Baetjer v. New England Alcohol Co.

• Decision Date: 16 May 1946
• Citation: 66 N.E.2d 798,319 Mass. 592
• Court: United States State Supreme Judicial Court of Massachusetts Supreme Court
• Parties: HARRY N. BAETJER & others, trustees, v. NEW ENGLAND ALCOHOL COMPANY.

319 Mass. 592

66 N.E.2d 798

HARRY N. BAETJER & others, trustees, v. NEW ENGLAND ALCOHOL COMPANY.

Supreme Judicial Court of Massachusetts, Suffolk.

May 16, 1946

January 10, 1946.

Present: FIELD, C.

J., QUA, DOLAN & RONAN, JJ.

Sale, Contract of sale. Contract, Construction, Performance and breach. Words "Delivery."

A provision of a contract in writing for sale of a stated quantity of molasses to be loaded on the buyer's vessel at a Puerto Rican port, that the buyer should not be liable for failure to take delivery "for any of" several "cause," including war, and the fact that the state of war in

1942 prevented the buyer from obtaining any vessel to transport the molasses did not excuse the buyer from making payment on August 31,

1942, for molasses unshipped on that date, where earlier clauses of the contract provided that the buyer would take delivery during the year

1942 in not more than five parcels, the molasses loaded to be at his risk from the time it passed over the rail of his vessel "except where earlier date is herein fixed for transfer of risk"; that the molasses should be free of storage until shipped; that the seller would deliver aboard the buyer's vessel, barges "to effect delivery to vessels" to be provided by the seller; that on or before August 31, 1942, the buyer would "accept delivery in tanks of the seller [at a port in Puerto

Rico] of all" unshipped molasses, for which he would make payment on that date; and that upon "such payment, title shall pass to the buyer and thereafter such molasses shall be at the risk of the buyer," although the seller during 1942 should continue to store it and deliver it to the buyer's vessel.

Federal general imports order M-63, paragraph (b), as amended, prohibiting any person other than certain Federal agencies, except as authorized by the director of industry operations, from purchasing for import, importing, or receiving for import or making "any contract or other arrangement for importing of" molasses, did not excuse a buyer from making payment under the terms of a contract of sale of Puerto Rican molasses requiring the buyer to "accept delivery in tanks of the seller" at a port in Puerto Rico and to make payment on August 31, 1942, even though it was the buyer's intention to receive it for import, where it did not appear that the buyer could not obtain authority for importation from the director of industry operations, and the contract did not require the buyer to import.

That the buyer under a contract in writing for the sale of molasses made in

April, 1942, requiring his taking title on August 31, 1942, in tanks of the seller in Puerto Rico and providing for delivery by the seller in the seller's barges onto vessels to be furnished by the buyer, was unable by reason of Federal orders and the state of war to procure vessels to receive delivery, did not excuse him from making a stipulated payment on August 31, 1942, on the ground that the undertakings of the parties were expressly or impliedly conditioned in a contractual sense upon the continuance of availability of shipping facilities or that they were entered into upon the mutual assumption of such continuance, where the attendant facts not only did not show such ground but showed the contrary.

CONTRACT. Writ in the Superior Court dated October 15, 1942. The action was reported by Hurley, J.

R. G. Dodge, (T.

M. Banks, Jr., & A.

W. Scott, Jr., with him,) for the plaintiffs.

E. O. Proctor, (J.

W. Bryant with him,) for the defendant.

QUA, J. This action was originally brought to recover the sum of $259,473.19 alleged to have become due and payable by the defendant ^[1] to the plaintiffs on August 31, 1942, on account for a balance of two million fifty-nine thousand three hundred eleven gallons of Puerto Rican molasses out of a total amount of two million five hundred thousand gallons which the plaintiffs had agreed to sell and the defendant had agreed to buy under a contract in writing entered into between the parties on April 3 of that year. Early in 1944 the molasses in question was sold in accordance with a stipulation of the parties for the same price as that called for by the contract, so that the question now is whether the defendant is liable for interest for not having paid the sum alleged to have become due to the plaintiffs on August 31, 1942. The Superior Court reported the case upon a case stated without making any decision. G. L. (Ter. Ed.) c. 231, Section 111.

