L. Albert & Son v. Armstrong Rubber Co.

• Decision Date: 29 November 1949
• Docket Number: No. 6,Docket 21183.,6
• Citation: 178 F.2d 182
• Parties: L. ALBERT & SON v. ARMSTRONG RUBBER CO.
• Court: U.S. Court of Appeals — Second Circuit

178 F.2d 182 (1949)

L. ALBERT & SON v. ARMSTRONG RUBBER CO.

No. 6, Docket 21183.

United States Court of Appeals Second Circuit.

Argued October 5, 1949.

Decided November 29, 1949.

COPYRIGHT MATERIAL OMITTED

Abraham S. Ullman, Irving Sweedler and William L. Beers, New Haven, Conn., for plaintiff.

Albert H. Barclay and William L. Hadden, New Haven, Conn., with whom on the brief were Albert H. Barclay, Jr. and John W. Barclay, New Haven, Conn., for defendant.

Before L. HAND, Chief Judge and SWAN and CLARK, Circuit Judges.

L. HAND, Chief Judge.

Both sides appeal from the judgment in an action brought by the Albert Company, which we shall speak of as the Seller, against the Armstrong Company, which we shall call the Buyer. The action was to recover the agreed price of four "Refiners," machines designed to recondition old rubber; the contract of sale was by an exchange of letters in December, 1942, and the Seller delivered two of the four "Refiners" in August, 1943, and the other two on either August 31st or September 8th, 1945. Because of the delay in delivery of the second two, the Buyer refused to accept all four in October, 1945 — the exact day not being fixed — and it counterclaimed for the Seller's breach. The judge dismissed both the complaint and the counterclaim; but he gave judgment to the Seller for the value without interest of a part of the equipment delivered — a 300 horse-power motor and accessories — which the Buyer put into use on February 20th, 1946. On the appeal the Seller's position is that its delay was not too long; that in any event the Buyer accepted delivery of the four "Refiners"; and that they were in accordance with the specifications. As an alternative it insists that the Buyer is liable, not only for the value of the motor, but for interest upon it; and, as to the counterclaim, that the Buyer proved no damages, assuming that there was a breach. The judge found that all four "Refiners" conformed to the specifications, or could have been made to do so with slight trouble and expense; that the contract was inseparable and called for four not two and two; that the delivery of the second two was too late; and that, as the Buyer rejected all four, it was not liable on the contract at all. On the other hand, as we have said, he found that the Buyer's use for its own purposes of the motor, although not an acceptance of the "Refiners," made it liable for the value of the motor in quasi contract, but without interest. He dismissed the Buyer's counterclaim because it had failed to prove any damages.

The first issue is whether the Seller's delivery of the second two "Refiners" was too late, and justified the Buyer's rejection of all four in October of that year. The Seller does not — at least on this appeal — seek to recover the purchase price of the first two "Refiners" on the ground that the parties had at any time severed the contract into two separate ones, each for two. It follows that the Buyer was entitled in October, 1945, to reject the four, if the delivery of the second two was too late. The evidence as to this was as follows. Although the Buyer had suggested cancellation of the contract in the spring of 1943, by April first of that year it was pressing for delivery, and, when the Seller wrote at the end of July that it would ship the first two in "a couple of weeks," and the other two probably within four weeks, the Buyer not only did not protest against the delay, but in August accepted the two which the Seller did deliver. Moreover, when the Seller did not ship the other two within the time mentioned, the Buyer on October first, 1943, recognized the contract as still in existence. True, by the end of that year it began to complain of the performance of the two machines delivered, and it suggested that the Seller take them back; but, when the Seller answered by offering to put these two in proper condition, an active correspondence followed, resulting in a personal interview between the heads of the two parties in July, 1944. At this there was an inconclusive discussion of settlement, after which in August the Buyer agreed to install the two; and in September the Seller recognized the original contract as still in existence. Although in December the Buyer did declare its doubts whether it would be able "to keep these machines in production without considerable maintenance expense," and proposed a resale of them to the Seller, apparently the Seller did not reply; and in any event this proposal lapsed, for on February 23d, 1945, the Buyer wrote that it "would like to have you ship the two remaining Refiners at once." This demand the Seller answered by complaining that the two already delivered had never been paid for, to which on March 28th the Buyer rejoined that nothing was due on the contract until "30 days after the delivery of the complete order." It continued: "We want to complete the installation of this refiner line and are again requesting you to ship the two remaining refiners if they are in good operating condition."

