Case ID: abb-pr-ns_13/html/0135-01.html
Source: Caselaw Access Project
Author: {"author": "Earl,", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

HADDEN against DIMICK.
    Reversing 31 How. Pr., 196.
    
      Commission of Appeals;
    
    January, 1872.
    Cause of Action.—Rescission of Contract.— Estoppel in Pais.
    Defendant being bound to consign for sale all the goods he manufactured, to plaintiffs, but not being bound to manufacture, he refused to manufacture unless plaintiffs would make a different agreement with him. They consented, and made another agreement, but failed to keep it, whereupon defendant sold his goods to other parties. Held, that plaintiffs had no cause of action, since the first contract was abrogated by the second, and plaintiffs having failed to keep that, defendant had a right to rescind.
    
      Defendant being bound by a sealed contract to consign all the goods he manufactured to plaintiffs, they gave him oral permission to consign to other parties, and he acted on the permission. Held, that plaintiffs could not be allowed to recall it or to sue him for a breach of contract.
    William A. Hadden and others, composing the firm of Hadden & Co., sued Jeremiah W. Dimick, in the supreme court, to recover damages for the violation of the following agreement:
    “It is hereby agreed between J. W. Dimick and Hadden & Co., that the said J. W. Dimick shall, for the three years next ensning, . . . consign, exclusively to the said Hadden & Co., all the blankets of his manufacture to be sold by them, and that the commission to be allowed Hadden & Co. for such sales shall be seven and one-half per cent., to cover the guaranty of debt and all charges (including insurance from fire) to which the goods may be subject, after being received in store. J. W. Dimick,
    “New York, June 12, 1861. Haddeh & Co.”
    The breach of the contract complained of by the plaintiffs was the sale to the United States government of 14,874 blankets, at three dollars and seventy-five cents per blanket, without consigning them to the plaintiffs, and the refusing to pay them a commission thereon.
    For a defense, it was set up that the sale to the United States was made with the assent of the plaintiffs, and under a new agreement between the parties, which plaintiffs had failed to keep. The facts, as proved by defendant to support his defense, are given in the opinion.
    The court directed a verdict for plaintiffs, and ordered the hearing upon the case and exceptions to be had in the first instance by the court at general term. Defendant’s motion for a new trial on the judge’s minutes was refused, and defendant appealed therefrom to the court at general term. A t the general term defendant’ s exceptions were overruled, the order denying a new trial was affirmed and judgment ordered for plaintiffs on the verdict. (Reported in 31 Row. Pr., 198.) Defendant appealed to the court of appeals.
    
      W. G. Choate, for defendant, appellant.
    I. The plaintiffs’ consent that defendant might manufacture the blankets in question, for the United States, and not consign the same to them for sale under the agreement, is a defense to this action. If such consent were given the plaintiffs would clearly not be entitled to their commissions as such, because the sale would not be within the agreement.
    II. In this, as in all other contracts for service on the one side and compensation on the other, the compensation is to be regarded as substantially an equivalent for the stipulated service. ,
    III. Such new agreement, if made, or consent, if given, is clearly sufficient in law to operate as a waiver of the agreement so far as the goods are concerned. The principles of estoppel in pais apply.
    
      John Slosson, for plaintiffs, respondents.
    I. The contract between the parties was a valid and binding one. It was not void for want of mutuality, nor because it was acknowledged by one only of plaintiffs’ firm (Gram v. Seton, 1 Hall, 262; Renwick v. McAllister, 5 N. Y. Leg. Obs., 16; Worrall v. Munn, 5 N. Y. [1 Seld.], 229; Smith v. Kerr, 3 N. Y. [3 Comst.], 144; Skinner v. Dayton, 19 Johns., 513; Cady v. Shepherd, 11 Pick., 400; Fishmongers’ Co. v. Robertson, 5 M. & Gr., 131; 1 Pars. on Cont., 373; L’Amoreux v. Gould, 7 N. Y. [3 Seld.], 349). Nor was it invalid as being in restraint of trade (Palmer v. Stebbins, 3 Pick., 188; Alger v. Thacher, 19 Id., 51, and authorities cited in 2 
      Pars. on Cont., 254, note; Dunlap v. Gregory, 10 N. Y. [6 Seld.], 241; Van Marter v. Babcock, 23 Barb., 633; Holbrook v. Waters, 9 How. Pr., 335). The contract was never abrogated nor rescinded, nor was there any evidence of a new agreement.
   Earl,

Commissioner.—As the court refused to submit the case to the jury and ordered a verdict for the plaintiffs, it is sufficient to require a new trial, that there was some evidence tending to establish the defense which ought to have been submitted to the jury ; and, in considering this case, I will assume the facts to be substantially as testified to by the defendant.