The plaintiffs have a place of business at Caguas in Puerto Rico. The defendant produces industrial ethyl alcohol at its plant in Everett in this Commonwealth and has required as raw material great quantities of molasses. Negotiations between the parties began in January, 1942. The plaintiffs knew throughout that the defendant was manufacturing alcohol at Everett. The contract as finally agreed upon fixed a price "f. o. b. Buyer's vessel" at the port of Humacao, Puerto Rico.

Under the head of "Withdrawals" the contract provided that the buyer (defendant) would take delivery of "the molasses sold hereunder" during the year 1942 in not exceeding five parcels and would give the seller (plaintiffs) at least ten days' notice of the anticipated arrival of each tanker and of the amount to be loaded thereon by the seller. The molasses loaded was to be at the buyer's risk from the time it passed over the rail of the buyer's vessel, "except where earlier date is herein fixed for transfer of risk" -- a reference, doubtless, to the proposed delivery in the seller's tanks on August 31, 1942, hereinafter mentioned.

Under the head of "Pro Forma Payment" the contract provided that for each shipment prior to August 31, the buyer would make an initial payment of ninety per cent of the seller's "pro forma invoice" upon presentation of the invoice and bill of lading indorsed to the buyer's order at a designated bank in San Juan. (It was provided elsewhere in the contract that the amount of the final payment for each shipment was to be determined, after analysis of the molasses by a method of calculation elaborately described.) Under the head of "Pro Forma Payment" is also found this important provision, "The Buyer will on or before August 31, 1942, accept delivery in tanks of the seller [meaning in Puerto Rico] of all molasses covered by this Contract remaining unshipped." Payment on account of "such undelivered molasses" was to be made on said August 31, 1942, to the seller by the buyer at the bank in San Juan of ninety per cent of the amount of the seller's "pro forma invoice." "Upon such payment, title shall pass to the Buyer and thereafter such molasses shall be at the risk of the Buyer, but the obligation of the Seller to continue to store during the remainder of the year 1942 and to deliver to Buyer's vessel, as provided under the withdrawals clause, and the right of the Seller to collect the balance of the purchase price shall continue."

Under the head of "Storage" it was provided that the molasses would be free of storage until shipped.

Under the head of "Delivery" it was provided that the seller would deliver aboard the buyer's vessel at safe anchorage in Humacao Harbor, and it was elsewhere stipulated that the barges "to effect delivery to tank vessels" should be provided by the seller.

The contract contained a clause headed "Force Majeure" and reading as follows: "Seller will not be liable for any delay in delivery, or failure to deliver, any or all of the aforesaid molasses in case such delay in delivery, or failure to deliver, is caused by labor troubles, strikes, lockouts, war, riots, insurrection, civil commotion, failure of crops or supplies from ordinary sources, fire, flood, storm, accident or any Act of God, or other cause beyond Seller's control. In like manner Buyer shall not be liable for failure to take delivery of the molasses purchased hereunder for any of the above causes which would prevent Buyer's vessel from accepting delivery. But, in any such case, the party claiming the benefit of this article shall use due diligence to remove any such causes, and resume performance hereunder as soon as possible, performance by other party being suspended and excused meanwhile."

On April 3, 1942, the defendant took delivery at Humacao and later paid for four hundred forty thousand six hundred eighty-nine gallons. The tanker upon which this molasses was loaded was sunk by a submarine the next day. This was the only molasses ever delivered under the contract. The reasons which prevented the defendant from sending other tankers to take delivery are set forth in the case stated as follows: "For a long period of time beginning in January, 1942, the defendant made every reasonable effort to arrange for shipments of molasses covered by its contract with the plaintiffs, but on account of war conditions, including the shortage of tankers and destruction by enemy submarines, it was unable to arrange for any shipment except the one on April 3, 1942, above referred to. The defendant applied to the proper officials and government agencies including the War Production Board and the War Shipping Administration for means to transport the molasses in question from Puerto Rico, but was unable to obtain authorization. Defendant at all times acted with due diligence in an effort to secure means of removing the molasses, but was unable to do so through no fault of its own. It was not until the latter part of 1943 that it became possible to ship molasses from Puerto Rico in substantial quantities." It further appeared that foreign shipping was not available, and that the difficulties with shipping communication in 1942 were not confined to Puerto Rico but covered the Atlantic Ocean generally.

When August 31 arrived the...