Wigand v. Bachmann-Bechtel Brewing Co.

• Decision Date: 08 January 1918
• Citation: 222 N.Y. 272,118 N.E. 618
• Parties: WIGAND v. BACHMANN-BECHTEL BREWING CO.
• Court: New York Court of Appeals Court of Appeals

222 N.Y. 272

118 N.E. 618

WIGAND

v.BACHMANN-BECHTEL BREWING CO.

Court of Appeals of New York.

Jan. 8, 1918.

Appeal from Supreme Court, Appellate Division, Second Department.

Action by Charles F. Wigand against the Bachmann-Bechtel Brewing Company. From a judgment of the Appellate Division (169 App. Div. 285,154 N. Y. Supp. 840), reversing a judgment of the Trial Term, and dismissing the complaint, plaintiff appeals. Reversed.

Thomas G. Prioleau, of New York City, for appellant.

William S. Gordon, of New York City, for respondent.

CHASE, J.

The defendant, a corporation engaged in the business of brewing beer, produced as a by-product a large quantity of wet grains of little value. The plaintiff had been for several years engaged in the business of constructing and installing grain-drying plants to convert such wet grains into a marketable cattle food. They entered into a contract by which the plaintiff agreed (a) to install at the defendant's brewery a complete grain-drying plant as specifically provided, and have it ready for use on or before June 1, 1910; (b) to advance to the defendant $5,000, or so much thereof as may be necessary to provide a suitable place in the defendant's buildings for the erection of the grain-drying plant; (c) to employ all the help and do all the work in drying the wet grains; (d) to pay monthly for such wet grains 6 cents per barrel for each barrel of beer brewed by the defendant; (e) to keep the grain-drying plant in perfect repair for five years; (f) to retain title to the machinery erected and constructed for the grain-drying plant until the end of five years, or until 500,000 barrels of beer had been brewed, and then to transfer the title to such machinery and plant to the defendant; (g) to carry $10,000 of insurance on the grain-drying plant, insuring both himself and the brewing company as their interest may appear; and (h) to purchase of the defendant the dry grains produced by it and pay therefor the price named in the contract for three years after the expiration of the five-year period in which he is to maintain the plant and buy the wet grains.

The defendant by said contract agreed: (1) to prepare the place for the erection of the grain-drying plant without delay; (2) ‘to sell to the party of the second part [plaintiff] all of the wet brewery grains produced from the brewing at its brewery and to continue so to do for a period of five years from the 1st day of June, 1910, or until five hundred thousand [500,000] barrels of beer shall have been brewed by the party of the first part [defendant] at the said brewery’; (3) to furnish steam to run the grain-drying plant to the extent of 200 tons of coal per year; (4) to turn over to the plaintiff without costs any sacks in which rice may have been packed when purchased by the defendant; (5) to allow $250 to the plaintiff from the amount payable for wet grains each month as part payment toward the amount advanced by the plaintiff to make the changes in its buildings to receive the grain-drying machinery, until the amount so advanced is fully paid.

It was also covenanted therein that:

‘Eighth. Should the party of the first part hereto be prevented from operating its brewery by reason of strikes, breakdowns in machinery, or for any reason whether beyond its control or otherwise, then and in that event this contract and the performance thereof by the party of the first part shall stand in abeyance until the brewery of the party of the first part shall again be in operation.’

The plaintiff furnished the defendant the money to pay the expense of altering its buildings to receive the grain-drying plant, and also installed its plant at an expense to him of $6,050. From August 31, 1910, to April 30, 1912, the plaintiff received the wet grains from brewing 158,035 barrels of beer. The parties concededly complied with the contract in every respect until on or about May 1, 1912, when the defendant discontinued the operation of its brewery and sold its entire beer trade, business, and property (not including real property and brewing machinery) to another brewing company, and as a part of its contract with such company covenanted not to operate its brewery for a period of two years. The defendant has never resumed the operation of its brewery. This action is brought to recover damages sustained by the plaintiff by reason of the alleged unlawful abandonment of its contract.

The defendant contends that under the contract it only covenanted to sell to the plaintiff the wet brewery grains produced from its brewing at its brewery, and that as it has not produced any wet grains since May 1, 1912, it has in no way broken its contract with the plaintiff.

The mutual promises in the contract, many of which we have stated, are such that a voluntary and intentional failure to perform by the defendant would be inequitable and unjust. The large expenditure by the plaintiff for machinery which he placed in the defendant's plant for which pay could only be obtained by him through a continuance of the business; the furnishing by him of $5,000 to the defendant, only to be returned by deductions from the purchase price of the wet grains received; the necessity of expenditures to keep the plant in repair and for insurance, as stated, for the full period of five years, are important facts to be considered in determining what was meant by the defendant when it promised to sell to the plaintiff ‘all of the wet brewery grains produced from the brewing at its brewery’ as in the contract provided.

[1] Every contract implies good faith and...