Bradford Novelty Co. v. Technomatic, Inc.

Full title: BRADFORD NOVELTY COMPANY, INC. v. TECHNOMATIC, INC

Court: Supreme Court of Connecticut

Date published: Mar 1, 1955

142 Conn. 166 (Conn. 1955)

112 A.2d 214

Opinion

It is usually considered that the time fixed in a mercantile contract for performance by a party is of the essence, and therefore that failure to perform within the time stated will relieve the other party from the duty to perform. But where the contract calls for the manufacture and sale of an article not yet existent, the time specified for delivery is less likely to be considered of the essence. The party waiving the time provision in a contract by acquiescing in a delay may not take advantage of the breach of the provision so long as the other party makes reasonable efforts to perform within a reasonable time. The first party may not peremptorily rescind but must first give notice of his intention to do so and allow a reasonable time thereafter for performance. When a buyer refuses to accept and pay for goods and there is an available market for them, the measure of damages is the difference between the contract price and the market price at the time of the refusal. But where the goods are specially manufactured to meet a particular need of the buyer and they have no market, and no pecuniary value, the seller can recover the contract price. The contract by the defendant to design, construct and deliver to the plaintiff an automatic spraying machine for lacquering its plastic novelty products required delivery within five months from August 17, 1950, the date of the contract. There was a provision, however, that the defendant would not be responsible for delays from causes beyond its control. Owing to various difficulties, the completed machine was not ready for delivery until July 7, 1951. The conduct of the plaintiff subsequent to January 17, 1951, indicated that it acquiesced in the delay and sanctioned the defendant's continued efforts to finish the machine. The parties set July 7, 1951, as the date for the demonstration of the finished machine, but this was postponed to July 10. On July 9 the plaintiff rescinded the contract and demanded the return of the down payment. In the present appeal it claimed that the defendant failed to perform within a reasonable time. The trial court, however, as the trier of this question of fact, did not find that the delay was unreasonable, and the plaintiff did not seek a correction of the finding in this regard. The plaintiff also claimed that it was not bound by any extension of time beyond July 7. There was adequate support in the evidence, however, for the finding that the machine was ready for delivery on July 7 and that the plaintiff consented to the postponement of the demonstration to July 10. The machine had no market value, and no pecuniary value to the defendant. On all of the facts, held that the court was warranted in concluding that the defendant had fulfilled its contract and was entitled, under its counterclaim, to the contract price.

Argued February 2, 1955

Decided March 1, 1955

Action to recover a deposit paid to the defendant under a contract to manufacture a machine, brought to the Superior Court in Fairfield County by transfer from the Court of Common Pleas; the defendant filed a counterclaim to recover damages for breach of the contract, and the issues were tried to the court, Murphy, J.; judgment for the defendant on the complaint and the counterclaim, and appeal by the plaintiff. No error.

Milton L. Cohn, with whom was Israel J. Cohn, for the appellant (plaintiff)

Herbert L. Cohen, for the appellee (defendant).

BALDWIN, J.

The plaintiff brought this action to recover the sum of $2100, paid pursuant to a contract to construct a machine. It alleged that the defendant had failed to perform the contract within the time agreed. The defendant denied any breach of the contract and by counterclaim sought damages for the refusal of the plaintiff to accept the machine and pay the balance of the purchase price. The trial court rendered judgment for the defendant on the complaint and the counterclaim, and the plaintiff has appealed.

The finding of facts, which is not subject to correction, may be summarized as follows: The plaintiff was engaged in the business of manufacturing plastic novelty items. Its process of manufacture required the use of both automatic and hand spraying machines for lacquering. The defendant designed and manufactured special machinery for particular manufacturing requirements. On July 24, 1950, it submitted a proposal to the plaintiff for the construction of an automatic spraying machine. The proposal contained a clause stating that the defendant would not be responsible for delays in performance "due to strikes, accidents, shortages of labor or materials, delays by carriers or other causes beyond [its] control." After a series of modifications of the proposal, the parties entered into a contract on August 17, 1950, calling for the construction and delivery of an automatic machine within three to five months, subject to the clause regarding delays. The defendant encountered various problems, but it completed the designs for the machine by the end of October. Prior to November 7, the defendant brought to the plaintiff's attention an automatic spraying device which utilized a centrifugal system of paint dispersal and which could be adapted to the plaintiff's requirements. Although employment of this device would be a departure from the original proposal, the plaintiff, after a demonstration, agreed to the modification, and the parties, by an exchange of letters on November 7 and 8, changed their original agreement to provide for the use of this type of sprayer. On November 8, the plaintiff paid the defendant $2100 on the purchase price of $5100, as agreed in their contract. Because of difficulties beyond its control, the defendant failed to complete the machine by January 17, 1951, the date originally agreed upon.

In the early spring of 1951, the plaintiff advised the defendant that because of the inferior quality of plastic materials available for use it would be necessary to employ a machine with a rotary spindle instead of the type first contemplated. The defendant agreed to this change on March 28. The alteration presented new technical problems to the defendant and further delayed the project. Since neither party could obtain priorities for the purchase of necessary materials, which were in short supply owing to the Korean War, further delay ensued. Delay also resulted because the defendant could not promptly obtain, for experimentation in developing the machine, the kind of lacquer used by the plaintiff. During the spring of 1951, the plaintiff made inquiries concerning the progress of the work. It was advised by the defendant on May 2, that, barring unforeseen developments, the machine should be completed by the end of the month. An appointment to see the completed machine in operation was made for July 7. On that date, the finished machine was ready for delivery. It conformed to all the specifications of the contract between the parties. The defendant requested that the demonstration fixed for July 7, which fell on Saturday, be postponed until Monday, July 9. The plaintiff expressed its displeasure at the postponement but agreed to come to the defendant's plant on Tuesday, July 10. Instead, on July 9, it posted a registered letter to the defendant rescinding the contract and demanding the immediate return of the $2100 it had paid. The defendant was ready and able to deliver the machine on July 7 and on July 10, and for a reasonable time thereafter. It did not try to sell the machine or determine its market value because it was constructed especially for the plaintiff's needs, and efforts to sell it would have been futile. It had no pecuniary value to the defendant. On these facts the trial court concluded that the defendant had fulfilled its contract, as modified in November, 1950, and March, 1951, and ordered judgment for the defendant to recover $3000, the unpaid balance of the purchase price.

