Poel v. Brunswick-Balke-Collender Co. (159 A.D. 365, 1913)

Laughlin, J. :

This is an action to recover damages for the breach of an executory contract for the purchase by the defendant of about twelve tons of upriver fine Para rubber. The principal questions litigated on the trial and presented for review by the appeal are with respect to whether the plaintiffs established a contract valid within the Statute of Frauds, and authority of defendant’s agent to make the contract, and concerning the measure of damages.

The plaintiffs were copartners engaged in the business of importing and dealing in crude rubber; and the defendant was a domestic corporation engaged in the business of manufacturing and selling, among other things, billiard tables. The defendant had manufacturing plants at Long Island City, N. Y., and Chicago, 111., and Muskegon, Mich.; but the billiard tables were made only at the factory at Muskegon, and all of the rubber purchased by it was used at that place. Its principal office was in Chicago, but it had a branch office in the borough of Manhattan, New York. One Kelly represented the plaintiffs’ firm in selling rubber, and on its part conducted the negotiations with respect to purchasing the rubber in question. The defendant had in its employ in its purchasing department one Rogers, who had an office at the Long Island City factory, and represented the defendant in purchasing raw material. Rogers negotiated seven prior purchases of rubber by the defendant from the plaintiffs’ firm, through its said agent, the first of which was made on the 24th day of November, 1909, and the last on the 31st day of March, 1910. Kelly and Rogers had on the former occasions conducted their negotiations, in part at least, over the telephone.

On Saturday, the 2d of April, 1910, negotiations for the purchase of the rubber in question were opened by a conversation between Kelly and Rogers over the telephone. It does not appear which called up the other, but it would be a reasonable inference from the testimony of Kelly that he called Rogers, for he says he informed Rogers that he had a certain number of tons of rubber to sell and asked if he “could sell him any rubber,” and in answer to the inquiry Rogers inquired how the market was. The evidence with respect to the parol negotiations leading up to the alleged contract in writing is uncontroverted. Kelly says that after informing Rogers about the state of the market and the kind of rubber his firm had for sale, Rogers inquired concerning the ability of plaintiffs’ firm to deliver rubber the following year, and Kelly replied, in substance, that it could .sell rubber “for January-June, equal monthly shipments for "Upriver fine Para rubber, at probably $2.42 a pound,” shipments to be made from either Brazil or Europe; that Rogers then asked Kelly’s opinion with respect to the future course of the market, and was advised that Kelly thought it was going up, whereupon Rogers inquired whether Kelly could get the rubber for him “at once,” and was informed, in substance, that Kelly could not s.ay definitely until he received cables on the following Monday morning; that thereupon Rogers said “ he would take twelve tons of rubber for equal monthly shipments from Brazil or Europe at $2.42,” the rubber to be upriver fine Para rubber, and Kelly was to communicate with him on the following Monday. After this conversation, and on the same day, Kelly prepared a letter, which was signed in the name of plaintiffs’ firm by him and mailed to the defendant, addressed to it at Long Island City, on the same day. That letter was produced on the trial by the defendant, and is as follows:

“ Poel & Arnold,

“277 Broadway.

“New York, April 2, 1910.

“Brunswick-Balke-Collender Co.,

“Long Island City, L. I.:

“Gentlemen.—As per telephonic conversation with your Mr. Rogers today, this is to confirm having your offer of $2.42 per lb. for 12 tons Upriver Fine Para Rubber, for shipment either from Brazil or Liverpool, in equal monthly parts January to June, 1911, about which we will let you know upon receipt of our cable reply on Monday morning.

“ Thanking you for the offer, we remain,

“Very truly yours,

“POEL AND ARNOLD

“Per W. J. Kelly.”

There was no further communication between the parties or their representatives until Monday, April 4, 1910, when Kelly,, after receiving cables from London — cables from Brazil sometimes came to plaintiffs’ firm by way of London, but it does not appear whether or not any of these cables emanated from Brazil — dictated a memorandum to a stenographer, which was written out, and the original was signed by one of the plaintiffs in the name of the firm and inclosed with a letter to the defendant that day, and a carbon copy was pasted in the book of orders or contracts kept by plaintiffs’ firm. The letter inclosing the memorandum was likewise addressed to the defendant at Long Island City, and the body of it was as follows:

“Enclosed, we beg to hand you contract for 12 tons Upriver Fine Para Rubber, as sold you today, with our thanks for the order.”

