Case ID: ad_109/html/0201-01.html
Source: Caselaw Access Project
Author: {"author": "Hooker, J.:", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

Robert T. Kirkland, Respondent, v. The Niagara Gorge Railroad Company, Appellant.
    Second Department,
    November, 1905.
    ‘Contract to buy coupon railroad tickets — waiver of conditions therein.
    Plaintiff’s, assignor, a navigation company, entered into a contract with the defendant and, among other things, agreed to sell coupon tickets over defendant’s railroad, to pay for the same at the rate of forty-five cents each, and to purchase and pay for at least 3,000 tickets per day and 180,000 tickets in the aggregate. To secure the performance of the contract the navigation company deposited §5,000 with the defendant. The navigation company failed, through lack of business, to purchase 3,000 coupons daily or the aggregate required, and informed defendant that it could not go on under that part of the agreement. The defendant replied in writing that though there was “ no time to further modify a written contract entered into months ago,” etc., the navigation company could depend upon fair treatment on final settlement. The letter further stated that henceforth the charge for tickets must be fifty instead of forty-five cents each “ as the forty-five cent rate was a special concession on the theory that you were to carry out the written contract.” Thereafter the navigation company paid for tickets at the fifty-cent rate.
    
      Meld, that said letter was a waiver of the terms of the contract requiring the purchase of 3,000 tickets daily or the aggregate stated, and that such waiver was supported by a sufficient consideration;
    That plaintiff was entitled to recover the §5,000 security, less the amount owing by the navigation company for tickets actually bought but not paid for.
    
      Meld, further, that interest could only be recovered from the date of action, as proof of demand was insufficient.
    Appeal by the defendant, The Niagara Gorge Railroad Company, from a judgment of the Supreme Court in favor of the plaintiff, entered in the office of the clerk of the county of Kings oil the 10th day of December, 1904, upon the decision of the court, rendered after a trial at the Kings County Trial Term, both sides having moved for the direction of a verdict.
    
      George G. Riley, for the appellant.
    
      Harry F. Lawrence, for the respondent.
   Hooker, J.:

Plaintiff’s assignor, the International Navigation Company, on February 7, 1901, proposing to operate a line of steamships upon the Niagara river during the season of the Pan-American Exposh tion, entered into a traffic arrangement with the defendant, the Niagara Gorge Railroad Company, which then operated a line of railroad.along the lower Niagara river. This agreement provided that the navigation company should have the right to sell coupon tickets which should give the holders the privilege of riding over the defendant’s line; the navigation company was to pay the sum of forty-five cents for each coupon sold by it, payments for which, were to be made daily to the defendant; the agreement Was to become operative on the 1st day of June, 1901, and continue until the 1st day o'f October, 1901; with the privilege to the navigation, company to continue it Upon the same terms until the 1st day of November, 1901. The contract also provided: “And.in addition thereto,, as a security for the performance of this contract, the Navigation Company agrees that it will deposit with the treasurer of the Gorge Company, on or before June 1, 1901, the sum of five thousand ($5,000:00) dollars in cash, or an approved surety company bond in the sum of ten thousand ($10;000.00) dollars, conditioned for the faithful performance of. this contract, as the Gorge • Company may elect.” The navigation company also agreed to purchase from the defendant at least 2,000 coupon tickets per day and to pay for them whether it resold the same-or not, and that if the. navigation. company purchased and paid for 240,000 or more coupon tickets the defendant would rebate and pay back to it the sum of seven and one-half cents for each coupon ticket so purchased by it, the rebate payment to be made on the 1st day of November, 1901, or as soon.thereafter as the business could be conveniently adjusted between the parties. This contract was in writing, signed and sealed by the parties thereto. On June 10, 1901, the parties by a further agreement in writing, modified that of February seventh, by providing that the contract should go into effect on July first, instead of June first, and “ that any and all tickets in, excess of 180,000 which may be sold by you shall be at and after the rate of forty-five cents; and that.ány and all tickets over our road sold by you in May and June shall be at and after the-rate of forty-five cents each. The guaranty shall be- amended so as. to be 180,000 instead-of 240,000, and. the rebate shall relate only to 180,000 and shall not apply to any tickets sold in excess of that nun^bev. A further condition for this modification will be that the $5,000 cash guaranty provided for by the contract shall be paid to the treasurer of the Niagara Gorge Railroad Co. at once, as we understand that you are already issuing tickets with coupons over our road, and we have honored them and desire to continue to do so.” Later the sum of $5,000 mentioned in.the agreements was paid over, by the navigation company to the defendant.

