Corn Products Refining Co. v. Fasola

The opinion oí the court was delivered by Bergen, J. September 10th, 1918, the plaintiff and defendant entered into a written, contract by the terms of which the plaintiff agreed to sell to the defendant “Five hundred eases No. 5 Mazóla,” to be delivered within sixty days after delivery order. The terms of payment were thirty days net, or two per cent, discount for cash if payment was received by the seller within ten days from date of invoice, subject, however, to the following stipulation: “If at any time before shipment the financial responsibility of the buyer becomes impaired, or unsatisfactory to the seller, cash payment or satisfactory security may be required by the seller before shipment.” Under this agreement the plaintiff shipped to the defendant two hundred of the cases contracted for, and dated the in [182] voice November 12th, 1918, so that payment therefore did not mature, under the contract, until December 12th, 1918. The shipments were made in two lots of one hundred cases each, but the invoices were both dated November, 1918. The defendant, on the 26tli day of November, 1918, requested the delivery of the balance of the cases contracted for which the plaintiff refused to honor, and the defendant, claiming a breach of contract, refused to pay for the cases delivered, whereupon the plaintiff brought suit and recovered a judgment for the delivered goods at the contract rate, the court directing the jury to return a verdict for the plaintiff, which is one of the errors alleged in support of this appeal. The facts on this branch of the case are not in dispute and they are: that the plaintiff had been doing business for some time with the defendant, limiting the credit to $3,000; that to comply with the order would extend the credit to about $9,000; that it had been the practice of the defendant to generally discount her bills within ten days to the extent at least of seventy-five per cent, of her purchases, and that this had not been done in the present case when the request was made that jDlaintiff ship the residue of the cases contracted for. The trial court held that under this contract the seller had a right to require cash payment or security before further shipment if the financial responsibility of the buyer had become unsatisfactory to the seller, and that the undisputed facts showed a sufficient basis to sustain a want of satisfaction with the financial responsibility of the buyer, and to justify the seller in exercising the option reserved in the contract. The willingness of a seller to extend credit upon being satisfied with the financial responsibility of the buyer must, to a large extent, be committed to the judgment of the seller, and when parties contract that if the responsibility of the buyer becomes unsatisfactory to the seller tire latter maj1, require cash payment or satisfactory security before delivery of the goods contracted for, the vendor is entitled to the benefit of his contract and, if for any reason, not pretended or unreal, he becomes dissatisfied with the financial responsibility of his debtor, he may invoke his contract and refuse to ship until secured according [183] to the terms of the agreement. In Gwynne v. Hitchner & Yerkes, 66 N. J. L. 97, it was held that under a contract by a workman to perform his work in a manner satisfactory to his. employers the latter had a right to judge for themselves whether his work was satisfactory, and that it was error to leave to the jury the question whether they ought to have been satisfied. The opinion was written for the Supreme Court by Mr. Justice Van Syckel, citing a large number of cases. This case was referred to with approval by Judge Adams in bis opinion for tins court in Gwynne v. Hitchner & Yerkes, 67 Id. 654, in which case it was held that it must appear, in defence of an action by a discharged employe for want of satisfactory work, that the employer was in fact dissatisfied, and that that was the basis for' the discharge! In the instant ease the testimony is undisputed that the refusal by the plaintiff to make further shipment was because they had become dissatisfied with the financial responsibility of the buyer, and not for any other reason. It appears in the case that they were perfectly willing to ship the goods upon payment or security, so there was no jury question open on that subject. That the sellers had become dissatisfied with -the financial responsibility of their buyer clearly appears, and if they were required to give any reason, those they gave were not unreal or pretended, but sufficient to answer the terms of the contract. Where a vendor contracts to deliver goods and allows the buyer credit for a term agreed upon, and by the same writing reserves the right to withdraw the credit and demand cash payment or security before the shipment of the goods if the financial responsibility of the buyer becomes unsatisfactory to the seller, the question of the satisfaction of the seller with the buyer’s financial responsibility is to be settled by the seller before he parts with his goods, but there must he a real want of satisfaction with the buyer’s financial responsibility, and the refusal to ship without payment or security must be based on that reason alone. If the evidence shows a disputed question whether the seller was in fact dissatisfied or not a jury question is presented. [184] Rot whether the seller ought to be satisfied, but whether he was dissatisfied, and acted as he did for that reason. Gwynne v. Hitchner & Yerkes, supra. This result makes it unnecessary to consider defendant’s counter-claim. The judgment will he affirmed, with costs. For affirmance &emdash; The Chancellor, Chief Justice, Swayze, Trbnchard, Parker, Bergen, Minturn, Kalisci-i, Black, White, Heppeniieimer, Williams, Taylor, Gardner, Ackerson, JJ. 15. For roversal-None.