Norfolk Hosiery & Underwear Mills v. Aetna Hosiery Co.

98 S.E. 43, 124 Va. 221

• Court: Supreme Court of Virginia
• Decided: January 16, 1919
• Status: Published

Opinion

Burks, j.,

(after making the foregoing statement) delivered the opinion of the court.

[1, 2,1 This action was brought in June, 1916, by the Aetna Company against the Norfolk Company to recover damages for the failure on the part of the defendants to accept and pay for the 'output of the 76 needle machines from February 23, 1915, to February 1, 1916. The defendant, pleaded non-assumpsit, and a special plea of recoupment, under section 3299 of the Code. The special plea, sought to recover damages of the plaintiff for failure to> manufacture and deliver to the defendants the goods called for in the agreement alleged to have been made-on January 5, 1915. It is earnestly insisted by counsel for the plaintiff that “When the defendant filed its. special plea it forever waived its right to defend on the ground that it had rescinded the contract because of the failure of the plaintiff to begin deliveries on February 1st.”' In this, counsel for the plaintiff, is clearly mistaken. The continued existence of the contract was put in issue by the-plea of non assumpsit, and while there could be no recoupment if the contract did not exist, and to this extent the-two pleas are inconsistent, this is not a valid objection, for the defendant may plead as many several matters.of law or fact as he deems necessary. Code, sec. 3264. Not only so, “but with us inconsistent pleas are allowable, and in trying one, the court cannot look to the existence of the other, hence we look upon each branch of the pleading as-totally separate and distinct from every other, and the defenses under one cannot be straightened or curtailed by the existence of the other. Were it otherwise, the liberty of pleading several, and even contradictory, pleas would be defeated. McNutt v. Young, 8 Leigh (35 Va.) 542, 553. Nothing is more common in practice than contradictory pleas. In the case at bar, if the defendant did not seek any recovery over and above the plaintiff’s claim, there was no necessity for the special plea as the defense set up by it might have been shown under the general issue of non-assumpsit. Columbian Accident Ass’n. v. Rockey, 93 Va. 678, 25 S. E. 1009; Burks’ Pl. & Pr. section 239.

[3] On the trial, the court gave six instructions on the motion of the defendants. Some of them were probably more favorable to the defendants than they should have been, but this is not assignable error. Not by the defendants, because they were favorable to them and asked by them, nor by the plaintiff because it was not injured by them, as the verdict was in its favor.

The action of the trial court in refusing defendants’ instruction number three is assigned as error. This instruction was as follows:.

“The court instructs the jury that if they believe from the evidence that a contract existed between the Aetna Hosiery Company, the plaintiff, on the one hand, and the defendants on the other, whereby the said plaintiff agreed and undertook for the period of one year beginning February 1, 1915, to make and deliver to the said defendants 150 dozen pair of 76-needle socks per day, for the consideration of $1.65 per dozen, and that it, failed to make and deliver said socks ,at the time specified, and that said failure continued up to February 23rd, that then the defendants had a right to notify plaintiff not to ship any goods after that time, and their so doing did not constitute on their part a breach of the contract sued on, and the jury shall so find.”

[4] There was no. error in refusing this instruction. Undoubtedly time was of the very essence of the contract in suit, and the parties fully realized that fact, and there is no need to cite authority for the elementary proposition that in such case there can be no recovery upon the contract in case of failure to perform within the time stipulated. But there is no reason why one party who had a right to rescind because of the breach by the other may not waive that right' and hold the other party to performance. The law on this subject is well settled. Conceding that the contract bound the plaintiff to begin deliveries on February 1, 1915, the instruction wholly ignored the evidence tending to show a waiver of this provision of the contract, and left the jury free to find for the defendants on this question notwithstanding such waiver. It presented only a partial view of the evidence, as to the rights ofl the parties, respectively, under the contract. It is true that the instruction does not in terms direct a verdict for the defendants, but, ignoring all evidence tending to show that the defendants had waived their rights under the contract, it tells the jury that under the contract “the defendants had a right to notify the plaintiff not to ship any goods after that time, and their so doing did not constitute on their, part a breach of the contract sued on, and the jury shall so find.” No other instruction given in the case dealt with the subject of waiver by the defendants of their rights under the contract, and to have given the instruction, as asked, would have been misleading. In New York, etc., R. Co. v. Thomas, 92 Va. 606, 609, 24 S. E. 264, 265, it is said:

[5] ^'Calling the special attention of the jury to a part only of the evidence and the particular fact or facts it may tend to prove, and ignoring the residue of the evidence and the facts it may tend to prove, gives undue prominence to such recited evidence, and disposes the jury to regard it and the fact it tends to prove as the particular evidence, and the' fact to be relied on in determining the issue before them, and thus mislead them.

