Case Name: George B. Hand, Appellant, v. Gas Engine and Power Company and Charles L. Seabury & Company, Consolidated, Respondent
Court: New York Court of Appeals
Jurisdiction: New York
Decision Date: 1901-05-14
Citations: 167 N.Y. 142
Docket Number: 
Parties: George B. Hand, Appellant, v. Gas Engine and Power Company and Charles L. Seabury & Company, Consolidated, Respondent.
Judges: 
Reporter: New York Reports
Volume: 167
Pages: 142–153

Head Matter:
George B. Hand, Appellant, v. Gas Engine and Power Company and Charles L. Seabury & Company, Consolidated, Respondent.
(Argued March 29, 1901;
decided May 14, 1901.)
1. Contract—Advertising—Allowance on Purchase. An agreement. for advertising, to be paid for by the deduction of a certain sum from the contract price of launches provided that price reaches a designated amount, imports a covenant on the part of the advertiser to deal with the other party to the advertising contract in the sale of such launches on exactly the same terms as it offers to other customers.
3. Construction—Meeting of Minds. A contract for the purchase of launches to be paid for in cash is not invalid on the ground that the minds of the parties did not meet, merely because the purchaser, whose identity and purpose were not known to the vendor, intended to pay part of the price with the outstanding obligation of the vendor on an advertising contract, since payment to a vendor in his own obligations, is a payment in cash.
3. Refusal to Perform. A recovery for the agreed price of advertising may be had in money under a contract to pay for such advertising only by an allowance on the price in case of a certain purchase, where the advertiser after an agreement for such purchase had been made at a cash price without his knowing the identity of the purchaser, on his subsequently learning the purchaser’s intention to pay part in the obligation for advertising refuses to complete the sale.
Hand v. Gas Engine & Power Co., 34 App. Div. 354, reversed.
Appeal from an order of the Appellate Division of the Supreme Court in the first judicial department, entered November 16, 1898, reversing a judgment in favor of plaintiff entered upon a verdict directed by the court and granting a new trial.
The nature of the action and the facts, so far as material, are stated in the opinion.
Charles De Hart Brower for appellant.
An offer of sale was made by defendant, accepted by plaintiff, and a contract price agreed upon. (Dustan v. McAndrew, 44 N. Y. 72.) The defense that the making of an agreement to sell at a special contract price was fraudulently induced, was not within the issues raised by the pleadings. (Dabney v. Stevens, 10 Abb. [N. S.] 39; Clark v. House, 16 N. Y. Supp. 777 ; Beach v. Cooke, 28 N. Y. 508; Wright v. Delafield, 25 N. Y. 266; Romeyn v. Sickles, 108 N. Y. 650 ; Day v. Town of New Lots, 107 N. Y. 148 ; Southwick v. F. Nat. Bank, 61 How. Pr. 164 ; Code Civ. Pro. § 500 ; Wood v. Amory, 105 N. Y. 278.)
E. P. Johnson for respondent.
If there was any contract at all, it was a contract specifically providing for the payment of the full price in cash. (Delaume v. Agar, McGloin [La.], 98.)

Opinion:
Cullen, J.
The complaint alleged that Elwood S. Hand, the plaintiff's assignor (to be hereafter called the plaintiff), on October 31st, 1900, entered into the following contract in writing with the Gas Engine and Power Company, the defendant's predecessor (to be hereafter called the defendant):
"Hew York City, Oct. 31 sí, '90.
" Mr. E. S. Hand, Auditorium Building, Chicago, Ills.:
" Dear Sir.-—-In consideration of the insertion of an advertisement to occupy three pages (the copy for which is attached hereto) in the book descriptive and illustrative of the Auditorium Building, Chicago, we promise to allow and deduct from our contract price for naphtha launches, providing said price amounts to $5,000 or more, the sum of eleven hundred and fifty-five dollars ($1,155), on or after publication and delivery to us of twenty-five books containing our advertisement. In the event of said purchase not being made good, we are to' be absolutely acquitted of any charge for the advertisement herein provided. It is also agreed that we are to be furnished without extra charge with the original drawings prepared for the illustrations, as also electrotypes of same. The copy of plates and written matter to be submitted to us before going to press. The order for the launches above referred to must be given us at least three months prior to date for delivery of launches. Yerv respectfully,
" GAS EHGIHE & POWER CO.,
" Jno. J. Amory, Secy. & Treas.
