Case ID: ny-super-ct_52/html/0407-01.html
Source: Caselaw Access Project
Author: {"author": "By the Court.—Van Vorst, J.", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

ALFRED LISTER, et al., Respondents, v. LOUIS WINDMULLER, et al., Appellants.
    
      Contract—meeting of minds on subject of—Unilateral mistalce, effect of —: Warranty by exhibition of sample—Measure of damages, vendor no title—Breach of contract to deliver in presentí, time of—Error on trial, curing of.
    
    Where the subject of the contract is plainly described in the agreement signed by the parties, the agreement is of itself the best evidence of meeting of minds and assent, and, in the absence of fraud or mutual mistake, is conclusive.
    Where the mistake is that of one party alone, the rule of law is that whatever his real intention may be, if he manifests an intention to another party so as so induce that other party to act on it in making a contract, he will be estopped from denying that the intention as manifested was his real intention, and cannot avoid the contract on the ground of mistake.
    Where a sale is made by sample, the possession of the sample by the seller is constructively sufficient possession of the bulk of goods from which the samples are represented to be drawn,to authorize the purchase]-, in the absence of any evidence to the contrary, to beliqve and act on this belief, that the vendee was actually in possession of the bulk; and is sufficient to raise by implication a warranty of title to the bulk in the vendor. Want of actual possession of the bulk is in such case, as between the vendor and vendee, immaterial.
    The measure of damages against the vendor for breach of contract of sale of personal property, the vendor in fact having no title to the property sold, but making the sale innocently, is the difference between the contract price and the value at the time of breach.
    The time of breach of contract of sale and delivery in presentí, is, as against the vendor, when there is either an absolute refusal to deliver, or a distinct announcement of an inability to deliver.
    Error in exclusion of evidence is cured by the subsequent admission of evidence on the same point offered by the party against whom the error was committed.
    Before Sedgwick, Oh. J., and Van Voest, J.
    
      Decided December 7, 1885.
    Appeal from judgment entered on the verdict of a jury in favor of plaintiff against defendants, and from an order denying a motion for a new trial.
    The facts appear in the opinion.
    