Thus it appears that, whatever may have been the Seller's delay up to that time, the Buyer would have been bound to accept a delivery of the second two within a reasonable time after March 28th, and to pay for the four, assuming that they conformed to the specifications, as the judge found that they did. As we understand it, the parties are not at variance so far, except for the finding as to conformity, just mentioned, which turns out to be irrelevant, as will appear. Since the Seller did not deliver the second two machines until five months after the demand of March 28th, the first question is whether the judge was right in holding that that was too late. When the Seller in July, 1943, said that it would ship the second two machines within four weeks, we will assume that that was the proper measure of a reasonable time for their delivery, and would have been conclusive, had it not been for the conduct of the parties during the following eighteen months. However, although during that period the Buyer had been in doubt whether it could make operative the two already delivered, it had never even intimated an objection to the delay in the delivery of the second two. If the circumstances had not changed as much as they did during the five months after March 28th, it might therefore be plausibly argued that the long drawn negotiations showed that further delay was not of vital consequence, in spite of the fact that in mercantile contracts, time is ordinarily "of the essence."¹ Nevertheless, we think it impossible to excuse the delay, because the circumstances did greatly change after March 28th, 1945. The judge found that "the great demand at the time of the commencement of this program for lowgrade reclaimed rubber was of a temporary nature"; it could not compete with any other rubber if that appeared in "sufficient" quantities. That did not mean that rubber was not still "reclaimed" and sold in the open market; but "obviously market conditions for second-hand rubber-machinery changed between the days of acute shortage in which the contract was made and the time of delivery." We accept his summing up of the situation in the following words: "at approximately the date of delivery * * * the fighting war came to an end, the prospect of future availability of rubber was altered, and any loss from change in conditions in that period may well fall upon the party whose unexcused delay prevented prompt delivery on the final demand." We agree that the delivery was too late.

The Seller answers that in any event the Buyer accepted the "Refiners" because (1) it "intimated" that it had done so; (2) it had done an "act in relation to them * * * inconsistent with the ownership of the seller"; and (3) it had without objection retained them for more than "a reasonable time."² The supposed intimation was a letter of the Buyer on October 11th, 1945, in which it asked the Seller to confirm to the Buyer's accountants the amount of the Seller's claim against it as of September 30th, 1945; and in which it stated that claim as $25,500; the full purchase-price. It must be conceded that this was a most unhappy statement, vis-à-vis the Buyer, for, taken at its face, it surely presupposed acceptance of the "Refiners." Nor would it be any excuse that the Buyer's practise was to charge itself upon its books with the cost of goods as soon as they were delivered, and by way of precaution to check its figures with those with whom it dealt. Nevertheless, although the Buyer could not excuse the letter by any undisclosed practice or intent of its own, and although judged by itself it might have constituted an "intimation" of acceptance, we think that, when it is read with what had passed between the parties before it was written, it is not susceptible of that understanding. These were the facts. After the Seller had delivered the first two "Refiners" in August, 1943, the Buyer on October 1st, 1943, complained that the Seller had billed it for four machines, although it had delivered only two, and asked for "corrected invoices covering only the portion you have shipped." A year later, on October 24th, 1944, after the Seller had on September 2d, 1944, made it clear that it was going on with the contract, in a letter in precisely the same terms, mutatis mutandis, as the letter of October 11th, 1945, the Buyer asked the Seller to confirm the charge in its favor on the Buyer's books of $15,500, the price of the first two "Refiners." While matters stood in this posture it could be argued with considerable plausibility that the contract had been severed, or "split," into two contracts, each for two machines, and that the letter of October 24th, 1944, was an acceptance of the first two. However, it soon transpired, if it was not already known, that the Buyer had no such intent, and that not only did the contract remain single as it had been at the start; but that the inquiry of October 24th, 194...