Case Name: William W. Mack et al., Appellants, v. Edward P. Snell, Respondent
Court: New York Court of Appeals
Jurisdiction: New York
Decision Date: 1893-11-28
Citations: 140 N.Y. 193
Docket Number: 
Parties: William W. Mack et al., Appellants, v. Edward P. Snell, Respondent.
Judges: 
Reporter: New York Reports
Volume: 140
Pages: 193–206

Head Matter:
William W. Mack et al., Appellants, v. Edward P. Snell, Respondent.
(Argued June 29, 1893;
decided November 28, 1893.)
The owner of materials who delivers them to others employed to manufacture them into goods, does not lose his property therein, nor is he precluded, by receiving the manufactured articles, from asserting his title, and at the same time resisting a recovery for the work on the ground that the workman has not performed his contract; and this, although the latter has furnished some material.
The parties entered into a contract, by the terms of which, plaintiffs agreed to manufacture for the defendant 1,000 pairs of pruning shears, to be in all respects like a sample furnished; defendant to furnish the rough castings for the handles, etc., and plaintiffs the blades. In an action to recover the contract price for the work, in which defendant set up as a counterclaim failure to perform and asked damages for the breach, these facts appeared: Defendant delivered the castings and plaintiffs manufactured the shears, but failed to conform to the sample, and in consequence, they were worthless. Defendant received a portion of the shears, but on discovery of the defect refused to receive the balance. The defect was not discoverable by inspection of the shears in their completed state, but only by taking one of them apart, and defendant did not discover it until all were manufactured. Held (O’Brien and Maynard, JJ., dissenting), that the contract was one of bailment, not of purchase and sale, and so; the title to the completed shears was at all times in the defendant, and this notwithstanding his refusal to receive them; that plaintiffs, having wholly failed to perform, were not entitled to recover anything for their work; that the acceptance of part of the shears and the omission to return them on discovery of the defect or to notify plaintiffs thereof did not preclude defendant from claiming non-performance, as he had the absolute right to retain them, and was neither bound to inspect them or to notify plaintiffs of his objections.
Also, held, that defendant was entitled to recover upon the counterclaim as damages, the difference between the price agreed upon for plaintiffs’ work and the value of the shears had they been made according to contract.
Appeal from judgment of the General Term of the Supreme Court in the fifth judicial department, entered upon an order made June 23, 1892, which affirmed a judg ment in favor of defendant entered upon the report of a referee.
This action was brought to recover §699 for labor performed and materials furnished by plaintiffs in the manufacture of 1,000 pruning shears, under a contract with defendant.
By the terms of said contract defendant was to furnish the rough castings for the handles, etc., and plaintiffs the blades, and complete their manufacture so as to conform to a sample furnished. The answer set up as a counterclaim that plaintiffs warranted the shears, and that they were imperfectly made, and asked damages for breach of the warranty.
The referee found that the shears manufactured were not like the sample, and were worthless, and directed judgment in favor of defendant for the difference between the value of the shears, if made according to contract, and the price agreed to be paid plaintiffs for the manufacture.
The facts and the findings of the referee, so far as material, are stated in the opinions.
Henry M. Hill for appellant.
