William C. Atwater & Co. v. Panama R. Co.
| Decision Date | 10 February 1931 |
| Citation | 255 N.Y. 496,175 N.E. 189 |
| Court | New York Court of Appeals Court of Appeals |
| Parties | WILLIAM C. ATWATER & CO., Inc., v. PANAMA R. CO. |
OPINION TEXT STARTS HERE
Action by William C. Atwater & Company, Incorporated, against the Panama Railroad Company, wherein defendant filed a counterclaim. Judgment of the Trial Term (132 Misc. Rep. 704, 230 N. Y. S. 482) was modified and affirmed by the Appellate Division (229 App. Div. 463, 242 N. Y. S. 342), and both parties appeal.
Modified, and as modified affirmed.
Appeals from Supreme Court, Appellate Division, First Department.
Wilson W. Thompson and Edward M. Bassett, both of New York City, for plaintiff.
Richard Reid Rogers, of New York City, for defendant.
By written contract dated July 28, 1920, the plaintiff agreed to sell and the defendant agreed to buy 36,000 tons of coal to be delivered ‘in approximately equal monthly proportions' during the year beginning August 1, 1920, and expiring July 31, 1921. At the end of January, 1921, one-half of the coal had been delivered and accepted. Thereafter, at the request of the defendant, shipments of coal were reduced, and, from the end of March until July 26th, entirely withheld. The seller during these months was ready to deliver, each month, the monthly proportion called for by the contract. When the contract expired about 12,500 tons were still undelivered because the defendant had failed and refused to accept all the coal it had agreed to buy. For the consequent damages the plaintiff has recovered judgment.
In August, September, and November, 1920, the plaintiff did not deliver the full ‘monthly proportions' of the coal it had agreed to sell. There was a deficit of 4,516 tons, reduced slightly by the delivery of more than the ‘monthly proportion’ in October. During these months war conditions and other causes beyond the plaintiff's control reduced the production of plaintiff's collieries below their normal maximum capacity. The plaintiff's obligation to deliver was not absolute. The contract provided expressly that: Deliveries under this contract are subject to war conditions * * * or other causes beyond our control. If during the period of this contract the production of the aforesaid collieries shall for any cause above stated be less than their normal maximum capacity the tonnage to be delivered, under this contract, shall, at the option of the seller, be reduced in proportion and there shall be no liability on the part of the seller for the reduction so made.' Deliveries actually made during these months would have exhausted the seller's obligation if the seller chose to exercise its option. No obligation to deliver the deficit later, no liability for failure to deliver could then survive. Normandie Shirt Co. v. J. H. & C. K. Eagle, 238 N. Y. 218, 144 N. E. 507, 35 A. L. R. 714.
Although the plaintiff never notified the defendant that it intended to exercise its option to reduce the tonnage ‘to be delivered’ under the contract and though the defendant was not informed that the contingency had arisen upon which the tonnage to be delivered might, ‘at the option’ of the plaintiff, be reduced, both parties contend upon this appeal that the reduction in deliveries, actually made, operated as an exercise by the seller of the option to reduce the tonnage ‘to be delivered’ and, of its own force, terminated all obligation to deliver or accept more. It is difficult to reconcile that contention with the pleadings in this case; it is impossible to reconcile it with the proven facts.
The defendant, perhaps not knowing that circumstances had arisen under which the plaintiff might, ‘at its option,’ reduce its obligation to deliver, during each of the months which had elapsed, the full ‘monthly proportions' of the coal sold, kept pressing the plaintiff to complete deliveries of each monthly installment. The plaintiff, perhaps not understanding that the effect of the exercise of its option to reduce the tonnage to be delivered during certain months would be to terminate for all time any obligation to deliver more than had been delivered during those months, or, perhaps, believing that postponement of full performance of its original obligation would prove more profitable than its partial cancellation, yielded to the defendant's urging and, during December and January, delivered not only the ‘monthly proportions' for those months, but, in addition, the deficit in the deliveries of the ‘monthly proportions' for the months which had passed. Both parties measured their contractual rights and obligations upon the assumption that these remained unchanged. At the end of January, 1921, these obligations had been fully performed except, of course, that delivery of some monthly installments had been made after tne end of the month.
Perhaps the assumption that the plaintiff was under any obligation to deliver more than it had already delivered was mistaken. That we do not now decide. Right or wrong, that assumption governed the intention of the parties and dictated their acts. Delivery was intended to cover the deficit in earlier monthly quotas. It was accepted upon that understanding. When the buyer requested and accepted delivery of the full monthly quotas for the months that had passed, it chose for its own purposes to waive its right to refuse dilatory deliveries. It wanted the coal and it received, what it wanted. It may not now assert that because the plaintiff may have been under no obligation to make such delivery, the coal so delivered and accepted should be applied, contrary to the intention of the parties, in satisfaction of obligations to deliver and accept installments not then due. When the seller complied with the buyer's request to complete delivery of unfilled quotas, the seller chose for its own purposes to waive its right, if any, to refuse such delivery. It may not now assert that it was under no obligation to make such delivery and that, contrary to the intention of the parties, a new and independent contract for the purchase and sale of the coal so delivered should be implied.
The courts in determining the obligations of a contract should, when possible, apply the same measure as the parties have applied in performing their obligations. After the actual delivery and acceptance of the monthly installments, in accordance with the original terms of the contract, the seller may not assert that by acts which were, at best, equivocal, it exercised an option to reduce its original obligation. The contractual rights and obligations remained as they were written. Obligation to deliver the full monthly proportion was fulfilled, but not all the deliveries were made at the stipulated time. The question remains whether the defendant may under its counterclaim recover for delay in such deliveries.
The acceptance of the goods does not, in the absence of express or implied agreement, discharge the seller from liability in damages for breach of any promise or warranty in the...
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