Ana Maria Sugar Co., Inc. v. Quinones

• Decision Date: 06 June 1918
• Docket Number: 1295.
• Citation: 251 F. 499
• Parties: ANA MARIA SUGAR CO., Inc., v. QUINONES.
• Court: U.S. Court of Appeals — First Circuit

251 F. 499

ANA MARIA SUGAR CO., Inc., v. QUINONES.

No. 1295.

United States Court of Appeals, First Circuit.

June 6, 1918

Curtis Mallet-Prevost & Colt, of New York City (E. Crosby Kindleberger, of New York City, of counsel), for appellant.

Jorge V. Dominguez, of San Juan, P.R., for appellee.

Before BINGHAM and JOHNSON, Circuit Judges, and BROWN, District Judge.

BINGHAM Circuit Judge.

This is an action to recover damages for breach of contract. It was brought in the district court of Mayaguez, Porto Rico. In the complaint it was alleged that the plaintiff was a merchant doing business in the city of Mayaguez, and that the defendant was a corporation having a place of business in that city; that on August 4, 1914, in that place the plaintiff bought from the defendant 740 sacks of centrifugal sugar, second class, at the rate of $3.22 1/2 per hundredweight, which, according to the custom of the market was to be paid for cash on delivery, the same to be delivered on or before the 15th of August, 1914; that thereafter the defendant refused to deliver the sugar unless the plaintiff should previously deposit in the Royal Bank of Canada, at Mayaguez, the sum called for by the invoice for the sugar sold, amounting to $6,079; that the defendant failed to deliver the sugar either in part or in whole, and refuses to deliver the same as provided in said contract; that the plaintiff has always been ready and willing to receive the sugar, to pay the price agreed upon delivery of the same, and comply with all the stipulations of the contract; and that by reason of the defendant's failure in the premises plaintiff has suffered damages in the sum of $6,173.24, that being the difference in the price of the sugar due to the rise in the market.

The defendant in its answer denied each and every allegation stated in the complaint, and, as new matter, set forth that the contract of August 4, 1914, was for 748 sacks of cane sugar; that one of the terms of the contract was that the plaintiff was to make a deposit on that day in the Royal Bank of Canada, at Mayaguez, in favor of the defendant, for the purchase price of said sugar, to wit, the sum of $6,079, and that thereupon the defendant was to deliver the sugar to the plaintiff in partial lots of 160 sacks, the first by railroad upon receipt of the order of the bank to that effect, and the remainder by cartloads during the week next to the aforesaid date; that the provision as to deposit in the bank was a condition precedent to its obligation to deliver the sugar and was imposed and agreed to for the reason that the sugar was subject to a lien to the Royal Bank of Canada, and that the plaintiff failed to comply with this condition.

A trial was had before the district judge, who found that, on August 4, 1914, the plaintiff and defendant entered into a contract by telephone for the purchase and sale of 748 sacks of centrifugal sugar, second class, each sack to weigh 252 pounds, at the price of $3.22 1/2 per hundredweight, to be delivered to the plaintiff in the following manner: One hundred and sixty sacks by railroad as soon as the defendant received the order for delivery from the Royal Bank of Canada, and the remainder to be delivered in cartloads during the week following the making of the contract; that it was agreed that the price of said sugar-- $6,079-- should be first deposited by the plaintiff in the Royal Bank of Canada, at Mayaguez, to the defendant's credit; that at the time of the execution of the contract the sugar was pledged to the bank; that the plaintiff, without excuse, on the day following the execution of the contract, notified the defendant that he was unwilling to accept the condition as to payment of the purchase price, and that the defendant, on August 6, informed the plaintiff that the above contract was terminated and rescinded for failure to comply with the condition as to payment, which it had a right to do. Having found these facts, the district judge entered judgment dismissing the complaint, with costs to the defendant. Thereupon the plaintiff appealed to the Supreme Court of Porto Rico.

