Wasserman v. Broadalbin Knitting Co.

Heffernan, J. In this action plaintiffs are seeking to recover damages sustained by them because of the alleged failure of defendant to deliver merchandise under a written contract of purchase and sale. Defendant denies that it breached its contract and pleads a counterclaim against plaintiffs because of their failure to comply with the contract. The Trial Judge dismissed the claims of both parties and from that determination both have come to this court. The facts in this case are not in dispute. The principal ones appear in the dissenting opinion and need not be repeated here. Leibner and Friedman had authority to solicit business for defendant. Their authority was strictly limited to such solicitation. Any order taken by them required confirmation by defendant. Plaintiffs had full knowledge of the limitation of authority on the part of these agents. On October 8, 1940, the parties to this action entered into the contract involved in this suit. By the terms of that contract plaintiffs agreed to purchase from defendant, and defendant agreed to manufacture and sell to plaintiffs, 10,000 dozen sweaters, of various colors, at $6,625 per dozen. The entire order was to be manufactured, delivered and accepted by plaintiffs by April 1,1941. One of the provisions of the contract is: “Sped [22] fications applying to this contract must be given in ample time so that goods can be manufactured by the date of delivery indicated.” The contract also provided that plaintiffs should furnish defendant specifications for size and color assortments from week to week. On October 10, 1940, the soliciting agents wrote plaintiffs regarding the contract in which letter they stated, among other' things: “ It is agreed by you that you will take in complete, all goods on this order by April 1, 1941.” In response to this letter plaintiffs on October 16,1940, wrote defendant a letter in which they said: “We agree to take in all goods on this order by April 1st, 1941.” From the date of the contract until the early part of March, 1941, defendant and its agents repeatedly endeavored to obtain from plaintiffs specifications of size and color assortments, without which defendant could not manufacture the sweaters, but without success. The excuse offered by plaintiffs for their failure to comply with the terms of the' contract was that business was very poor and that they were hopeful that conditions would improve. Unquestionably plaintiffs breached the contract made on October 8, 1940. In fact they make no pretense on this appeal that they complied with that agreement. By their failure to carry out the terms of their contract they prevented performance by defendant. It is their contention that by mutual consent the contract was modified to extend the time of performance to and including May 31, 1941. In support of their claim that the contract was modified plaintiffs are relying entirely on a letter written by defendant to them under date of February 28, 1941, the pertinent parts of which are: “As you know, the time limit on your present contract specifying ladies’ sweaters is fast approaching the due date, and due to the fact that we were under the assumption at the time the orders were placed that we would be given a steady run, we hope that you will now be able to give us some real sizable releases. We stand ready to build up a sizable production quite quickly, so if you can work out a schedule with Messrs. Friedman & Leibner on Monday of next week covering requirements for March, April- and May, we assure you that it- will he greatly appreciated. Also, if you figure that 100 dozen or so a day will be sufficient for the time being we will operate on this basis, and of course will gladly arrange to step this up whenever you so instruct, or keep adding a [23] certain percentage each week until we get up to a certain capacity. “ We know that you will readily understand our position in this matter, and now assure you that your cooperation will be greatly appreciated. After you have talked to Messrs. Friedman & Leibner on Monday and worked out a schedule we would be glad to have you phone us collect regarding this so that we can immediately get started.” (Emphasis supplied.) What happened after plaintiffs received that letter is .of paramount importance in determining whether or not there was an extension as claimed by plaintiffs. On March 3, 1941, plaintiffs requested Leibner and Friedman to visit them at their place of business. The agents complied with the request. Plaintiffs said they had defendant’s letter of February 28th but could not furnish specifications. Not only did they say that but they also said that they could not go through with their contract. On or about March 10, 1941, the agents again visited plaintiffs and insisted upon being furnished with specifications against the contract. Plaintiffs replied that their conditions had not changed and that they still had on hand “ this terrific stock here and we are all choked up and we are still holding terrific quantities of this merchandise not only with you but with others with whom we are doing business and we can’t go through with this contract; we hate to part with it; we would like to hang on to it but we can’t go through with it.” On March 12, 1941, plaintiffs wrote defendant a most illuminating letter reading as follows: “ Gentlemen: Mr. Leibner has been in to see us several times and you have written to us regarding specifications against our blanket order, and we are, therefore, writing to you at' this time to explain the reason for our not giving you any. We have been waiting from week to week for the season to open up on this item, but so far we have been disappointed. We, as you know, have quite a big stock on hand and we are, therefore, not in a position to put in any more stock for the time being or until we see that the demand is opening up. We have confidence that the item will be good again as soon as the beachwear departments begin their promotions, and if we didn’t have such a large stock, we would surely have put some in work. We ask your indulgence to bear with us yet for awhile. We were very patient and indulgent with you in every respect [24] since we have been doing business together and we are asking the same treatment in return.” (Emphasis supplied.) In response to that letter defendant on March 17,1941, wrote plaintiffs a letter in which it said, among other things: “ We, of course, have not had instructions from you against this order which would be in accordance with, our original understanding, and therefore state that it is very possible that we will not be able to make deliveries of any garments after the expiration of your order, which is April 1, 1941.” It is quite obvious that there was a substantial increase in the price of sweaters between March 12th and March 18th because on the latter date plaintiffs wrote defendant a letter containing specifications for 500 dozen. Defendant declined to comply with this demand and we think very properly so. In its letter of February 28, 1941, defendant offered to extend the time of performance to May 31, 1941, and to manufacture for plaintiffs during March, April and May if plaintiffs worked out a schedule with the selling agents on March 3, 1941. Plaintiffs made no such attempt to work out a schedule and never accepted the offer to extend the time of performance. On the contrary they definitely rejected it. The testimony and letters which we have quoted'and particularly plaintiffs’ letter of.March 12, 1941, demonstrate beyond any possibility of doubt that they knew there was no extension in effect. They knew they were in default and they asked defendant’s “ indulgence to bear with us yet for awhile.” The complaint was properly dismissed. Coming now to defendant’s counterclaim: We are convinced that it is meritorious. There was no breach of the contract by defendant. It was at all times ready to manufacture the garments. It made every effort to obtain from the plaintiffs specifications in order that it could begin manufacturing. The proof of damages is uncontradicted. Had plaintiffs fulfilled their contract defendant would have realized a profit of $2,550. Defendant is entitled to recover that amount (Personal Property Law, § 145, subd. 4; Pierson & Co., Inc., v. Nederlandsch-Indische, etc., 203 App. Div. 365; James Talcott, Inc., v. Marshall Field & Co., 15 N. Y. S. 2d 846, affd. 258 App. Div. 1045). The judgment insofar as it dismisses plaintiffs’ complaint should be affirmed, with costs and disbursements to defendant. That part of the judgment which dismisses defendant’s counterclaim should be reversed on the law and facts and judgment is directed in favor of defendant on its counterclaim and against plaintiffs for the sum of $2,550 with interest from April 1,1941.