May 1, 1924.
Rabenold Scribner ( Allan R. Campbell, of counsel), for the plaintiff.
George Ryall, for the defendants.
In February, 1920, plaintiff contracted to sell and defendants to buy cloth to be manufactured, dates of shipment to be October, November and December. A sharp market drop caused defendants frequently to seek indulgence as to price, time of payment and delivery. On December 17, 1920, "the following mutual arrangement for payment" was confirmed by letter. The merchandise covered by the October and November invoices was paid for by trade acceptances, with the merchandise as security; "the balance of the order will be invoiced half about March 1, 1921 and half April 1, 1921 on the contract terms — 2/10/60, due May 10, 1921 and June 10, 1921." The October and November invoices have been paid. This suit is for the price of the balance.
On March 1 and April 1, 1921, plaintiff sent the invoices for the remaining goods, then in deliverable state and definitely appropriated to the contract. While plaintiff did not follow the previous practice to deliver to the buyer's store, defendants retained the March first invoice for ten weeks and the April first invoice for over six weeks without objection or request for delivery. Indeed, on March seventeenth, defendants, overlooking that they had received the March invoice, wrote: "We would be glad if you will kindly invoice as per your letter, that is, half the quantity to be invoiced in March and the other half in April with the usual terms, 2-10-20." Thereafter defendants urged a claim, abandoned on the trial, that the delivered merchandise was defective, and by letter of May seventeenth, more than ten weeks after the March invoice, again asserted the claim of defects, and continued: "As to this remaining merchandise which you have invoiced but failed to deliver at the time agreed upon, we hereby rescind our contract."
The appropriation of the goods to the contract was with the assent of the buyer in accordance with the Personal Property Law, section 100, rule 4, subdivision 1. Boiko Co. v. Atlantic Woolen Mills, 195 A.D. 207; affd., 234 N.Y. 583; Berkshire Cotton Mfg. Co. v. Cohen, 236 id. 364; Pignataro v. Gilroy, (1919) 1 K.B. 459. This assent may be "expressed or implied and either before or after the appropriation." An inference of fact is here to be drawn from undisputed evidence. Defendants claim that shipment was prerequisite to transfer of title. But the letter of December 17, 1920, confirmed an agreement not as to deliveries, but as to a "mutual agreement for payment." Though defendants knew the merchandise could be shipped within three or four hours, their letter of March 17, 1921 (two weeks after the March invoice), requested, not shipment, but only invoices. Again, ten days after the May invoice, defendants made a complaint as to quality, but no request for shipment. The claim of breach by non-shipment was an after-thought thrown as a makeweight into the letter of May seventeenth.
Professor Williston in 34 Harvard Law Review, 748, discussing Pignataro v. Gilroy, writes: "The seller, without previous authority so to do, appropriated certain goods to the buyer, which were of the kind and quality that contract between them required, and notified the buyer of the fact. No reply to this notification was made by the latter. The court held, and it seems rightly, that unless the buyer under such circumstances sends a prompt notice objecting to the appropriation, he must be deemed to assent thereto. The case is interesting not simply for the specific point decided in the law of sales, but with reference to the general question of when silence may be regarded as assent." The significance of the silence as to shipment is intensified by the expression of other objections.
The seller's obligation to ship became a condition subsequent. In Berkshire Cotton Mfg. Co. v. Cohen, 236 N.Y. 364, 370, the contract was for the sale of future goods; thereafter the seller stored the goods, in deliverable condition, in his warehouse and at the buyer's request postponed shipment. Hogan, J., writes: "But one inference can reasonably be deduced from the foregoing facts that the goods were in a deliverable state, that the same were unconditionally appropriated to the contract by the seller, with the assent of the buyers. The fact that the goods were to be F.O.B at mill is immaterial in view of the contract and intentions of the parties." That in the Berkshire case the buyer insured the good is an additional but not essential fact tending to sustain the inference of assent.
The letter of December 17, 1920, also evidenced an agreement to pay the price on a day certain "irrespective of delivery or transfer of title." Pers. Prop. Law, § 144, subd. 2. Purporting to be a "mutual arrangement for payment," it called on plaintiff not to ship, but only to invoice. While often the word "invoice" from context and surrounding circumstances means the equivalent of "bill and deliver," such was not the intention here. The price of these goods should have been paid within seventy days from November 1, 1920. The agreement of December seventeenth extended this time to seventy days from April first, grace of five months. Defendants had little interest in delivery; they were concerned with getting delay of payment. The consideration which sustain the inference of transfer of title also justify the conclusion that payment was to be made on the agreed dates irrespective of shipment.
The right to recover purchase price should not be obstructed by over-technical interpretation of the statutory provisions "Slight evidence is accepted as sufficient to show that title passes * * * though the seller is to make a delivery." McElwee v. Metropolitan Lumber Co., 69 F. 302, cited in Benj. Sales, § 329 and Willis. Sales, § 280.
The merchant, failing to receive payment on the day fixed, expects this specific relief. The trend of contemporary decisions is to conform the law with this mercantile concept of the seller's rights.
Verdict directed for plaintiff for $11,752.29, with interest on $7,606.83 from May 10, 1921, and on $4,145.46 from June 10, 1921.