The time fixed by the parties for performance is, at law, deemed of the essence of the contract. Janulewycz v. Quagliano, 88 Conn. 60, 63, 89 A. 897. The plaintiff claims that this rule applies especially to mercantile contracts like the present one and that the defendant's failure to perform within the time stated relieved the plaintiff from performance on its part. 3 Corbin, Contracts, 718; 2 Williston, Sales (Rev. Ed.) 452a, 453. While the rule is generally accepted, it is not decisive of the case at bar. Where the contract calls for the manufacture and sale of an article as yet nonexistent, the time specified for delivery is less likely to be considered of the essence. The reason is that in such a situation there is a probability of delay, and the loss to the manufacturer is likely to be great if the buyer refuses to accept and pay because of noncompliance with strict performance. 3 Corbin, Contracts, 719. This holds true on the facts here. The parties modified their original agreement on two occasions in November, 1950, when the use of a centrifugal sprayer was agreed upon, and in March, 1951, at the instance of the plaintiff, when a rotary spindle was adopted because the plaintiff could get nothing but inferior plastics for use in its business. Factors beyond the defendant's control also contributed to the delay. In addition to these salient facts, the conduct of the plaintiff clearly indicated that it acquiesced in the delay and would not require rigid adherence to the dates specified for the completion of the machine. Its conduct justified the defendant's belief that strict performance as to time would not be demanded. It sanctioned the defendant's continued efforts to finish the machine even though the day stated in the original agreement for final performance had long since passed. The plaintiff, by its conduct, waived its right to strict compliance with the provisions of the contract as to time of performance. 3 Corbin, Contracts, 722; 2 Williston, Sales (Rev. Ed.) 453f; 3 Williston, Contracts (Rev. Ed.) 856; O'Loughlin v. Poli, 82 Conn. 427, 436, 74 A. 763; Bonney v. Blaisdell, 105 Me. 121, 123, 73 A. 811; Hugh Paton Sons v. David Payne Co., 35 Scot. L.R. 112, 114.

The provision of the contract stipulating the time for performance having been waived, the plaintiff could not thereafter take advantage of it so long as the defendant was making reasonable efforts to perform within a reasonable time. O'Loughlin v. Poli, supra; Bonney v. Blaisdell, supra, 124; Petway v. Loew's Nashville Knoxville Corporation, 22 Tenn. App. 59, 68, 117 S.W.2d 975. The plaintiff, however, contends that the defendant, even if it was obligated only to perform within a reasonable time, failed to do so. Under the circumstances of this case, what was a reasonable time was a question of fact. Rochester Distilling Co. v. Geloso, 92 Conn. 43, 45, 101 A. 500; Galasso v. Cowles, 137 Conn. 111, 112, 75 A.2d 46. In the absence of a finding in the plaintiff's favor on this point, or of any attempt to correct the finding to include it, the claim is futile.

The plaintiff argues that it was not bound by any extension of time beyond July 7, 1951, the date set for a demonstration. The court has found that the defendant was ready and able to deliver the machine on that day and that the plaintiff consented to a postponement of its demonstration until July 10. But that aside, the plaintiff, having acquiesced in the nonperformance of the contract within the time stipulated, cannot peremptorily rescind the contract. It must first give notice of its intention to do so and allow a reasonable time for performance. Wooley v. Williams, 105 Conn. 671, 678, 136 A. 583; Remington Arms U.M.C. Co. v. Gaynor Mfg. Co., 98 Conn. 721, 731, 120 A. 572; Grippo v. Davis, 92 Conn. 693, 696, 104 A. 165; Petway v. Loew's Nashville Knoxville Corporation, supra; 3 Corbin, Contracts, p. 945; Restatement, 1 Contracts 311. This it failed to do. The court, having found that the delays in the completion of the machine were due to causes beyond the defendant's control, that, in effect, compliance with the terms of the contract as to time for delivery had been waived and that the defendant had fulfilled its contract, properly rendered judgment for the defendant on the complaint and counterclaim.

The plaintiff claims that the court erred in awarding the defendant the balance of the contract price as damages. Ordinarily, when a buyer refuses to accept and pay for goods, and there is an available market for them, the measure of damages is the difference between the contract price and the market or current price at the time the buyer refused to accept them. General Statutes 6679; Continental Copper Steel Industries, Inc. v. Bloom, 139 Conn. 700, 705, 96 A.2d 758. Where, as the court found in the case at bar, the goods are specially manufactured to meet a particular need of the buyer and there is no market for them, and they have no pecuniary value, the seller can recover the contract price. Allen v. Jarvis, 20 Conn. 38, 49; Belisle v. Berkshire Ice Co., 98 Conn. 689, 700, 120 A. 599; 3 Williston, Sales (Rev. Ed.) 583.

There is no merit in the plaintiff's claim of error in the admission of testimony, and no discussion of it is needed.