Multiplastics, Inc. v. Arch Industries, Inc.

• Decision Date: 16 April 1974
• Citation: 166 Conn. 280,348 A.2d 618
• Court: Connecticut Supreme Court
• Parties: , 14 UCC Rep.Serv. 573 MULTIPLASTICS, INC. v. ARCH INDUSTRIES, INC.

Page 618

348 A.2d 618

166 Conn. 280, 14 UCC Rep.Serv. 573

MULTIPLASTICS, INC. v. ARCH INDUSTRIES, INC.

Supreme Court of Connecticut.

April 16, 1974.

John F. Harvey, Jr., Wethersfield, for appellant (defendant).

Mitchel W. Garber, New Haven, with whom was Peter A. Treffers, New Haven, for appellee (plaintiff).

Before HOUSE, C.J., and SHAPIRO, LOISELLE, MacDONALD and BOGDANSKI, JJ.

BOGDANSKI, Associate Justice.

The plaintiff, Multiplastics, Inc., brought this action to recover damages from the defendant, Arch Industries, Inc., for the breach of a contract to purchase 40,000 pounds of plastic pellets. From a judgment rendered for the plaintiff, the defendant has appealed to this court.

The facts may be summarized as follows: ¹ The plaintiff, a manufacturer of plastic resin pellets, agreed with the defendant on June 30, 1971, to manufacture and deliver 40,000 pounds of brown polystyrene plastic pellets for nineteen cents a pound. The pellets were specially made for the defendant, who agreed to accept delivery at the rate of 1000 pounds per day after completion of production. The defendant's confirming order contained the notation 'make and hold for release. Confirmation.' The plaintiff produced the order of pellets within two weeks and requested release orders from the defendant. The defendant refused to issue the release orders, citing labor difficulties and its vacation schedule. On August 18, 1971, the plaintiff sent the defendant the following letter: 'Against P.O. 0946, we produced 40,000 lbs. of brown high impact styrene, and you have issued no releases. You indicated to us that you would be using 1,000 lbs. of each per day. We have warehoused these products for more than forty days, as we agreed to do. However, we cannot warehouse these products indefinitely, and request that you send us shipping instructions. We have done everything we agreed to do.' After August 18, 1971, the plaintiff made numerous telephone calls to the defendant to seek payment and delivery instructions. In response, beginning August 20, 1971, the defendant agreed to issue release orders but in fact never did.

On September 22, 1971, the plaintiff's plant, containing the pellets manufactured for the defendant, was destroyed by fire. The plaintiff's fire insurance did not cover the loss of the pellets. The plaintiff brought this action against the defendant to recover the contract price.

The trial court concluded that the plaintiff made a valid tender of delivery by its letter of August 18, 1971, and by its subsequent requests for delivery instructions; that the defendant repudiated and breached the contract by refusing to accept delivery on August 20, 1971; that the period from August 20, 1971, to September 22, 1971, was not a commercially unreasonable time for the plaintiff to treat the risk of loss as resting on the defendant under General Statutes § 42a-2-510(3), and that the plaintiff was entitled to recover the contract price plus interest.

General Statutes § 42a-2-510, entitled 'Effect of breach on risk of loss,' reads, in pertinent part, as follows: '(3) Where the buyer as to conforming goods already identified to the contract for sale repudiates or is otherwise in breach before risk of their loss has passed to him, the seller may to the extent of any deficiency in his effective insurance coverage treat the risk of loss as resting on the buyer for a commercially reasonable time.' ² The defendant contends that § 42a-2-510 is not applicable because its failure to issue delivery instructions did not constitute either a repudiation or a breach of the agreement. The defendant also argues that even if § 42a-2-510 were applicable, the period from August 20, 1971, to September 22, 1971, was not a commercially reasonable period of time within which to treat the risk of loss as resting on the buyer. The defendant does not claim that the destoryed pellets were not 'conforming goods already identified to the contract for sale,' as required by General Statutes § 42a-2-510(3), nor does it protest the computation of damages. With regard to recovery of the price of goods and incidental damages, see General Statutes § 42a-2-709(1)(a).

