Knight v. New England Worsted Co.

56 Mass. 271

Opinion

Shaw, C. J.

This is an action for goods sold and delivered, and the questions arising in it are the more important on account of the large amount of property involved. A circumstance, which renders the case the more complicated, and gives it the deeper interest, is, that a considerable part of the goods in controversy were destroyed by fire. If the property had then vested in the defendants, the risk and consequent loss were upon them; otherwise, the risk and loss were the plaintiff’s.

The plaintiff relied upon a written memorandum, signed by Simpson, the acknowledged agent of the defendants, which is set forth in full in the report. The execution is proved or admitted.

This memorandum is expressed in brief terms, but considered in the light thrown upon it by the surrounding circumstances, it is intelligible. In expounding a written contract, although parol evidence is not admissible to prove that other terms were agreed to, which are not expressed in the writing, or that the parties had other intentions than those to be inferred from it, yet it is competent to offer parol evidence to prove facts and circumstances, respecting the relations of the parties, the nature, quality, and condition of the real and personal property, which constitute the subject matter respecting which it is made. It is also competent to prove by parol evidence — indeed, it can hardly be done by any other — the acts of the parties, at and subsequent to the date of the contract, as a means of showing their own understanding of its terms.

The parol evidence, first introduced by the plaintiff, is of this character. It tended to prove, that the plaintiff had mills at Saxonville, at which he manufactured carpets; that the defendants had mills below those of the plaintiff, where they manufactured yarns; that on the 1st of March, two persons, on the part of each of these parties, began taking an account of stock in the plaintiff’s mills, and a schedule or inventory thereof, which was completed in a few days, was examined by the defendants’ superintendent and found to be correct, and sent to the defendants’ agent, before the fire took place. It further appears, that between the 1st and the 10th of March, the defendants took possession of the plaintiff’s mills, worked in them, locked up one of them which was not in use, finished a large quantity of carpets with the stock in the mills, and sent the same to market to be sold on their own account; that from the time they so took possession, the superintendent and workmen, who had been employed and paid by the plaintiff, were employed and paid by the defendants ; and that a large amount of wool and other stock, embraced in the inventory or schedule, was taken possession of by the defendants on their own account.

Here, it appears to us, the facts being satisfactorily proved, are all the elements prima facie of a complete sale and delivery of the stock, consisting of unfinished carpets in the loom, and of the yam and wool. The stipulation was for the whole stock, described in general terms, at certain agreed rates; and when the account and inventory were completed, stating the quantities of each, and the agreed prices were applied, the amount of the whole purchase was ascertained ; and this schedule, being sent to and accepted by the defendants’ agents, was evidence upon that point.. As to delivery, it is a familiar rule, that where there is a contract for the sale of personal property, delivery of the possession of the store or warehouse, where it is deposited, is a good delivery to corn píete the contract and vest the property in the vendee. Tarling v. Baxter, 6 B. & Cr. 360. Besides, the fact, that the defendants took actual possession of the stock and disposed of a considerable part of it on their own account, is quite conclusive on the subject of delivery.

The defendants, however, took a different view of the subject; and, when the plaintiff’s evidence was in, moved the court to order a nonsuit, or to instruct the jury, that the action could not be maintained. The grounds taken were, that the memorandum was one entire agreement; that the goods having been put into the possession of the defendants, subsequently to an entire agreement, it was incumbent on the plaintiff to prove performance, or a tender of performance, on nis part, of such entire agreement; or a waiver and abandonment thereof, and delivery on an independent and subsequent agreement. The court declined so to instruct the jury, but instructed them, that the contract was divisible, and that they need have no reference to the lease or to the real estate.

As we understand the argument, this objection divides itself into two distinct propositions: 1. That the plaintiff cannot recover, without setting out the entire agreement, and averring and proving performance or tender on his part: 2. That he cannot recover on a general count, as for goods sold and delivered, but must set out the acts done under it, and hence establish the obligation of the defendants “to make payment.

