Iwai & Co. v. Hercules Powder Co.

Atkinson, J. A controlling question is presented in the first assignment of error upon the judgment of the Court of Appeals. That is, did the Court of Appeals err in holding that the plaintiff was bound to provide a vessel at New Orleans not later than June 30 to receive the rosin? This question depends upon a proper construction of the contracts in their entirety, in the light of the subsequent conduct of the parties with reference thereto, as shown by the correspondence attached as exhibits to the petition. After careful consideration this court has reached the conclusion that the Court of Appeals did not err in holding that the plaintiff was bound to provide a vessel as indicated, and that, having failed to do so, plaintiff could not recover against the defendant on the basis of refusal to deliver the rosin after expiration of the time. The Court of Appeals ruled as above indicated, and also that the petition showed another breach of the contract by the plaintiff’s failure to furnish the defendant with “freight bookings.” The second assignment of error in the petition for certiorari relates to this last ruling; but no decision will be made on this question, because it is unnecessary in view of the affirmance of the judgment of the Court of Appeals as to the duty of the plaintiff to furnish the ship. The following presents the view expressed by the Court of Appeals: “As this court sees this case it presents for consideration two main propositions: (1) What is the proper construction of the four contracts on which suit was brought? (2) Were these contracts modified by the correspondence attached to the petition as. exhibits ? As to the first of these let us see what were the obligations of the parties under the contracts, in so far as questions relative thereto are raised in the case. Iwai’s obligations were to secure letters of credit, provide the steamers to transport the rosin, pay for the rosin at so much fgross for net, FAS steamer New Orleans, and furnish freight bookings.’ Under the contract, when should the steamer be pro [800] vided? Under none of the contracts was there any provision for ‘shipment’ later than ‘June steamer from New Orleans.’ What does ‘June steamer from New Orleans’ mean? That by these words Yaryan understood that delivery should be made in June is shown by the correspondence with the plaintiff, and especially by the following letters: On May 28 Yaryan wrote Iwai, in reference to contract No. 1319, in part as follows: ‘This contract calls for May-June shipment, and the letter of credit of your bank expires June 30, 1919. Furthermore, we have purchased a portion of this rosin from another party and specified May-June shipment, and he will require us to take delivery by June 30.’ On June 5, in reply to advice from Iwai that the ‘above rosin will be lifted last half of July,’ Yaryan wrote: ‘We can not carry rosin later than June.’ That Iwai understood that delivery was to be made in June is shown also by the correspondence, and especially by its letter of June 6, in which it wrote: ‘As it takes more than a week for a car to travel from your factory to the port, and over a week for the loading, we believe that shipping instructions should be furnished you between 1st of June and the 15th.’ Also by its letter of July 8, stating that a certain steamer probably would arrive about July 20, and adding: ‘If you can oblige us by waiting until this steamer, will appreciate your courtesy;’ and ‘All this trouble is due to steamship [company?] failing to bring ship to New Orleans, over which we have no control, and we sincerely hope that you will not hold us on' this point.’ It will be noted that in this letter there is not the slightest suggestion that Yaryan had cancelled the contracts when it had no right to do so. In so far as contracts 1319 and 1345 are concerned, it is apparent that both Iwai and Yaryan understood that they would expire with June, as the supporting letters of credit each expired June 30. While these letters of credit would have been good at any time during their life, had their expiration date been months after the expiration of the contracts, and their expiration would not fix the date of the expiration of the contracts, they were no longer of any avail after their expiration; and this fact seems conclusive that when they were signed both parties understood that the two contracts supported by them would end with the expiration of the letters of credit. As an abstract proposition, letters of credit supporting contracts would be available if they [801] matured after the contracts, but could not be used after their expiration, even though it be during the life of the contracts. Under the other facts of the case, the fact that two of the letters of credit expired July 31 was immaterial. “From the foregoing it appears that the contract provided that Iwai was to provide a steamer from New Orleans during June; and as he did not do that, he failed in this part of his obligation. Did Iwai furnish ‘freight bookings’ as contemplated in the contract? Under the marginal heading ‘Freight booking’ there was a promise to Yaryan, in the first contract, that it would be advised ‘in a day or two,’ and in the other contracts that it would be advised ‘separately.’ These promises have never been complied with. In its letter of June 6, Iwai, after saying, ‘We believe shipping instructions should be furnished you sometime between the 1st of June and the 15th,’ continued: ‘We took this matter up with Caldwell & Company, New York shipping agents of O. S. EL, and they assured us that they would communicate direct with J. H. W. Steele Company and ask them to issue accurate information as to shipment to be made against our above contracts.’ Caldwell & Company wrote to Yaryan on June 6, regarding shipment of rosin under contracts 1345, 1346, and 1347, in part as follows: ‘We wish to advise that we have requested the J. EL W. Steele Company, of New Orleans, to advise you when to forward this material to New Orleans, as sailing of steamer is still indefinite. When you receive this advice please forward this material,’ etc. (Italics ours.) The J. H. W. Steele Company did not write to Yaryan until July 7, after the contracts had been cancelled. Yaryan had, on June 5, positively told Iwai that it could not carry the rosin longer than June, and made Iwai two propositions, neither of which was accepted, but Iwai contented itself with the suggestion that it had taken the matter up with Caldwell & Company and they had assured it that they would communicate with J. EL W. Steele Company, and ‘ask them to issue accurate information as to shipment to be made against our above contracts.’ During the life of the contracts this ‘accurate information’ was never furnished Yaryan. ‘Freight booking’ is ‘making specific arrangements for the transportation of goods by a particular vessel in advance of its sailing day.’ Ocean Steam [802] ship Co. v. Savannah Locomotive Works, 131 Ga. 831 (5) [63 S. E. 577, 20 L. R. A. (N. S.) 867, 127 Am. St. R. 265, 15 Ann. Cas. 1044]. From the foregoing it appears that Iwai breached its contract, not only by failing to provide a vessel for the transportation of the rosin, bnt also -by failing to furnish ‘freight bookings.; In the correspondence attached to the petition as exhibits there is nothing that would change or modify the contract. Moreover, each contract provides that ‘No additions or amendments to this contract shall be binding until the same be endorsed in writing upon the back hereof and signed by the parties.' There was no such endorsement- upon either of the contracts." While no decision. will be made as to failure-or the effect of failure to make “freight bookings” the fact that the contracts contained provisions for furnishing the defendant with “freight bookings" supports the construction that the contracts contemplated delivery to a vessel to be furnished by the purchaser. If that were not so, the matter of “freight bookings” would be of no concern to the vendor, and would have no place in the contract. Employment of the term FAS (stated in the petition for certiorari to mean “Free Alongside Steamer”) has a like significance. This term does not, as contended, relate merely to price of the goods, though in the form it is written opposite the word “price," but it essentially relates both to price and delivery. It must be construed in connection with its context. It can not be written out of the contracts, but must be given effect. It was for many reasons a matter of practical advantage to the purchaser to have the goods delivered alongside the ship, and an inference arises that such advantage was contemplated when the provision was made. It requires more than mere placing the goods on a dock, at any time within the periods “May-June” or “June.” It requires placing them within such periods on a dock where the purchaser should place a ship to receive them, and that they be placed alongside the ship, which implies presence of the ship. If it would make a difference that -the contract specified a particular dock and a particular .time at which the goods should be placed, there’was no such provision in the contracts under consideration. The provision was, “Freight booking to be advised you separately." The fact that three of the contracts provided for payment against “dock receipts and invoices" does not alter the ease. Nor does [803] it matter whether the purchaser had a right to change his mind and not ship at all. He did not do so, and there was- no modification of the contract. The vendor offered, by telegram of June 5, 1919, to modify the contracts, but the offer was not accepted. It remained the duty of the vendor to place the goods alongside the 'ship where the contract provided. When this should be done he would be entitled to dock receipts and invoices upon which to draw his pay, but such provision for payment would not displace the obligation to deliver alongside the ship. . Nor did failure of the vendor to further notice or reply to the request made in the letter of the purchaser of June 6th, sent in reply to the above telegram, affect the case. The request was: “If Caldwell & Company fail to furnish you with information, kindly refer the matter to this office, and we will again take the matter up to your satisfaction.” The vendor was not bound to comply with the request to “refer the matter,” and failure to do so would not amount to a waiver or an estoppel to prevent the vendor from insisting on the terms of the contract. Judgment affirmed. All the Justices concur, except