Summary
In Browne v. Bryan Lumber Company, 188 Miss. 71, 194 So. 296, where the contract for the sale of crossties provided that they were to be shipped by water, it was held that even though it became impossible for the seller to ship by water, such fact did not relieve performance of the contract as regards his liability to a broker for his commission, and cites Harmon v. Fleming, supra, and Piaggio v. Somerville, supra, with approval.
Summary of this case from Superior Oil Co. v. BeeryOpinion
No. 34077.
March 4, 1940.
1. BROKERS.
Where, as result of broker's negotiations, seller made contract with railroad for sale of crossties but seller did not fulfill contract because it became apparent to him that he would incur a loss and he sold crossties to others, seller was liable to broker for commissions.
2. BROKERS.
Where contract for sale of crossties provided that ties were to be shipped by water and that delivery was to start within 60 days, even if it became impossible for seller to ship crossties by water, that fact did not relieve him from performing his contract, as regards his liability to broker for commissions.
3. CONTRACTS.
When a party by his own contract creates a duty or charge upon himself, he is bound to discharge it, although so to do should subsequently become unexpectedly burdensome or even impossible.
4. BROKERS.
Failure of seller to ship crossties by his own fault did not excuse him from paying commissions to broker who negotiated sale.
5. BROKERS.
Where notation, "All contracts subject to conditions beyond our control," was printed at top of letterhead used by seller, but condition expressed on letterhead was not pleaded and was not incorporated in contract of sale of crossties, the notation was not required to be considered in determining liability of seller to broker for commissions, notwithstanding seller had failed to perform sales contract.
APPEAL from the circuit court of Clarke county; HON. A.G. BUSBY, J.
Lyle V. Corey, of Meridian, for appellant.
Did the fact that it became impossible for the defendant to ship the crossties in question by water transportation from Mobile, Alabama, to Boston, Massachusetts, if such was a fact, relieve the defendant from liability for the commissions earned by the plaintiff? Or does impossibility of performance of a contract constitute a good and sufficient defense to a suit for breach of such contract? The question was fully answered by this court in the case of Piaggio v. Somerville, 119 Miss. 6, 80 So. 342, wherein the court said: "When a party by his own contract creates a duty or charge upon himself he is bound to perform it, although so to do should subsequently become unexpectedly burdensome or even impossible; the answer to the objection of hardship in all such cases being that it might have been guarded against by proper stipulation. Paradine v. Jane, Aleyn, 26, 82 English Reprint 897; Jemison v. McDaniel, 25 Miss. 83; Harmon v. Fleming, 25 Miss. 135; Abby v. Billups, 35 Miss. 618, 72 Am. Dec. 143; Mitchell v. Hancock County, 91 Miss. 414, 45 So. 571; 15 L.R.A. (N.S.) 833, 124 Am. St. Rep. 706; Anson on Contracts (25 American Ed.), 424; Harman on Contracts, 824; 3 Elliot on Contracts, Sec. 1891; 13 C.J. 639; 6 R.C.L. 997; Note L.R.A. 1916F, 10."
In 13 C.J., page 639, Sec. 712, we find this: "Where performance becomes impossible subsequent to the contract the general rule is that the promisor is not therefor discharged."
Did the agreement, if any, that the plaintiff was not to be paid its commissions until the crossties in question had been delivered to and paid for by the railroad company relieve the defendant from liability for such commissions in this case. First, let us consider the general law as announced by our courts on the subject of liability for brokerage commissions. In the case of Johnson v. Sutton, 94 Miss. 544, 556, 49 So. 970, 971, the general rule was stated as follows: "Where the contract between the broker and his principal specifies the terms upon which the land is to be sold, the broker has performed his duty and is entitled to his commissions when he produces a purchaser ready, willing, and able to buy upon the terms specified; but where the terms are not specified, and the actual sale is to be made by the principal, his duty is not performed until he produces a purchaser to whom the principal sells."
Cook v. Smith, 80 So. 777, 119 Miss. 375; Jenny v. Smith Powell Realty Co., 88 So. 171, 125 Miss. 608; Roell v. Offutt, 138 Miss. 599, 103 So. 239; Skermetti Realty Co. v. Devitt, 111 So. 302, 145 Miss. 815.
It follows that, in the absence of a specific agreement to the contrary, the plaintiff in the case at bar had earned its commissions and became entitled to payment thereof upon the acceptance by the defendant of the written order of the railroad company.
Now let us consider the effect upon such general rule of an agreement that the commissions would not be paid until the crossties had been delivered to and paid for by the purchaser. It is our contention that such an agreement would only determine the time when payment of the commissions should be made in the usual course of events and would not determine the ultimate liability of the defendant for such payment.
