Kehlor Flour Mills Co. v. Lindstroem

• Decision Date: 24 May 1918
• Citation: 230 Mass. 119,119 N.E. 698
• Parties: KEHLOR FLOUR MILLS CO. v. LINDEN & LINDSTROEM et al.
• Court: United States State Supreme Judicial Court of Massachusetts Supreme Court

230 Mass. 119

119 N.E. 698

KEHLOR FLOUR MILLS CO.

v.LINDEN & LINDSTROEM et al.

Supreme Judicial Court of Massachusetts, Suffolk.

May 24, 1918.

Report from Superior Court, Suffolk County; Franklin G. Fessenden, Judge.

Action by the Kehlor Flour Mills Company against Linden & Lindstroem and trustees, resulting in directed verdict for defendants. On report to the Supreme Judicial Court. Judgment ordered for plaintiff for the amount found by the jury.

Walter B. Grant, of Boston, and Bruce S. Elliott, of St. Louis, Mo., for plaintiff.

Swift, Friedman & Atherton, of Boston (Chas. E. Rushmore, of Boston, of counsel), for defendants.

RUGG, C. J.

This is an action to recover damages for breach of an alleged contract. At the time of the transactions here in issue, the plaintiff was a corporation engaged in the manufacture and sale of flour at St. Louis in the state of Missouri. The plaintiff employed as its agents respecting trade in Sweden and Norway, Noremberg & Belsheim of Christiania in Norway, who hereafter for convenience will be referred to as the agents. The defendants were purchasers of flour in Gothenberg in Sweden. The important point to be decide is whether a contract was made between the parties for the sale by the plaintiff and purchase by the defendants of a quantity of flour.

[1][2] The material negotiations on that subject were all by letter, telegraph or cable. Being thus in writing and no ambiguous words or terms being employed and the circumstances not being in controversy the question whether a contract was made is one of law and not of fact. Ellis v. Block, 187 Mass. 408, 411, 412, 73 N. E. 475;Goldstein v. D'Arcy, 201 Mass. 312-317, 87 N. E. 584. The writings taken together must be so plain in their meaning and effect as not to be open to reasonable misunderstanding, in order that there be a contract. If they are thus plain, it is of no avail for either party to say that they were not understood. Wheaton Building & Lumber Co. v. Boston, 204 Mass. 218, 224-226, 90 N. E. 598.

[3][4] The transactions consisted of offers made by the defendants to purchase flour of the plaintiff and replies made by the plaintiff or its agents to these offers. An offer made by one party must be accepted without qualification, or, if any variation from that offer is made by the accepting party, that variation in turn must be unequivocally adopted by the party making the first offer, before a contract can be made. Ordinarily the annexing of a condition to the acceptance of an offer is regarded as the rejection of the original offer and the making of a new counter offer. Such counter offer must be accepted without departure from its terms or there is no contract. Putnam v. Grace, 161 Mass. 237, 245, 37 N. E. 166;Harlow v. Curtis, 121 Mass. 320;Minneapolis & St. Louis Ry. v. Columbus Rolling Mills, 119 U. S. 149, 7 Sup. Ct. 168, 30 L. Ed. 376.

[5] The written intercourse here in issue took place within a few weeks after the outbreak of the great war. In general the court will take judicial notice of disturbance of commercial relations thereby caused between neutral countries dependent upon navigation in the zone affected by that war. Underhill v. Hernandez, 168 U. S. 250, 253, 18 Sup. Ct. 83, 42 L. Ed. 456.

[6][7] The first communication was a telegram of September 10, 1914, from the defendants to the agents, in these words:

‘Offer firm against reply here within Saturday September twelfth further forty thousand sacks Rex patent same price & terms. Shipment on call September October confirm by wire soonest possible.’

The words ‘same price & terms' refer confessedly to a contract in writing between the parties made a few days earlier, not otherwise here material except for the purpose of fixing price and terms. It is conceded that these elements, fixed thus by reference to the earlier contract, were a price of ‘dollars 6.90 (six dollars and ninety cents) per 220 lbs.’ and ‘payment: Dollars 276,000 (dollars two hundred and seventy six thousand) cash in American currency deposited immediately by cablegram by Messrs. Brown Bros. & Co., New York, who cable sellers and pay this amount to sellers against through bills of lading issued.’ ‘Credit opened [with Brown Bros. & Co.] wont be annulled or withdrawn,’ or in other words that credit was ‘to be irrevocable, not to be withdrawn & not to be canceled.’ Shorter expressions of this kind of credit appear to have been ‘bank guarantee’ and ‘confirmed credit.’ Receipt of this order was acknowledged to defendants by the agents who cabled it to the plaintiff. But the reply of the plaintiff through its agents was transmitted under the date of September 13 and received by the defendants on September 14. It was in these words:

‘We confirm sale additional forty thousand Rex hundred kilos cottons Linden Lindestrom six dollars and ninety cents free on board Boston cash New York. * * * Arrange immediately confirmed credit two hundred & seventy six thousand dollars Brown Bros. Company.’

