Case Name: Frank E. Foote vs. Olin H. Smith & another
Court: Massachusetts Supreme Judicial Court
Jurisdiction: Massachusetts
Decision Date: 1883-11-30
Citations: 136 Mass. 92
Docket Number: 
Parties: Frank E. Foote vs. Olin H. Smith & another.
Judges: 
Reporter: Massachusetts Reports
Volume: 136
Pages: 92–93

Head Matter:
Frank E. Foote vs. Olin H. Smith & another.
Hampden,
Sept. 25. —
Nov. 30, 1883.
Field & W. Allen, JJ., absent.
If a broker makes a contract for A. to sell and deliver to B. a certain quantity of wheat, at any time, during a year named, which A. may select, at a fixed price, and agrees that if, by a rise in the price of wheat, more margin shall be required, he will not sell the wheat, but will draw upon A. for such an amount as is necessary to carry the wheat, the broker has no right to close the contract without drawing upon A., although A. at the time is out of the State, and has made no provision for the payment of the draft, of which fact the broker has knowledge.

Opinion:
Holmes, J.
The defendants, who were brokers, made a contract for the plaintiff to sell and deliver to a third person 50,000 bushels of wheat, at any time, during the year 1882, which the plaintiff might select, at a fixed price. The plaintiff's evidence was, that the defendants agreed with him " that if, by a rise in the price of wheat, more margin should be required, they would not sell him out, but would draw upon him for such an amount as was necessary to carry the wheat." A little later, the plaintiff being out of the State, the defendants, after some communication with him, closed the contract without drawing upon him, and this action is brought to recover damages for their alleged breach of contract. The jury were instructed that, " if the agreement was that the defendants would draw on the plaintiff for such a margin as might be needed, and the plaintiff left his residence, and went out of the State, and left no provision for the payment of the draft, and the defendants were apprised of this, and had reasonable cause to believe that a draft would not be honored or paid, the defendants were not bound to draw."
The fair effect of the plaintiff's evidence is, that the defendants' right to select the time of delivery in place of the plaintiff, and to close the contract, was made conditional upon their drawing and his failure to honor the draft. It does not appear that the plaintiff agreed to pay when drawn upon, or that he had gone further than to stipulate for an opportunity to do so. But even if he had, he was only bound to pay when a demand was made upon him in the form of a draft, and therefore,, in any event, the first act was to come from the defendants. It follows that the plaintiff could not be put in default, and the condition satisfied, except by doing that act. No doubt he might have waived it, and have authorized the defendants to sell without drawing, but that effect cannot be attributed, as matter of law, to facts and conduct consistent with his ability and intention to pay. Kenerson v. Henry, 101 Mass. 152.
Gr. Wells Sf H. W. Ely, for the plaintiff.
G. M. Stearns, (E. II. Lathrop with him,) for the defendants.
Exceptions sustained.