At the end of the season the navigation company owed. $1,499.50 for coupons it had not paid for; it claimed to be entitled to the sum of $5,000 it had paid to the defendant less this sum; on the defendant’s refusal to pay, the claim came by mesne assignments to the plaintiff and this action was commenced. At the close of the evidence both parties moved for a direction of a verdict; the jury was discharged, and later the court directed a verdict for $3,500.50, the difference between the amount of a deposit of $5,000 and the amount concededly owing to the defendant, together with interest on that sum from the 4th day of November, 1901. The defendant appeals from the judgment entered upon findings made and signed by the justice before whom the case was tried.

The navigation' company failed to purchase 2,000 coupon tickets daily or 180,000 in the aggregate, and the defendant claimed that because the navigation company had thereby committed a breach of the contract in that respect the-defendant was entitled to keep the $5,000, for that deposit was made as security for the performance of this contract. We are persuaded, however, that during the life of the contract the defendant waived its provisions relating to the purchase of a given number of coupon tickets by the navigation company.

As early as the 27th day of July, 1901, it was realized and discussed by letter between the parties. to the contract that so far as attendance was concerned the exposition was a failure and disappointment to every one who was dependent upon this attendance for business. On that day the manager of the navigation company wrote to the defendant that three weeks before -that time they had informed the defendant’s treasurer that they “ would not go on under the two thousand daily coupon agreement and understood from him that your company was not thinking about that feature of our -agreejnent and therefore I did not deem it necessary to submit any other proposal with reference to it.” The letter stated that it was an utter, impossibility to. think of fulfilling the 2,000 daily coupon clause of the contract, and the most they could do would be to send all the traffic they could at the flat rate, and that they would-be exceedingly sorry at the end of the season to he-entitled to no rebate. On September Vt, 1901, the defendant wrote to the navigation company’s manager as-follows: '“'At -the last meeting of the board of-directors I was instructed to inform you that while there .is every disposition on the part of the Niagara Gorge Railroad . Co, to treat your -company with the utmost fairness, there is no time to further modify a written contract entered into months ago and already once modified. , Our treatment of .your company is a sufficient guaranty that you can depend upon fairness and reasonable treatment on a final settlement. I was instructed,, however, to say to you that from this time forth -we desire to have paid daily for the coupons sold over our line the sum of fifty cents each instead of' forty-fiye cents each as heretofore, as the forty-five cent rate was a special concession on the theory that you were to carry out the-written contract. In view of the fact that the written 'contract has not been observed On your part, this request, I am sure," will seem entirely reasonable to you. Our -treasurer will be instructed to-make collections accordingly. Trusting;,that this will be entirely satisfactory, Tours,” etc. On September 19, .1901,. the defendant’s auditor informed the navigation company that commencing with the; seventeenth of that month coupons would be rated at fifty cents instead of forty-five as theretofore. The navigation company paid the new rate without demur from that time until the close of. the season.

