Gerli v. Poidebard Silk Manufacturing Co.

— 433 — The opinion of the court was delivered by Dixon, J. On March 28th, 1893, C. & E. Gerli, Eratelli & Company, entered into a contract to sell and deliver in New York, to the .Poidebard Silk Manufacturing Company, thirty bales of extra Piva new silk, deliverable, ten bales July 20th to 25th, ten bales August 15th, and ten bales September 1st to 10th, each installment to be paid for sixty days after delivery, at $5.90 per pound. In consequence of the lateness of the new crop it was impossible for the sellers to make delivery of the first ten bales within the time specified, and on July 27th the buyer extended the time for such delivery until August 1st. On that 'date, the impossibility; still continuing, the buyer notified the sellers that it can-/ celed the contract because of the default and would declinej to receive any of the merchandise ordered. On August 15th the new crop of silk had not yet arrived in New York, but it arrived before September 10th. Under these circumstances one of the members of the selling firm assigned the firm’s rights in the contract to Paul Gerli, the plaintiff, and thereupon he brought this suit against the buyer to recover damages arising from the refusal to accept the installments of August 15th and September 1st to 10th. At the trial the justice denied the right to damages for the installment of August 15th, and directed a recovery of the damages as to the installment of September 1st to 10th. On exceptions taken at the trial each party has assigned error. The errors assigned by the purchaser will first be considered— First. That the claim for damages was assignable, so as to authorize the assignee to sue thereon in his own name, is clear on the words of the supplement to the Practice act approved March 4th, 1890. Pamph. L., p. 24. It was “ a chose in action arising on contract.” Such a chose in action belonging to a partnership may be transferred by a single member of the firm. Story Part., § 101. — 434 — Second. The contract was fully proved within the statute of frauds. Evidence introduced on behalf of the defendant showed that its general manager had written and signed a memorandum of the order given for the goods, in which were stated all the terms of the proposed contract, and that thereupon the agent of the sellers had sent to the buyer a written acceptance of the order duly signed. Such proof was suffi - cient. Brown St. of F., § 346. Third. The other exception pressed by the defendant below is that the trial justice denied the right of the buyer to rescind the contract on the non-delivery of the first installment of silk. The general rule on this subject was thus laid down by this •court in Blackburn v. Reilly, 18 Vroom 290: “In contracts for the sale of goods, to be executed by a series of deliveries and payments, defaults of either party, with reference to one or more of the stipulated acts, will not ordinarily discharge the other party from his obligation, unless the conduct of the party in default be such as to evince an intention to abandon the contract or a design no longer to be bound by its terms.” In the 'case cited, this rule was enforced against the buyer. In Trotter v. Heckscher, 13 Stew. Eq. 612, this court, and in Otis v. Adams, 27 Vroom 38, the Supreme Court, enforced it against the seller. That the conduct of the vendors in the present case did not evince an intention to abandon the contract or not to be bound by its terms, appears beyond dispute. They failed to deliver the July installment because it was impossible to do so, offered to deliver other silk which they considered equally valuable, expressed their willingness to come to an equitable arrangement for their default, and, on the first intimation of a purpose on the part of the vendee to rescind the contract, they protested against the right of rescission and insisted that they should be permitted to make the subsequent deliveries. They showed a design the very opposite of repudiation. bTor do we find anything in this contract or the circumstances of the parties from which it can reasonably be inferred — 435 — -that the parties intended the delivery of each installment of -silk to be a condition precedent to the continuing obligation ■of the contract. So far as appears, the usefulness to the buyer of any installment did not at all depend upon the prompt delivery of prior installments, and full indemnity for ■every default could be secured by action based thereon. So ■that, under the rule before declared, it would seem that the ■attempt to rescind was illegal. The defendant, however, insists that the rule is not applicable to the present case, because the sellers' fault consisted in failing to do the first thing required to be done in performance of the contract, and Norrington v. Wright, 115 U. S. 188, is cited as an authority for this distinction. On principle, I do not see that, for such a purpose, the first -act to be done stands upon a different footing from subsequent acts. A default in that does not make it more certain