Auer & Twitchell v. Robertson Paper Co.
| Decision Date | 09 November 1920 |
| Docket Number | No. 253.,253. |
| Citation | 111 A. 570 |
| Court | Vermont Supreme Court |
| Parties | AUER & TWITCHELL v. ROBERTSON PAPER CO. |
Exceptions from Windham County Court; Stanley C. Wilson, Judge.
Action by Auer & Twitchell against the Robertson Paper Company, on contract. Plea, the general issue, offset, and declaration in offset. Judgment for plaintiff, and defendant excepted. Reversed and rendered.
Argued before WATSON, C. J., and POWERS, TAYLOR, MILES, and SLACK, JJ.
A. F. Schwenk and W. R. Daley, both of Brattleboro, for plaintiff.
Barber, Barber & Miller, of Brattleboro, and W. B. C. Stickney, of Rutland, for defendant.
The plaintiff is a corporation organized in March, 1916. It succeeded to the entire business of a copartnership of the same name, who, at the time the contracts in question were made, were jobbers handling paper located at Philadelphia, Pa. The corporation brings this suit as assignee of the copartnership. The complaint is in contract for the recovery of two invoices of paper delivered to the defendant in February, 1916, in part performance of an accepted order placed by the defendant with the copartnership on September 29, 1915. No question is made but that the defendant had the paper and has not paid for it. The defense is based upon a complaint in offset, alleging breach of two separate contracts, one based upon the order of September 29 and the other upon an order dated December 20, 1915. On the facts found by the court judgment was entered for the plaintiff for its entire demand, and the defendant's claims in offset were disallowed. The defendant excepted to the judgment as contrary to and not supported by the findings; so the only questions for review are whether on the findings the defendant's claims in offset, either or both, should have been allowed. The findings respecting these claims are such that they can best be considered separately.
The order of September 29, 1915, was for a total of 9,000 pounds of white Glassine paper of certain specified sizes, to be filled promptly at a price of 10 cents per pound, delivered at Bellows Falls, terms "3%—30 days." It was accepted unqualifiedly by letter under date of October 1, 1915. The paper sued for was covered by two invoices, one dated February 10, 1916, and the other February 23, 1916. The court found the two invoices to have been overdue after 30 days from their respective dates. Other shipments had previously been made under this contract, which were paid for within the 30 days allowed for taking the discount. Both orders were for Glassine paper to be manufactured and delivered in the future, and not what is known as stock paper, or paper already manufactured, which could be delivered at once. The correspondence, which is referred to and made part of the findings, shows that the defendant was insistent, and persisted in its demands for deliveries under both orders; plaintiff's assignors all the time protesting that they were doing their best to fill the orders. The court finds that the shipments were greatly delayed, owing to conditions of which both parties had knowledge at the time the order was placed, and that the shipments that were made on the September order were made within a reasonable time in view of these conditions. Under date of April 24, 1916, the plaintiff wrote the defendant a letter, requesting payment of the two invoices. On April 27 it renewed the request, with an intimation that further shipments of paper would not be made until a remittance covering the February invoices was received. The defendant replied inquiring further about shipments, and agreeing to remit for the February invoices, if advised that a promised shipment had been made. The plaintiff's answer was a refusal to ship paper claimed to be ready for shipment until the remittance was received, and the defendant's reply a refusal to pay until further delivery was made on the September order.
At the trial the plaintiff insisted that further shipments under both orders were rightfully withheld because the defendant had broken the contract by refusing payment, while the defendant insisted that the plaintiff's refusal to make further deliveries was a breach of the contract, entitling the defendant to damages under its complaint in offset. In respect to the terms of payment the court found that the understanding of the parties was that each invoice was to be paid for separately according to the terms of the order, and so far as it was a matter of fact that such was the contract between them, and that the two invoices were "due and unpaid" 30 days from their respective dates. On the record before us it is to be taken that by the terms of the contract payment of each separate invoice was to be made on or before 30 days from its date. The terms, "3%—30 days," are in effect so construed by the trial court, presumably on evidence before it to show that such was its meaning as a trade term. There is no exception to the "finding" as a finding of fact, and the parties appear to have been content with the conclusion reached by the court in that respect.