The original memorandum, designated “ Contract,” inclosed with the letter, was not produced on the trial, but the carbon copy, without signature, was received in evidence as Exhibit 3, and will be so referred to for brevity. It is as follows:

K-W

“ Brunswiok-Bauce-Collender Co.,

“Long Island City, L. I.

“Sold to You: P. A.

“For equal monthly shipments January to June, 1911, from Brazil and/or Liverpool, about twelve (12) tons Upriver Fine Para Eubber at Two Dollars and forty-two cents ($2.42) per pound; payable in U. S. Cold or its equivalent, cash twenty (20) days from date of delivery here.”

It was admitted that the letter and inclosure were received by the defendant. The letter was either opened by Eogers, or it and the inclosure were delivered to him, for after examining the inclosure, he filled in one of the defendant’s blank order forms, under date of April 6, 1910, and on that day mailed it to the plaintiffs. It was received in evidence as Exhibit 4. This form of order, by a printed memorandum at, the top, indicated that it was given by the purchasing department of the defendant, and opposite the words “ Order No.” were printed in red ink the figures “25409.” Underneath this there was a printed direction to the effect that that number must appear on all invoices and cases. To the left at the top there appeared in large type the name of the defendant and its Long Island City address. Next came the date, and after that, in the blank space for the name of the person to whom the order was addressed, Bogers filled in the name of the plaintiffs’ firm with its address. He then inserted, under a direction in print tó “ Please deliver at once the following, and send invoice with goods,” the following:

“About 12 tons Upriver Fine Para Bubber at 2.42 per lb. Equal monthly shipments January to June, 1911.”

Immediately under this blank space thus filled in by Bogers, and to the right,-was a printed subscription, as follows:

“ BespectfuBy yours,

“The Brunswick-Balke-Collender Co. of New York.

“ Per........................”

Under this subscription, opposite the word “Per,” Bogers wrote his name. To the left of this subscription, the following appeared in comparatively fine print, with the exception of the first fine which was in larger type than the rest, viz.:

“ Conditions on which above order is given.

“ Goods on this order must be delivered when specified. In case you cannot comply, advise us by return mail stating earliest date of delivery you can make, and await our further orders.

“ The acceptance of this order which in any event you must promptly acknowledge will be considered by us as a guarantee on your part of prompt delivery within the specified time.

“Terms............F. O. B.............”

The testimony of Bogers shows that, in filling in Exhibit 4, he followed the terms of the sale as specified in the original of Exhibit 3, and that the omissions, which were merely with respect to the place from which the rahher was to be shipped and the terms of payment, were unintentional and accidental.

Rogers also testified that he returned to the plaintiffs with Exhibit 4 the original of Exhibit 3. This testimony was controverted by evidence given in behalf of the plaintiffs. Rogers assigned as a reason for returning it that it contained a clause relieving the plaintiffs from liability for delays in delivery in case of strikes “and some other memorandum of that kind.” Kelly testified that the form of contract which the plaintiffs’ firm usually sent to its customers with respect to the purchase of rubber, at and prior to that time, contained a note as follows:

“Note: This contract contingent upon strikes, accidents, or other causes beyond our control.” He, however, testified “we did not always put on our writings this strike clause,” and that it was not on the original of Exhibit 3, and that if it had been it would have been shown on the carbon copy, Exhibit 3. It is fairly to be inferred from Kelly’s testimony that if the strike clause was omitted from the original of Exhibit 3, the omission was by mistake, for he conceded that long prior to that time the plaintiffs’ firm had inaugurated the practice of inserting such a clause, and it appears by his testimony that the only reason he was able to say that it was not inserted in this instance is that it is not contained in the carbon copy. If the strike clause was on the original of Exhibit 3 that would render the testimony of Rogers, to the effect that he returned the paper, probable. It is not probable, however, that the original contained any typewriting not found in the carbon copy, and it would seem that if Rogers, by sending Exhibit 4, intended to reject the original of Exhibit 3, he would have notified the plaintiffs’ firm by letter or message to that effect. One of the plaintiffs, whose initial appears on the carbon copy, testified that, according to his usual custom, he compared Exhibit 3 and the original, and thereupon initialed the carbon copy, and that the original did not contain a strike clause. Three of the four individuals who, in the usual course of business, might have received Exhibit 4 for the plaintiffs’ firm, gave testimony tending to show that the original of Exhibit 3 was not returned. One of the plaintiffs, who might have received it, was absent in Europe and did not testify. It appears, however, that in the usual course of business it would have reached the hands of Kelly had it been returned. None of the prior contracts between the parties contained a strike clause which with other evidence tends to show that it was not inserted in contracts for this quality of rubber. This evidence presented a sharp issue of fact with respect to whether the original of Exhibit 3 contained a strike clause, and whether it was rejected and returned by Rogers. The trial court had the advantage of seeing the witnesses, and we would not be justified" in revers, ing his finding and finding the other way, and we do not think that the evidence renders the correctness of the finding made sufficiently doubtful to require a new trial.