      Francis Lawton, attorney and of counsel for appellants, argued:
    I. It was error to rule out the testimony offered to show that the subject-matter contemplated by the parties did not exist, and that therefore the minds did not meet (Cutts v. Guild, 57 N. Y. 234; Dana v. Munro, 38 Barb. 528; Baldwin v. Middleberger, 2 Hall, 176; Saltus v. Pruyn, 18 How. Pr. 512; Scrantova v. Booth, 29 Barb. 171 ; Booth v. Bierce, 38 N. Y. 463 ; Fullerton v. Dalton, 58 Barb. 236 ; Crowe v. Lewin, 95 N. Y. 423; Benjamin Sales, 4 Am. Ed. § 50 ; Thornton v. Kempster, 5 Taunt. 786 ; and Story Sales, §§ 147-150). Even if the minds had met upon the thing described and intended to be sold, it was not acted upon. This action could not be upheld in such case unless there was fraud or a covenant of warranty of title (Day v. Nason, 1 East. Rep. 772; Scranton v. Clarke, 39 Barb. 275 ; Hopkins v. Grinnell, 28 Id. 537 ; Robinson v. Anderton, Peake, 94; Early v. Garrett, 9 B. & C. 932). No fraud is alleged or shown. No express warranty of title is alleged or shown, and defendants had no title nor possession of the goods in question personally, or by agent. No warranty is therefore implied (Benj. Sales, 4 Am. Ed. § 641, and note; Scranton v. Clarke, 39 N. Y. 222 ; Hopkins v. Grinnell, 28 Barb. 532 ; Burt v. Dewey, 40 N. Y. 483 ; Story Sales, 3d Ed. p. 459 ; Bechet v. Smithers, 50 Super. Ct. 381; McCoy v. Archer, 3 Barb. 323 ; Edick v. Crim, 10 Id. 445 ; Mills v. Porter, 5 T. & C. 65 ; Bishop Contr. 96 ; Scranton v. Clarke, 39 Barb. 275 ; Sweetman v. Prince, 26 N. Y. 230 ; 2 Kent Comm. 478 ; 1 Parsons Contr. 5 Ed. 575 ; Reynolds v. Roberts, East, 749).
    II. The court erred in instructing the jury, that the measure of damages was the difference between the contract price and the market price of the goods mentioned in the contract during the month of May, after the breach of the contract had occurred. Damages, if any, should have been nominal. On sales of specific ascertained pieces of property damages divide into three classes : 1. Where buyer acquires the ownership of the thing sold. In such cases its increase belongs to him, and his damage on seller’s failure to deliver, is its value at the time of failure. 2. Where buyer acquires no ownership by reason of seller’s deceit. In such cases profits and increase which buyer would have received if the contract had been lived up to as made, are charged as punitive damages. 3. Where buyer acquires no ownership by reason of innocent failure of title in the seller. In such cases buyer’s loss is complete when the ineffectual contract is made, and the price then paid is the measure of his damages (Day v. Nason, 1 East. Rep. 772; Pumpelly v. Phelps, 40 N. Y. 74; Scranton v. Clarke, 39 Id. 224 ; Conger v. Weaver, 20 Id. 144). The foregoing rules apply to sales of the class named, whether with or without warranty; whether of realty or personalty ; whether executed or executory. 1. Sales with and without warranty: In case of warranties for quiet enjoyment and failure of title : The price agreed upon by the parties is taken as conclusive evidence of the value of the land (Kelly v. Dutch Church, 2 Hill, 116; Kinney v. Watts, 14 Wend. 38). If nothing is paid, he recovers nominal damages for the breach. Where there is no warranty but a mere naked agreement to convey, the amount paid is also recovered back, but upon the theory of money had and received, or placing the parties as they were. If nothing is paid, there is then not even nominal damages (Baldwin v. Munro, 2 Wend. 407; Mack v. Patchin, 42 N. Y. 175 ; 3 Caines, 118 ; Scranton v. Clarke, 39 N. Y. 224). 2. Executed and executory sales : The foregoing rules are applied to contracts to sell in futuro by analogy to covenants of title in executed sales (Peters v. McKeon, 4 Den. 546 : Conger v. Weaver, 20 N. Y. 144, and cases below). 3. Sales of realty and personalty : Kent, Ch. J., lays down the rule in a case of warranty, as follows : “In warranties upon a sale of chattels the law is the same as upon the sale of lands, and the buyer recovers back only the original price ” (Staats v. Exrs. of Ten Eyck, 3 Caines, 113). This rule is usually applied in the books in general terms to all cases of failure of title without fraud, irrespective of warranty. And it seems to have been uniformly followed in cases of personal property (Armstrong v. Percy, 5 Wend. 535 ; Case v. Hill, 24 Id. 102 : Hopkins v. Grinnell, supra; Burt v. Dewey, supra; Atkins v. Hosley, 3 T. & G. 327 ; Converse v. Miner, 21 Hun, 367; Rawle on Gov. 4 Ed. 242), and of real estate (Cockroft v. N. Y. & N. H. R. R., 69 N. Y. 201, and many cases cited). The case of Shepherd v. Hampton, 3 Wheat. 200 ; Douglas v. McAllister, 3 Cranch, 298 ; and Clark v. Pinney, 7 Cow. 686 ; are cases of contracts for the sale and delivery at a future time of unascertained and unidentified merchandise of given quantity and character —like stock sales on margin, and cotton futures, without any intention to pass title m. presentí ; and have no application to the case at bar. See also Hopkins v. Grazebrook, 9 B. & C. 31. It is the rules applied to covenants for quiet enjoyment that govern in actions upon failure of title in sales of chattels (O’Brien v. Jones, 91 N. Y. 423, and cases cited). The transaction in the case at bar was an innocent mistake, and the third general rule of damages above given applies. The breach of contract was in the failure to pass title as agreed, and the damage and right of action were complete when the ineffectual contract was signed (Bingham v. Weiderwax, 1 Coms. 509 ; Dusenbery v. Callahan, 8 Hun, 543). And further, the goods were demanded and not delivered and the reason given several times before May 21. Marshall, Oh. J., says in such a case : “I can find no principle which in a case of plain mistake with respect to title will permit the damages to grow after the contract has been broken ” (Letcher v. Woodson, 1 Brock.). In the case at bar the contract was signed May 9. Damages could not increase after that tirqe. They are measured by the price paid. Nothing having been paid, plaintiff’s damages, even in case of warranty, are nominal.
    HI. The court erred in ruling that defendants’ evidence of market value must be confined to time of breach. Plaintiffs were allowed to show market value up to the end of May. Defendants were entitled to same ruling.
    IV. The cases cited to the contrary by plaintiff, Dana v. Fiedler, Cahen v. Platt, McKnight v. Dunlap, are cases of valid contracts to sell and deliver unidentified and unspecified quantities of merchandise at a future time ; Havemeyer v. Cunningham is a case where plaintiffs acquired the ownership of the goods and defendant failed to deliver. The case of Mack v. Patchin, 42 N. Y. 167, was decided on the ground of defendant’s bad faith, and in that and all the cases there cited, which might seem contrary to the foregoing; the seller had either knowingly sold what he had not, or refused to deliver wha,t he had conveyed by valid sale.. None of these cases have any application to a case of innocent failure of title upon the sale in presentí of a specific ascertained chattel like the one at bar.
    
