Nat'l Importing & Trading Co. Inc. v. E.A. Bear & Co.

• Decision Date: 16 February 1927
• Docket Number: No. 17088.,17088.
• Citation: 155 N.E. 343,324 Ill. 346
• Parties: NATIONAL IMPORTING & TRADING CO., Inc., v. E. A. BEAR & CO.
• Court: Illinois Supreme Court

324 Ill. 346

155 N.E. 343

NATIONAL IMPORTING & TRADING CO., Inc.,

v.E. A. BEAR & CO.

No. 17088.

Supreme Court of Illinois.

Feb. 16, 1927.

Error to First Branch Appellate Court, First District, on Appeal from Superior Court, Cook County; Silas Cook, Judge.

Suit by the National Importing & Trading Company, Inc., against E. A. Bear & Company. Judgment for plaintiff was affirmed by the Appellate Court (236 Ill. App. 426), and defendant brings error.

Reversed and remanded for a new trial.

Thompson and Dunn, JJ., dissenting.Parker H. Hoag, Frederic Ullmann, Charles M. Haft, William T. Church, and Egbert Robertson, all of Chicago, for plaintiff in error.

McCormick, Kirkland, Patterson & Fleming, of Chicago (Charles F. Rathbun, Louis G. Caldwell, and Joseph H. Pleck, all of Chicago, of counsel), for defendant in error.

PER CURIAM.

The defendant in error filed a suit in the superior court of Cook county against the plaintiff in error company on a contract for the sale and delivery of 225 cases of Chinese crystal hen egg albumen, of about 200 pounds net per case, at the price of $1.54 per pound, duty paid. The contract signed by the parties contained the following specifications:

‘Shipment from the Orient, 75 cases in April, 50 cases in May, and 100 cases in June, 1920. Quality, f. a. q. of the season. To be approved before removal from docks. Terms of payment: Net cash sight draft against bill of lading. Insurance, by seller. Weights, shipping. Tare, shipping. Sample for arbitration to be drawn and sealed in the presence of both buyer and seller or by some persons agreed upon by both.’

The contract further provided that the albumen should comply with the Food and Drug Acts of June 30, 1906 (U. S. Comp. St. §§ 8717-8728), and with requirements of the Department of Agriculture as to zinc. The plaintiff in error defended on the ground of failure to perform in accordance with the terms of the contract. Some counts of the declaration having averred a parol agreement to amend certain terms of the contract, the plaintiff in error also filed a plea of the statute of frauds and the Uniform Sales Act. The jury returned a verdict for the plaintiff in the sum of $18,500 as damages for the breach of the contract. The Appellate Court affirmed this judgment, and the cause comes here by writ of certiorari.

The vendor sold the goods in the open market, and the suit is to recover the difference between such sale price and the contract resulting from the decline in the market value of the goods.

The contentions of the plaintiff in error are, first, that, having pleaded the statute of frauds, the modifications of the contract are avoided, and the offers of performance on the part of the defendant in error having been made according to the parol amendment of the contract, there was a failure of performance, and plaintiff in error was justified in refusing the goods when tendered. It is also contended that the contract, as sought to be amended, was void, under section 4 of the Uniform Sales Act (Smith-Hurd Rev. St. 1925, c. 121 1/2), the price of the goods sold being for more than $500, as in such case that act requires that the contract of sale be in writing, and that the same rule is to be applied to a modification of a contract made under the Sales Act as applies to modifications under the statute of frauds.

The contract was dated November 20, 1919. The facts pertaining to the modification of it as found by the Appellate Court, and which must therefore be taken as the facts here, are that about March 12, 1920, Miner E. Bear, secretary of the plaintiff in error company, went to New York and conferred with Royal L. Firman, treasurer of the defendant in error, and asked that the plaintiff in error be allowed to take some of the albumen on trade acceptances instead of sight drafts, and that delivery of the same be in lesser quantities and over a longer period of time than provided for in the contract. He requested that the deliveries be made in smaller quantities for the reason that it would assist in financing the transaction for his company. Firman told him that the vendor would be glad to do anything in that respect that it could do, but that he could not promiseanything until he learned whether the bank financing the transaction for the vendor would accept trade acceptances on the shipments. On March 18, 1920, the plaintiff in error wrote to the defendant in error, saying:

‘With reference to the trade acceptance on these three shipments of albumen to come, will say that we would like to have these on 90-day acceptances.’

