Johnson v. North Baltimore Bottle Glass Co.

The opinion of the court was delivered by Porter, J.: It is the contention of plaintiffs that the facts disclosed established, as a matter of law, that two contracts were entered into between the parties; that there was a breach of the first contract causing damage to plaintiffs; that afterward a second contract was made and carried out; and that plaintiffs by entering into the second in no manner waived their right to claim damages for the breach of the original contract. On the other hand it is claimed by defendant that the undisputed facts establish, as a matter of law, that there was but one contract, the terms of which were modified by consent of the parties; and that plaintiffs, by consenting to this modification, and their acceptance of the goods, thereby waived all claim for damages for failure to deliver under the terms of the original contract. It was the duty of plaintiffs, upon the breach of the contract, to use diligence to procure the goods some [767] where and thus to minimize any damages for which they expected to hold defendant liable. It was so held in Lumber Co. v. Sutton, 46 Kan. 192, 26 Pac. 444. In that case a mere acceptance of the lumber after the specified time for the delivery was said not to constitute a waiver of a claim for damages caused by the failure to deliver in accordance with the terms of the contract. It appeared that the lumber was of such a character as could not be procured in the market at the place of delivery, and that the owners of the buildings for whom it was purchased were daily incurring expense by the failure of the vendor to provide the lumber at the time specified. The court said that under such circumstances it was the duty of the vendees to make the injury as light as possible by taking and using the lumber upon its arrival, and that to have returned the lumber would not have lessened the damages which had already accrued, but would have aggravated the injury and enhanced the vendor’s liability. In Van Winkle & Company v. Wilkins et al., 81 Ga. 93, 104, 7 S. E. 644, 12 Am. St. Rep. 299, which was an action to recover the contract price of machinery sold for a cottonseed-oil mill, the court, in allowing damages resulting from its non-delivery in due time, by way of recoupment, notwithstanding the objection that receiving the machinery was a waiver of such damages, said: “As to the damages resulting from delay, these had already been sustained when the mill was received; its reception, in so far as it affected them at all, could only hinder more from accruing; it certainly could not increase them. There was no inconsistency between reception of the machinery and retention of the claim for damages on account of delay to furnish it by the time stipulated. To hold that there was a waiver by implication would be very unreasonable.” (Page 104.) It was held error to charge the jury, in an action to recover the purchase-price of building material in which defendant counter-claimed damages sustained by [768] reason of non-delivery within the time agreed upon, that they had a right to consider whether the receipt of the goods was not a waiver of any claim for damages. (Gaylord et al. v. Karst, 17 N. Y. Supp. 720.) In that case the court said that the charge obviously had “no other purport than to instruct the jury that if they found that defendant consented in April to accept future delivery of the building material, which plaintiffs had originally agreed to deliver on the 4th of the previous month, they were at liberty, to find further that defendant had thereby waived all claim for damages accruing to him from plaintiffs’ default in delivery by the time first appointed; and as this seems to be in direct conflict with the law as declared by the court of appeals in Ruff v. Rinaldo, 55 N. Y. 664, and McMaster v. State, 108 N. Y. 542, 553, 15 N. E. 417, it is impossible to escape from the conclusion that the charge was erroneous and the exception thereto well taken. That the defendant was prejudiced by this error is a proposition the validity of which is apparent upon its mere assertion, as the error vitally affected the meritorious consideration by the jury of defendant’s counterclaim.” (Page 721.) In Hansen and Hansen v. Kirtley, 11 Iowa, 565, it was held that the acceptance of the goods after the time fixed for delivery may be considered by the jury as evidence of a waiver of the damages sustained by the delay, but that its weight must depend upon the circumstances of the case. In the case of Industrial Works v. Mitchell, 114 Mich. 29, 72 N. W. 25, which was an action to recover upon notes given for the purchase-price of machinery, defendant sought to ‘recoup damages occasioned by delay in the delivery and for further delay resulting from defects in the machinery. It was held that the mere acceptance of the machinery by the vendee, without protest, after the time specified, and his appropriation of the same to his own use, and even the giving of [769] notes for the purchase-price, did not constitute a waiver of his right to claim damages for the delay. It was said that circumstances often require a vendee to accept the goods after a specified time or suffer irreparable loss, and that the acceptance in that case amounted to a compulsory one. In McMaster v. The State of New York, 108 N. Y. 542, 15 N. E. 417, the court said: “The contention that, where there is a breach of contract by one party and the other thereafter is permitted to perform the same in part, receiving the contract price for such part performance, the injured party thereby waives or releases his right to damages for the breach, has no foundation in reason or authority. It is undoubtedly the rule that where one party to a contract breaks the same, the other party may stop and refuse further performance. But instead of doing so he may perform so far as he is permitted and then claim the damages he has' suffered from the breach.” (Page 533. See, also, Orange Growers Ass’n v. Gorman, 76 Mo. App. 184, affirmed in 161 Mo. 203, 61 S. W. 820, 54 L. R. A. 718.) We think the rule as qualified by many of the cases is correct; that the mere acceptance of a purchased article after the agreed time of delivery does not constitute a waiver of damages for the delay, unless such acceptance is accompanied by other circumstances which manifest an intention on the part of the purchaser to waive such damages. The intention of the parties controls. (24 A. & E. Encycl. of L. 1074, 1161; Ramsey et al. v. Tully et al., 12 Ill. App. 463; Belcher v. Sellards [Ky.] 43 S. W. 676.) It is true that in none of the correspondence on the part of plaintiffs, following the refusal of defendant to deliver the goods, is there any intimation of an intention to hold defendant under the original terms of the contract. Nor, on the other hand, is there any intimation that they intended to waive a claim for damages caused by delay. It is also true that the defendant’s letter of April 7 did not stop with a refusal to deliver, [770] but contained an offer to go ahead provided satisfactory terms were made for the payment of the purchase-price. Plaintiffs adopted the suggestion and arranged for satisfactory terms of payment. Whether we call this a modification of the original or a new contract is not very important. The time for delivery under the original contract had already expired. There had been a breach of the terms of the contract. All of the evidence which consists of the correspondence between the parties is before us, and we have difficulty in arriving at the same conclusion reached by the trial court in finding for defendant. The court may have erroneously held that the acceptance of the goods was a waiver of any claim for damages for failure to deliver. There is nothing in the additional circumstances which, in view of all that occurred, warrants the inference that the plaintiffs by acceding to the demand for cash payment intended to waive damages for the breach which had already taken place. Having accepted the order and permitted plaintiffs to rest for several months in the assurance that the goods would be delivered at a certain date, defendant, after the time expired, refused to deliver, placing the refusal upon grounds which under ordinary diligence in business should have been discovered and made known to plaintiffs long before. These circumstances seem to make it unreasonable to hold plaintiffs to have waived any actual damages suffered because they consented to the change in the terms of payment and accepted the goods. The judgment is reversed and the cause remanded for another trial. All the Justices concurring.