Stolper Steel Products Corp. v. Behrens Mfg. Co., Inc.

• Decision Date: 07 June 1960
• Citation: 10 Wis.2d 478,103 N.W.2d 683
• Parties: STOLPER STEEL PRODUCTS CORP., a Wis. corporation, Appellant, v. BEHRENS MFG. CO., Inc., a Wis. corporation, Respondent.
• Court: Wisconsin Supreme Court

Page 683

103 N.W.2d 683

10 Wis.2d 478

STOLPER STEEL PRODUCTS CORP., a Wis. corporation, Appellant, v. BEHRENS MFG. CO., Inc., a Wis. corporation, Respondent.

Supreme Court of Wisconsin.

June 7, 1960.

Poss, Toelle & Schuler, Milwaukee, John H. Ames, Milwaukee, of counsel, for appellant.

A. Warren Cahill, Waukesha, for respondent.

CURRIE, Justice.

The principal issue on this appeal is whether the defendant purchaser was required to give the plaintiff manufacturer notice, which would have fixed a reasonable time within which the plaintiff must have completed performance on its part, as a condition precedent to the defendant cancelling the contract.

The plaintiff knew when it accepted the defendant's order that the portable bubbler was a seasonable item, the principal sale of which took place just prior to the football season. Time, therefore, was of the essence of the contract. However, the evidence clearly establishes as a matter of law that the defendant by its conduct did waive performance beyond the agreed extension date of August 25th and consented to the plaintiff continuing its operations under the contract beyond such date.

The conduct of the defendant evincing such waiver and consent consists of the following: On September 13th, Behrens, defendant's president, came to the plaintiff's plant and agreed to the substitution of the electro-polish finish. Plaintiff's agent Ross on September 21st picked up four of the bubblers from the place of business of the electro-polisher, and the defendant retained and accepted three of the same. Ross took Hauk, the maker of the dies, to plaintiff's factory on September 23rd so that Hauk could inspect the plaintiff's operations and straighten out difficulties in performance encountered by the plaintiff. On October 7th Behrens in behalf of the defendant picked up the dies at plaintiff's plant and stated to defendant that he wished to repair and polish them, thus intentionally inducing the plaintiff to believe that such dies would then be returned to the plaintiff for its operations under the contract.

The rule of law which we deem governs this case is set forth in 1 Black, Rescission and Cancellation (2d ed.) p. 623, sec. 219:

'Even where time is made the essence of the contract, this provision may be waived by the party for whose benefit or protection it is inserted, either expressly or by extending the time for payment or performance or by granting indulgence to the other party in this regard; and when such a waiver has been made, he cannot arbitrarily and summarily declare a forfeiture of the contract for delay, but must first demand payment or performance and give the other party a reasonable time and opportunity, after such demand, to comply.'

This same principle is stated in 17 C.J.S. Contracts § 435, p. 918, as follows:

'So, where time for performance has been extended with no intention manifested to hold to literal performance or a provision wherein time is made of the essence is waived, notification and a reasonable time for compliance are necessary.'

Both of the foregoing extracts from Black and Corpus Juris Secundum were quoted with approval by this court in its opinion in Guentner v. Gnagi, 1951, 258 Wis. 383, 392, 46 N.W.2d 194. Although the facts in the Guentner case do not parallel those of the instant case, the court by quoting such extracts placed its stamp of approval thereon. They apply particularly to a situation where time was made of the essence by the original contract, which is the situation that here confronts us.

In D'Onfro v. State, 1945, 270 App.Div. 9, 59 N.Y.S.2d 205, the plaintiff contractor had entered into a highway construction contract with the state of New York which called for completion on December 15, 1936. By its conduct the state led the plaintiff to think that the completion date would not be insisted upon and waived past delays. On December 29, 1936, the state gave the plaintiff notice that he was required to complete performance in ten days' time. At the expiration of such ten days' period the state gave notice of cancellation. The court held that under the circumstances ten days was not a reasonable time in which to require complete performance by the plaintiff and permitted recovery of damages by the plaintiff. In its opinion the court stated (59 N.Y.S.2d at page 208):

'The conduct of the State amounted to a waiver of the time of completion as fixed by the contract; to that extent time ceased to be an essential element, and it could only be restored by notice fixing a reasonable time within which the contract was to be completed. Lawson v. Hogan, 93 N.Y. 39; Schmidt v. Reed, 132 N.Y. 108, 30 N.E. 373; Taylor v. Goelet, 208 N.Y. 253, 101 N.E. 867, Ann.Cas.1914D, 284.'

In view of the foregoing authorities we determine that the defendant had no right to cancel the contract On October 17, 1955, without first having given the plaintiff notice fixing a final date of completion which would have afforded the plaintiff a reasonable time in which to complete performance on its part. Because of such wrongful termination of contract, the plaintiff is entitled to recover as damages its reasonable costs for labor and materials incured by it until the date of cancellation, or the contract price for the 100 units, whichever is lower. Bishop v. Price, 1869, 24 Wis. 480, and Manning v. School District, 1905, 124 Wis. 84, 105, 102 N.W. 356. In this case the contract price of $24.50 per unit, or $2,450 in all, governs the amount of the plaintiff's damages even though its actual costs were more than $500 in excess thereof.

An additional defense to the plaintiff's cause of action is advanced in defendant's brief. Such defense is that the plaintiff's request for an increase in price constituted an anticipatory breach on its part that justified the defendant in cancelling the contract on October 17, 1955.

In order to constitute an anticipatory breach of a contract based upon a request for a modification of terms, such request must be coupled with an absolute refusal to perform unless such request is granted. Restatement, 1 Contracts, p. 475, sec. 318...