Sturges & Burn Manufacturing Co. v. American Separator Co.

Lyon, J.: In each of the months of January, February and March, 1906, the defendant, which was engaged in the business of manufacturing and selling cream separators at Bainbridge, N. Y., gave to the plaintiff, which was engaged in the business of manufacturing sheet metal specialties at Chicago, 111., an order for the manufacture of 5,500 sets of covers for separators of the two sizes known as No. 1 and No. 2. The order of January eleventh was for 3,000 sets of covers divided equally between sizes 1 and 2; the order of February sixth was for 500 sets of No. 1 covers, and the order of March twentieth was for 2,000 sets of covers, 1,000 of each size. Each order specified shipment by freight to defendant at Bainbridge, the first two orders asking shipment at once. The March order asked for shipment as soon as possible. In acknowledgment of this last order plaintiff wrote defendant as follows : “Chicago, 3/22/06. “ Gentlemen.—Your favor of the 20th inst., enclosing order No. 619 for No. 1 and No. 2 covers complete with- floats is received and shall have prompt attention. If you have occasion to write about this please refer to our order No. 11,441. Thanking you very kindly for this' remembrance, we are, ‘ ‘ V ery truly yours, “STURGES & BURN MFG. CO., “By E. B. H.” Several letters and telegrams from defendant to plaintiff urging prompt or immediate shipment were offered in evidence, but in none of them, prior to that of August 6, 1906, was there any suggestion of a’cancellation by defendant of any part of — 65 — the orders, or of the fixing of a time limit for the filling of the orders. August 6, 1906, the defendant wrote the plaintiff as follows : “Aug. 6, 1906. “Sturges & Burn Meg. Co., “Harrison & Green Sts., “Chicago, 111.: “ Gentlemen.— We are in receipt of your invoice of Aug. 4th, covering 500 sets of No. 2 covers. Owing to the delay in filling our orders, this will be all the No. 2 covers we see our way clear to use, at least for the present, whilst in regard to No. 1 covers, we could handle about 500 sets more of that size than you have so far invoiced us with. Therefore, over and above this amount, we will ask you to cancel our orders. In other words, all that we wish you to ship us is 500 sets of No. 1 covers until such time as we place another order with you. “Very truly yours, “AMERICAN SEPARATOR CO.” Subsequent to the receipt of this letter on August eighth, and down to and including August thirtieth, plaintiff continued to ship separator covers to defendant, which defendant accepted and paid for without objection, the shipments between and including those dates aggregating 1,732 sets of covers, and making a total of 4,438 sets of the 5,500 sets of covers embraced in the three orders, and completing the filling of the January and February orders and nearly one-half of the March order. On September eighth and nineteenth plaintiff made shipments of covers*, the number of sets of which is not shown, but the same were sufficient to amount at the contract price to $760, leaving yet to be shipped in order to furnish all the covers contracted for approximately 300 sets. The said shipments of September eighth and nineteenth duly reached the railroad station at Bainbridge and defendant was notified of that fact but refused to pay the freight charges thereon or to accept the property, and the same was subsequently sold by the railroad company to pay the freight charges. So far as the record discloses, no correspondence was had between the parties hereto subsequent to said letter of August — 66 — sixth until October 22, 1906, when the plaintiff wrote the defendant as follows: “ 10-22-’06 “American Separator Co., “ Bainbridge, N. Y.: “We are enclosing herewith invoice for separator covers which we have packed and hold subject to your order and which we respectfully request you to give us shipping directions for. There will also be other shipments and for these we will be glad to have you give us shipping instructions.” No such shipping instructions were ever given by defendant to plaintiff, and plaintiff completed a sufficient number of sets of covers to fill the balance of said order's and is holding them subject to the order of defendant. The summons in this action was issued in May, 1908. The answer denied liability to plaintiff on account of plaintiff’s alleged failure to manufacture and deliver said covers within a reasonable time, and also interposed a counterclaim for loss sustained by defendant by reason of such failure on the part of plaintiff, as well as by reason of defendant having thereby been compelled to procure elsewhere a portion of the covers at an additional expense. A jury was waived and the case tried by the court. The trial justice found the facts practically as above detailed; also that the said orders and acceptances constituted the contracts between the parties and obligated plaintiff to manufacture and deliver the covers with reasonable promptness; that a reasonable time for the performance of the March contract after the receipt of the material therefor on June first and twenty-first did not exceed forty working days; that plaintiff began making deliveries on the March contract August twenty-first, shipping during the ten days between that date and August