than •do other defaults that the party aggrieved cannot get exactly what he contracted for; for that default, as well as for others, ■he may be compensated by suit, and by that default, as readily as by others, he may obtain an unconscionable advantage if he is entitled to rescind or retain the bargain as self-interest may dictate. As evidence of repudiation or abandonment, 'non-performance of the first thing-required to be done may be more persuasive than if the promisor had partially carried •out his contract-, but, as a basis on which a right of rescission is to be supported, it cannot, merely because it is first in order ■of time, have any greater importance than later defaults. In Norrington v. Wright, ubi supra, the plaintiff had contracted to ship from Europe to the defendant, in Philadelphia, •one thousand tons of rails in each of the months of February, March, April, May and June. In February he had shipped four hundred tons which the defendant had received and paid for, not knowing that less than the required quantity had been shipped. In March the plaintiff had shipped eight hundred and eighty-five tons, and the defendant, on learning of these deficiencies, declared the contract terminated. The court held that he was justified in doing so. — 436 — I am not sure that I perceive definitely the principle on which this decision was rested. But the case seems now to-be cited for the following paragraph in the opinion of the court: “ The seller is bound to deliver the quantity stipulated,, and has no right * * * to compel the buyer to accept a less quantity j * * * and when the goods are to be-shipped in certain proportions monthly, the seller’s failure to-ship the required quantity in the first month gives the buyer-the same right to rescind the whole contract that he would .have had if it had been agreed that all the goods should be-delivered at once.” I cannot but think that there is here some confusion of thought. If a contract of sale requires the delivery of all the goods at once, and the seller tenders only part at the time-specified, certainly the buyer may refuse to accept the part,, but it is scarcely accurate to say his refusal is based upon a> rescission of the contract. He has simply refused to do what he never agreed to do. But if the goods are to be delivered in installments at different times and the seller tenders one-installment on the day specified, then if the buyer refuses to-accept it, plainly his refusal must rest upon a different foundation. He had agreed to accept such a tender, and his refusal can be justified only on the idea that he has become released from that agreement — that is to say, with reference to the-point we are now considering, it must appear that his agreement to accept the installment tendered was dependent on the due performance by the seller of another promise which he-had failed to perform. We are thus bropght-to the real question in all bargains of this nature, whether on the proper construction of the contract the performance of any. particular-stipulation by one party is a condition precedent to the continuance of obligation upon the other party, and logically this-must be the question as well with regard to the first stipulation as the subsequent ones. On this question this court adopted the general rule that, when the seller has agreed to deliver the goods sold in installments, and the buyer has agreed to pay the price in install — 437 — ments which are proportioned to and payable on the delivery ■of each installment of goods, then default by either party with reference to any one installment will not ordinarily entitle the other party to abrogate the contract. We were led to the adoption of this rule because it seemed to be supported by the greater strength of judicial authority and to be most likely to promote justice. We see no sufficient reason for abandoning it. The rule governs the case in hand and maintains the right ■of the plaintiff to recover damages for the defendant’s refusal to accept the third installment of silk. Therefore, as against the defendant, the judgment is not erroneous; The plaintiff below assigns error upon the exclusion of his claim for damages, because of the refusal to accept the installment deliverable August 15th. In this there was no substantial error. Conceding that the defendant’s repudiation of thérwliole contract before August 15th absolved the sellers from the duty of téndering an installment on that date and gave • them an immediate right of action against the defendant for a breach of contract, nevertheless, when it appeared, as it did on the trial, that by no possibility could the sellers have made tender of the silk due August 15th, because the silk did not arrive in New York ■until a later day, it became evident that as to that installment the sellers suffered no loss by the breach. There are other assignments of error in the record, but as ■counsel did not notice them in argument, we assume that they me all involved in the matters above decided or are waived. The judgment should be affirmed.