said contract, the said parties contracted and agreed as follows: The plaintiff agreed to execute and deliver to defendant its promissory note for $1,000, dated January 11, 1909, payable in four months from its date, and that said plaintiff would assume and pay any indebtedness of defendant to the D. H. Stoll Manufacturing Company under the latter’s contract with said Stoll Manufacturing Company, not exceeding the sum of $1,200. By said agreement of settle
The instrument then closes with an agreement on the part of each party to release the other from any and all liability arising out of the original contract and its modifications.
The record does not show whether or not the bill of sale which was to evidence the transfer of title to the merchandise was ever executed, but it is apparent that the parties treated the transaction as a completed sale so far as the articles and personal property which it was agreed should go to the plaintiff was concerned, as a portion thereof was shipped to plaintiff from Newark as stipulated. The $1,000 note was executed and delivered by plaintiff to defendant. Plaintiff failed to pay and discharge the claims of the D. H. Stoll Manufacturing Company as it had agreed, and same were paid by defendant, and plaintiff subsequently gave to defendant its promissory note for $1,010 to cover the amount of the Stoll Company’s claim as finally paid by defendant. Plaintiff’s two notes were not paid when due and one thereof was renewed. Finally, on September 21, 1909, defendant, evidently tiring of plaintiff’s tardiness in paying its said notes, notified plaintiff that it would on October 1, 1909, sell at public sale the merchandise which it claimed to hold as security for the payment of plaintiff’s said note for $1,000, which had finally matured September 11,1909. Plaintiff received this notice, but apparently ignored the same, and on October 1, 1909, the balance of the merchandise mentioned in the agreement cf December 24, 1908, remaining in defendant’s possession, was sold at public auction, the sum of $477.20 being realized from the sale. This amount was applied by defendant upon its $1,000 note, leaving a balance due thereon of $522.80, besides interest and protest fees.
Thereafter plaintiff brought this action to recover of defendant the sum of $8,250, which it claimed it had paid to defendant, seeking to treat the transaction of December 24, 1908, as a conditional sale by defendant to plaintiff of the chattels and merchandise which defendant had on hand as the residuum of its contract for the manufacture of said cleaners. Plaintiff’s
Defendant answered in the action denying plaintiff’s said contention as to the interpretation to be placed upon their agreement, and insists that the transaction was not a conditional but an absolute sale so far as the merchandise on hand was concerned, and that such sale was then and there completed and that the title to said goods passed to plaintiff, the possession thereof being retained merely as security for the payment of the $1,000 note concurrently executed and delivered by plaintiff to defendant and to secure and indemnify defendant for the amount of the D. H. Stoll Company claim. Defendant’s contention is that it held said chattels as security, and plaintiff having defaulted it had the right to dispose thereof, applying the proceeds upon the indebtedness secured. In its answer defendant counterclaimed upon the balance unpaid upon its said $1,000 note and upon the $1,010 note given to adjust the Stoll Company’s claim. No reply to defendant’s counterclaim was ever served by plaintiff. The trial took a strange and, I think, unprecedented course. The action was brought to trial at the Erie Trial Term on November 21, 1912. The evidence was largely documentary and was presented to the court and a jury. At the close of plaintiff’s evidence the defendant moved for a dismissal of the plaintiff’s complaint and for judgment in defendant’s favor upon the counterclaims contained in defendant’s answer and to which plaintiff had not replied. No ruling appears to have been made thereupon. The defendant offered
The record contains the following additional memorandum: “August, 1913. Judgment directed in favor of the plaintiff and against the defendant for Bight Thousand six hundred ten dollars ($8,610), and dismissing the defendant’s counterclaims.’’
Upon such proceedings was the judgment appealed from entered.
The conduct of the trial justice thus outlined was entirely unauthorized and extra judicial. But counsel for defendant, it would appear from the record, made no objection and took no exception to the course adopted by the justice who presided at the trial, apparently acquiescing in the discharge of the jury and the court’s proposal to hold his motions for future consideration, and no attempt has been made to correct the irregularities attending the entry of judgment.
Moreover, I can discover no evidence in the record of the trial in support of plaintiff’s allegation that under the contract of December 24, 1908, it paid defendant the sum of $8,250, or any other sum, and said allegation of plaintiff’s complaint is denied by defendant’s answer. The record appears barren of any evidence to support the verdict attempted to be directed by the trial justice.
However, disregarding the unprecedented procedure leading up to the judgment rendered and the absence of evidence to support it, it seems to me that upon the merits the judgment appealed from should be reversed. The rights of the parties are dependent upon the interpretation which we are to place upon the agreement entered into by the parties on December 24, 1908. The instrument as a whole was intended as a settlement of a long standing deal between the parties. It adjusted
That it was the clear intention of the parties that the title to and ownership of the merchandise in question should at once pass from defendant to plaintiff was clearly evidenced by the following provisions of the contract:
1. Defendant’s agreement to place the goods on board cars at ¡Newark on plaintiff’s demand within sixty days from date of contract (afterwards performed as to a part of the goods).
2. The provisions that said goods in the meantime should be stored by defendant, “but always entirely at the risk of the party of the first part ” (plaintiff).
3. The understanding “that the party of the second part [defendant] shall retain in its possession all of said property so transferred by said bill of sale as security for the payment of said note of One Thousand Dollars, and as security for and against any loss,” etc., by reason of said D. H. Stoll Manufacturing Company’s contract.
4. The provisions permitting plaintiff to sell said goods or
These provisions seem to me to clearly show, an intention on the part of both plaintiff and defendant that the title and ownership of the goods should pass to plaintiff, and that defendant’s possession thereof was merely to secure it for the unpaid indebtedness of plaintiff. The giving of the note, the assumption of the Stoll Company claim by plaintiff, the surrender of all claim to the moneys deposited and the sale of the goods were all acts to be and become contemporaneously effectual. From a careful perusal of the contract I find no provision showing any intent of the parties that the ownership of the chattels should remain in defendant. Unless there was such an intent the sale was unconditional. Ordinarily in cases of conditional sale the property sold is delivered to the conditional vendee. Section 65 et seq. of the Personal Property Law prescribes the procedure to be adopted by a conditional vendor on retaining the property conditionally sold. Here there was no retaking, as the property never passed from defendant’s possession, but was retained as a pledge and security for the payment of plaintiff’s obligations. Plaintiff having defaulted it was clearly within defendant’s power under the terms of the contract to sell and dispose of the personal property which it held as security.
I am of the opinion that the trial justice erred in awarding plaintiff judgment herein, and that defendant’s motion to dismiss plaintiff’s complaint and for judgment on the counterclaims pleaded in defendant’s answer should have been granted.
I think the contract of December 24, 1908, operated as an unconditional contract of sale from defendant to plaintiff of the merchandise and personal property therein mentioned, title thereto at once passing to plaintiff; that defendant retained possession thereof solely as security for the payment by plaintiff of its $1,000 note and for its agreement to pay the D. H. Stoll Company claim, and that plaintiff having defaulted in meeting its said obligations, the defendant acted within its rights in advertising and selling the property and in applying
All concurred.
Judgment reversed and new trial granted, with costs to appellant to abide event.