Case Name: GRANT v. PRATT & LAMBERT
Court: New York Supreme Court, Appellate Division
Jurisdiction: New York
Decision Date: 1905-12-30
Citations: 97 N.Y.S. 29
Docket Number: 
Parties: GRANT v. PRATT & LAMBERT.
Judges: 
Reporter: West's New York Supplement
Volume: 97
Pages: 29–38

Head Matter:
GRANT v. PRATT & LAMBERT.
(Supreme Court, Appellate Division, First Department
December 30, 1905.)
1. Contract—Time of Breach—Evidence.
Evidence, in an action for breach of a contract to manufacture varnishes-according to plaintiff’s formula, stipulating for certain damages if it be breached within two years, and for greater damages if there be breach of it thereafter, held sufficient to sustain a finding that the breach was more than two years after the making of the contract.
2. Arbitration and Award—Agreement to Arbitrate—“Disputes.”
The right of plaintiff to recover the damages provided by his contract with defendants, if they cease to manufacture as therein stipulated, is not such a dispute as is contemplated by the clause of the contract providing that any dispute between the parties shall be referred to and decided by arbitrators, and that no action shall be brought by either party, except to enforce a decision of such arbitrators.
[Ed. Note.—For eases in point, see vol. 4, Cent. Dig. Arbitration and Award, § 28.]
3. Same—Effect as Defense.
A clause in a contract providing for arbitration of any dispute, and that no action shall be brought by either party, except to enforce a decision of such arbitrators, is no defense to an action to recover on the contract, in the absence of evidence that before commencement of the action defendants insisted on their right to arbitrate or took steps to carry out the agreement therefor.
[Ed. Note.—For cases in point, see vol. 4, Cent. Dig. Arbitration and Award, § 30%.]
Ingraham and Patterson, JJ., dissenting.
Appeal from Trial Term, New York County.
Action by W. Wallace Grant against Pratt & Lambert. From ,a judgment on a verdict for plaintiff, and from an order denying a motion for new trial, defendant appeals.
Affirmed.,
Argued before O’BRIEN, P. J., and PATTERSON, INGRAHAM, EAUGHE'IN, and CLARKE, JJ.
John C. Milburn, for appellant.
Edward M. Shepard, for respondent.

Opinion:
O'BRIEN, P. J.
I agree with the opinion of Mr. Justice INGRAHAM upon all the questions discussed, except as to the date of the breach, and from his views upon that subject I dissent. He states in his opinion that:
"The plaintiff was entitled to have the jury instructed that from the undisputed evidence the breach occurred within two years from the date of the contract."
. This is not in accord with my view of the evidence. The contract was dated January 26, 1893, and in my opinion the evidence shows that the breach did not occur prior to that time, but, on the contrary, that it occurred, as found by the jury, in the year 1896. ,
Upon the trial it was established that from the beginning of operations under the contract there were disagreements between the parties thereto; the plaintiff asserting that the defendant did not manufacture the hig-h-grade varnishes in the quantity required by the contract, and the defendant claiming that the varnishes, when made from plaintiff's formulae, were not of the quality represented, and did not satisfy the requirements of the trade. In answer to this the plaintiff in torn alleged, and introduced evidence to support the claim, that whatever imperfections existed in the varnishes were caused by the improper and defective implements furnished for its manufacture by the defendant, and by incompetent and unskillful operators employed,by it against plaintiff's protest.
Although this mutual dissatisfaction existed almost from the time the contract was executed, it appears, nevertheless, that until June, 1898, both parties were endeavoring to adjust the difficulties, and the defendant gave no intimation until that time that it would refuse to carry out the contract. That instrument provided that the plaintiff might require the defendant to furnish a monthly report of its operations under the contract, "to be verified by the oath of one of of its officers, and with this requirement it complied, not only prior to January 26, 1895, but also after that date. In March of the latter year it furnished such a verified report, which stated: •
"The following is the report of varnish made and sold under our agreement with you."