      Edward H. Hobbs, attorney, and of counsel, and Benjamin S. Harmon, of counsel for respondents, argued :
    I. The alleged mistake upon the part of defendants is not one which will be relieved against in equity (1 Story’s Eq. Jur. § 151, 12 ed.). The mistake here antedates the making of the contract; it consisted, not in naming one thing when another was intendéd, but in naming a thing under a mistaken supposition as to its ownership, and mere mistaken calculation is never ground for equitable relief (1 Story’s Eq. Jur. §§ 138, h and i; Segur v. Pingley, 11 Conn. 134). When a party by reason of his own want of care has lost his remedy at law, equity does not interfere (Marvin v. Bennett, 26 Wend. 169 ; Penny v. Martin, 4 Johns. Ch. 566 ; Taylor v. Fleet, 4 Barb. 95 ; Butman v. Hussy, 30 Me. 263). The mistake claimed by defendants is one which they, by reasonable diligence, could have guarded against. A contract will be rescinded upon the ground of mistake only when the parties can be, and are, put back into their original position (Cobb v. Hatfield, 46 N. Y. 533 ; Hammond v. Pennock, 61 Ib. 145 ; Smith v. Mackin, 4 Lans. 41). The whole gist of this action is that defendants put plaintiffs back into their original position.
    II. There was an implied warranty of title on the part of defendants to the goods in question. 1. The sale being a sale by sample, of specific bags of merchandise, on store in a specified place, possession of the sample at the time and place of sale, was possession of the whole. It is the unquestioned law in both this country and England, that upon the sale of goods in the possession of the vendor, and as his own, there is an implied warranty of title Benj. on Sales [4th Am. ed.] §§ 961, 962 ; Eichholz v. Banister, 17 C. B. N. S. 708 ; Burt v. Dewey, 40 N. Y. 283 ; Bennett v. Bartlett, 6 Cush. 225). 2. Even if it be held defendants had not possession of the goods, there was a sufficient affirmation of title to constitute a warranty (2 Benj. on Sales, §§ 952, 958 ; Hoe v. Sanborn, 26 N. Y. 552). The principle sometimes found laid down in American text-books, to the effect that there is no warranty of title when the goods are not in possession of the vendor, must be taken with certain broad restrictions. Reference is there had to sales of the mere naked interest of those having no possession, actual or constructive (McCoy v. Artcher, 3 Barb. 323 ; Whitney v. Heywood, 6 Cush. 82, 86 ; Huntington v. Hall, 36 Me. 501). Sales by sheriffs and auctioneers are common examples (Sheppard v. Earles, 13 Hun, 651; Hopkins v. Grinnell, 28 Barb. 533). The Hew York decisions which are claimed to establish the general principle above laid down, are confessedly based upon special facts, showing the purchases to have been those in the nature of speculations, either with knowledge on the part of the vendees that the articles were in the possession of others (Edick v. Crim, 10 Barb. 445), or for a price, or under circumstances, showing that purchasers were buying at their own hazard, with no affirmations of ownership on part of the vendors (McCoy v. Artcher, 3 Barb. 323 ; Scranton v. Clark, 39 N. Y. 220). The case of Cutts v. Guild, 57 N. Y. 229, cited by appellant to support the proposition that the minds of the parties did not meet, was a case where both parties meant to deal with a certain kind of judgment, but in fact, a different judgment was disposed of. Crowe v. Lewin, 95 N. Y., so far as it is applicable, supports the respondents’ position.
    III. There was a breach of the contract on the part of defendants by reason of non-delivery. 1. Ho time of performance being specified, the law implies that it shall be within a reasonable time (Terwilliger v. Knapp, 2 E. D. S. 86 ; Jones v. Folwer, 37 How. Pr. 104). 2. Even if a reasonable time had not elapsed, plaintiffs were at liberty to treat the contract as broken; since if one is bound to perform a future contract, but, before the time for its performance, declares his inability or disinclination to perform, a breach arises, eo instanti (Anderson v. Sherwood, 56 Barb. 66 ; Burtis v. Thompson, 42 N. Y. 426). Between May 9, the date of the contract, and May 21, the assumed date of breach, plaintiffs several times demanded the goods, but were as often informed by defendants that they had been mistaken as to the ownership of the goods, and would be unable to deliver.
    IV. There was no error in the estimate of damages. The measure of damages was correctly taken to be the difference between the contract price and the value of the goods at the time the contract was broken (Dana v. Fiedler, 12 N. Y. 40 ; Cahen v. Platt, 69 Ib. 348 ; Havemeyer v. Cunningham, 35 Barb. 315; McKnight v. Dunlop, 5 N. Y. 537).
    V. Appellant cites many cases as to the rules appliable to realty. The distinction between those rules and those to be applied upon default of title in sales of personalty, is recognized in all the books (Pumpelly v. Phelps, 40 N. Y. 59 ; Mack v. Patchin, 42 Ib. 167 ; Clark v. Pinney, 7 Cow. 681; Shannon v. Comstock, 21 Wend. 457 ; Gregory v. McDowell, 8 Wend. 435 ; Hopkins v. Lee, 6 Wheat. 109 ; Peters v. McKeon, 4 Den. 546 ; Baldwin v. Munn, 2 Wend. 396).
   By the Court.—Van Vorst, J.