thirtieth, both dates inclusive, 936 sets of covers; that the refusal of defendant to accept the September shipments, and any further delivery of covers, was upon the ground that by the delay in filling said orders and making shipments the plaintiff had failed to perform its contract. The conclusions of law reached by the trial justice, so far as is material to consider them at this time, were that the contract created by the order of March twentieth and the acceptance of — 67 — March twenty-second required shipments of covers by plaintiff to defendant to be made as soon as possible; that the plaintiff did not perform either of said three contracts within a reasonable time; that the defendant had the right to rescind the March contract because of the unreasonable delay of the plaintiff in performing the same, and that defendant was entitled to judgment dismissing the complaint, and awarding defendant damages against the plaintiff for ■ the additional sum which the defendant had been compelled to pay for the covers which it had bought elsewhere. It is from the judgment entered in accordance with such decision that this appeal has been taken. We cannot agree with the conclusion of the learned trial court that the defendant had the right to rescind the March contract because of unreasonable delay of the plaintiff in performing the same. Where an act is to be performed within a reasonable time, time is not of the essence of the contract, and, unless it be made so by the subsequent acts of either of the parties, the delay of the plaintiff in furnishing an article contracted for furnishes no defense to an action brought to recover the contract price therefor. Courts do not allow a rescission of the contract for mere delay in performance unless the parties have made time of the essence of the contract. (Taylor v. Goelet, 208 N. Y. 253.) The record discloses no act of either party subsequent to making the March contract which made or tended to make time of the essence of such contract. Moreover, it has been held that an agreement to manufacture and deliver articles “ as soon as possible ” means within a reasonable time. (Hinds v. Kellogg, 13 N. Y. Supp. 922; affd., 133 N. Y. 536.) However, assuming that “as soon as possible” does not mean within a reasonable time, but that it calls for the doing of the act with all possible expedition, as was held in Sentence v. Kelly (59 Hun, 512), yet the defendant having permitted the plaintiff to continue to perform the March contract by manufacturing and delivering on and between August twenty-first and thirtieth 938 sets of covers which the defendant accepted and paid for without objection, and having allowed the plaintiff to continue to expend time and money in completing the manufacture then under way of the — 68 — remaining covers called for by the March contract without notifying plaintiff of its intention to refuse acceptance thereof, cannot now plead delay in the manufacture and delivery of such remaining covers as a defense to this action. (Hinds v. Kellogg, supra; Dunn v. Steubing, 120 N. Y. 232.) In the latter case time was expressly made of the essence of the contract, yet it was held that while upon plaintiff’s failure to perform by the day fixed, defendant might have insisted upon his strict legal rights and thus put an end to the contract, having permitted plaintiff to continue the performance, he could not insist on the delay as a' defense to the action. Nor is there any injustice in the application of this principle to the case at bar. In or about August of the preceding year the defendant had ordered manufactured by plaintiff 2,200 sets of covers which were delivered to and accepted by defendant in or about the month of November for use by defendant in its January and February sales. So far as the evidence discloses the defendant did not at any time inform the plaintiff of its intention to make such changes in the form of its separators to be manufactured the following year as would require a different style of cover, and in fact defendant’s president testified: “We took steps to change the model of our separator after the close of the season, I should say somewhere about August or September, 1906.” It seems probable that plaintiff, mindful of its delivery of covers to defendant the preceding November, concluded that defendant wanted covers for its next year’s trade, which defendant’s president testified was at its height from January to April and practically stopped about July first, and which he had never known to run later than August first, and that relying upon such conclusion plaintiff completed the covers, all of which plaintiff’s general manager testified were nearly finished early in August and were then in the assembling room. Nothing need be said regarding the effect of the letter of August sixth in view of the holding of this court on the prior appeal that the acceptance of the covers by defendant after rescission was equivalent to a revocation of it, and an unequivocal notice of an election to abide by the contract. Such also is the position of the defendant upon this appeal. — 69 — The judgment appealed from must be reversed and a new trial granted, with costs to the appellant to abide the event. All concurred. Judgment reversed and new trial granted, with costs to appellant to abide event.