Piaggio v. Somerville, 119 Miss. 6, 80 So. 342; Randall v. Johnson, 59 Miss. 317, 42 Am. Rep. 365; Hughes v. McEwen, 112 Miss. 36, 72 So. 848, L.R.A., 1917B, 1048; 13 C.J. 684, Sec. 776.
We submit that the liability of the defendant for the commissions earned by the plaintiff constituted a present liability from the date the order of the railroad company was accepted and the only effect of the alleged agreement would be to postpone the date of payment until the sale to the railroad company was completed. Since this sale was never completed, payment became due within a reasonable time. What would constitute a reasonable time can be determined by the original order of the railroad company. This order was dated Oct. 1, 1936, and provided that delivery should be completed within six months from date, i.e., not later than April 1, 1937. It follows that the plaintiff was entitled to payment of its commissions not later than April 1, 1937.
In order for the defendant to sustain his contentions it was necessary for him to prove two things. First, that it was impossible for him to deliver the crossties. Second, that the plaintiff's commissions were to be paid only if the crossties were actually delivered and paid for. If he failed to prove either of these two things, the plaintiff was entitled to recover. Proof of the first without proof of the second would be of no avail, because the plaintiff would still have produced a purchaser acceptable in every respect to the seller and would have performed its duty and earned its commissions.
Delta Pine Land Co. v. Wallace, 83 Miss. 656, 36 So. 263; Johnson v. Sutton, 94 Miss. 544, 556, 49 So. 970, 971; Cook v. Smith, 80 So. 777, 119 Miss. 375; Jenny v. Smith Powell Realty Co., 88 So. 171, 125 Miss. 608; Roell v. Offutt, 138 Miss. 599, 103 So. 239; Skermetti Realty Co. v. Devitt, 111 So. 302, 145 Miss. 815.
Likewise, proof of the second without proof of the first would be useless. For then it would be a case of a sale negotiated by the broker and accepted by the seller which failed through some fault of the seller. And the broker would still be entitled to payment of its commissions.
Long v. Griffin, 74 So. 613, 113 Miss. 659; Lizana v. Brown Realty Co., 111 So. 867, 146 Miss. 758; Hays v. Goodman-Leonard Realty Co., 111 So. 869, 146 Miss. 766; Halliburton v. Crichton, 147 Miss. 621, 111 So. 743.
We respectfully submit that the defendant's own proof shows conclusively that the only reason the ties were not shipped was the defendant feared he would suffer a loss. The motion for a peremptory instruction should have been sustained.
The judgment of the lower court should be reversed and judgment rendered in this court in favor of the appellant for the full amount of the commissions in the sum of $400 with interest and costs, the interest to be computed from April 1, 1937, after allowing a reasonable time for performance of the contract.
Jacobson Snow, of Meridian, for appellee.
No commissions were earned by the appellant broker under the agreement and by virtue of a long established custom and usage of trades of such kind existing by and between the appellant and appellee because the crossties in question were never shipped, and under said agreement and custom no commissions were due appellant.
Lee v. Greenwood Agency Co., 123 Miss. 823, 86 So. 449.
No commissions were earned by or are due to the appellant, because the appellee accepted the order for the shipment of the crossties in good faith and at a time that he did not anticipate nor have any reason to anticipate it would be beyond his control to obtain a boat to transport the crossties in question. The failure to obtain a boat was a condition that was not in existence at the time the said order was acceped, and it was not in contemplation by either party that at the time of the shipment of the crossties a boat to transport the crossties could not be obtained.
G. S.I.R.R. Co. v. Horn, 135 Miss. 804, 100 So. 381; Chicago, Milwaukee St. Paul R.R. Co. v. Hoyt et al., 37 L.Ed. 625; 17 C.J.S. 954, Sec. 463; 3 Williston on Contracts, 3316, Sec. 1953.
It was a condition beyond the control of the appellee to obtain a boat to transport the crossties in question by water from Mobile, Alabama to Boston, Massachusetts, as provided for in the terms of the accepted order of the Railroad Company, the purchaser of the ties. The evidence shows that there was no boat obtainable which would agree to transport the 20,000 crossties during the time in which they should have been transported according to the order. Written agreement is filed in this cause by and between appellant and appellee to the effect that all the letters, in evidence in this case, which were written by the appellee to the appellant or the Railroad Company, except the one written by J.E. Toney of date February 6, 1937, at the Lamar Hotel, Meridian, Mississippi, contained in printing thereon the following stipulation: "All contracts subject to conditions beyond our control . . .; and this was a written stipulation as a condition in the performance of the contract which excused the appellee from shipping the crossties as it is undisputed in the record that it was without his fault and a condition beyond his control that he could not obtain a boat to transport the 20,000 crossties in question from Mobile, Alabama, to Boston, Massachusetts. Under the facts in this case and the well-established rule of law pertaining to same, the appellee was excused from the performance of this contract by the said stipulation, and he is thereby discharged from the performance of same.