Assuming that these findings were correct, and, therefore, that the work of the plaintiffs was not performed in accordance with the contract, the plaintiffs were, nevertheless, entitled to recover, for the reason that the defendant waived the defects. (Read v. Randall, 29 N. Y. 358 ; G. M. Co. v. Allen, 53 id. 515, 519 ; Dounce v. Dow, 64 id. 411; Mason v. Smith, 130 id. 474, 480 ; C. I. Co. v. Pope, 108 id. 232, 236; Studer v. Bleistein, 115 id. 316, 325; Pierson v. Crooks, Id. 539; Norton v. Dreyfuss, 106 id. 90; 2 Schouler on Pers. Prop. § 381; Leavenworth v. Packer, 52 Barb. 132; Pomeroy v. Shaw, 2 Daly, 267; Tiedeman on Sales, § 115 ; Brown v. Foster, 108 N. Y. 387; Beach v. Kidder, 8 N. Y. Supp. 587; Knickerbocker v. Gould, 115 N. Y. 533 ; Quincey v. White, 63 id. 370.) Defendant was not entitled to recover an affirmative judgment. (Edwards on Bailments, § 410; Story on Bailments, § 423 ; Higgins v. Murray, 73 N. Y. 252, 254; Stewart v. Stone, 127 id. 503, 505; Benjamin on Sales, §§ 610, 673; Sedg. on Dam. § 759; 2 Schouler on Pers. Prop. § 3281; D. Co. v. Harding, 49 N. Y. 321; Studer v. Bleistein, 115 id. 316, 324; Zabriskie v. C. V. R. R. Co., 131 id. 72, 18.)
Heman W. Morris for respondent.
There has been no acceptance of the shears by the defendant, and he has never waived a substantial performance of the contract by the plaintiffs. (Harris v. Rathburn, 2 Keyes, 312; Van Schaick v. Sigel, 60 How. Pr. 122; F. C. Co. v. Metzger, 118 N. Y. 264; Gurney v. A. & G. W. R. R. Co., 58 id. 358; Briggs v. Hilton, 99 id. 525.) The contract between plaintiffs and defendant was essentially one of bailment in which defendant delivered his goods to plaintiff to have labor performed on them and materials added thereto, when the same goods were to be returned to him without loss of identity and without substantial change. (Pierce v. Schenck, 3 Hill, 28.) Assuming that the contract was in legal effect an executory contract for the sale of the shears, still, in no possible aspect of the case, are plaintiffs entitled to recover. ( White v. Miller, 71 N. Y. 118; Van Wyck v. Allen, 69 id. 61; Hawkins v. Pemberton, 51 id. 198 ; Muller v. Eno, 14 id. 597; Norton v. Dreyfuss, 106 id. 94.) Defendant was properly allowed the damages which he sustained from plaintiffs’ breach of the contract, by way of counterclaim. (Muller v. Eno, 14 N. Y. 597; Cary v. Gruman, 4 Hill, 625; Dillon v. Anderson, 43 N. Y. 237.)

Opinion:
Andrews, Ch. J.
The referee found and both parties concede that the contract between the parties was one of bailment and not of purchase and sale. The consequence follows that the title to the completed shears was at all times in the defendant. The materials added by the plaintiffs in performing their contract became by accession, when joined with the material furnished by the defendant, the property of the latter, he having furnished the principal part, the part furnished by the plaintiff being accessorial merely. (Pierce v. Shenck, 3 Hill, 28 ; Foster v. Pettibone, 7 N. Y. 435 ; Merritt v. John son, 7 Johns. 473.) When, therefore, the plaintiffs delivered to the defendant in January, 1884, one hundred and forty-six pairs of completed shears, it was a delivery to the defendant of his own property, and the title to the undelivered shears,, completed in March, 1884, was also in the defendant, notwithstanding his refusal to receive them. The plaintiffs agreed to manufacture the shears, using the handles furnished by the defendant, for the sum of seventy-four cents per pair, to.be made in all respects like the sample. The referee found that the shears manufactured were not like the sample, but. were defective by reason of not conforming thereto, whereby they were useless and of no value, and that the defects were not discoverable by inspection of the shears in their completed state, hut that by unscrewing the nut which holds the parts, of the shears together and separating them, the defects could be seen. It is also found that the defendant did not discover the defects in the shears until all the shears had been manufactured and were ready for delivery.