Under the agreement of June 12, the defendant was not bound to manufacture any blankets ; but all he did manufacture, he was bound, during the three years, to consign to the plaintiffs for sale.

The plaintiffs, although they did not expressly agree to sell, were impliedly bound to sell all the blankets which should thus be consigned to them, and for their services, charges and insurance, and for their guaranty of payment for the goods sold, they were to have a commission of seven and one-half per cent.

Under this agreement the plaintiffs were defendant’s factors, and in making the sales of the goods were, like other factors, bound to follow his instructions. They were not bound to make him any advances nor to pay him the cash when the goods were sold upon credit, but in such case they were simply bound to guaranty the credit of their customers.

Under this agreement the parties went on until December, 1861, when, the sales being dull, the defendant being short of money, and the plaintiffs refusing to make advances, he concluded to stop manufacturing. He, therefore, did stop until August, 1862, when he learned that the government of the United States were giving out contracts for blankets. He then went to the plaintiffs and proposed to them to start his looms again, and take a contract from the government if they would become his sureties in the contract, and take the government pay and pay him cash as he delivered the goods, and he would allow them a commission of seven and one-half per cent. This proposition plaintiffs accepted, and the terms were thus settled, upon which the defendant would again enter upon the manufacture of blankets.

The first effort of the parties, in pursuance of this agreement, to procure a contract from the government failed. A second one was more successful. The defendant, with the aid of the plaintiffs’ agent, obtained a contract, and after he had signed and become bound by the same, and had entered upon the performance thereof, and for the purpose had incurred large expenses, the plaintiffs repudiated the agreement, refused to become his sureties, and declined to pay him cash for the goods as he should then deliver them to the government.

The defendant then procured other sureties, and performed his contract with the government. And yet it is claimed by the plaintiffs that they are entitled to their commissions upon the blankets as if they had been consigned to them under the original written agreement. I cannot assent to this claim. Under the agreement the defendant was not bound to manufacture any blankets. It was always in his power to dictate the terms upon which he would commence or continue the manufacture. He had the right to say that he would not manufacture unless they would sell for five per cent., or unless they would make him advances or become his sureties. This new agreement imposed upon or exacted from the plaintiffs, would in no proper sense be a violation on the part of the defendant of the old one, because under that he was not bound to manufacture. It would take the goods manufactured under it, out of the old agreement and create new rights and relations between the parties. Suppose the defendant had refused to manufacture any blankets unless the plaintiffs would sell them for five instead of seven and one-half per cent., and the plaintiffs had assented to this, and the defendant had then gone on and consigned the goods to them for sale. Could they have charged seven and a half per cent. ? Clearly not. If nothing else forbade it, the law of equitable estoppel in pais would.

I am then of opinion, that after this new agreement was made, and in pursuance of it the defendant had entered into a contract with the government and commenced its execution, and the blankets thus to be manufactured had been taken out of the old agreement, they could not again be brought within its scope, by the repudiation of the agreement on the part of the plaintiffs.

But there is another reason for a new trial, still more obvious. There was, at least, evidence tending to show that the plaintiffs refused finally to have anything to do with the government contract, and that they consented that the defendant might manufacture, sell and deliver the goods to the government. In this aspect of the case, they waived their right to the delivery of the goods to themselves, under their contract. After this waiver had been acted upon by the defendant, upon what principle of law or justice could the plaintiffs claim their commissions ? A party entitled to the performance of a sealed contract may waive its performance by parole, and after he has thus waived it, he is estopped from claiming a non-performance induced by his own conduct (Fleming v. Gilbert, 3 Johns. Ch., 528).

I am, therefore, of the opinion that the judgment should be reversed and new trial granted, costs to abide event.

Judgment accordingly.