Harvard Brewing Co. v. Sperber (90 A.D. 417, 1904)

McLennan, P. J.:

The plaintiff, a foreign corporation, is engaged in the manufacture and sale of ales and beers. The defendant Arthur G. Sperber, at the times hereinafter mentioned, was engaged in the business of bottling and selling to the trade malt liquors at Rochester, N. Y. On the 11th day of March, 1901, he entered into an agreement with the Harvard Brewing Company, in writing, by which he agreed to purchase goods manufactured by the plaintiff, at certain prices, and to bottle and sell such goods exclusively. His agreement also contained the following provision : “ The party of the second part (the defendant Arthur G. Sperber) hereby agrees to furnish a good and sufficient bond with two sureties, in the sum of three thousand dollars ($3,000), to guarantee the said party of the first part (plaintiff) against all loss from the sale of said products, and from any credit that may be extended or money advanced by-the party of the first part, in the establishment of the business of the party of the second part.”

The learned trial court found that on or about the date of the execution of said agreement, to wit, the 11th day of. March, 1901, the defendants, pursuant to the provisions of said agreement, executed and delivered to the plaintiff their certain bond, the conditions of which were identical with those of the bond upon which this action is founded; that after the lapse of several months, and shortly before the execution and delivery of the bond in suit, it was discovered that the bond first delivered was defective in that it did not specify the penalty thereof, and that for that reason alone, on the 6th day of Hay, 1902, the same was surrendered to the defendant Arthur G. Sperber, arid that thereupon the defendants executed and delivered to the plaintiff the bond in suit, the recitals and conditions of which, so far as material in this discussion, read as follows:

“Whereas, Arthur G. Sperber is engaged in the bottling and wholesaling of malt liquors in the city of Rochester, State of New York, and wishes to continue to purchase beer and malt. liquors of the Harvard Brewing Company of Lowell, Commonwealth of Massachusetts, and purchased the same upon credit from time to time, in accordance with the terms of an agreement made the 11th day of March, 1901, and duly executed by the said Harvard Brewing Company and the said Arthur G. Sperber; and

“Whereas, said Arthur G. Sperber is indebted to said Brewing Company and desires to obtain credit for the purchase of said malt liquors of the Harvard Brewing Company.

“Now, therefore, the condition of the obligation is such that if the bounden Arthur G. Sperber shall pay and liquidate for all beers and liquors furnished by the said Harvard Brewing Company that he purchases from time to time, and shall faithfully live up to * * the terms of the aforesaid agreement made and executed the 11th day of March, 1901, and refund all moneys which may be advanced by the said Harvard Brewing Company, or moneys or credits extended to him according to this obligation, then this obligation is to be void, otherwise to remain in full force, virtue and effect.”

The trial court also found that between the date of the said agreement and the 6th day of May, 1902, the date of the delivery of the bond in suit, the plaintiff sold to the defendant Arthur G. Sperber goods to the amount of $4,569.31, no part of which has been paid; and also that the plaintiff sold and delivered to said' Arthur G. Sperber, pursuant to the agreement between the parties, between the 6th day of May, 1902, and the 12th day of December, 1902, goods amounting to $2,248.91, to apply upon which certain sums had been specifically paid, amounting to the sum of $1,018.60, leaving due and unpaid thereon a balance of $1,230.31.

In his conclusions of law the learned trial justice determined that the defendants are not liable upon the bond in suit, for any indebtedness of the defendant Arthur G. Sperber, for goods' sold and delivered to him pursuant to said agreement, prior to the said 6th day of May, 1902, and that their liability must be held to cover only such debts and obligations of said defendant as were incurred pursuant to said agreement from and after said date, and awarded judgment for the plaintiff for the unpaid balance of such indebtedness, to wit, $1,230.31, together with costs of the action.

The plaintiff duly excepted to such conclusions, and the question involved therein is now before this court;

A reading of the agreement, pursuant to which all the purchases and sales of goods between Sperber and the plaintiff were made, and particularly the provision thereof above quoted, shows that it contemplated that at some time in the future a “ good and sufficient bond with two sureties, in the sum of three thousand dollars” should be executed and delivered to the plaintiff to protect it against loss upon