I. In regard to the first, there is no doubt, that the contract was one entire contract, and it may be safely assumed, that the undertakings and stipulations, on the one side, may have been and were the motive and the consideration for the stipulations on the other side. So, where several different instruments are all executed at the same time, and bear the same date, and have a relation to each other, they are all said to be deemed in law to constitute one and the same transaction, — one entire contract,—and yet the legal effect is, to bind different parties to do different things, at different times. Thus, a contract may be one and entire in its origin; and,

yet, looking to the performance of different things, at different times, it may be divisible in its operation. This, then, leads to the great question, which has been much agitated in courts of law, and sometimes has been the subject of very subtile distinctions, that is to say, whether mutual stipulations are dependent, so that he who demands performance must show performance, or a tender or readiness to perform, on his part: — or independent, so that the consideration of the stipulation on the one side is the mutual promise on the other, not requiring an actual performance or tender, but where the remedy upon both sides is by action. This question depends upon the intention of the parties, and the nature of the respective stipulations, and is to be determined rather from the sense of the whole taken together, than upon any particular form of expression. If a party promise to build a house upon the land of another, and to dig a well on the premises, and to place a pump in it; and the owner of the land covenants seasonably to supply all materials, and furnish a pump; it is very clear, that the stipulation to furnish materials is dependent and constitutes a condition, because the builder cannot perform on his part, until he has the materials. So to put a pump into the well. But the stipulation to dig a well is not conditional, because it goes to a small part only of the consideration, and does not necessarily depend on a prior performance, on the part of the owner, and because a failure can be compensated in damages, and the remedy of the owner is by an action on the contract. The rule was laid down by lord Mansfield, in the case of Boone v. Eyre, 2 W. Bl. 1312, cited in 1 H. Bl. 273, in a note. It is this : Where mutual covenants go to the whole consideration on both sides, they are dependent covenants, the one precedent to the other. But where they go only to a part, and a breach may be paid for in damages, there the defendant has a remedy on his covenant, and shall not. plead it as a condition precedent. This rule has been restated and affirmed, with slight variations adapting it to particular circumstances, in a great number of cases, both in England and in this country. Duke of St. Albans v. Shore, 1 H. Bl. 270; Campbell v. Jones, 6 T. R. 570; Havelock v. Geddes, 10 East, 555, 564; Glazebrook v. Woodrow, 8 T. R. 366 ; Storer v. Gordon, 3 M. & S. 308. See also Kingston v. Preston, cited in Jones v. Barkley, 2 Dougl. 684, 689. These principles have been fully recognized and adopted in this commonwealth. Hopkins v. Young, 11 Mass. 302; Tileston v. Newell, 13 Mass. 406. Where several different instruments are executed at one time, and have relation to each other, they shall be construed together as one contract. Makepeace v. Harvard College, 10 Pick. 298 ; Sibley v. Holden, 10 Pick. 249. The question, whether covenants are dependent or independent, depends upon the intentions of the parties, and the nature of the acts to be performed. Howland v. Leach, 11 Pick. 151. Some of the stipulations in an entire contract may be dependent, and others independent, according to their nature and the order of performance. Couch v. Ingersoll, 2 Pick. 292; Kane v. Hood, 13 Pick. 281. The same rules of construction apply to a simple contract as to a contract under seal. Kane v. Hood, above cited.

The next point to be considered, being a subdivision of .the first question, is, whether, according to the rules of law, thus stated, the stipulation on the part of the defendants, to purchase and pay for the estate in question, was a mutual and dependent stipulation, or an independent one. Taking this memorandum of agreement, in connection with the facts and circumstances, proved by evidence aliunde, it was a stipulation on the part of the company, to hire the plaintiff’s mills, which he held under the city; the stipulation on the part of the plaintiff, that he would not engage in the carpet manufacture, during the term of this lease, indicates, that it was to be hired for some term of time; the stipulation that the rent should commence from the 1st of March, and the stipulation, on the part of the defendants, that they would take possession at that time, indicate clearly when the operation of the contract was to commence. Supposing the first act to be done, namely, the taking possession by the defendants, coupled with an implied stipulation on the part of the plain tiff, to give them possession, were mutual and dependent contracts ; they were respectively performed by the parties. The one gave and the other took possession on the 1st of March. The next step was to be taken on the part of the defendants. They were to take and pay for all the stock at prices agreed. When there is an agreement to purchase a designated quality of goods at agreed prices, and nothing remains but to measure, weigh, count, or otherwise ascertain the quantity ; when such weighing or measuring is done, either in the manner agreed upon in the contract, or in any other manner, by. the assent and agreement of the parties, the price becomes due on delivery, unless there be some agreement for credit. Riddle v. Varnum, 20 Pick. 280; Macomber v. Parker, 13 Pick. 175. By necessary implication of law, in the absence of any stipulation, the price becomes forthwith payable. That they should be so measured and the price ascertained, at or even after the defendants should take possession, would be the ordinary presumption from the fact of the defendants’ taking possession of the leased premises, and of the stock in them at the same time; and also from the fact, that the stock was so measured by agents mutually appointed, and the result thereof communicated to the agents of the company, without objection.

