St. Regis Paper Co. v. Hubbs & Hastings Paper Co.

• Decision Date: 30 January 1923
• Citation: 235 N.Y. 30,138 N.E. 495
• Court: New York Court of Appeals Court of Appeals
• Parties: ST. REGIS PAPER CO. v. HUBBS & HASTINGS PAPER CO.

235 N.Y. 30

138 N.E. 495

ST. REGIS PAPER CO.

v.HUBBS & HASTINGS PAPER CO.

Court of Appeals of New York.

Jan. 30, 1923.

Action by the St. Regis Paper Company against the Hubbs & Hastings Paper Company. From a judgment on an order of the Appellate Division (201 App. Div. 397,194 N. Y. Supp. 150, 482), which reversed an order of the Trial Term setting aside a verdict for plaintiff for $24,375, and granting a new trial and directing reinstatement of the verdict, plaintiff appeals.

Reversed, and judgment granted for plaintiff for $44,426.03.

Appeal from Supreme Court, Appellate Division, Fourth Department.

Henry Purcell and Francis E. Cullen, both of Watertown, for appellant.

Fred A. Robbins, of Hornell, for respondent.

POUND, J.

Plaintiff sues for an unpaid balance on the sale of paper. Defendant, not denying the allegations of the complaint, sets up a counterclaim, alleging that plaintiff is a manufacturer of print paper, such as newspapers are printed on, and that defendant is a broker in the sale of such paper; that defendant as such broker secured contracts for plaintiff from three newspaper publishers for their supply of paper for given periods; that the understanding was that defendant should guarantee the accounts, and that the paper so shipped should in the first instance be charged to defendant, and not to the newspaper publishers; that plaintiff, after furnishing the publishers paper under such contracts for some time, repudiated its agreement, delivered no more paper, and refused to pay defendant the commissions to which it would have been entitled, to its damage.

On the trial it appeared that the transactions between the parties took the following form of written contracts, one set of which was, in substance, as follows:

Defendant as buyer (for Rochester Printing Company), and plaintiff as seller entered into a contract of sale of paper, 4,500 tons a year for two years from January 1, 1919, price for the first three months ending March 31, 1919, $3.77 per hundred pounds, ‘ price for the balance of the year to be fixed by mutual consent. In the event that the parties to this agreement shall fail to arrange a price for any quarter before the expiration of the preceding three months, this contract, in so far as it pertains to delivery over the unexpired period shall terminate.’ ‘If at any time during the life of this contract, both parties can agree on a fixed price for the balance of the contract, that agreement shall take the place of the three months' price agreement.’

The contract under the caption ‘Remarks' contains the usual provisions relieving either party from liability for failure to take or supply such paper in consequence of strikes and other causes beyond their control. It also provides that the provisions last referred to shall run through to ‘an original contract’ between defendant and the Rochester Printing Company for whose use the contract is placed, and that the publisher and plaintiff are the contracting parties as ‘ to said conditions,’ i. e., as to strikes, etc.

On the same date Rochester Printing Company as buyer and defendant as seller entered into a contract of sale in the same terms as the foregoing, excepting only that the price was fixed at $4.10 per hundred pounds.

The other two sets of contracts differ only as to name of publisher, price, amount of paper, and period covered. In the last quarter of 1919 plaintiff refused to agree with defendant on a price for the first quarter of 1920, and finally quoted a price so high that the publishers could not agree on it with defendant. In so doing it acted arbitrarily, without making an attempt to agree and for the purpose of terminating the contract, depriving defendant of its prespective profits on the transaction and placing the business in the hands of others.

Defendant contends that this transaction was a sale by the plaintiff to the publisher, the defendant acting as a broker and receiving a commission of 2 per cent. on the contract price. Plaintiff's contention is that the transaction as evidenced by the formal written instruments was a sale to defendant and a resale by it to the publisher. The contract price for the first three months in each transaction was to net defendant 2 per cent., and this amount was referred to by the parties in their correspondence as a commission.

The trial court submitted to the jury the question whether the defendant was a broker in the transaction, and whether plaintiff acted in good faith in trying to fix the price of paper. The jury found for the defendant. The trial justice set the verdict aside and granted a new trial, saying that, assuming defendant acted as broker, its commissions must be limited to 2 per cent. on the paper to be delivered during the first three months of the contract, as the only enforceable contract between the parties was for the first three months' delivery, and...