Plant City Steel Corp. v. National Machinery Exchange, Inc.

• Citation: 297 N.Y.S.2d 559,23 N.Y.2d 472,245 N.E.2d 213
• Court: New York Court of Appeals
• Decision Date: 15 January 1969
• Parties: , 245 N.E.2d 213 PLANT CITY STEEL CORPORATION, Respondent, v. NATIONAL MACHINERY EXCHANGE, INC., Appellant.

Page 559

297 N.Y.S.2d 559

23 N.Y.2d 472, 245 N.E.2d 213

PLANT CITY STEEL CORPORATION, Respondent, v. NATIONAL MACHINERY EXCHANGE, INC., Appellant.

Court of Appeals of New york.

Jan. 15, 1969.

Michael Permut, Morris Permut and Stephen H. Finkelstein, New York City, for appellant.

Clarence Fried and Richard I. Wolff, New York City, for respondent.

KEATING, Judge.

Plant City Steel Corporation answered an advertisement in a trade publication placed by National Machinery Exchange, Inc., a dealer in used industrial machinery. National had advertised for sale a Kane and Roach, No. 23, Horizontal Angle Roll machine, and upon National's request forwarded to Plant City a picture of the machine which described its capacity. The machine was represented to be able to bend metal angles, leg out, 6 inches by 6 inches by 1 inch. The price asked for the machine was $16,000.

Plant City negotiated for the purchase of the machine. The documents of sale contained a warranty that the machine would perform as specified in the advertisement. After Plant City installed the machine it attempted to roll a piece of flat bar 6 inches by 1 inch. The metal bar shattered the tooling of the machine. The tooling was repaired and another metal bar placed in the machine. Again the tooling was shattered. The plaintiff procured a capacity chart for this particular machine and discovered that it could not perform the operations warranted by National. The maximum capacity of the machine purchased could only bend angle legs of metal bars up to 5 inches by 5 inches by 1/2 inch. Plant City's manager telephoned National and disclosed the problem, noted National's breach of contract and demanded repayment of the purchase prices, together with installation and free charges. National refused. The president of the plaintiff corporation thereafter visited National's office and renewed the company's demand. After being rebuffed once again, Plant City instituted an action to recover its expenditures for the machine.

After issue had been joined in this litigation, the parties entered into a written stipulation of settlement. Under the terms of the settlement, the defendant agreed to pay the plaintiff $13,000 upon the return of the machine. The plaintiff warranted the machine would be returned in the same condition it was when received. The machine subsequently was returned, but the defendant refused to accept delivery claiming it was not in the same condition as when originally delivered.

Thereafter, the plaintiff made a motion for leave to serve a supplemental complaint in the original action setting forth as an additional cause of action the breach of the written stipulation agreement. The defendant did not oppose the motion, and it was granted. The causes of action stated in the supplemental complaint were the original breach of contract and loss of profit plus the breach of the executory accord.

Section 15--501 (subd. 3) of the General Obligations Law provides: 'If an executory accord is not performed according to its terms by one party, the other party shall be entitled either to assert his rights under the claim, cause of action, contract, obligation, lease, mortgage or other security interest which is the subject of the accord, or to assert his right under the accord.' The statute does not specify when the aggrieved party must make his election. Only one decision has addressed itself to this particular issue. In Elliott v. Prockter Prods. (282 App.Div. 758, 761, 122 N.Y.S.2d 546) it was held that a '(p)laintiff may not join a cause of action for breach of contract and a cause of action based on an alleged settlement of the cause of action for breach of contract.' The court held that this result was dictated as a matter of substantive law. It stated: 'The alternatives are not to be presented in a pleading but represent a choice which must be made by the plaintiff in advance of pleading.' The court, therefore, ordered the plaintiff to make an election between the two causes of action in an amended complaint. The decision upheld the defendant's contention that such an election had to be made. We dismissed the appeal taken from this order as nonfinal (306 N.Y. 629, 116 N.E.2d 240). The question of when an election must be made has, therefore, never been decided by this court.

The trial court in the present action permitted the plaintiff to make its election after all the evidence had been adduced by both parties. The court reasoned that, since the defendant had not opposed the plaintiff's motion for leave to serve a supplemental complaint, the order permitting the pleading of the breach of the executory accord along with the contract action became the law of the case. The trial court, confronted with the different causes of action in the complaint, required the defendant to defend both the accord and the contract claims and did not require the plaintiff to elect which remedy he wanted to pursue at trial since the court could not determine after the plaintiff's case who had breached the executory accord.

The Appellate Division, First Department, affirmed because 'the defendant did not object to the pleading of the inconsistent causes * * * (and) under the special circumstances here, must be deemed to have waived whatever right it may have had before the trial to compel the plaintiff to make an...