In this case the defendants seek to avoid liability for a failure to deliver personal property, in pursuance of an alleged sale thereof to the plaintiffs, upon the ground that they were not the owners thereof, and had no authority to sell it, and that the sale was made through a mistake on their part, as to the identity of the article.

The sale was made through a broker who represented the defendants, and who delivered to the parties respectively a bought and sold note. But the defendants distinctly ratified the transaction by writing their approval thereof on the note. The contracts of sale described the subject thereof as follows: “Fourteen hundred and six (1406) bags (more or less) soft red blood, in usual good order and condition, like sample, to be delivered from Lawrence & Co.’s stores, foot of Water street.” The agreement for the sale was made on the 9th day of Hay, 1883. At that time, the defendant, in fact, had no such merchandise for sale as is described in the contract. They neither owned themselves, nor had they any authority from others, to sell such merchandise.

‘1 Soft red blood ” is an ammoniacal preparation well known in commerce. It is used as a fertilizer. At the time of this sale, the defendants had 1406 bags of an ammoniacal preparation called “burnt leather,” for sale, on account of the Park Bank. It was stored in Lawrence & Co.’s worehouse. In the same warehouse in which the “burnt leather”- was stored, there were 1900 bags of “soft red blood,” belonging to the Manhattan Bank. With this latter article the defendants had nothing to do.

The Park Bank instructed the defendants to sell the 1406 bags of ammoniacal material belonging to them, and they placed the matter in the hands of their broker, who, through some mistake, drew samples from the merchandise of the Manhattan Bank, instead of that belonging to the Park Bank. The samples were drawn from the bags of “ soft red blood.” The broker exhibited these samples to the plaintiff, who purchased the quantity mentioned in the contract, at $2.50 per ton. The purchase was made by the plaintiffs in good faith. They needed the article which the sample exhibited to them represented.

