Opinion
June Term, 1900.
Benjamin J. Downer, for the appellant.
John L. Cadwalader, for the respondent.
On October 17, 1896, the parties to this action entered into a written agreement through Ira A. Kip Co., brokers, acting for both parties, whereby the defendant agreed to purchase of the plaintiff 7,000 bales of current quality Sisal hemp, to arrive at the port of New York; 3,500 bales to be shipped at Progresso, per steamer or steamers, during the month of December, 1896; and 3,500 bales during the month of January, 1897. The names of the steamers to be given by the plaintiff as soon as known to it. The sale was for cash, payable on delivery.
"Hemp to be sound and in good order, and to be taken by buyers from alongside steamers as discharged, at actual gross weight. Any inferior, red (not exceding 5% of each) damaged and pickings, to be taken by buyers, at a fair allowance from above price, to be decided by the undersigned.
"IRA A. KIP CO., Brokers."
Pursuant to the terms of this agreement, the first shipment was made by the steamer Habana, which carried 1,710 bales, and arrived at the port of New York on January 4, 1897. Immediately upon the arrival of the steamer the hemp was examined by the brokers who made the contract, and was rejected by them as being of an inferior quality and not in compliance with the terms of the sale. It is claimed by the plaintiff that the brokers were not authorized to determine whether the hemp answered the requirements or not; that they were not made arbiters between the parties to make such determination. That part of the contract which we have quoted is somewhat ambiguous upon this subject. It is evident that it can be construed to mean that the brokers were to determine whether the hemp contained "any inferior, red (not exceeding 5% of each), damaged and pickings;" and the fact that the defendant sent its own agent to make an examination of the hemp upon its arrival, is some evidence that its construction of the agreement did not constitute the brokers the sole arbiters in determining whether the hemp answered the requirements of the contract, so as to make the brokers' determination conclusive. But however this may be, and whatever be the correct construction of the contract in this respect, we do not regard the determination of such question as essential to the disposition of this case, as we think it is controlled by another principle of law not involved therein. Immediately upon the rejection of the cargo of the Habana the brokers notified the parties of such fact, and the defendant, after such notice, wrote the plaintiff of the result of the examination by the brokers and of its own examination, and refused to accept the hemp as not being in compliance with the contract. On receipt of this letter the plaintiff notified the defendant that it would supply 2,750 bales from a shipment made by the steamer Greetlands, to make up for the shipment already rejected. No claim was made by the plaintiff at this time that the hemp rejected answered the terms of the contract; on the contrary, it acquiesced in its rejection, and within a few days offered the same shipment of hemp to the defendant, through the same brokers, at a less price than that for which the contract called, which offer was declined by the defendant.
Prior to the arrival in the port of New York of the steamer Greetlands, the defendant was notified by the brokers that the plaintiff would fulfill its contract by delivering from the Greetlands, then due in New York, about 2,750 bales; by the Glen Mavis, shortly sailing for New York, about 1,500 bales, and the Mathilda, due at Boston about February first, 2,800 bales. Upon the arrival in the port of New York of the Greenlands on January nineteenth, the cargo was examined by the brokers and was by them rejected as not being in compliance with the contract; and the brokers notified the parties of such determination, and the defendant thereupon notified the plaintiff of such fact, and that it refused to accept the hemp as not answering the requirements of the contract. In reply to this notification the plaintiff stated that it would make compliance with the contract, pending investigation, from the cargoes of the Glen Mavis and the Mathilda. Of the two last-named cargoes, the defendant accepted 3,938 bales, and 20 bales were sent from the cargo of the Greetlands to be put through the defendant's machine, in order to test its quality, and they were also retained by the defendant, thus leaving 3,042 bales short of the amount required to fulfill the contract. On the last of the February following, the brokers wrote the defendant that they had upon that day re-examined the cargo of the steamer Habana, which had in the meantime been stored, and that they thought a large part of the bales would pass as current; and on March eighth following, the plaintiff wrote the defendant that the cargoes of the steamers Habana and Greetlands answered the requirements of the contract, and requested them to take the bales necessary to complete the same and pay therefor. This the defendant declined to do. Thereupon, after some correspondence, in which the plaintiff notified the defendant of its intention to sell the same if the latter did not take and pay therefor, the plaintiff sold 3,041 bales at auction, the sale resulting in a loss from the contract price of $6,853.20; and it is this difference which the plaintiff seeks to recover in this action.