The trial court's conclusion that the defendant was in breach is supported by its finding that the defendant agreed to accept delivery of the pellets at the rate of 1000 pounds per day after completion of production. The defendant argues that since the confirming order instructed the defendant to 'make and hold for release,' the contract did not specify an exact delivery date. This argument fails, however, because nothing in the finding suggests that the notation in the confirming order was part of the agreement between the parties. Since, as the trial court found, the plaintiff made a proper tender of delivery, beginning with its letter of August 18, 1971, ³ the plaintiff was entitled to acceptance of the goods and to payment according to the contract. General Statutes §§ 42a-2-507(1), 42a-2-307.

The defendant argues that its failure to issue delivery instructions did not suffice to repudiate the contract because repudiation of an executory promise requires, first, an absolute and unequivocal renunciation by the promisor, and, second, an unambiguous acceptance of the repudiation by the promisee. Yaffe v. Glens Falls Indemnity Co., 115 Conn. 375, 378, 161 A. 521; Wells v. Hartford Manilla Co., 76 Conn. 27, 35 55 A. 599. Anticipatory repudiation is now governed by General Statutes §§ 42a-2-609 to 42a-2-611, which in some respects alter the prior law on the subject. The present cases does not involve repudiation of an executory promise, however, since the defendant breached the contract by failing to accept the goods when acceptance became due.

The defendant next claims that the plaintiff acquiesced in the defendant's refusal to accept delivery by continuing to urge compliance with the contract and by failing to pursue any of the remedies provided aggrieved sellers by General Statutes § 42a-2-703. In essence, the defendant's argument rests on the doctrines of waiver and estoppel, which are available defenses under the Uniform Commercial Code. General Statutes §§ 42a-1-103, 42a-1-107, 42a-2-209; Mercanti v. Persson, 160 Conn. 468, 477-479, 280 A.2d 137; see 1 Anderson, Uniform Commercial Code (2d Ed.) §§ 1-103:31, 1-103:51. The defendant has not, however, shown those defenses to apply. Waiver is the intentional relinquishment of a known right. Brauer v. Freccia, 159 Conn. 289, 295, 268 A.2d 645. Its existence is a question of fact for the trier. Brauer v. Freccia, supra. The trial court did not find that the plaintiff intentionally acquiesced in the defendant's breach of their agreement, thereby waiving its right to take advantage of that breach. Indeed, the plaintiff's repeated attempts to secure compliance seem inconsistent with the possibility of waiver. See Bradford Novelty Co. v. Technomatic, Inc.,142 Conn. 166, 112 A.2d 214, for an example of acquiescence in delayed performance.

Nor has the defendant made out a case of estoppe. 'The two essential elements of estoppel are that 'one party must do or say something which is intended or calculated to induce another to believe in the existence of certain facts and to act on that belief; and the other party, influenced thereby, must change his position or do some act to his injury which he otherwise would not have done.' Dickau v. Glastonbury, 156 Conn. 437, 441, 242 A.2d 777; Pet Car Products, Inc. v. Barnett, 150 Conn. 42, 53, 184 A.2d 797.' Mercanti v. Persson, supra, 160 Conn. at 477, 280 A.2d at 142. Neither element of estoppel is present in the record of this case. The plaintiff's requests for delivery instructions cannot be said to have misled the defendant into thinking the plaintiff did not consider their contract breached. In fact, General Statutes § 42a-2-610, entitled 'Anticipatory repudiation,' specifically provides that the aggrieved seller may 'resort to any remedy for breach as provided by section 42a-2-703 . . ., even though he has notified the repudiating party that he would await the latter's performance and has urged retraction.' Although the present case is not governed by General Statutes § 42a-2-610, that section does demonstrate that the plaintiff's conduct after the defendant refused to accept delivery was not inconsistent with his claim that the contract...