The plaintiffs, shortly after the delivery of the bought and sold notes, demanded the merchandise, and failing to secure it, towards the close of the month, purchased in the market a quantity of it, at an advance over and above the price named in the contract.

There was evidence offered, and received, upon the trial, that the market value of this description of merchandise advanced, during the month of May, after the contract of sale was made.

It is argued by the learned' counsel for the appellants that no valid contract of sale was made, that the subject-matter of the sale, 1406 bags, etc., “like the sample shown,” did not exist—that the minds of the party.did meet.

It is not necessary to question the proposition that assent is indispensable to the validity of a contract. There is no sale, unless the minds of the parties agree as to the subject-matter thereof. There is no evidence that the minds of these parties were not in accord as to,the subject-matter of this sale. The defendants’ brokers offered to the plaintiffs samples of a particular kind and character of merchandise, distinct and peculiar. The plaintiffs needed in their business such merchandise, and they accepted the proposition to purchase it. The terms were agreed upon. The subject-matter of the sale was exactly described in the written contract, which the defendants themselves, having read, approved. Can it be claimed that they did not mean to sell 1406 bags “ soft red blood ” when they signed the contract ? The papers distinctly advised them not only as to what the plaintiffs had agreed to buy, but also what they proposed to sell. Their minds, therefore, agreed as to the identity of the sub j ect-matter.

In the absence of fraud, or of a mutual mistake, an agreement, signed by the parties, where the subject of the sale is plainly described, is of itself the best evidence of assent. Where the words are ambiguous, or may be taken in a different sense, by the parties, parol evidence might be allowed, as to the sense in which they were understood by the parties. But none of these elements exist in this case. Between the parties the transaction was honest, and each understood the contract as it expressed itself. We are not to overlook that fact.

Had the subject-matter been described differently in the two notes, then there would have been no assent.

In the case of Thornton v. Kempton (5 Taunt. 786), cited among others by the appellants’ counsel, the broker, who represented both parties, negotiated a sale, but by mistake described the subject of the sale differently in the bought and sold note. There was no assent. The case of Cutts v. Guild (57 N. Y. 229), also cited by appellants’ counsel, illustrates a case of fraud, or mutual mistake as. to the subject-matter.

In this case, the defendants, relying upon the representations and action of their broker, believed that the description contained in the contract, which they distinctly approved, covered the merchandise belonging to-the Park Bank, which they had been authorized to sell.. But of the defendants’ belief or intentions in this regard, other than is expressed in the written contract, the plaintiffs were entirely ignorant. They contracted upon the faith of the samples, and the description - of the subject matter, as prepared by their broker. Upon these facts, they were justified in relying. The law regards only expressions of intention which are communicated, in, determining the validity of contracts. When the mistake-is that of one party alone, the rule of law is, that whatever a man’s real intention may be, if he manifests an intention to another party so as to induce that other party to act upon it, in making a contract, he will be estopped from denying that the intention, as manifested, was his; real intention (Benj. Sales, § 55, and cases cited in note).

It is also argued by the counsel for the appellants,, that the defendants had neither title nor possession of the-goods in question, that there was no warranty of title,, express or implied, and that having no title, and not being-authorized to sell the property in question, they could not give a title. The subject of an implied warranty, in the absence of one that is express, upon the sale of personal property, has been much discussed in the courts. The question has, however, chiefly arisen between the purchaser from a person without title, where the former has been sued by the true owner for its conversion. Such was the case of Burt v. Dewey (40 N. Y. 283), where a stolen horse had been sold. In that case, the rule was stated, that when a vendor at the time of sale was in possession, a warranty of title is implied. The legal question in that case was, however, one of damages. In O’Brien v. Jones (91 N. Y. 193), there was evidence of express warranty. In the early case, McCoy v. Quackenbon (3 Barb. 323), it is stated, Judge Amasa J. Parker writing the opinion of the court, “that upon this point, there has been some conflict of opinion, and the question not being judicially settled in this state, it is necessary to give it a careful examination.” From such examination the result reached by the court was, “ the possession of a chattel by a vendor is equivalent to an affirmation of title, and in such case the vendor is to be held to an implied warranty of title, but if the property sold be, at the time of the salé, in the possession of a third person, no warranty of title will be implied. ” In another part of the opinion, the judge says, “the intent and understanding of the parties must be sought from all the circumstances of the transaction. ” In the case last cited, the action was to recover for a breach of a warranty of title on the sale of a promissory note, which was not at the time of sale in the possession of the vendors. The plaintiff failed in the end to recover, for it distinctly appeared that there were circumstances showing that the plaintiff had been advised before he purchased, of the vendor’s doubts about his property in the note, and that he purchased the “ note at his own risk.” Under such circumstances there could have been no implied warranty.