To this the defendant in error replied that it would be willing to accept 90-day acceptances, if its bank would agree. It appears from the evidence that later the bank did agree to take care of these acceptance. In the latter part of February, 1920, the market price of albumen began to decline. In March the price had dropped from $1.54 to $1.15, and the price decline continued up to the time this action was started. By the middle of July the price had declined to about 80 cents. On April 13, 1920, the plaintiff in error wrote the defendant in error, attempting to persuade the latter to cancel the contract, calling attention to the fact that the price had gone down to $1.23, and suggesting that the defendant in error had not made the actual purchase of albumen to cover the contract. To this letter the defendant in error replied that the contract represented an actual purchase on its part to cover it and refused to cancel. During the first week of May the defendant in error notified the plaintiff in error by telephone that the April shipment had arrived in Seattle and would be forwarded in a few days by freight. Elmer Bear, the president of the plaintiff in error, in the conversation that followed, referred to the terms of payment and again requested a modification by accepting trade acceptances, to which the defendant in error agreed. It was also in this conversation agreed that a less number of cases should be delivered than those required by the contract. The plaintiff in error was thereby provileged to take 25 instead of 75 cases. The shipment which included the 75 cases, referred to in the contract as the April shipment and which left Shanghai, China, on April 1, reached Seattle, Wash., on May 2, and a few days later came on to Chicago and was unloaded in the warehouse of White, Stokes & Co., subject to delivery orders of the defendant in error. After some correspondence and conversations, certain trade acceptances and changes in the delivery of the goods were agreed upon, and Elmer Bear, president of the plaintiff in error, directed the defendant in error to have the papers made out at the bank, which was done. It appears that numerous other conversations were had in May and June. An invoice for 25 cases of the April shipment was delivered to the plaintiff in error, and it thereafter called up the office of the defendant in error complaining that no order for delivery had been sent with the invoice, it being understood between the parties that the delivery was to be effected by an order on White, Stokes & Co. On July 8 sight drafts and trade acceptances covering the shipments were presented to the plaintiff in error accompanied by a delivery order, and the plaintiff in error refused to receive the goods, ascribing no reason for such refusal. At a later conference it was suggested by counsel for the plaintiff in error that the April shipment had not taken place according to the terms of the contract, it being conceded that the April shipment was put on board a steamer at Shanghai on the last day of March. Firman then on July 14 (the time for delivery not having expired) told the plaintiff in error that the defendant in error had in New York at that time albumen of the same kind, shipped in the months and of the quality specified in the contract, even as construed by the plaintiff in error, which would be delivered to the plaintiff in error, if desired. The reply was that the plaintiff in error would not take anything under the contract. Firman's evidence on this point is corroborated by a salesman, who testified that the attorney for the plaintiff in error then stated:

‘No deliveries would be accepted under the contract.’

On August 28, that time still being within the period limited for deliveries according to the contract, the defendant in error wrote:

‘We have 225 cases here which we can tender in the strictest technical compliance with your contract.’

The plaintiff in error replied on August 31 in a letter which is properly characterized as evasive and as constituting a rejection of the offer. Attempts to secure performance of the contract were futile, as were efforts to secure an adjustment. On October 14 the defendant in error made a final offer, both by letter and telegram, to deliver the 225 cases contracted for, which offer, however, was refused, the plaintiff in error then specifying as ground for such refusal that the quality of the albumen was not according to the contract.

The first question involved in the case is whether there was a breach of the original contract by placing the albumen on board ship in the Orient on the 31st of March instead of during the month of April. It is conceded that the boat left Shanghai on April 1. This involves the question of construction of the language, ‘Shipment from the Orient, 75 cases in April,’ etc.

[1] It is contended by the plaintiff in error that in contracts of this character time is of the essence of the contract and the buyer may refuse delivery if shipment is not made in strict accordance with the contract, though the difference may be slight; that statements of the date of shipment by the vendor go to the identification or description of the property and are therefore in the nature of warranties, proof of the truth of which is a condition precedent to recovery for failure to accept, and it cites in support of this contention Bowes v....