The plaintiffs,, on receiving Exhibit 4, appear to have regarded it as a confirmation of the contract submitted by them. They filed it away after making a notation on Exhibit 3 of the defendant’s order number for the purpose of complying with its request to have said order number appear on the invoices and cases. There were, as already stated, parol negotiations between Rogers and Kelly with respect to the seven prior separate sales of rubber by the plaintiffs to the defendant; and in each instance the plaintiffs after such negotiations forwarded to the defendant contracts in the same form as the original of Exhibit 3, and without the so-called strike clause; and, with respect to five of them, Rogers upon receiving such contracts forwarded to the plaintiffs orders for the goods on the same printed blank form as that used in this instance, with the exception that one of such orders covered the purchases embraced in two of the contracts transmitted by the plaintiffs’ firm. The record does not show whether or not Rogers communicated with plaintiffs after receiving the contracts from them for the other two prior purchases. In each of the four memorandums, like Exhibit 4, which Rogers so sent to plaintiffs, he omitted the terms of credit, as he did in this instance. It was conceded that the rubber embraced in those contracts was delivered to the defendant pursuant to the terms of the contracts as thus made and paid for by it. There is no evidence on the question as to whether on said former occasions the plaintiffs sent any further communication to the defendant after receiving said orders from Rogers; but it is a reasonable inference from all of the evidence that the parties considered the contracts then closed without further negotiations or communications.

Accepting, therefore, as we do, the findings of the trial court that the original of Exhibit 3 did not contain the strike clause, and that Rogers did not return it with Exhibit 4, and assuming that Rogers had authority to negotiate the contract for the defendant, it would seem that the minds of the parties had met on the terms of the contract contained in the original of Exhibit 3, and that the clause in fine print on Exhibit 4 to the left of the subscription was not intended to call for an acceptance, particularly in view of the former transactions between the parties, which distinguishes the case from Hough v. Brown (19 N. Y. 111), wherein it was held that a party who stated the terms of a contract, negotiated by parol, in a letter written to the other party, saying that he accepted them and requesting the party to whom the letter was addressed to accept his letter in writing, was not binding upon the writer of the letter in the absence of an acceptance thereof in writing. The inadvertent omission by Rogers from Exhibit 4 of the place from which the rubber was to be shipped at most would have given the plaintiffs’ firm a greater latitude with respect to the point from which shipment was to be made; and his inadvertent omission of the twenty days’ credit after delivery would at most have left the time of payment to be implied by law which would have been less favorable to defendant.

Although Exhibit 4 contains no reference to the original of Exhibit 3, it is perfectly clear from the evidence that the two papers relate to the same transaction and were intended to embody the same contract. It is not, however, necessary to decide whether the original of Exhibit 3 and Exhibit 4 taken together would constitute a sufficient note or memorandum of the contract signed by the defendant within the Statute of Frauds, for the record contains another item of evidence consisting of a letter written by the defendant to the plaintiffs’ firm on the 7th day of January, 1911, which supplies any omission. That letter is as follows:

“We beg herewith to advise you that within the past few weeks there has come to our attention through a statement made to us for the first time by Mr. Bogers, information as to certain transactions had by him with you in the past, and especially as to a transaction in April last relating to 12 tons of crude rubber. Mr. Bogers had no authority to effect any such transaction. on our account, nor had we any notice or knowledge of his action until he made a voluntary statement disclosing the facts within the past few weeks.