In the case under consideration, the defendants’ broker had in his possession the samples represented to be drawn from the bulk of the merchandise described in the contract of sale. These samples stood in the place of the bulk. Constructively, that was a sufficient possession of the bulk, to authorize the plaintiffs to believe, and to act upon the belief, that the defendants were actually in possession of the bulk. That would be a sufficient possession to give rise to the implication of title in the defendants.

It may be, as is argued by the appellate court, that the plaintiffs could not have had a decree for a specific performance of this contract; but an inability to get such relief affords no reason for not awarding damages in an action at law, where a cause of action at law in fact exists.

It may also be true, that the defendants, upon allegations of the mistake of their broker and themselves, could have had a rescission of the contract, but such judgment could only have been had upon indemnifying the purchasers from actual loss. For he that would have equity must do equity.

The consequences of the defendants’ mistake should not be borne exclusively by the vendees. If the plaintiffs have in fact sustained loss, through the defendants’ mistake, the loss should fall upon the defendants.

The appellants’ counsel urge that the damages should have been nominal, only. In Burt v. Dewey (40 N. Y. 283), it was held in substance, that where no damages had been actually sustained, the recovery of damages should be nominal.

The learned judge, upon the trial of this action, limited the damages to the difference between the market value of the merchandise during the month after the breach, and the price fixed by the contract. Under the evidence, that direction truly measured the plaintiffs’ loss, and nothing more. Several demands were made by the plaintiffs upon the defendants for the merchandise. A written demand was finally made on May 2Í. Then, at least, it was distinctly announced to the plaintiffs, that a mistake had occurred, and that the merchandise could not be delivered. After that, as already stated, the plaintiffs purchased from others, at the market value, which was in excess of the price fixed by the contract. In June following, the defendants tendered the merchandise described in the contract, but such tender came too late, and was properly refused.

We have looked with care over all the exceptions taken by the appellants’ counsel during the trial, and do not find that either of them can be sustained.

The case appears to have been well and. considerately tried by the learned judge. We do not think that the defendants, upon the whole case, can well complain of the rulings.

There was, however, one ruling, which at first blush appeared to be erroneous, growing out of the disposition made of the defendants’ offer to prove that “ the value of the particular bags of soft blood,” mentioned in the contract, the market value during the whole month of May, was not greater than $2.50 per ton. The judge denied the offer and request, upon the ground.that the “contract fixes the price.” It is true that it was not proper to prove the market value as it existed on the day the contract was made, but it was material to show what such value was after the breach, during the rest of the month. But whatever injury the defendants sustained by this ruling, was completely repaired afterwards, for evidence was allowed to be given upon the precise point by the defendants.

In the end, there was a conflict as to the market value of the merchandise, after the breach.

There seemed to be two grades of this merchandise, one of which was “prime quality.” The defendants claimed that the article described in the contract, according to the samples, was of an inferior grade.

One of the defendants testified that he was familiar with the prices of these goods, in May, 1883. He said: “ there was a difference of about ten per cent, in the market value of the goods of this sample, compared with the market value of goóds of prime quality. The goods of this sample were worth about ten per cent, less than prime goods.” There was other evidence of the same kind. The learned judge distinctly charged, that if the jury “believe that the goods like the sample shown to the plaintiffs,” were only worth $2.50 per ton, during the month of May, then the defendants are entitled to a verdict.

The judgment and order appealed from are affirmed, with costs.

Sedgwick, Oh. J., concurred.