Court Opinion

ID: 9450105
Source: CourtListenerOpinion
Date Created: 2023-08-04 16:35:18.733273+00
Date Added: 2024-06-11T17:32:09.049790
License: Public Domain

HAYS, Circuit Judge
(dissenting):
In dashing to the rescue of the plaintiff corporation as if it were a maiden in distress the majority has trampled on the facts as found by the lower court and on some well established propositions of law. The majority opinion absolves the plaintiff from a clause providing for limitation of liability which plaintiff accepted in a signed contract. And this in a situation involving two corporations dealing with each other at arm’s length where there is no reason to believe that either of the parties had any particular advantage in bargaining. Far from being a case demanding a sympathetic effort to correct an inequity born of unequal bargaining power, the widowed mother and the slick book salesman, or the simple farmer buying the lightning rods, this is the case of a corporation with a plant in New York and a subsidiary in Alabama ordering to its own specifications a machine to be made especially for its use and costing nearly $15,000. Surely parties who are so evenly matched can be left to make their own contracts without the help of the judges of the Second Circuit.1
There is no public policy either national or state against the inclusion in a contract of a clause limiting liability. There is nothing shocking or outrageous about the clause to which the plaintiff agreed in the present case. A manufacturer making a machine for a special purpose to a buyer’s specifications may quite properly believe that he requires protection against unforeseen aspects of possible liability. There is nothing in the law as it has been applied in the past which would prevent such a manufacturer from limiting liability to return of the purchase price.
The majority attempts to extricate the plaintiff from the position into which it got itself by making a new finding of oral modification. On September 24, 1957, when delivery was already long overdue, the plaintiff telegraphed to the defendant saying, in effect, “Either deliver my tooling machine or I’ll send back the welder and get my money back.” 2 The defendant replied by saying it would expedite delivery of the tooling machine. It is in this exchange that the majority professes to find a modification of the original signed contract, although obviously all that happened was that defendant asked plaintiff to waive for the time being its right to return the welding machine and get its money back. And this is exactly what plaintiff did.
To make out an oral modification of the written agreement the majority finds that there was an exchange of promises by the parties. In the first place, says the majority, the plaintiff’s telegram was an offer of a promise to forbear returning the welding machine if the defendant would promptly deliver the tooling ma*11chine and make it operational at plaintiff’s plant. Not only is this analysis of plaintiff’s telegram the most transparent fiction but of course if the plaintiff’s “offer” were accepted according to its own terms, plaintiff’s promise would be unenforceable because the defendant would not be required to do anything he was not already under an obligation to do. Ripley v. International Rys. of Cent. America, 8 N.Y.2d 430, 441, 209 N.Y.S.2d 289, 295, 171 N.E.2d 443, 447 (1960); Pershall v. Elliott, 249 N.Y. 183, 163 N.E. 544 (1928); 1 Williston, Contracts § 142 (Jaeger 3d ed. 1961).
The chief objection to the oral modification theory is that the exchange of promises never occurred in fact. The plaintiff’s telegram was not a promise or even an offer. There is not the slightest ground for stating that defendant ever promised to repair the tooling machine at plaintiff’s plant. Indeed plaintiff never made any claim of such a promise in its complaint, in its testimony, as that testimony is reflected in the court’s opinion, or in its brief. The promise which plaintiff claimed it relied on was that: “[defendant] would expedite delivery of the tooling equipment and apparatus, and that it would have the said equipment completed and functioning at the plaintiff’s place of business within a reasonable time thereafter.”
Even as to this promise, which would be clearly insufficient to support a coun-terpromise to refrain from resorting to the remedy provided by the contract, the lower court found as a fact that, if made at all,3 it was made by a representative of defendant who “had no authority to amend the contract or any of the provisions of the conditions of sale.”
The “conditions of sale” in the contract provide that: “No change in or deviation from the terms, provisions or conditions of this quotation shall have any effect unless such change or deviation shall have been approved in writing by an officer of the Company.”
The trial court found that: “No written approval by any officer of defendant was given for any such change.”
Section 15-301, subdivision 1, of the New York General Obligations Law, McKinney’s Consol.Law, c. 24-A provides:
“A written agreement or other written instrument which contains a provision to the effect that it can*12not be changed orally, cannot be changed by an executory agreement unless such executory agreement is in writing and signed by the party against whom enforcement of the change is sought or by his agent.”
The case against an oral modification which had the effect of eliminating the limitation on liability is, then, in summary:
(1) There is nothing whatever to support the majority’s conclusion that the defendant made an enforceable promise which would constitute a modification of the written contract.
! (2) If any promise at all was made it was made by a representative of defendant who was not authorized to agree to any modification of the agreement.
(3) In any event an oral modification of the agreement would have been wholly without effect under the New York statute.
This court should reverse the decision below and order the entry of judgment for the defendant on both plaintiff’s claim and defendant’s counterclaim.

. The fact that a later letter from plaintiff to defendant, referring to the contract, was apparently, according to the trial court, “either dictated or approved” by plaintiff’s attorney may suggest a further reason wby plaintiff does not need the protection of this court.

. For the exact text of the telegram, see footnote 2 to the majority opinion.

. The trial court found that even if there was such an agreement as plaintiff alleged, it constituted no waiver either express or implied of “any of the printed conditions of sale.” In the light of this conclusion the court did not consider it necessary to make a definitive finding as to whether there was, in fact, such an agreement. The court does say, however:
“The alleged waiver is not mentioned in any of the written communications from plaintiff to defendant. The McQuil-lan letter of January 10, 1958 (Ex. 35) does not mention any waiver of any of the conditions of sale. It does not allege any new agreement.” * 3: * * *
“Nor was there any mention of any alleged new agreement or of any waiver of the conditions of sale, in Exhibit 39, plaintiff’s letter of February 4, 1958. If there had been any new agreement between the parties involving any waiver by defendant of the conditions of sale it would have been mentioned. Apparently plaintiff’s attorney either dictated or approved that letter before it was sent. A line at the end of the letter would so indicate. The only contracts mentioned in the letter dated February 4, 1958 (Ex. 39) are those based on defendant’s quotations and plaintiff’s orders of January 1957. No new contract is claimed.”
This language is equivalent to a finding of fact that there was no such agreement.
The existence of such an agreement was a factual question depending on the statements and representations of the parties in their conversations and written correspondence. Judge Eeibell’s opinion states that the testimony was in conflict:
“The alleged agreement set forth in paragraph Tenth of the amended complaint according to plaintiff’s contention was made by defendant’s Mr. Spolian-sky, in a telephone conversation between him and plaintiff’s Mr. McQuil-lan. Defendant denies that any such agreement was made * * * ”
The majority has no ground whatsoever for disregarding the trial court’s findings and making new findings on this issue. See Gediman v. Anheuser Busch, Inc., 299 F.2d 537, 547 (2d Cir. 1962) ; Orvis v. Higgins, 180 F.2d 537, 539-540 (2d Cir.), cert. denied, 340 U.S. 810, 71 S.Ct. 37, 95 L.Ed. 595 (1950).