[6] . “Instructions in writing are carried by the jury to their room when they retire to consider of the verdict, and, if they contain a rehearsal of a part only of the evidence, their tendency is to impress unduly on the jury such part of the evidence, to the disadvantage of the other evidence in the case, which may be equally or more important in determining the issue, but rests only in the memory of the jury.” For other cases on the same subject, see Burks PI. & Pr., sec. 268, note 15.

[7, 8] The defendants insisted, and the court so instructed the jury at their instance, that their letter of February 23 was a mere shipping direction and “that it was not intended thereby to terminate the contract.” If this be true, then the contract continued in force, and if the failure of the plaintiff to make deliveries between February 1 and February 23, 1915, gave the defendants the right to rescind, they waived those rights and elected to hold the plaintiff to its contract. The defendants were within their rights in doing this, but when they kept the contract alive against the plaintiff they kept it alive also in its favor and against themselves, and neither could sue the other except for a breach thereafter occurring.

In Frost v. Knight, L. R. 7 Ex. 111, it is said:

“The promisee, if he pleases, may treat the notice of intention as inoperative, and await the time when the contract is to be executed, and then hold the other party responsible for all the consequence of non-performance; but in that case he keeps the contract alive, for the benefit of the other party as well as his own; he remains subject to all his own obligations and liabilities under it, and enables the other party not only to complete the contract if so advised, notwithstanding his previous repudiation of it, but also to take advantage of any supervening circumstance which would justify Mm in declining to complete it.”

In Bernstein v. Meech, 130 N. Y. 354, 358, 29 N. E. 255, 256, it was said:

“But whatever view may have been taken of the right of the defendants to treat the contract for the purpose of its performance as at an end, and to act upon that assumption when they received the plaintiff’s letter, they disposed of that question by their letter to him. By this it appeared that the defendants elected to keep the contract in force for the purposes for which it was made. This operated alike upon the rights of both parties, and the plaintiff was justified in so understanding it. In that view the contract was kept alive until the time arrived for performance and the obligations of the defendant no less than those of the plaintiff for -the purpose remained effectual.” See also Inman v. Elk Cotton Mills, 116 Tenn. 141, 92 S. W. 760.

The defendants’ letters of February 24, 1915, and April 12, 1915, also seem to indicate that the defendants intended to insist on the performance of the contract, and the testimony of W. P. McClure, who was associated with the defendants in this contract, and who was examined in this cause as witness on their behalf, is to the effect that between 20th and 25th of April, 1915, he had a talk with Holden “with reference to getting of any of these goods,” but could not get them. Hecht also testifies that he tried to get all machine goods from the plaintiff after April 12, but without success, and Holden testifies that the defendants attempted to get goods from him on this order in April, 1915. We have no difficulty, therefore, in arriving at the conclusion that the defendants wlaived whatever rights of rescission they had for failure of the plaintiff to make deliveries prior to February 23, 1915.

[9] The next assignment of error is to the action of the court in granting the following instruction, on the'motion of the plaintiff:

“The court instructs the jury that if they believe from the evidence that the contract mentioned in the declaration, was entered into between the plaintiff and defendant and that the plaintiff was ready and willing to perform the same, and that performance thereof was prevented by defendant without fault of the plaintiff, then there was a breach of the contract by defendants.”

There is omitted from this instruction the word “able,” which should have been inserted in order to make it accurate. It was necessary that the plaintiff should have been not only “ ready and willing to perform,” but also able to perform the contract. But no such objection was raised to the instruction either in the trial court or this court, and. under the evidence, the jury could not have been misled by its omission.

