Rubber Trading Co. v. Manhattan Rubber Mfg. Co.

• Decision Date: 05 June 1917
• Citation: 116 N.E. 789,221 N.Y. 120
• Parties: RUBBER TRADING CO. v. MANHATTAN RUBBER MFG. CO.
• Court: New York Court of Appeals Court of Appeals

221 N.Y. 120

116 N.E. 789

RUBBER TRADING CO.

v.MANHATTAN RUBBER MFG. CO.

Court of Appeals of New York.

June 5, 1917.

Appeal from Supreme Court, Appellate Division, First Department.

Action by the Rubber Trading Company against the Manhattan Rubber Manufacturing Company. From a judgment of the Appellate Division (164 App. Div. 477,150 N. Y. Supp. 17) affirming a judgment for plaintiff, defendant appeals. Reversed.

Louis W. Stotesbury, of New York City, for appellant.

Harry D. Nims, of New York City, for respondent.

CARDOZO, J.

The defendant, a manufacturer of rubber, agreed to buy from the plaintiff, an importer, 15 tons of prime thin disc Manicoba rubber at $1 per pound; delivery was to be made at the rate of about 5 tons a month in September, October, and November, 1912, and delivery orders were to be sent to the buyer when the rubber was ready. Goods were to be billed on a credit of 10 days. The first delivery under this contract was made in August, and was paid for in September. At the time of payment inspection had not yet been made. Defects were later discovered, and 7,900 pounds were returned with the plaintiff's consent. The incident seems to have warned the defendant of the need of caution. A second shipment arrived from abroad in October. The defendant's president was notified of the arrival of the vessel, and was asked to inspect the rubber while it lay in the warehouse or on the dock. He refused to do so. There would be no acceptance, he said, till the rubber reached the defendant's factory, where it could be carefully examined, and subjected to laboratory tests. ‘We won't accept any more rubber at the storehouse. You have got to ship it to our factory, and we will put it through a chemical test and won't pay you unless it is satisfactory.’ He also told the broker who signed the contract for the buyer that he would accept only round discs, but a few days later he said that the shape did not matter if the rubber in other respects was right. The plaintiff was not satisfied that acceptance should be postponed until delivery had been made. It wrote the defendant on October 16, 1912:

‘Referring to our contract with you of July 19, 1912, for fifteen tons of Prime Thin Disc Manicoba rubber: You have stated to us that you intend to make a very careful inspection of the rubber delivered under this contract, in addition to the usual inspection. We have placed with the West Side Warehouse, No. 79 to No. 101 Laight street, about 11,200 pounds of rubber, which we hereby tender you as the October delivery under this contract. Please make such further inspection of this rubber as you wish as soon as possible, notifying us when it will be convenient for you to make such inspection, in order that we may place enough of our men at your disposal to enable you to make the examination quickly and easily.’

The letter closes with the statement:

‘Delivery orders are ready to be handed to you as soon as you notify us that this rubber is satisfactory.’

The defendant sent back word to forward the delivery orders, and that the rubber would then be taken, but that its quality must be right or payment would not be made. The plaintiff retorted:

‘That the rubber must be approved in New York, and its leaving the storehouse would be an acknowledgment of its acceptance.’

Other shipments arrived from abroad in November. Again, the plaintiff gave warning that delivery orders would not be furnished till notice was received that the rubber was satisfactory. Its president admits that it never receded from that position. Neither side would yield. Each notified the other that the contract had been broken. The plaintiff sold part of the rubber at a reduced price; the rest it retained. The action is brought to recover the profit which has been lost.

The complaint, as it stood until the trial, alleged a tender of the October and November shipments, and the defendant's refusal to receive them. At the trial, it became manifest that this theory would not hold. The tender had been coupled with a condition that approval must precede delivery. This condition was a departure from the contract. The plaintiff makes no claim to the contrary. The trial judge charged without objection:

‘The plaintiff had no right to demand a stipulation that the goods were satisfactory before making delivery. The insistence upon such demand invalidated the tender. There has been no tender of performance by the plaintiff in this case, nor is there one claimed.’

To escape this difficulty, the plaintiff amended its complaint upon the trial, and changed the theory of its action. It alleged that on October 9, 1912, ‘the defendant wrongfully repudiated the said contract, and definitely notified the plaintiff that it would not thereafter perform the same.’ This anticipatory breach, it is said, made tender of the rubber needless. Two acts are relied upon as evidence of repudiation. One is the defendant's announcement that withdrawal of the goods from the warehouse must be without prejudice to their rejection afterwards. The other is the notice that the discs delivered must be round. The demand for round discs was withdrawn a few days later. It was not referred to again by either of the parties. Of the two acts assigned as evidence of repudiation, the first only deserves discussion.

We may assume without deciding that the warehouse, which was the place of delivery, was also the place where inspection should have been made. Bliss Co. v. U. S. Incandescent Gas Light Co., 149 N. Y. 300, 306,43 N. E. 859;Williston on Sales, § 480. We may also assume, again without deciding, that the defendant was at fault and in effect renounced performance when it insisted upon the...