The claim is made by the plaintiff that the breach of contract, if any, for which the defendant is seeking to recover damages, was committed by the copartnership, and so the claim in offset was properly disallowed against the plaintiff. It is argued, that in the absence of any agreement between the parties to the suit respecting liability, the assignment of the rights of the copartners under the contract did not make the plaintiff corporation liable to the defendant for breaches committed before the assignment was made. This claim is untenable. If, as the plaintiff assumes, the alleged breach was by the copartnership, it does not follow that the resulting damages could not be offset in this action. The plaintiff relies upon Smith v. Kellogg et al., 46 Vt. 560, wherein it is held that the action for a breach of a mere personal contract cannot be brought against the party to whom the contracting party has assigned his interest, but must be brought against the original contracting party. The contract in that case was a lease by Smith of a drug store and personal property, in eluding a soda fountain, to Kellogg and one Lowry. During the term the lessees disposed of the fountain, which was a breach of the lease, and afterwards Lowry assigned his interest in the lease to a third party, who was made defendant with Kellogg in the suit subsequently brought by Smith to recover for the breach. It was held that Lowry, and not his assignee, should have been made a party defendant with Kellogg. This is wholly unlike the case at bar. Here the plaintiff corporation by assignment took over the entire business of the copartnership, both as to assets and liabilities, including all outstanding contracts. The former partners are the real owners of the corporation, the only other stockholder being a clerk in their employ. As a legal entity, the corporation stepped into the shoes of the copartnership, but the course of business between the parties was interrupted. We do not find it necessary to consider whether in the circumstances the plaintiff would be estopped, for the Practice Act (G. L. 1789-1805), by virtue of which the plaintiff would be enabled to prosecute the claim as assignee in its own name, carries the provision that the authority thus conferred shall not affect the defenses which the debtor might have made if the action had been brought by the assignor. G. L. 1800. This amounts to a provision that in a suit by an assignee all defenses shall be available that the defendant would have if sued by the assignor. Clearly, the statute embraces all defenses growing out of the transaction, and would include such a claim as the defendant here relies upon in offset. The same principle applies as in a suit on an overdue note in the name of the transferee, as to which see Armstrong v. Noble, 55 Vt 428; Haley v. Congdon, 56 Vt. 65.
The defendant contends that there was no specific finding that it broke the contract. However, that such is the necessary inference from the facts found is not denied—in fact is inferentially admitted. The position taken is that refusal to pay for the paper delivered under the contract, such refusal not evincing a purpose on its part to renounce the contract, did not entitle the plaintiff to rescind it. This brings us to the principal question in the case, which is whether the defendant's failure to pay as the installments came due was such a breach of the contract as justified the plaintiff's refusal to make further deliveries. This depends upon the character of the contract, whether entire or severable, and the nature of the defendant's breach, whether it did or did not go to the essence of the contract. It is not every breach of a contract that defeats recovery or relieves the other party from performance, but only such as is of the essence of the contract. So it is that failure of either party to perform an essential term of a contract in character entire gives the other party the right to rescind. Assuming that the contract in question was entire, if the time of payment was not of its essence, the breach, which was compensable in damages, would not defeat the defendant's recovery; but, if otherwise, it would operate as a discharge, and justify the plaintiff in treating the contract as ended. Rioux v. Ryegate Brick Co., 72 Vt 148, 155, 47 Atl. 406; Thompson-Starrett Co. v. Ellis Granite Co., 86 Vt. 282, 289, 84 Atl. 1017; Tichnor Bros. v. Evans, 92 Vt 278, 102 Atl. 1031, L. R. A. 1918 C, 1025.
The fact that goods are to be paid for in installments, while making the contract apportionable as to payments, does not necessarily make it severable, rather than entire, for other purposes. A contract may be single in some of its aspects, and divisible or apportionable in others, particularly with reference to remedies for its breach. Ordinarily, if it is a severable contract in other aspects, the failure...
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