We are convinced that-the true interpretation ■ of. the letter ol September seventeenth is that it evidences an intention on the part of'the defendant to waive, the terms of, the. contra,ct- theretofore in force requiring the navigation company to purchase, 2,000 coupons daily. •

Although-it is stated, that there is no time to modify the contract of February seventh,' and. the navigation company was urged to rely on the'fairness of the defendant as that attribute had,been - evidenced by the past dealing between- the . parties, - yet the letter distinctly reads: “I was instructed, fioioeveryto say to you” that henceforth the charge for tickets must be fifty instead of forty-five cents each, and this “ as the forty-five cent rate was a special concession on the theory that you were to carry out the written contract.” The only provision of the written contract to which this expression could possibly be referred was that requiring the navigation company to purchase and pay for 2,000 coupon tickets daily at forty-five cents each. The volume of attendance at the exposition had been disappointing, and both parties knew in; although the navigation company had agreed to buy 2,000 tickets daily, it had not done so, and the defendant knew of that; some time before July 27, 1901, the navigation company’s manager told the defendant’s treasurer that it could not go on under the 2,000 daily basis ; on July twenty-seventh the navigation company wrote to the defendant that it was an utter impossibility to do so; and in view of all these facts the defendant’s letter of September seventeenth, observing that the navigation company had not performed that part of its contract and that the special rate of forty-five cents ivas made in consideration of its purchasing 2,000 tickets daily and requiring in'future the payment of fifty cents per coupon, was clearly an offer to waive the. requirement of the written contract in respect of the navigation! company’s undertaking to purchase a given quantity of transportation ; the navigation company accepted the offer and thenceforth until the end of the season paid the full sum of fifty cents ■ per coupon. This sum had theretofore never been mentioned in any of 'the written agreements between the parties, and was clearly the basis of a new modus ojperandi adopted by them in. view of the fact that it was apparent that the contract would not: be performed.

It is perfectly apparent that the waiver was supported by abundant consideration ; the navigation company was under no obligation to pay fifty cents per coupon; it suffered the detriment of paying-an additional sum for tickets. Of course the defendant might, probably have insisted on any day prior to the seventeenth of Sep-, tember that the contract was no longer in force, on account of its. breach by the navigation company’s not having settled daily for at. least 2,000 tickets; but it did not do so, and on the other hand went even so far as to refund to the navigation company on August-tenth and again on September thirteenth, moneys on account of tickets which had been theretofore paid for but hot actually used, even though the navigation company was then falling so far short of buying 2,000 daily that the number of tickets for which refund was made on those days would' not have Brought the purchase up to the contract requirement.

The language of the letter of September 17,1901, standing alone, seems clearly to indicate an intention on the part of the defendant to waive the provision of the contract under discussion; if more were needed, the conditions which prevailed, conceded!y known to botli parties, and the course of dealing between them, remove all doubt.

The defendant makes no claim that the contract was not performed by the navigation company, except in respect to the volume of its purchases and its failure to pay $1,499.50 for tickets used; to the sum of $5,000, deposited by it to secure the performance, the assignee of the navigation company is entitled, less the charge for tickets actually used.

The judgment must, however, be modified ; in respect to the interest allowance. The sum of $624.21 appears, to have been included in the judgment as interest on the sum of $3,500.50 from November 4, 1901, but there is no finding that the demand was made on that or any other day and no testimony of any probative, value that a demand was ever made. - The man who acted as auditor for the navigation company, the only witness procured by the plaintiff, says that such a demand was made, but on cross-examination makes it plain that he knows nothing about it, as follows: “ Q. Now, what do you know about the demand that was made for this $5,000 ? A: The payment was sent to them. I was not present when a demand was made. I couldn’t tell you. whether that demand was oral or in writing. Q. Then you are simply guessing-on whether a demand was made or not, and when it was made, are you not ? A. I had 'that from the statement of the treasurer. Q. Somebody told it ? A. Yes, sir. Q. That is all you know about it, isn’t it? A. Yes, sir.”

Because thére is no proof of demand, interest may not be had except from the date of the commencement of the action; and the judgment must, therefore, be modified by deducting interest on $3,500.50 from November 4¿ 1901, to March' 19, 1904, the date of the service of the summons and complaint, and- as so modified affirmed, without costs to either party.

Hirschberg, P. J., Bartlett, Jenks and Miller, JJ., concurred.

Judgment modified in accordance with the opionion of Hooker, J., and as so modified affirmed, without costs to either party. ' Order to be settled before Hooker, J.