New Haven & Northampton Co. v. Quintard

6 Abb. Pr. 128, 37 How. Pr. 29

• Court: The Superior Court of New York City
• Decided: January 15, 1869
• Status: Published

Opinion

By the Court. Jones, J.

When no time is specified for the performance of a contract, its legal effect is that the parties have contracted for its performance in a reasonable time.

What the reasonable time thus contracted for is, must be determined upon a consideration of all those facts which both parties had in view in making the contract.

There are some general rules which have a controlling influence in determining what this reasonable time is in those cases where they are applicable. Thus, one is presumed not to require more than a business day to pay a sum of money which he has contracted to pay; so one who sells an article is presumed to have it on hand, ready for delivery ; so, again, one who contracts to perform an act within a reasonable time is presumed to have the means at hand for immediately proceeding on its performance.

Evidence showing the existence of facts known, or presumed to be known, to both parties, and that the parties contracted in reference thereto, will modify these rules in accordance with said facts ; but unless so modified, the parties will be presumed to have contracted in reference to these rules.

To apply these rules to the present case : The contract was made November 17, 1834, in the city of New York, and was to ship at Baltimore or Georgetown, two cargoes of- coal to New Haven, at $6.25 per ton at Baltimore or Georgetown. Under this contract the defendants, according to the above rules, must be presumed to have had on hand, ready for shipment, the requisite amount of coal, and to have had facilities for immediately commencing the shipment.

Only so much time, then, can be allowed them for the performance of their contract as was requisite to send notice of the contract to Baltimore or Georgetown, and to complete a shipment of coal on hand at either of those places, commenced immediately on the receipt of said notices at said places.

It would perhaps be superfluous to require proof to show that a month would be an unreasonable time to take for performing these acts.

But there is evidence showing that four and a half cargoes can be shipped per month ; that four cargoes had been shipped in December, 1864, one of them to New Haven; and thus establishing, under the above rules, that the reasonable time within which the contract should have been performed expired at least as early as December 17, 1864.

It is however insisted that there is evidence showing facts modifying the above rules, and extending the time for performance. The facts thus relied on are : 1. Obstruction of the railroad by freshets; 2. Raids by rebel forces obstructing the railroad ; 3. Delay of the railroad in delivering the coal, and its appropriation to its own use of a considerable quantity of the coal that it should have delivered.

None of these matters were shown to have been mentioned at the time the contract was entered into, nor is it shown that at that time they were known to the plaintiffs, or their agent, nor can the plaintiffs or their agent be presumed to have known them.

The contract therefore was not entered into with reference to any of these matters; and they cannot therefore be considered in determining the question as to what should be deemed a reasonable time for its performance (Ellis v. Thompson 3 Mees. & W., 445; Farmer’s Loan & Trust Co. v. Hunt, cited 16 Barb., 521).

The common carrier cases cited by respondents counsel do not conflict with the foregoing views. They hold that where no time is specified within which transportation is to be made, the contract of the carrier is to transport with reasonable diligence. Of course such a contract is not broken if a delay occurs not within power of the carrier to control, because such a delay does not show a want of reasonable diligence.

The case of Wibert v. Erie Railroad Co. (12 N. Y. [2 Kern.], 251), does not maintain the doctrine that the fact of the delay being occasioned by an accumulation of previously received freight, will excuse the carriers in cases not falling within the statute mentioned in the . opinion, or within the principle of that statute.

Whether in other cases such fact would be an excuse may be regarded as not yet determined in this State, and it is unnecessary now to determine it.

In the demurrage case the court held that where there was no express contract as to the time in which the vessel should discharge cargo, the law would imply a contract to discharge her in the usual and customary time for unloading such cargo ; that such custom required the vessel to await her turn; and that, as the defendant in the case then on argument was the owner of the dock, and there was an unusual accumulation of vessels at his dock with cargoes for himself, he should be allowed to show that such accumulation was without his fault, and consequent upon risks to which navigation is frequently exposed. Indeed, the opinion seems to indicate that it would lie on the plaintiff to show that the accumulation was by fault of the defendant (Cross v. Beard, 26 N. Y, 85).

The case of Crocker v. Franklin Company (3 Sumn., ), is a report of a nisi prius trial had in a sister State. o

Assuming the charge of the learned judge in that case to lay down a doctrine opposed to that of the charge in this case, still it would not be an authority to control our decision in its favor as against the charge under review. It possesses no greater weight than the present charge. The fact that it is prior in point of time, and is printed in a volume of reports, does not invest it with any greater weight.