Piaggio v. Somerville, 119 Miss. 6, 80 So. 342; Jemison v. McDaniel et al., 25 Miss. 83; Harmon et al. v. Fleming, 25 Miss. 135; 3 Williston on Contracts, 3346, Sec. 1969.
The order for the crossties contemplated that they should be assembled in sufficient quantities to be inspected by the Railroad Company's inspector, and that the crossties should be shipped as a whole in a boat from Mobile, Alabama, to Boston, in the condition in which the crossties were when they were inspected. That it was impracticable and would be a detriment to appellee to ship them in lots of 1500 or 2000 once a week by boat because they were sap pine crossties, and if not shipped in one lot, at once after being assembled and inspected, that the space of time which is required to ship 20,000 crossties in lots of 1500 or 2000 each, once a week would require a long time for the shipment of the crossties, and they would thereby deteriorate, become damaged, and cause a great loss to appellee and the refusal of the crossties at destination on account of deterioration. That it was contemplated in the trade that the 20,000 crossties would be shipped at once, in good condition, at one time. The contract required that the ties be delivered f.o.b. cars NY, N.H. H Tracks, Boston, Massachusetts, and it necessarily follows that the ties had to be in the same condition as when inspected by the inspector at the point of shipment when they arrived f.o.b. cars NY, N.H. H Tracks, Boston, Massachusetts. If the ties were not in the same condition as when they were inspected at the shipping point, the Railroad Company could refuse them as not being up to contract. This required the ties to be shipped at once after inspected, and the only way this could be done would be by shipping in one boat that would carry 20,000 crossties, or by shipping in more than one boat at the same time that would convey the whole lot. The argument that they could have been shipped in lots of 1500 each per steamer per week is untenable, because the testimony here, without contradiction, shows that they were sap pine ties and would deteriorate if not shipped at once, and that if the shipment was delayed by making a shipment of 1500 per week, it would require thirteen or more weeks to ship the entire lot, and would on account of the damage and deterioration to the ties in delay of the shipment cause loss to be suffered by the appellee, which was not in contemplation of the contract, and we, therefore, contend that appellee had a right to ship the ties in one boat at one time, or in more than one boat at one time, and if he could not get the boats to carry them all at one time that he is excused from the performance of the contract. The testimony further shows that the ties began to deteriorate to such an extent that the appellee was compelled to sell them in order to prevent further loss on them; and the testimony further shows that he did not sell them for more than the price agreed upon under the existing contract. The entire testimony shows his good faith, and that it was to his interest to ship these crossties, and that his only reason for not shipping them was a condition beyond his control in that he could not secure transportation in accordance with the contract.
This case was presented to the jury under instructions granted by the court as to the law of the case, and resulted in a verdict for the appellee upon which a judgment was rendered dismissing the case, and which we contend should not be disturbed.
Argued orally by Lyle V. Corey, for appellant, and by Gabe Jacobson, for appellee.
The appellant, Browne Bryan Lumber Company, a corporation, brought an action at law to recover from the appellee, J.E. Toney, $400 brokerage commissions for effecting a sale of twenty thousand crossties by Toney to the New York, New Haven Hartford Railroad Company at Boston, Massachusetts.
To the declaration, the appellee Toney filed a plea of the general issue, and a long special plea, the effect of which was that it became impossible for Toney to comply with his contract to ship the ties by water transportation; and that, under this condition, no commissions ever became due the appellant as a broker.
The case was submitted to a jury which returned a verdict in favor of Toney, and the Browne and Bryan Lumber Company appeals here.
On this appeal, the New York, New Haven and Hartford Railroad Company will be denominated the railroad; the Browne Bryan Lumber Company will be denominated the broker; and Toney, who traded as the Shubuta Tie Timber Company (not incorporated) will be spoken of as Toney.
We think the court below erred in not granting the peremptory instruction requested by the broker, the appellant here.
In the beginning, we will say that we shall ignore the pleadings for the reason that the case was developed by the evidence, and on that, we think the broker was entitled to his commissions for effecting the contract between the railroad and Toney.