Upon these findings, which are supported by evidence, no-action lies in favor of the plaintiffs to recover for work, labor' or materials. They wholly failed to perform their contract in its true scope and meaning. It is plain that under the general rule no compensation can he demanded by the plaintiffs. The-consideration upon which the defendant's promise rested has-never been furnished. The defendant, it is true, has title to the shears, hut this is because he owned the materials out of which they were made; the articles he contracted for have never been furnished. In place of these were furnished articles. useless and valueless because of defects in construction not existing in the sample shears. The claim is made, however, that the plaintiffs are entitled to recover on the contract, not on the ground of performance, but by reason of the omission of the defendant to reject and return the shears delivered in January, 1884, or to notify the plaintiffs that they did not conform to the contract. ' The silence of the defendant, it is claimed, operated in law as an acceptance of the shears, delivered, and precludes him from claiming that those subse - quently manufactured of the same kind were defective. The plaintiffs seek to apply the principle governing executory contracts for the manufacture and sale of chattels of a specified kind, subsequently delivered by the vendor in performance of the contract. In such cases the law imposes upon the vendee the obligation to make examination for the purpose of ascertaining whether the articles delivered conform to the contract, and if he fails to make inspection within a reasonable time, he will, in the absence of fraud or express warranty, be concluded from afterwards setting up the existence of defects which an inspection would have disclosed. This rule has, we think, no application to a case like this. In the case of vendor and vendee under an executory contract, on delivery of the goods the title passes conditionally only to the vendee. It is necessary to the proper protection of the vendor that the vendee, if he rejects the goods and thereby throws them back upon the vendor, should act with reasonable promptness. It would be unjust to permit him to retain the goods after opportunity for inspection, giving no sign, and subsequently claim that they were not according to the contract. He is bound to express his dissent, and thus enable the vendor to protect his interests. The reason upon which the doctrine governing executory contracts for the sale of chattels subsequently delivered rests, is inapplicable to contracts for the manufacture of articles from materials furnished to the manufacturer by the other party to the contract. The title to the things manufactured is in the owner of the materials, whether they conform to the contract or not. The claim of the other party is for work and labor. The employer may await the presentation of the claim of the other party before acting. His retention of the articles manufactured is the exercise of an absolute right, and he is neither bound to inspect the articles nor to notify the other party of his objections. The omission to object may, in many cases, be material evidence on the question of performance, and in case of continuous deliveries of articles manufactured from time to time, the duty to speak after knowing the defects might arise. But in the present case the findings exclude the inference of bad faith on the part of the defendant, or that, knowing that the shears delivered were defective, he remained silent and permitted the plaintiffs to manufacture the others. The fact that the defendant retained the shears delivered and did not offer to return them after he discovered that they were defective, is no answer to the defense that the plaintiffs had not performed their contract. The defendant's possession followed the title, and the plaintiffs in no event were entitled to have the shears delivered returned to them. The owner of real property who has employed another to erect a house on his land, does not, by taking possession of the house and occupying it, preclude himself from denying that the builder has performed his contract. (Smith v. Brady, 17 N. Y. 173.) In like manner the owner of materials who employs another to manufacture them into garments or chattels of any description, does not lose his property in the materials, nor is he precluded by receiving the manufactured articles from asserting his title thereto, and at the same time resisting a recovery for the value of the work, on the ground that the workman had not performed his contract.
In respect to the judgment for the defendant on his counterclaim, we perceive no legal error. It represents the value of the contract to the defendant in case the plaintiffs had performed, measured by the difference between the price agreed to be paid by the defendant for the shears, and their market value if made according to the contract. The claim that as the title to the shears manufactured was in the defendant, the value of the materials should have been deducted, is not presented by any finding or exception, and it cannot be affirmed upon this record that the materials, in the condition in which they then were, were of any value to the defendant. The exception to the finding of the referee that there was an express warranty that the shears should conform to the sample, which warranty would survive an acceptance of the shears, need not be considered. The facts found show that the plaintiffs did not perform their contract and were not entitled to recover thereon. The result reached would not be affected by an error, if any, in characterizing the plaintiffs' contract to make the shears according to the sample as an express warranty which would survive an acceptance of the shears.
We find no error in the record and the judgment should be affirmed.