But it does not lay down any different doctrine. It is true there are contained in the charge some general expressions which, taken by themselves, would give color to the respondents’ propositions. But these remarks immediately follow the citation of the case of Ellis v. Thompson (3 Mees. & W., 445), and the instruction given to the jury of the doctrine established by that case, viz : that the question of reasonable time was to be determined by a consideration of those facts bearing on it which were proved, or presumed by law, to be known to both contracting parties. Then these general remarks follow, instructing the jury which facts, if known to both parties, would bear on the question of reasonable time.

Taking the whole charge together, this is the correct exposition of the meaning of the general expressions in question ; and in this respect the charge does not militate against the doctrine advanced in this opinion.

The other cases cited need no especial reference. They contain no doctrine- at variance with the above views. ■ • =-

But it is further urged that the freshet was the act of' God ; and, as I understand, that consequently the time within which the contract should otherwise be performed was thereby extended ; and the case of Wolfe v. Howes (20 N. Y., 197) is cited. Under the legal signification of the term “ act of God” (Niblo v. Binsse, 44 Barb., 62) a freshet may well be considered as an act of God.

An act of God, however, does not change the contract between the parties ; but when it renders performance impossible it affords an excuse for nonperformance. To entitle a defendant to the benefit of such excuse he must plead it as an affirmative defense. This the defendants in the present case have omitted to do.

But further than this : the only freshet complained of. occurred in the spring of 1864, long before the contract in question was entered into, and then caused an interruption of but ten days. There is no evidence tending to show that this freshet interfered with the delivery' of the coal, otherwise than by causing a deficiency of supply to meet the contracts then on hand, and consequently to delay then* execution, and by reason thereof the execution of others coming after them. This is too remote to have any effect on the present contract. A defendant cannot be allowed to evade the requirements of his contract by seeking for an excuse for delay in its execution at such a remote period of time prior to the making of the contract. Besides, the defendants must have known of the effect of this freshet at the time they made the contract, while the plaintiffs were in ignorance of it; and they must be deemed to have made the contract to ship in a reasonable time without any reference to the effect of the freshet.

There was considerable evidence on the subject of scarcity of vessels to receive shipments of coal. However that fact may be, it cannot, for the reasons given in respect to the raids, be considered in determining the question of reasonable time.

Other of the appellants’ points raise the question whether shipment and payment were not to be concurrent acts, and to be performed simultaneously.

I think shipment was to precede payment.

The contract called for a shipment by defendants to plaintiffs at Philadelphia. This shows that it was not in the contemplation of the parties that plaintiffs should be at either Baltimore or Georgetown to receive the coal; if it was not contemplated that they should be there to receive it, it could not have been contemplated that they should be there to pay or receipt. Shipment and pay-merit then were not to he concurrent acts. Payment was not to he a precedent act, for the whole evidence shows that the nonshipment was never sought to be excused on the ground that precedent payment had not been made.

It follows that, as the proof is clear that no shipment was ever made, and no valid excuse is shown for not making it, that defendants are liable for the breach of the contract without any tender or offer on plaintiffs’ part (Morris v. Sliter, 1 Den., 59).

This view disposes of the second, third, fourth, fifth, and sixth points, except so much of point sixth as refers to defendants’ continued willingness to perform.

Upon these principles, the clear and uncontradicted evidence shows that the reasonable time for the performance of the contract by the defendants expired at least as early as December 15, 1864, and at that time there was a breach of their contract on the part of the defendants.

This necessarily disposes of the objection arising out of plaintiffs’ offer to furnish vessels to receive the cargoes, and the limit as to the rate to be paid for carrying the freight placed by it on the shipbrokers it employed. For these matters, occurring after breach, were not sufficient to constitute a waiver thereof, or to relieve the defendants from their liability already accrued.

But there are.further reasons why this offer and limit cannot defeat plaintiffs’ recovery.

The offer to furnish vessels was voluntary and without consideration, and therefore could not operate to change the rights of the parties under the contract. Nor will an offer or endeavor by one party to the contract to aid the other in performing his contract, and thus speed its fulfillment, absolve the other from performance. .

If both parties regard the offer as giving to the one the exclusive charge of providing something which the other was bound to provide, and they so act upon it, this "would form an excuse for a delay in performance occasioned by a nonprovision of the thing to be furnished.

Such offer, however, might at any time be withdrawn, and then the parties would be remitted to then.’ rights under the contract, with such excuse for intermediate delay as might be furnished by the existence of the offer.