Sometime in September, 1936, the railroad submitted to the broker a written offer to purchase twenty thousand sap pine ties. This written offer of the railroad was, by the broker, submitted to Toney. Negotiations were had between Toney, the broker, and the railroad, the main feature of which resulted in the railroad agreeing to pay three cents per tie more than was in the original written offer; and, after these negotiations, on October 12, 1936, Toney wrote the railroad the following letter:
"October 12, 1936.
"Mr. C.R. Painter, Purchasing Agent, "New York, New Haven Hartford R.R. Co., "New Haven, Conn.
"Dear Sir:
"We acknowledge receipt of your order No. 62 — 36 for 20,000 dense Southern Yellow Pine cross ties.
"We will do our very best to complete this order as quickly as possible. Cross tie production is lower in the Southern States now than I have ever seen it on account of so much highway building, government work and the farmers crops being good. I really think we cross tie people are going to have a harder time filling orders this season than ever before.
"Thanking you for this business, we are,
"Yours very truly,
"Shubuta Tie Timber Co. "J.E. Toney."
The contract in question is lengthy, and we call attention to what we conceive to be the pertinent parts thereof. Omitting details, the railroad identified the contract as Order No. 62 — 36, and it was addressed to C.R. Painter, the purchasing agent of the railroad. The prices and description of ties were set forth therein. It also provided that the ties were to be shipped by water, and that delivery was to start within sixty days and be completed within five months, and this language was used: "Ties shall be assembled in consignments of sufficient number to justify sending N.Y.N.H. H. inspector to shipping port. To arrange inspection notify H.J. Sullivan, at 427 West 20th St., Jacksonville, Florida."
Under the heading "Terms of Purchase" this appeared in the contract: "Do not hold goods to complete order in one consignment, but make shipments as material may be ready, sending a complete set of invoices on simplified forms to cover each shipment." The ties were to be delivered in Boston. The contract was accepted October 12, 1936 (and prior thereto by the brokers with the consent of Toney). It did not contain reservation or condition as to lack of shipping facilities, rates to be paid by Toney, or any other condition which would relieve him of his contract in any way.
On November 17, 1936, Toney wrote the railroad that he hoped to begin shipments within two weeks. The record discloses that Toney purchased ties from others and assembled them on the dock at Mobile, Alabama. About the time he executed the contract, he discovered that a boat line on which he had relied for transportation of ties had ceased to do business, and there remained a line owned by a paper corporation which was used in its business but carried freight for others. He also discovered that their rate would be higher than he anticipated paying, and that they would not carry in excess of fifteen hundred ties per week. At the time he wrote the letter saying he hoped to begin shipments within two weeks, he was aware of these adverse circumstances, and he evidently realized that he would lose money if he fulfilled his contract. However, the broker procured for him a booking for transportation of two thousand ties per week at a rate less than the paper company had made him. He declined to avail himself of the rate and booking, and sometime in February or about the first of March, it appears that he had assembled the ties at Mobile, that they had been inspected, and he could not obtain transportation for the entire lot of twenty thousand ties in one shipment. He then declined to ship the ties in split shipments, sold them to other parties for a sum not exceeding the contract price with the railroad; and in his evidence said that the railroad had never called on him to perform his contract or pay damages. However, in April, the railroad notified him that they would go in the market and buy the ties and hold him responsible for its loss.
This record shows that there was no misunderstanding as to the commission to be paid — two cents per tie by Toney to the broker. Toney testified that in selling ties theretofore it had been the custom for commissions to be due when shipments were made. Browne, the man who represented the broker in this transaction, testified positively that the commissions of the broker were due when the contract was executed — "when the minds of the parties met." All of the letters, and previous dealings, tend to support the broker's contention.
There is nothing to show that the railroad knew anything about, or had anything to do with, Toney's plan for shipment of the ties. However, when the time was about to expire for shipment, they offered to extend his time so that he could make split shipments. Toney declined to make split shipments for the reason, as he said, that sap pine ties would deteriorate in value.