It is plain that if the communications had ended here there would be no contract. The time limit of the offer by the defendants to make the purchase expired on September 12 and the acceptance of that offer by the plaintiff, although unequivocal in terms, was not sent by the agents until September 13 and was not received by the defendants until September 14. This was two days after the offer of the defendants expired according to its express terms. But the communications between the parties did not end here. On September 14 the defendants wired the agents:

‘Confirm we bought further 40 thousand sacks Rex per Canton and further two thousand Sovereign same price & terms as previously Sovereign shipment September Scandinavian tonnage subject to depositing equivalent amount kronas with Skandinaviska Kreditaktiebolaget until dollars available confirm by wire.’

The Skandinaviska Kreditaktiebolaget was a bank in Gothenberg. Receipt of the telegram of the defendants of September 14 adding the new condition was acknowledged by the agents by telegram in these words:

‘We confirm having wired Kehlor Flour Mills yesterday that for the further forty thousand Rex bought by you per steamer Canton end October from Boston at price & terms as former lot equivalent amount in kroner will be deposited with Skandinaviska Kreditaktiebolaget until dollars available for same.’

The saem in substance was written on the same date by the agents to the defendants. On September 16 the agents sent a telegram to the defendants in these words:

‘Kehlors cable, ‘confirm Linden forty thousand Rex steamer Canton Boston end October six ninety arrange irrevocable credit Brown Brothers have bought wheat to fill contract and must commence shipping flour promptly.’ Order Kreditaktiebolaget instantly through Brown Brothers cable Kehlors deposit preliminarily made of equivalent amount kroner until dollars available which must be procured with the utmost despatch and also that the deposit will neither be withdrawn nor canceled confirm by wire to us that so has been done.'

The portion of this telegram inclosed in subquotation marks was in English, being the quotation of a cablegram from the plaintiff to the agents, sent in reply to their cablegram transmitting to it the telegram of the defendants of September 14, and the rest of the telegram was in the Swedish language. On the same day, September 16, the agents wrote to the defendants reciting their telegram of even date and adding:

‘And we are awaiting your immediate wire confirmation that the equivalent for the last 40,000 sacks Rex for shipment per the S. S. Canton end October has been preliminarily deposited with the Skandinaviska Kreditaktiebolaget in Swedish currency until dollars obtainable in the course of a few days, in which respect all effects are made from your side, and that the Skandinaviska Kreditaktiebolaget wire to Kehlors today hereabout through Brown Bros. & Co., New York, and that the deposit be neither withdrawn nor canceled.’

In order to determine the meaning of the telegram and letter, both under date of September 16, of the agents, including copy of the plaintiff's cablegram to them in reply to the defendants' final offer, sent to the defendant, it is necessary to analyze the meaning of the defendants' proposition to purchase. That proposition in its final form depends upon three different writings: (1) The original contract to which reference is made for ‘price & terms,’ (2) the telegram of the defendants of September 10, and (3) their telegram of September 14. The pertinent parts of these already have been quoted.

There would be no doubt as to the meaning of the contract if it depended on the first two writings alone. It is the third which causes difficulty. That instrument contained a variation from the earlier offer. That telegram of September 14 was not a breaking off of previous negotiations, but a continuance of them. Its first three words, namely, ‘confirm we bought,’ incorporate all that has gone before (so far as not then to be modified) and is the language of an intent to express a completed transaction. But there is one new condition added, and the whole contract must be treated with that ‘subject’ clause incorporated. In order to ascertain the complete offer of the defendants, their several communications must be put together. So far as concerns the crucial matter of payment, these terms were ‘dollars 276,000 (dollars two hundred & seventy six thousand) cash in American currency deposited immediately by cablegram by Messrs. Brown Bros. & Co., New York, who cable sellers and pay this amount to sellers against through bills of lading issued,’ ‘Credit opened...