But in this case the parties did not regard the offer as one which gave the exclusive charge of procuring a vessel to the plaintiffs, nor did they act on it as such. The defendants’ shipping-agent swears that he told the shiphrokers employed by plaintiff that he would procure a vessel himself if he could. Again he says, “I offered to ship up to two hundred and fifty tons whenever I could ship the coal with certainty, and Rose & Lyon or myself could find a vessel of suitable character.”

The offer was simply to aid in finding a vessel, and was so understood by the parties, and, consequently, did not relieve defendants of their obligation to ship in a reasonable time.

Further, defendants’ shipping-agent placed restrictions on the shiphrokers as to the character of the vessel to be furnished. This, except on the basis that the offer was a mere voluntary one of assistance, he had no right to do, and so the placing of such restrictions destroyed the effect of the offer.

Again, the shipping-agent not being then able to furnish the coal, undertook to notify the shiphrokers at the earliest moment when he could furnish the coal. He never gave any such notification, therefore the nonshipment is to be ascribed rather to the absence of coal than to the nonproviding a vessel.

The limit as to the rate to be paid by the shiphrokers for carrying the freight was imposed by the plaintiffs on their agents to govern their action. They did not assume to act on the obligation of the defendants.

Their obligation was to ship at the ruling rates. A limitation not addressed to them, but to a third party, wholly unconnected with, and acting independently of them, for his guidance, cannot affect their obligation.

This disposes of so much of the sixth point as was not before disposed of; also of the first, second, and third subdivision of point seven ; also of the second and third subdivision of point ten.

The testimony of Small as to the price of coal at Baltimore was properly admitted ; although he made no sales himself personally, yet his testimony shows that he had knowledge, from being on the spot and being cognizant of sales made by others.

This disposes of the eighth point.

The discrepancy between the evidence of Small and that of Lyon as to the size of cargo which Small offered to furnish, was, in the views above taken, wholly immaterial ; and consequently any erroneous assumption on that point would not call for a reversal; and for the same reason, the exclusion of the letter of Rose & Lyon, even if erroneous, does not affect the judgment. The same remark applies to the point respecting the demand of Yea-mans prior to JSTovember.

It is also said that plaintiffs sought to obtain a larger cargo than they were entitled to. I find no evidence sustaining this. They were entitled to two cargoes of two hundred and fifty tons each. I do not perceive that they ever sought to obtain more than five hundred tons. Certainly after the great delay in furnishing the coal they were entitled to have as much of five hundred tons loaded in one vessel as the draft of water at the dock where the coal was to be furnished, and the accommodation of the dock would permit. This disposes of all of the seventh point not before disposed of, and also of the first subdivision of the tenth. As to the charge, leaving it to the jury to determine whether the evidence of Qnintard did not show a refusal to perform, I think the charge was more favorable to the defendants than they had a right to.

Quintard’s testimony is that he informed the plaintiffs’ agent, when the offer and demand were made by him, that the coal was ready at any time when plaintiff would send a vessel for it, or the defendants could get one to send it.

Such were not the terms of the contract. The contract was for a shipment within a reasonable time. It is held above that what is a reasonable time does not depend on the difficulty of procuring vessels ; that by the contract defendants undertook to have the means for shipment on hand ready to commence the shipment as soon as the order could in due time be transmitted to their agent. The offer then to perform upon conditions not provided for by the contract was a refusal to perform according to its requirements. Again, it is above held that before this offer was made a breach of the contract had occurred; an offer to perform after breach will not relieve from liability therefor.

This disposes of all of the tenth point not before disposed of.

Under the law as settled by this court, the written offer of April 23, 1864, signed by the defendants, and the letter of November 17, 1864, signed by plaintiffs’ agent, referring to the offer of April 23, and treating it as a subsisting contract, constituted a valid contract under the statute of frauds.

Another objection urged, is that the agreement was not properly stamped under the United States stamp act.

The stamp act applicable to this case is that of June 30, 1864, which took effect August, 1864, and the point arises under section 158 of that act, which is as follows:

“ Sec. 158. And be it further enacted, that any person or persons who shall make, sign, or issue, or who shall cause to be made, signed, or issued, any instrument, document, or paper of any kind or description whatsoever, or shall accept or pay, or cause to be accepted or paid, any bill of exchange, draft or order or promissory note, for the payment of money, without the same being duly stamped, or having thereupon an adhesive stamp for denoting the duty chargeable thereon, with intent to evade the provisions of this act, shall, for every such offense, forfeit the sum of two hundred dollars, and such instrument, document, or paper, bill, draft, or order, or note shall be deemed invalid and of no effect.”

The point is not well taken, for two reasons :

1. There is no evidence that the omission to affix the the proper stamp was with intent to evade the provisions of the act. It is necessary that the omission should be with such intent in order to invalidate the instrument, and the burden of proving such intent lies on the party seeking to invaliditate it, the defendants in this case.