It was conceded upon the trial that there was not a strict compliance with the contract upon the part of the plaintiff, but the evidence is sufficient from which the jury would have been authorized to find that the defendant waived strict compliance and would have been bound to take from any shipment, upon the four steamers, the number of bales for which the contract called. It clearly appears, however, that the plaintiff acquiesced in the report of the brokers, in rejecting the hemp shipped by the steamer Habana, as not being in compliance with the contract, and in the action of the defendant upon this report, based upon its own examination. And while in answer to the notification by the defendant of the rejection of the cargo of the Greetlands, it replied that, pending investigation, it would make compliance by other shipments, it did not make any investigation of such cargo until March following, or in any respect claim that the defendant was bound to take it in fulfillment of the contract. The conclusion that the plaintiff acquiesced in the rejection of the hemp is stoutly contended against, for the reason that, as it had no knowledge whether or not the hemp answered the requirements of the contract, therefore, there could be no acquiescence in a claim in respect to the basis of which it was ignorant. But its attitude in this respect is not in anywise to be determined by its knowledge, or lack of knowledge or intention. It made no objection to the claim, and became bound thereby. The failure to investigate and determine the fact was its own fault, for which the defendant was in nowise responsible. Had the defendant at such time refused to further continue negotiations under the contract, it would have acted within its strict legal rights and been under no liability whatever to the plaintiff.
It appears, however, that the defendant subsequently expressed a willingness to take from the plaintiff current Sisal hemp in fulfillment of the contract, and these negotiations were of such a character that the contract continued to remain in force so far as to permit the performance thereof by the plaintiff within a reasonable time. It is to be borne in mind, however, that at all of the times when these negotiations were had, the defendant's claim was that the plaintiff was in default, and with knowledge of such condition the latter acquiesced therein. In this view a duty was devolved upon the plaintiff if it sought to make compliance with the contract by subsequent act to make such act clear and unequivocal, so that the defendant would be clearly advised of the hemp, which the plaintiff claimed it was required to take, and to be given an opportunity to receive the specific bales and pay therefor. The crucial question, therefore, upon this branch of the controversy is, did the plaintiff by any act succeed in changing the relative position of the parties? In other words, did the plaintiff's subsequent act relieve it from its admitted default and place the defendant in default? If it did then the plaintiff's complaint was improperly dismissed.
Upon this subject the proof is that Rosso, a representative of the plaintiff, and one Heydrich, both experts in hemp, examined the cargoes which were taken from the Habana and Greetlands, and both testified that they found hemp answering the terms of the contract. Rosso was asked whether the hemp contained more than five per cent of red, damaged and pickings in it, and answered: "That we could not ascertain; it could only be ascertained from counting the bales. When we came to deliver the hemp we found less than the ten per cent." At the time of this examination the hemp was in storage, and that which the plaintiff required the defendant to take was mingled with a considerable number of other bales which it was not pretended should be taken. No separation was ever made of the hemp which it was claimed answered the requirements of the contract, and after this examination and at the time when the plaintiff notified the defendant to take and pay for the same, such hemp still remained and continued to be mingled with the other hemp and was never separated therefrom prior to its removal and sale. It is plain, therefore, that there never arrived a time when the plaintiff was able to say to the defendant: "There are the specific bales of hemp to answer the requirements of our contract with you and which we now demand that you take." And there was no time prior to the auction sale when specific bales of hemp were set apart, which the defendant, had it desired, could take and make payment in fulfillment of the contract. We are, therefore, of the opinion that there was no act of the plaintiff which placed the defendant in default under its contract, and that the hemp was not tendered in such manner as to require the defendant to take and pay therefor. ( Croninger v. Crocker, 62 N.Y. 151; Benj. Sales, § 689; Foot v. Marsh, 51 N.Y. 288; Arnold Sales, § 325; Macomber v. Parker, 13 Pick. 175, 183.)
There is some question as to whether the subsequent examination disclosed a sufficient number of bales among those examined to answer to the requirements of the contract. Certainly Rosso and Heydrich did not ascertain this fact, and while it is possible to find from Rosso's testimony that the subsequent results showed that there existed a sufficient quantity of current hemp to answer the requirements, yet such fact was not determined at the time, and it was from such act of determination that the defendant's liability was established, or it was not established at all.
We are, therefore, of the opinion that after the rejection of the two cargoes, the plaintiff was bound to make tender of specific hemp, sufficient to answer the terms of the contract, before the defendant could be placed in default. In this regard there was failure so to do, for which reason the complaint was properly dismissed. The judgment should, therefore, be affirmed, with costs.
PATTERSON, INGRAHAM and McLAUGHLIN, JJ., concurred.
Judgment affirmed, with costs.