"Accepted Oct. 31st, 1890. E. S. Hand;" it also alleged the performance of the contract by the plaintiff; that on the 6th day of December, 1897, the defendant entered into an agreement to sell to the plaintiff two naphtha launches for the sum of-five thousand dollars; that thereupon the, plaintiff duly tendered to defendant said contract and the sum of $3,845 in money in payment of said contract price; that the defendant refused to accept the sum or to deliver the launches. The plaintiff demanded judgment for the sum of $1,155 due on the advertising contract. The defendant answered, admitting the execution of the contract of October, 1890, and its performance by the plaintiff, but .denied making the agreement of December, 1897, for the sale of the launches, and also the allegations of the complaint in respect to the plaintiff's tender of payment. It did not plead the Statute of Frauds against the agreement of 1897, nor did it allege that said agreement was obtained by fraud. On the trial the plaintiff proved the making of an oral agreement for the sale of the two launches for the sum of $5,000 in cash. The negotiations for this sale were had between the plaintiff's assignor and John J. Amory, the president of the defendant, who were the same persons who made and executed the contract of 1900, that instrument being prepared by Mr. Amory. In these negotiations bland did not disclose that he was the person with whom Amory had made the agreement of December, 1900, or that in bargaining with him he intended to apply that contract in payment for the launches. Amory admitted making the oral agreement for the sale of two launches, but testified that it was to be for cash, and that he did not at the time identify the proposed purchaser as being the person with whom he had made the advertising contract in 1900. He further testified that in the negotiations Hand gave his name as Stokes. The evidence discloses no real controversy as to the other issues in the case, the refusal of the defendant to deliver the launches and the tender by the plaintiff of the purchase money. The trial court directed a verdict in favor of the plaintiff. The Appellate Division, by a divided court, reversed this judgment and ordered a new trial. '
The ground on which the prevailing opinion below proceeds is that the minds of the parties never met as to the sale for the launches, and that there was no valid agreement (or at least that the question was one of fact for the jury), because the defendant expected to receive actual money in payment, while the plaintiff intended to set off the amount due him on the advertising contract. To ascertain the validity of this objection to the recovery in the trial court it is necessary to first determine what were the rights of the plaintiff under the contract of 1890. If by this agreement the defendant was under no obligation to sell to the plaintiff, or was at liberty to put such prices on its goods as it saw fit, it is plain that the agreement for compensation to the plaintiff was entirely illusory and without possible value. Under such a construction it would not secure payment to the plaintiff of a dollar or a dollar's worth. The agreement must be interpreted reasonably, and to give it any effect it must be construed as importing a covenant on the part of the defendant not only to deal with the plaintiff, but to deal with him on exactly the same terms as it offered to other customers. To a certain extent this agreement was in the nature of a due bill payable in goods. In Vance v. Bloomer (20 Wend. 196) it is said of such an instrument: ic The due bill contains an acknowledgment that A (the payee) has paid him in advance for the amount in goods therein expressed; and a promise is implied on the part of the merchant that whenever A shall call at his store and present the due bill he will deliver to him such articles as he shall select out of the goods on hand. The store of the merchant is the place of payment; and no action can be maintained on the due bill until A shall call at the store of the merchant for the goods, and the merchant shall refuse to deliver such goods as A shall select. Indeed, A is to be treated as other customers are to be treated. The merchant is also required to deliver the goods at the market price, and has no right to charge them at a higher price." The plaintiff had performed his part of the advertising contract years before the negotiations for the purchase of the launches. The amount specified in the contract was, there- • fore, at the time an existing indebtedness of the defendant, and a payment to a vendor in his own obligations is a payment in cash. (Foley v. Mason, 6 Md. 37.) The agreement also required that the plaintiff should purchase goods to the amount of at least $5,000, and he was, therefore, obliged to pay $3,845 in addition to the amount due him for advertising. This he tendered in money, and in law his turning in the advertising contract and payment of the remainder in money would have been a payment of $5,000 in cash. Had the plaintiff actually paid the $5,000 entirely in money, the instant after he had made the payment he could, under the terms of his contract, have demanded repayment to him of the sum of $1,155, and in case of refusal have recovered therefor. It is said that the minds of the parties did not meet, but what was the subject as to which they were not in accord ? It was not as to the price of the launches, for concededly the defendant-was willing to sell them for $5,000; nor as to the terms of payment, for also, concededly, the payment was to be in cash. Where the parties were apart was that the defendant did not expect to be compelled to fulfill its own obligation. Was this a material consideration % It is said by the learned court below that the plaintiff by suppressing his intention to turn in the contract has been allowed more upon it by the defendant than he would have been allowed had his full purpose been disclosed. This may be the fact, but it would not have been the fact if-the defendant had intended to live honestly up to its agreement. That agreement was to pay $1,155, true not in money, but in goods; but still in goods at the same price as that for which they would have been sold to any other party.
There must be some standard at which the plaintiff might require goods to be sold to him,' or otherwise, as already said, he was entirely without means of obtaining compensation for his services. Appreciating this, it is suggested that the list or catalogue price of the defendant's launches should be such standard. It would be sufficient to say that the written agree ment does not refer to list price, but to contract price. Beyond this it appears by Amory's own testimony that in ordinary sales deductions were made from the list prices, arid in the catalogue it is stated that special terms will be made for purchases amounting to $5,000 or more. It is urged that the plaintiff has taken an inequitable advantage of the defendant through the latter having forgotten the outstanding contract, but there appears to be on the other hand quite as little equity in» the defendant's course of conduct.' When the dispute arose about turning in the contract as payment, the defendant first offered to receive it jirovided the price of the launches was increased to $5,900, which in effect would allow-the plaintiff $255 for the $1,155 it owed him, and finally offered to receive it on a sale .at $5,500, thus allowing for the contract $655. We do not say that the plaintiff could have held the defendant to a bargain that he had procured by fraud, but no such defense is pleaded. The failure of the jilaintiff to call attention in its negotiations with the defendant to the outstanding contract, which probably the defendant's officer had forgotten, may be inconsistent with the highest standard of honor, but it did not constitute fraud in law, because he was under no obligation to state the fact. (Wood v. Amory, 105 N. Y. 278.) Indeed, it may be said that the defendant seems to have been fully as alert and keen to satisfy its obligation for the smallest possible sum as the plaintiff has been to obtain the most, he could for it.
The order of the Appellate Division should be reversed and the judgment entered on the verdict at the trial court affirmed, with costs.