2. Even if the burden of proof was upon the plaintiffs, yet the defendants cannot now take advantage of the defect of proof; for on his motion for a nonsuit they did not call the attention of the plaintiffs to such defect. They claimed, on the motion for a nonsuit, that the bare omission of the stamp of itself invalidated the agreement. This was their only claim, and in this they were in error.

This disposes of the first point.

But I think the ninth point is well taken, and the rule of damages adopted was erroneous. The proper rule is the difference between the contract price and the market price on the day of breach. This contract did not become valid and binding until November 17, 1864 ; until that day there was no legal obligation on the defendants to perform. The reasonable time within which they should perform must date from the day on which they first became liable to perform. Plaintiff was allowed to recover at a rate which ruled prior to the contract becoming binding, which was higher than that which ruled afterward. From the time the contract became binding down to a date long subsequent to the breach, the market rate has remained uniform at §10.50 per ton.

The judgment should be reduced by deducting §350, with interest thereon.

If the plaintiffs consent to make such reduction, the judgment is affirmed without costs of appeal to either party. If they refuse, judgment is reversed, and a new trial is ordered, with costs of appeal to the appellants to abide the event.

Monell, J.

One of the questions in this case is whether the contract was invalid by reason of not being stamped, as required by section 158 of the act of Congress of June 30, 1864. That section provides that any person who shall make any instrument, &c., “without the same being duly stamped, or having thereupon an adhesive stamp for denoting the duty chargeable thereon, with intent to evade the provisions of this act,” &c., such instrument “ shall be deemed invalid and of no effect.”

The instruments which formed the contract in this case were six several letters, written by the parties respectively, commencing April 23, and ending December 13, 1864; and the plaintiff proved that in April, 1865, after the commencement of the action, they placed the required revenue stamp upon one of the letters addressed to them by the defendants, which letter contained the offer of the defendants to sell the plaintiff the coal in question.

The form of the contract in this case illustrates one of the difficulties in the practical working of the revenue stamp act. Where an entire agreement is included in one instrument, signed by the respective parties, the letter of the act can be complied with; but where the agreement consists of separate instruments, each signed by one party only, at a different time, or, as in the case before us, of six letters, written at intervals, during a period of eight months, and where no contract is formed until the last instrument is signed and delivered, or the last letter is sent and received, it is difficult to determine when, or upon which of the several instruments the revenue stamp shall be placed. I do not understand the act to require that each of the several parts of the agreement shall be stamped, but merely that each sheet or piece of paper upon which it is written shall be stamped ; and yet in no other way could there have been in this case a compliance with the statute.

The language of the act is, that “ any person who shall make, sign, or issue * * * any instrument, document, or paper, of any kind or description whatsoever, ’ ’ shall forfeit, &c. This language would indicate that each of the separate parts of an instrument, when signed, shall be stamped-; so that a written offer to sell must be stamped at the time it is written or sent, although it has not been and may never be accepted, anduntilacceptance it is of no force or effect. But there are other parts of the act which, in effect, define the meaning of any “instrument, document, or paper.”

The stamp required is one “ denoting the duty chargeable thereon,” and the several kinds of instruments, &c., are designated, and the duty prescribed. Thus, among others, an “agreement, contract, or appraisement,” requires, for each sheet or piece of paper on which the same is written, a stamp of five' cents. A contract, therefore, is an “instrument” affected by the section of the act before referred to, and although when made, each sheet or paper on which it is written must be stamped, yet the adqnowhere requires such stamp to be affixed while the contract is merely inchoate. Otherwise it would be necessary to affix a stamp upon each of the incipient writings when written, and to cancel them, as required by the act. Yet such incipient writings, with canceled stamps thereon, may not become a part of any contract, as where a written offer to sell is not accepted or agreed to. The sensible construction of the act would seem to be, that a contract when formed shall be stamped upon each sheet with the required stamp. Of course the act relates to written instruments only. A parol contract is not within its provisions.

The act declares that an instrument not so stamped shall be deemed invalid and of no effect, and as it is required to be so stamped at the time the instrument is made, the invalidity relates to the time of making. It is therefore, at least, very questionable whether a subsequent affixing of a stamp would render a contract valid, unless it was affixed in the manner provided by the amendment of section 158, by the act of March 3, 1865. I do not) however, propose to examine that question, for it seems to me very clear that the contract in this case was not invalid and of no effect, unless the omission to affix a proper stamp thereon was with intent to evade the provisions of the act.