Here, then, was a stipulation on the part of the defendants, the legal effect and import of which were, that they would take and pay for certain goods, before any other act of performance could be done on the part of the plaintiff; of course, this stipulation was independent of any such performance to be done or averred. If the plaintiff should engage in the manufacture of carpets, it was independent of this stipulation to purchase. If he was under an implied obligation to the defendants for quiet enjoyment, this obligation could not be broken till their possession should be interrupted. The defendants had entered as the tenants of the plaintiff, and were never interrupted in the peaceable possession of the mills, till the mills were burnt. We are therefore of opinion, that whatever was the character of some of the stipulations of this contract, the contract to purchase and pay- for the goods on delivery was distinct and independent.

II. The next ground taken was, that even if this stipulation in the contract was independent, it was yet part of one entire contract, and that the plaintiff could not recover on a count in indebitatus assumpsit for goods sold and delivered, but should have set out the special contract, and have alleged the existence of such facts as would render the defendants liable.

The general rule is, that notwithstanding goods have been sold under a special agreement, yet if the agreement has been executed, and all the terms and conditions complied with, it has ceased to be executory, and has resulted in a debt, or duty to pay money, and therefore the vendor may recover thereon, in a count in indebitatus assumpsit. If the facts are not such as to prove that the defendant is indebted for the goods, then the contract is executory, and the plaintiff must set it out specially and truly, with the terms and conditions, and allege performance on his part. Felton v. Dickinson, 10 Mass. 287; Baker v. Corey, 19 Pick. 496.

Nor are we aware of any difference between the case, where the contract for the sale of goods is single and disconnected with other stipulations, and where it is a separate and independent stipulation, embraced in the same contract with other stipulations, on either or both sides. The principle is the same ; that which was an executory undertaking, has been executed and become a debt alike in both cases. And it appears to us, that the case is not without authority. Mayfield v. Wadsley, 3 B. & Cr. 357. Where an outgoing tenant had agreed with an incoming tenant, to take the crop of wheat growing on forty acres, at a fixed price, and also to purchase certain dead stock and a machine on the farm, at a valuation of a third person, which valuation was made accordingly, there was some difference of opinion among the judges, whether the plaintiff could recover in indebitatus assumpsit for the growing crops, on the ground, that being part of the realty, the contract in relation thereto was contrary to the statute of frauds, but a majority of the court held, that he could recover for the whole, and all the judges agreed," that for the dead stock, which was to be taken at a valuation, indebitatus assumpsit would lie. See also Stone v. Rogers, 2 Mees, & Weis. 443.

The true rule seems to be, as laid down in a recent case in this commonwealth, that if one contracts to do several things, at several times, an action of assumpsit will lie on each default ; for, although the agreement is entire, the performance is several, and the contract divisible in its nature. Badger v. Titcomb, 15 Pick. 409. In this case, Mr. Justice Wilde traces back the rules of the common law upon this subject to an ancient period, when it was held, that but one action of debt would lie upon one contract; and points out the distinction between the actions of debt and of assumpsit, the latter of which, in form and theory, is an action on tort, claiming damages for the violation of a promise ; and he cites the authorities, on which the law has now finally settled down upon the more reasonable and equitable principle, that for each separate and distinct breach of a contract to do several things, an action will lie. And it appears, that this distinction between debt and assumpsit is not now regarded in England. By a recent English case, very like the present, it was held, that debt would lie for goods sold and delivered, on a separate and independent stipulation, to purchase and pay for goods, contained among several other mutual stipulations, in an agreement for a lease. Stone v. Rogers, 2 Mees. & Weis. 443.

The court are therefore of opinion, that the direction of the judge was right, in refusing to order a nonsuit when the plaintiff rested his case, and in instructing the jury, that the contract was divisible, so far as performance and the right to recover for non-performance were concerned; and that the jury need have no reference to the lease or to the real estate, nothing being to be done by the plaintiff respecting them, as a condition precedent to his right to maintain this action for the breach assigned.

III. Supposing the plaintiff had thus far made out aprima facie case, it becomes necessary to examine the residue of this report, to ascertain how far the case was legally changed by the evidence offered in defence. The defendants gave in evidence a paper signed by the plaintiff, and by the agent and treasurer of the defendants.