And to this was appended a detailed statement showing 298 gallons sold for a price exceeding $3 per gallon, and 1,505 gallons for a price less than $3 per gallon. On June 12, 1895, a further report was made by the defendant, verified by its treasurer, showing the sale of over 14,000 gallons of varnish, and containing the statement:
"We give below the report for March, April, and May, and the same has ,been placed to the credit of your account."
Other reports were introduced in evidence showing sales under the contract for the months of June, July, August, September, October, and November, 1895; and upon December 7th the defendant furnished to the plaintiff, at his request, a summary of the amount of business done during the .year under thé contract which showed the manufacture and sale of 3,726 gallons of varnish listed at above $3 per gallon, and of 25,817 gallons of varnish listed below $3 per gallon. Particular attention should be given to the statement by the defendant in this report that it proposed to live up to the contract, strictly. This statement was made many months after the two-year period; and certainly the plaintiff had the right to rely upon it, and to proceed upon the assumption that whatever differences might exist between him and the defendant would be amicably adjusted. Nor can the defendant complain if the jury accepted as true its written statement that it then regarded the contract as an existing obligation and proposed to carry out its requirements.
This situation remained unchanged during the first half of the following year. Further verified reports were furnished by the defendant on January 19, 1896, February 13th, March 11th, April 6th, and May 12th; all of them containing the statement that during the respective months the defendant had made and sold from plaintiff's formulas the amount of varnish specified. On June 12, 1896, the defendant, in answer to a letter from the plaintiff, wrote that it had "fully carried out its contract," had "made goods in precise conformity to the formula," and had "energetically pushed their sale, only to find that quantities were thrown back on its hands by purchasers." This was an assertion of performance, with a reiteration of the original complaint heretofore alluded to, and the letter further indicated that the defendant then considered the contract- in force, for it suggested that the plaintiff visit its factory and superintend the manufacture of the varnish. In June, however, according to plaintiff's testimony, he was requested by the defendant's treasurer, Andrews, to call upon him, and in that interview Andrews asserted in substance that, while the contract was still in force, he thought it could be broken, and he proposed to attempt to do so, as he did not regard it as an advantageous contract for the defendant to be burdened with. This, the plaintiff claims, was the first intimation given to him by the defendant that it would repudiate the contract, and he testified further that at this interview he was told by Andrews that the defendant had not made varnishes from his formulae since Andrews came into the premises, which was in April or May, 1895. It was shortly after this that the letter of June 25, 1896, referred to in the prevailing opinion, was written, which letter contained the statement that the last time the defendant had tried to make goods according -to the plaintiff's formulae was under his direct supervision in July, 1894. That assertion, as well as the statement made by Andrews, is, however, directly contradicted by the fact, already alluded to, that up to May, 1896, the defendant continued to furnish monthly verified reports, alleging that it was manufacturing goods under plaintiff's formule or under this contract. In addition to this it will be observed that, while the May report and those preceding it state that the goods theretofore sold had been manufactured from plaintiff's formule, the following report, dated June 12, 1896, recites that the goods sold during the month were made from plaintiff's formulae only "in part."
This evidence, considered together, might well have satisfied the jury, as it apparently did, that up to June, 1896, both parties were performing the contract to the best of their ability, but that in the last-mentioned month the defendant changed its position, broke the contract for the first time, and for the purpose of lessening its damages sought to shift the breach so that it might appear to be within the two-year period. Until after Andrews' threat in that month it continued sending plaintiff its sworn monthly statements, acknowledging its indebtedness to him under the contract; and the jury were justified in relying upon the verified reports, as well as upon the other evidence referred to, and in finding that the defendant, until June, was in good faith attempting to manufacture and sell plaintiff's varnishes in the quantity which the trade demanded, and that the breach occurred in that month, when Andrews, representing the defendant, substantially repudiated the contract in the interview with plaintiff, and thereafter wrote the letter of June 25th.
If my conclusion in this respect is right, then the plaintiff was entitled to the larger sum which became due after the expiration of the two-year period; and, the verdict being for this amount, the judgment entered thereon, and the order appealed from, should be affirmed, with costs.
LAUGHLIN and CLARKE, JJ., concur.