Koehler & Hinrichs Mercantile Co. v. Illinois Glass Co.

173 N.W. 703, 143 Minn. 344, 1919 Minn. LEXIS 508
CourtSupreme Court of Minnesota
DecidedJuly 25, 1919
DocketNo. 21,334
StatusPublished
Cited by9 cases

This text of 173 N.W. 703 (Koehler & Hinrichs Mercantile Co. v. Illinois Glass Co.) is published on Counsel Stack Legal Research, covering Supreme Court of Minnesota primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Koehler & Hinrichs Mercantile Co. v. Illinois Glass Co., 173 N.W. 703, 143 Minn. 344, 1919 Minn. LEXIS 508 (Mich. 1919).

Opinion

Lees, C.

This was an action to recover damages for breach of a contract of sale tried by the court without a jury. The findings were in plaintiff’s favor and defendant appeals from .an order denying a new trial.

• Plaintiff is a dealer at wholesale in glassware, bottles, flasks and oth,er merchandise. Its place of business is at St. Paul. Defendant is a manufacturer of glassware at Alton, Illinois, and has an agency for the sale of its goods at St. Paul. On January 9, 1915, a contract in writing between defendant and the Koehler & Hinriehs Company was executed. By its terms the former agreed to sell, and the latter agreed to buy, on or before December 31, 1916, 12 carloads of Ko-Hi flasks, at a stipulated price, shipments to be made upon specifications furnished by the buyer at least 30 days in advance of the shipping date, the final specifications to be furnished not later than October 1, 1916. Payments were to be made within 30 days after shipment with certain discount privileges. It was provided that, if the financial responsibility of the buyer became impaired or unsatisfactory to the seller, cash in advance of shipment or satisfactory security might be demanded. There was a clause reading as follows:

“It is agreed that under this contract Koehler & Hinriehs Company may have the privilege of increasing quantity as much as they may desire at price shown herein, during the period covered by this contract.”

[346]*346On June 6, 1916, the contract was assigned by Koehler & Hinrichs Company to Koehler & Hinrichs Mercantile Company, the plaintiff in this action. The latter was a corporation organized to succeed to the 'business of the former and became the owner of all its assets at that time. Prior thereto defendant had furnished and been paid for two carloads of Ko-Hi flasks. Defendant had notice of the transfer to plaintiff as early as July 1, 1916. Between that date and August 25 following, defendant furnished the plaintiff, at various times and upon its orders and specifications, one carload of flasks. They were furnished and paid for in accordance with the terms of the contract. Between August 25 and October 1, 1916, plaintiff furnished specifications and delivered orders to defendant for 13 carloads of flasks and was able and offered to pay for them in cash at the contract price 'before they were shipped, but defendant refused to furnish any of them. The difference between the contract price of the flasks and their market price when defendant refused to deliver them was $1,993.70. This amount, with interest from January 1, 1917, was awarded to plaintiff.

The questions we are called upon to decide axe: (1) Whether the contract was void for want of mutuality either generally or as to the flasks ordered in excess of 12 carloads. (2) Whether the contract was assignable, and, if not, whether defendant is estopped from defending on that ground.

1. The contract contains an agreement by the glass company to sell, and an agreement by the Koehler & Hinrichs Company to buy, a definite quantity of flasks at a stipulated price, payable on a day certain. It provides for delivery of the flasks upon specifications to be furnished by the buyer within a stated time, and it contains the clause we have quoted giving to the buyer the privilege of increasing the quantity of flasks.

As to the 12 carloads, it is quite clear that the promises were not all on one side, for there is an express agreement on the one hand to sell and on the other to buy. Each party could hold the other to the performance of its agreement. The promises were mutual, were made at the same time, and are incorporated in a bilateral contract. Such promises so made are a sufficient consideration for each other. 1 Dunnell, Minn. Dig. § 1758; Ellsworth v. Southern Minnesota Ry. Ex. Co. 31 Minn. 543, 549, 18 N. W. 822; Bayne v. Greiner’s Estate, 118 Minn. 350, 136 N. W. 1041; Page, Contracts, § 296.

[347]*347Furthermore the parties, by their acts after the contract was executed, treated it as one having mutuality of obligation. In March, 1936, the buyer sought to have it canceled. The seller offered to cancel it if paid $500, and used this language in its letter in reply to the request for cancelation: “This contract is certainly a liability of the Koehler & Hinriehs Company in case our factory sees fit to enforce it.” Later it wrote that it preferred to furnish the flasks specified in the contract at the contract price and did not wish to cancel it or release the buyer. No further attempt was made to do away with the contract, but, on the contrary, it was acted upon by the delivery to plaintiff in small lots of another carload of flasks. The conduct of the parties amounted to a practical recognition of - the binding effect of the contract, insofar as the sale, of 12 carloads of flasks was involved, and we decline to hold that it was void for want of mutuality.

The court found that three carloads of flasks were delivered, leaving nine to be delivered if there had been no increase in the quantity definitely specified in the contract. Thirteen carloads more were ordered but not delivered, and damages were awarded for the failure to make delivery of that quantity, the court giving effect to the option clause in the contract. It is confidently asserted in' defendant’s behalf that this portion of the contract is unilateral and not supported by any consideration. We have examined the authorities cited to sustain this contention, but think it is unnecessary to go beyond our own decisions in disposing of the question.

It has been 'before the courts on many occasions. There is some diversity of opinion concerning the principles involved and more in their application to specific cases. This court is now definitely committed to the rule that if the party holding an option under a contract has bought his option for value paid or absolutely agreed to be paid, he may enforce it. Staples v. O’Neal, 64 Minn. 27, 65 N. W. 1083; Gregory Co. v. Shapiro, 125 Minn. 81, 145 N. W. 791; Murphy v. Anderson, 128 Minn. 106, 150 N. W. 387; First Nat. Bank of Hastings v. Corp. Securities Co. 128 Minn. 341, 150 N. W. 1084; Scott v. T. W. Stevenson Co. 130 Minn. 151, 153 N. W. 316. The rule has been approved by the United States Circuit Court of Appeals for this circuit. Conley Camera Co. v. Multiscope & Film Co. 216 Fed. 892, 133 C. C. A. 96.

The rule applies to the option given to the buyer in the contract now [348]*348under consideration. It was bound to take and pay for 12 carloads of flasks. This obligation furnished the consideration not only for the seller’s promise to furnish them, but also for its promise to furnish a greater quantity if ordered bjr the buyer in accordance with the terms of its option. The fact that some of the flasks were to be shipped to Chicago, presumably for resale at a profit in a territory not theretofore covered by plaintiff, is of no importance. The option gave the buyer “the privilege of increasing quantity as much as they may desire * * * during the period covered by this contract.” We find nothing in the language employed indicating that it was the purpose of the parties to limit the quantity the buyer might order to the reasonable necessities of its established trade at St. Paul.

2.

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Bluebook (online)
173 N.W. 703, 143 Minn. 344, 1919 Minn. LEXIS 508, Counsel Stack Legal Research, https://law.counselstack.com/opinion/koehler-hinrichs-mercantile-co-v-illinois-glass-co-minn-1919.