Nitro Powder Co. v. Agency of Canadian Car and Foundry Co.

• Decision Date: 25 April 1922
• Citation: 233 N.Y. 294
• Court: New York Court of Appeals Court of Appeals
• Parties: NITRO POWDER COMPANY, Appellant, v. AGENCY OF CANADIAN CAR AND FOUNDRY COMPANY, Respondent.

233 N.Y. 294

135 N.E. 507

NITRO POWDER CO.

v.AGENCY OF CANADIAN CAR & FOUNDRY CO.

Court of Appeals of New York.

April 25, 1922.

Action by the Nitro Powder Company against the Agency of Canadian Car & Foundry Company.Judgment entered upon a verdict directed in favor of the defendant was affirmed by the Appellate Division(192 App. Div. 908,182 N. Y. Supp. 940), and plaintiff appeals.

Affirmed.Appeal from Supreme Court, Appellate Division, First department.

Walter H. Pollak, Osmond K. Fraenkel, and Louis Werner, all of New York City, for appellant.

Eli J. Blair and George W. Field, both of New York City, for respondent.

POUND, J.

This is an action to recover damages for breach of contract to sell trinitrotoluol, commonly known as TNT, which is a high explosive war material.Plaintiff and defendant on October 24, 1917, entered into a written agreement of sale and purchase of a large quantity of salvaged TNTat 31 and 25 cents a pound.After defendant had delivered one carload, the government of the United States took over the remaining portion by government order, dated October 30, 1917, paying therefor 45 cents a pound.Plaintiff contends that defendant induced this taking by the government, and that it must respond in damages for the loss sustained by plaintiff.The taking was a legal taking within the National Defense Act of Congress(39 Stat. 166).The question is whether the contract thereby came to an end from causes beyond the control of the parties.The contract contains the following clause:

‘It is mutually agreed that the seller will only be called upon to deliver such quantity of above material as may be reclaimed from Russian shells at Kingsland, and that should the quantity be reduced by fire, explosion, government taking over the material, or any cause beyond the control of the seller, the seller will not be called upon to replace such shortage.’

[1] On well-established principles of the law of contracts, the disposition of this case by the courts below was correct.

‘When people enter into a contract which is dependent for the possibility of its performance on the continual availability of a specific thing, and that availability comes to an end by reason of circumstances beyond the control of the parties, the contract is prima facie regarded as dissolved.The contingency which has arisen is treated, in the absence of a contrary intention made plain, as being one about which no bargain at all was made.’Tamplin Steamship Co. v. Anglo-Mexican Petroleum Products Co., [1916]2 A. C. 397, 406.

The subject-matter of the contract was the quantity of material reclaimed from Russian shells as that quantity might be reduced by government taking over the material.The contract is in terms conditional on governmental inaction and subject to the condition that if the government should requisition the goods and render it impossible that the seller should perform its contract, performance should be excused.The taking by government completely frustrated the contract because it left no material upon which the contract could operate.As soon as the material was taken, defendant was released from all obligation to the plaintiff.Defendant had no control over the situation.It merely acquiesced in action which it had no power to stop.Plaintiff could not therefore recover the difference between the conditional contract price and the government price.The Claveresk (C. C. A.)264 Fed. 276;The Isle of Mull (C. C. A.)278 Fed. 131.

[3] The fact that the defendant sought or welcomed the taking of the TNT by the government is immaterial.It was not bound to say to the government representative:

‘You must wait until we deliver to plaintiff and then make your requisition on it.’

Sovereignty is not thus dealt with.Such an exhortation would have been futile.

‘It was not the...