The appeal record embodied the pleadings in the case, the entry of judgment, the opinion of the district judge embodying the findings of fact and rulings of law, a 'statement of the case' setting forth the evidence, oral and documentary, introduced at the trial, which the district judge certified to be correct and ordered to form a part of the judgment roll for the appeal. There was also a bill of exceptions setting forth in detail the exceptions taken by the plaintiff to the rulings of the district judge at the trial, which was certified by him as correct, and ordered to form a part of the judgment roll on the appeal. In the Supreme Court the record was amended by the addition of certain documents which had been introduced in evidence, but omitted from the record sent up from the court below, through mistake.

The Supreme Court reviewed the evidence and found that the plaintiff had 'clearly established the substantial allegations of his complaint'; that the district court had committed 'such manifest error * * * as to require a reversal of its judgment'; 'that they were thoroughly convinced by the whole record that in the conversation by telephone, on the 4th of August, which constituted the true contract between the parties, nothing whatever was said about a deposit of the money as a condition precedent to the delivery of the sugar'; that 'the market was rising on the 4th and continued to rise'; that the 'defendant knew when its letter of confirmation was written that conditions indicated a further advance in price'; that 'every hour that passed made the contract more valuable to the purchaser and more disadvantageous to the vendor'; that 'the first notice the plaintiff ever had of the proposed requirement as to the deposit of the purchase price was contained in defendant's letter confirming the agreement by telephone, and after the contract of purchase and sale had been consummated'; that it appeared 'from the evidence that in the contract made between the plaintiff and defendant it was tacitly stipulated that the price should be paid, following the custom of the market, upon delivery of the article, which was to be transported by the defendant, at its own expense, from the (its) factory to the plaintiff's storehouse, in the city of Mayaguez, during the week next ensuing after the execution of the contract,' and that 'such delivery was never made by the defendant.' Upon the question of damages the court found that the 'plaintiff had been doing business in Mayaguez for many years, speculating in sugar and coffee, and had previously bought sugar of the defendant in the same way and upon the same terms and conditions as in the instant case, paying for it on delivery after weighing and inspecting the same'; that 'the deal itself was based upon current quotations from the New York market in so far as known at the time, and the question of a fluctuating market was clearly in the minds of both parties'; that 'the testimony as a whole leaves no room for doubt that prospective profit or loss according to the rise or fall of prices in the New York market was plainly within the contemplation of the parties,' and that they were 'inclined to accept the figures of the plaintiff based on the New York prices at the expiration of the period within which the defendant had agreed to deliver the sugar, less the customary discount.' It ruled that, according to section 1073 of the Civil Code, indemnity for losses and damages included 'not only the amount of the loss which may have been suffered, but also that of the profit which the creditor may have failed to realize'; and it further found and ruled that the 'defendant actually sold during the month of August large quantities of sugar at $6.52, apparently including the lot already sold to plaintiff at $3.22 1/2,' and that, 'whether the difference in price be regarded as damages or as the proceeds of a resulting trust, the profit thus actually obtained by the defendant on the sugar of plaintiff belongs to the latter and not to the former.'

It also ruled that the complaint stated facts sufficient to constitute a cause of action. Having made these findings and rulings, judgment was entered for the plaintiff for $6,173.24.

From this judgment the defendant appealed to this court and produces here a transcript of the record as forwarded to the Supreme Court of Porto Rico, together with the opinion of that court embodying the findings of fact above set forth and the judgment entered thereon, certified by the secretary and recorder of the Supreme Court as agreeing with their originals, and also an assignment of errors in which the defendant complains that the Supreme Court erred (1) in holding that the plaintiff's complaint states facts sufficient to constitute a cause of action; (2) that the plaintiff had proved the essential allegations of his complaint; (3) in finding that the contract did not provide for a deposit of the purchase price as a condition precedent to the delivery of the sugar; (4) in finding that the sugar was to be paid for upon its delivery, and not prior thereto; (5) in finding that the time of payment was fixed by local custom and impliedly agreed to by the parties; (6) in reviewing the evidence and reversing the finding of fact made by the trial court as to the payment being a condition precedent to the delivery; (7) in failing to consider and give due weight to a certain writing introduced in evidence; (8) in finding that the defendant made no delivery of the sugar; (9) in failing to consider and give due weight to the fact that the plaintiff made no tender of the price of said sugar to the defendant and that said...