In re Marcalus Mfg. Co.

• Decision Date: 05 May 1954
• Docket Number: No. 222-49.,222-49.
• Citation: 120 F. Supp. 784
• Parties: In re MARCALUS MFG. CO., Inc.
• Court: U.S. District Court — District of New Jersey

120 F. Supp. 784

In re MARCALUS MFG. CO., Inc.

No. 222-49.

United States District Court D. New Jersey.

May 5, 1954.

Charles Danzig, Newark, N. J., for Paul L. Troast, Trustee.

O'Mara, Schumann, Davis & Lynch, Jersey City, N. J. (by Frederic W. Schumann), for debtor.

Spingarn & Sachs, Union City, N. J. (by John G. Crowe, New York City), for claimant.

SMITH, District Judge.

This matter is before the Court on a petition for review filed herein by the Mills Paper Company, hereinafter identified as the creditor, pursuant to Section 39, sub. c of the Bankruptcy Act, 11 U.S.C.A. § 67, sub. c. The petition alleges that the creditor is aggrieved by an order, heretofore entered by the referee in Bankruptcy, under the terms of which its claim for damages was expunged. The petition for review was not filed within time, but we have nevertheless considered the matter on its merits.

The creditor filed with the trustee a claim for damages which was predicated upon an alleged breach of a contract for the sale of paper. The trustee objected to the claim and the matter was referred to the referee in Bankruptcy for hearing and determination. The objections were sustained and the claim for damages was expunged.

It appears from the record before the Court that on October 26, 1946 the creditor initiated negotiations which had for their object the purchase of paper from the debtor. The creditor submitted to the debtor a written offer (Exhibit A annexed to the Stipulation of Facts) to purchase paper under the terms and conditions therein outlined. This offer was accompanied by a Purchase Order (Exhibit A-1 annexed to the Stipulation of Facts) which contained terms and conditions consistent with those in the written offer. This offer was unequivocally rejected by the debtor by letter dated October 28, 1946, (Exhibit B annexed to the Stipulation of Facts) which contained a counter-offer. The creditor here relies upon the correspondence which passed between it and the debtor on and after the said date.

The letter of October 28, 1946, supra, read as follows: "We are returning herewith your order No. 3112 and we offer you 500 tons, for delivery in November and December, special book paper with proper water lined and not water lined mark. The full trim of the machine, namely 120", at 7½¢ per lb., at terms of one-third cash deposit with order or $25,000." (Emphasis by the Court). This was clearly an offer to sell the paper of the type described under specific terms and conditions, to wit, the prepayment of a cash deposit and the payment of the balance on delivery. The latter condition, not stated in the offer, is derived from Section 42 of the Uniform Sales Act, N.J.S.A. 46:30-48, which provides: "Unless otherwise agreed, delivery of the goods and payment of the price are concurrent conditions".

Thereafter, on October 29, 1946, the creditor forwarded to the debtor a new purchase order, which it now contends was an acceptance of the debtor's counter-offer. This order was not accompanied by a "cash deposit" and otherwise failed to conform to the debtor's counter-offer. The new purchase order contained material conditions, including a modification of the terms of payment, which were not embodied in the debtor's counter-offer. There was included in the purchase order, in addition to the other conditions, a requirement that "All orders * * * be acknowledged * *." Therefore, the purchase order cannot be construed as an unequivocal acceptance of the debtor's counter-offer.

The new purchase order, although purportedly an acceptance of the debtor's counter-offer, was both an effectual rejection and a counter-offer by the creditor to purchase paper on the terms and conditions therein prescribed. Restatement of the Law, Contracts, Sections 58, 59 and 60, pages 65 and 66; Williston on Contracts, Section 51, Vol. 1, at page 144, et seq.; Wilson v. Windolph, 103 N.J.Eq. 275, 143 A. 346, 347; Gable v. English, 93 N.J.Eq. 172, 115 A. 374; Poel v. Brunswick-Balke-Collender, Co., 216 N.Y. 310, 318, 110 N.E. 619; Mahar v. Compton, 18 App.Div. 536, 45 N.Y.S. 1126, 1128; Lamborn v. Woodard, 4 Cir., 20 F.2d 635, 636, et seq.; Canton Cotton Mills v. Southwest Overall Co., 8 Cir., 8 F.2d 807, 809; Columbia Malting Co. v. Clausen-Flanagan Corporation, 2 Cir., 3 F.2d 547, 549; Phoenix Iron & Steel Co. v. Wilkoff Co., 6 Cir., 253 F. 165, 1 A.L.R. 1497; and the other cases hereinafter cited. The additional terms and conditions injected by the creditor were material, and therefore the consummation of a valid and enforceable contract was made to depend on the debtor's unequivocal assent to them and a written acknowledgment of the purchase order. Ibid; see also deVries v. Evening Journal Ass'n, 9 N.J. 117, 87 A.2d 317, 318. The debtor did not agree to the terms and conditions embodied in the purchase order; in fact, it rejected the order under circumstances hereinafter discussed.

The applicable rule is succinctly stated in Johnson & Johnson v. Charmley Drug Co., 11 N.J. 526, 95 A.2d 391, at page 397, as follows: "* * * a contract does not come into being unless there be a manifestation of mutual assent by the parties to the same terms; and, while the manifestation of mutual assent is usually had by an offer and an acceptance either in words or by conduct, it is elementary that there can be no operative acceptance by acts or conduct unless the offeree's assent to the offer according to its terms is thereby unequivocally shown. There must * * be an agreement — a `meeting of the minds' on the subject matter, to use...