When all the testimony in this case is analyzed, it means that Toney made a contract with the railroad, which he did not fulfill for the reason that it became apparent to him he would incur a loss. It is true that about the first of March he could not obtain a boat to carry the entire shipment at one time, but he was encouraged to make split shipments, and then his contract allowed him so to do. Under all the evidence, it was not impossible for Toney to comply with his contract, and no condition arose beyond his control that he alone did not create. If we assume, however, that it became impossible for him to ship the crossties by water from Mobile, Alabama, to Boston, Massachusetts, that fact did not relieve him from performing his contract. Our quotation in this opinion from the contents of the contract indicates that he is not relieved on that account. This Court said in the case of Piaggio v. Somerville, 119 Miss. 6, 80 So. 342, 344: "when a party by his own contract creates a duty or charge upon himself he is bound to discharge it, although so to do should subsequently become unexpectedly burdensome or even impossible; the answer to the objection of hardship in all cases such being that it might have been guarded against by a proper stipulation. Paradine v. Jane, Aleyn, 26, 82 Eng. Rep. 897; Jemison v. McDaniel, 25 Miss. 83; Harmon v. Fleming, 25 Miss. 135; Abby v. Billups, 35 Miss. 618, 72 Am. Dec. 143; Mitchell v. Hancock County, 91 Miss. 414, 45 So. 571, 15 L.R.A. (N.S.) 833, 124 Am. St. Rep. 706; Anson on Contracts (2d American Ed.), 424; Harmon on Contracts, 824; 3 Elliott on Contracts, Sec. 1891; 13 C.J. 639; 6 R.C.L. 997; note L.R.A. 1916F, 10."
In the case of Harmon v. Fleming, supra, this Court said: "We find the common law rule, on this subject, stated in the following manner: 'Where the law casts a duty on a party, the performance shall be excused, if it be rendered impossible by the act of God. But where a party, by his own contract, engages to do an act, it is deemed to be his own fault and folly, that he did not thereby expressly provide against contingencies, and exempt himself from liability in certain events; and in such case, therefore, that is, in the instance of an absolute and general contract, the performance is not excused by an inevitable accident or other contingency, although not foreseen by, or within the control of the party.'"
In the case of Piaggio v. Somerville, supra, three exceptions are recognized: 1. A subsequent change in the law, whereby performance becomes unlawful. 2. The destruction; from no fault of either party, of the specified thing, the continued existence of which is essential to the performance of the contract. 3. The death or incapacitating illness of the promisor in a contract which has for its object the rendering of personal services.
There is a suggestion of an argument by the appellee that under the case of Gulf S.I.R. Company v. Horn, 135 Miss. 804, 100 So. 381, 34 A.L.R. 814, the subject of this contract was destroyed. The facts of this case do not bring it within the facts of that case. The subject of this contract was the ties. They were never destroyed, but instead of Toney performing his contract after having the railroad inspect the ties, he deemed it to be to his advantage to sell the ties to other parties. In the Horn case, the contract was that Horn was employed as an assistant claim agent for training Kemp, and before the time for the performance of the contract Horn ceased to be the claim agent of the railroad, and the Court held that the subject matter of the contract was gone.
It is idle to say that because Toney deliberately breached his contract with the railroad, which had been procured by the broker, he was thereby relieved from paying the brokerage fees. Men cannot ruthlessly disregard their solemn contracts; and, the most that can be said of Toney's testimony is that his intention was to pay the commission only when the shipment was made. His testimony does not rise to the dignity of establishing anything more than the due date of payment of the commission to the broker, if that. Failure to ship by his own fault does not excuse him from paying commission. This was fully settled in Piaggio v. Somerville, supra, and the authorities there cited.
"All contracts subject to conditions beyond our control" was printed at the top of the letterheads used by Toney in all of the material correspondence. This condition expressed on the letterhead was not plead. In the letter of acceptance, this provision was not referred to, neither was it made a part of the contract. The acceptance was unreserved. In the plea, the written memorandum on the letterhead was not referred to as being any part of the contract made by Toney with the railroad company. After the case was docketed in this Court, counsel for the appellee and appellant agreed that it was a fact that this appeared on the letterhead in all the material correspondence, including the letter of acceptance emanating from Toney's office. It will be observed that this sentence did not appear on the letter quoted in this opinion which was made an exhibit in the record. To set the matter at rest, no condition has been testified to by Toney or his stenographer that indicated that it was impossible for him to comply with his contract. It was always within his power to have complied with this contract. It may have cost him more money than he anticipated when the contract was made, but even this is to be doubted when the record and all of the correspondence is considered. There is no merit in the contention that the notation on the letterhead had anything to do with or was considered by either party as part of the contract, but in the absence of any pleading in this regard, it is not here worthy of notice.
Considering now the whole case, and in order to finally dispose of it, we are holding that March 1, 1937, was a reasonable time within which shipments could have been made by Toney to the railroad; that he is indebted to the broker in the sum of $400, with 6 per cent interest thereon from March 1, 1937; and judgment will be entered here accordingly for the appellant.
Reversed and judgment here for appellant.