“ In order that you may not be put to any unnecessary inconvenience, we feel bound to give you notice at the earliest opportunity after investigating the facts, that we shall not recognize these transactions or any others that may have been entered into with Mr. Bogers which were without our knowledge or authority. ”

This letter was signed in the name of the defendant “Per Chas. P. Miller, Vice Prest.” If Bogers was authorized to represent the defendant, or plaintiffs were led to believe he was, the provisions of this letter by which it attempted to repudiate his authority, were, of course, ineffective. The defendant at that time, at least, was chargeable with knowledge of the correspondence and contracts which Bogers had theretofor had and negotiated for it, and of the correspondence he had had with respect to this transaction, and of the original of Exhibit 3 which he then held for it. The letter clearly recognizes that a transaction had been effected between Bogers and the plaintiffs for the purchase of twelve tons of rubber. The defendant merely disclaimed Bogers’ authority to effect it. The only transaction he had with the plaintiffs with respect to the purchase of such rubber during the month to which the letter relates, on the assumption that the original of Exhibit 3 did not contain the strike clause and that it embraced all the terms of the contract previously negotiated, as shown by the uncontroverted evidence, was the negotiation of the contract, embodied in the original of Exhibit 3. It is tobe borne in mind that the defendant held the contract signed by plaintiffs, and there is in such case no danger of opening the door to fraud or perjury by construing defendant’s letter as relating to the contract which is executed in a manner to bind plaintiffs. (See Newton v. Bronson, 13 N. Y. 587, 595.) We recognize that the authorities hold that the note or memorandum, to constitute a compliance with the statute, must give the names of the parties and state all the terms of the contract with reasonable certainty, either in itself or in “some othérwriting or thing” referred to therein, and without the aid of evidence of parol negotiations (Mentz v. Newwitter, 122 N. Y. 491; Ward v. Hasbrouck, 169 id. 407; Brauer v. Oceanic Steam Navigation Co., 178 id. 389; Wilson v. Lewiston Mill Co., 150 id. 314; Evans v. Pelta, 146 App. Div. 749); but we do not deem it an extension of that doctrine to hold that on these facts the defendant admitted by its letter of January 7, 1911, that the contract evidenced by the original of Exhibit 3, which it was competent to identify by parol evidence as has been done, had been negotiated between the defendant’s agent Rogers and the plaintiffs, and, on that theory, notwithstanding the fact that the letter was written for the purpose of repudiating liability, it, taken with the original of Exhibit 3, constitutes a sufficient memorandum signed by the defendant within the Statute of Frauds. (Raubitschek v. Blank, 80 N. Y. 478; Thompson v. Menck, 4 Abb. Ct. App. Dec. 400; Beckwith v. Talbot, 95 U. S. 289; Smith v. Colby, 136 Mass. 562; Cave v. Hastings, L. R. 7 Q. B. Div. 125; Long v. Millar, L. R. 4 C. P. Div. 450.)

On the question of Rogers’ authority to represent the defendant there is evidence in addition to that with respect to the former purchases of rubber of the plaintiffs by the defendant through him. Kelly testified that prior to such purchases he talked with one Troescher, the secretary and treasurer of the defendant, whose headquarters were at the New York office, and who alone signed the checks in payment of the rubber subsequently purchased, “about rubber;” that Troescher asked him from time to time concerning the state of the market, and said “That Mr. Rogers would do the buying of the rubber;” and that thereafter contracts were negotiated through Rogers. Mr. Arnold, one of the plaintiffs, testified that prior to any of the purchases he had several conversations with Troescher with respect to news concerning the rubber market, and that Troescher informed him “ that Mr. Rogers did the buying for the company.” The defendant gave evidence tending to show that Rogers did not have general authority to purchase rubber for it, and that the purchases he made were authorized in each instance by its Chicago office. On cross-examination Kelly answered a question, as to whether the defendant had ever given him reason to suppose that Rogers had authority to purchase rubber on his own responsibility, in the negative. On that testimony the learned counsel for the appellant argues that Kelly knew that Rogers had no authority to purchase rubber excepting when specially authorized. After so testifying, however, Kelly further testified, in effect, that he was led to believe that Rogers was the general purchasing agent of the defendant by the fact that the defendant had instructed him to sell rubber to the defendant through Rogers, and further stated that this was based on the fact that prior to making any of the contracts he met Troescher, Rogers and one Shank, who was the superintendent of defendant’s factory at Muskegon, where the rubber was used, at the defendant’s office, and was then instructed