This paper is not dated. It was offered as an agreed statement of facts entered into with a view to a reference in September, 1847. There is nothing in the paper itself, indicating that it was prepared for this purpose, and we can perceive nothing in the records of the company, leading to a conclusion, that any such paper was prepared for such a purpose. On the contrary, from the internal evidence, which the paper itself affords, and from the testimony of Mr. Balch and Mr. Fuller, it seems more probable that it was made soon after the fire, for the purpose of being laid before the Merchants Insurance Company, under a belief, that the parties, one or the other of them, could avail themselves of the insurance, which the plaintiff had at that office. The paper would naturally be drawn up, if that were the object of it, in such a manner as to favor as much as possible the claim upon the insurance company. The court are of opinion, that this was not intended to alter or vary the rights of the parties, as established by the prior instrument, but is at most an admission by the plaintiff of what he understood his rights to be. If he supposed that his policy still covered the property, because it was the same property, in the same place, and that the policy would cover it, though the legal ownership had changed, this was a mistaken legal inference, and did not amount to the admission of any fact, contrary to his present claim. His offer to transfer the policy to the company implies that he did not consider the loss his, and of course did not consider the property his.

The other point, on which this paper is supposed to be material, is, that there was an agreement, as appeared from the annexed memorandum, of the plaintiff, and that from this memorandum a proper lease and a particular agreement were to be made, as soon as the plaintiff could obtain the requisite authority from the city to underlet.

Upon this part of the paper, it may be remarked, that it indicates, that there was a memorandum signed by the plaintiff, to the company, containing the stipulations on his part to the company, and of course it is a different memorandum from that first above recited, which is one containing the stipulations of the company to him. No such writing from the plaintiff to the company has been produced, and therefore it is not to be presumed, that it contained any other stipulations than those to be inferred from the writing which is produced and recited. There being no intimation, in the memorandum before us, that any written lease or extended agreement should be made by the plaintiff, the paper can amount to nothing more than this, that there was an understanding by the parties, not introduced into the memoran • dum, that such lease should be made.

The first remark is, that not being introduced into the memorandum, it could not be given in evidence to control, or alter, or add a new stipulation to, the written agreement; and, secondly, if it were so, if the defendants voluntarily entered into the premises without it, and held them without interruption or disturbance, till the fire, the making of such written lease was not a condition precedent, necessary to be performed by the plaintiff, before he could claim payment for the goods.

But, thirdly, the memorandum itself constituted a present demise, and as such operated to invest the defendants with the character of tenants, even though it was intended and expected that a more formal lease should be given. Chapman v. Black, 4 Bing. N. C. 187.

The paper goes further and states, and this must be regarded as evidence of the admission of the plaintiff, that under all the circumstances, the treasurer of the defendants considered that they could have no risk not covered by the plaintiff's policy, until the transfer of the lease from the city, and some settlement, or arrangement for settlement, made, for the materials taken or to be taken from the plaintiff. It would rather seem, from the first clause in this paper, and from the fact appearing in their records, that they were to pay a different rent to the plaintiff from that which he was to pay the city, and that the intention and expectation of the parties was, that he was not to assign and transfer the lease which he held of the city, but to underlet to the company. But considered either way, it was an admission of the plaintiff, as to what the treasurer considered to be the relative rights of the parties, respecting the policy of insurance.

Upon this paper, and the whole evidence, the defendants' counsel requested sundry instructions to the jury, as set forth at length in the report.

The first instruction prayed for was adopted, and the instruction given accordingly.

The second instruction could not be legally given, for the reason already stated, that by the terms of the written contract, the giving of a. written lease, even if stipulated for, was not a condition precedent, if the defendants had entered and taken possession, under the agreement, without such written lease.

The third instruction could not be legally given, and would have been erroneous, for the reasons already stated.

As to the fourth instruction prayed for, the court did instruct the jury, that if any thing respecting the sale and purchase of the estate remained to be done, to ascertain the price and terms, the transfer was not complete, and the plaintiff could not recover for goods sold and delivered. This was all which properly could be given under this prayer.

The fifth is a complicated prayer for instructions, assuming some facts, not proved, and requiring the court to instruct the jury, authoritatively, upon the effect of evidence, which the court was not bound to do. The evidence, as such, was left to the jury with proper instructions.

The sixth instruction prayed for is disposed of by the preceding. The inferences proposed to be drawn were inferences of fact, and as such properly left to the jury 0:1 the evidence.

The construction of the paper, which was the subject of the seventh prayer for instructions, was rightly left to the jury. They were instructed, that this paper relied on by the defendants, as an admission of facts by the plaintiff, should be considered by them, and that they should judge from the evidence respecting it, whether it was prepared with a view to a reference, as contended by the defendants, or with a view to an application -to the Merchants Insurance Company’s office, as suggested by the plaintiff. They would also judge from the evidence, whether this paper was obtained from the plaintiff by disingenuous mean's or for any sinister purpose.

The court are of opinion, that the further instruction as to this paper, and the other instructions given by the judge, were correct; that the prayers for instruction made by the defendants, so far as they were not granted, were rightly withheld; and that there is no ground to set aside the verdict.

Judgment on the verdict.