Nor is it important to consider the amendment of July 13, 1866, which provides that no instrument required to be stamped, which has been .signed or issued without being stamped, shall be admitted in evidence, until a stamp shall have been affixed thereto. In this case the stamp was affixed before trial. Besides, the amendment referred to merely excludes the instrument from being read in evidence, but does not affect its validity.

This brings me to the principal question, namely, upon whom the burden lies of showing such intent.

As respects the penalty, the act casts the burden upon the party seeking its remission to prove there was no intent to evade the law; but the causes which render a contract invalid are left to be established in such manner and by such party as, according to the rules of pleading or of evidence, is usual.

A party objecting, as an unvarying rule, is deemed to hold the affirmative, and must furnish the necessary evidence to predicate the objection. Therefore, if it is objected that an instrument is void, by reason of its not being stamped, the objector must show that the omission of the stamp was with intent to evade the revenue law.

The section is very clear on this subject. Any person who shall make any instrument, and shall, with intent to evade the law, fail to affix thereon a proper stamp, shall forfeit, &c., and such instrument shall be invalid. The fraudulent intent is the offense, and if none exists there is no penalty.

In all cases of penalty or of crime, the law presume;, innocence, and guilt must be established to secure conviction. The revenue act is a penal statute, and if an action were necessary to obtain the fine, no one will doubt that it would be necessary for the government tc show a fraudulent intent to repel the presumption of innocence. Ho such action, however, is required, the government being authorized to collect the penalty in the manner that other revenue is collected.

There are two quite different effects resulting from omitting to affix a revenue stamp upon a contract or other instrument. One inures to the government, and the other to individuals ; but they do not arise from the same cause. The forfeiture or penalty, which belongs to the government, is incurred whenever a person makes an instrument, and omits to stamp it, and the penalty may be, as before stated, collected without action. But if such person seeks a remission of the forfeiture, he must satisfy the collector of his innocence of any design to defraud the revenue. Where the effect, however, of omitting the stamp inures to individuals, the omission must be connected with a fraudulent design, which the party seeking to avail himself of the effect must establish by competent proof.

The revenue act is like our statute concerning fraudulent conveyances, which renders void every conveyance made with the intent to hinder, delay or defraud creditors. To avoid a conveyance under that statute, the onus is upon the creditor to establish the fraudulent intent. Indeed, under any statute which, for stated reasons, renders a contract or other instrument void, the attacking party holds and must prove the'affirmative. A note void for usury, or under the gaming laws, for an insufficient consideration, or contracts contra bonos mores, must be shown to be void for these reasons, by the party setting up the objection. Yet in those cases the statute declares the instruments to be void for these reasons only.

If I am correct in the construction of the act, the objection of the appellants’counsel, that the plaintiffs failed to prove a valid contract, is not sound. I think I have shown that something more than failure to affix a stamp was necessary to invalidate the contract, namely, that the act of omission was with a fraudulent design. I have also, I think, shown where the onus probandi lies. The production of an unstamped contract is proof of a legal contract, and is sufficient proof until its validity is shown by bringing it within the provisions of the act. The rule of strict construction of a penal statute has no application to that part of the revenue act which merely renders contracts void, and a clear discrimination is made between the two cases. Congress did not intend, nor does the act require, that the usual rules of evidence should be changed. Had there been such intent, provision would have been made for relieving parties, as is made in respect to the penalty.

In the case of Beebe v. Hutton (47 Barb., 187), it is intimated that it is incumbent upon the party claiming the benefits of a contract to establish his innocence of any fraudulent design. While I fully concur in most of the views so ably expressed in the very learned opinion in that case, I must dissent from the point to which I have referred, for the reasons which I have already stated. I see nothing in the statute which takes it out of the reason of the ordinary rule, which requires proof from the party holding the affirmative, not only because it is impossible to prove a negative, but because the negative does not admit of the direct and simple proof of which the affirmative is capable.

The case of Vorebeck v. Roe (50 Barb., 302), substantially sustains the views I have expressed. In the case of Myers v. Smith (48 Barb., 614), the court did not notice the very significant words in the act “with intent to evade,” &c., but merely assumed that the contract was invalid, because not stamped.

My conclusion is, that an objection to a contract or other instrument because it is not stamped as required by the revenue laws, is unavailing, unless the party objecting prove that the stamp was omitted with intent to evade the act of Congress, and that the mere failure or neglect to affix the stamp is not evidence of such intent.

Concurring in the views expressed by Mr. Justice Jones in this case, I am of opinion that the judgment, as modified by him, should be affirmed.

Pithian, J., concurred.