[10] The objection to the instruction is that “It was earnestly contended before the trial court, and is now just as seriously urged, that the evidence in this case discloses the fact, not only that the plaintiff was not ready and not willing, but that, on the contrary, the exact opposite condition existed.” The instruction with the suggested insertion made correctly propounds the law, and there was more than a mere scintilla of evidence in the cause upon which to base it. The plaintiff’s manager testified that the sample tendered conformed to the contract, but was rejected; that the plaintiff was ever thereafter during the year ready, able and willing to perform the contract, but received no orders to proceed, and that the only reason for non-performance was the attitude and conduct of the defendants. Whether the facts were, as hypothetically stated in the instruction, was a question for the jury, and( was properly submitted to them.

[11] The third assignment of error is to the action of the court in granting the following instruction, on the motion of the plaintiff, to-wit:

“The court instructs the jury that if they believe from the evidence that the plaintiff is entitled to recover in this case, then they should proceed to assess the damages to which it is entitled and the court further instructs the jury that in ascertaining such damages, they should first determine from the evidence in this case what the entire costs would have been to the plaintiff to complete its contract with the defendants, and after ascertaining the costs of completion, to deduct the same from the sum which the plaintiff would have been entitled to receive from the defendant under the terms of the contract, if the same had been performed. From this result they should then deduct any profits which the evidence shows were made by plaintiff by using the 76 needle machines described in the evidence. The result thus ascertained will be'the damage which the plaintiff is entitled to recover in this action.”

The objection to this instruction is that the contract calls for the output of 20 machines, when the evidence fails to show what that output was, or what the profit was per dozen, and hence the jury did not have before them sufficient data upon which to base a verdict. The defendants’ letter of January 5th says: “You will also purchase immediately up to 20, 76 needle machines or a sufficient quantity of same to. make a product of 150 dozen per day of wool half hose.” .The plaintiff’s letter of acceptance of January 15th, accepted the order “to make you one hundred and fifty (150) dozen per day, or the product of twenty (20) Banner machines.” Both parties calculated that the twenty machines would make one hundred and fifty dozen per day. The price to be paid for the goods was fixed by the contract. Holden testified for the plaintiff that the price of the material, and the costs of manufacture amounted to 96 55/100 cents per dozen, and an itemized statement of how the amount was arrived at was laid before the jury. Another witness, disinterested, testified that the prices given by Holden were reasonable. While Holden had not actually tested the capacity of the machines, because there had been no necessity to do so, he estimated their capacity at one hundred and fifty dozen per day, and, figuring on this basis, placed the plaintiff’s loss of profits at $26,255.62. The expert placed on the stand by the defendants thought that the product of the machines could not be safely placed at over 500 dozen per week. Counting five working days per week, as is done by the plaintiff in error, that, would be 100 dozen per day. If this be taken as the proper basis, it would reduce the plaintiff’s profits by one-third, and ascertain its loss, on the basis of profits testified to by Holden, at $17,508.75, but from this there were to be some deductions testified to by Holden, and mentioned in the instruction. The jury fixed the plaintiff's damages at $17,100. In view of these facts, we cannot say that “there was no evidence of a sufficiently definite character to enable the jury to arrive at the damages sustained by the plaintiff.”

ri2] The last assignment of error is that the court erred in refusing to set aside the verdict on the ground that it was contrary to the law and the evidence. As the evidence appears in cold print, without the advantage possessed by the jury and the trial court, we probably wouldi not have found or approved the verdict which was found by the jury and approved by the trial judge, but that will not justify this court in setting aside the verdict, unless, after considering the case as on a demurrer to the evidence by the plaintiffs in error, we are of opinion that the verdict is without evidence to support it, or is plainly contrary to the evidence. Jackson v. Wickham, 112 Va. 128, 70 S. E. 539, and cases cited.

[13] There has been much argument on the subject of the divisibility of the contract, and counsel have ably discussed the authorities pro and con, but before entering upon that question it is necessary to first ascertain what was the contract between the parties. Only after this has been ascertained will it be necessary to determine whether or not that contract was divisible, provided any such question is involved in it. The defendants contended that there had been a verbal contract between the parties on January 5,, 1915, and that it embraced not only the 76 needle goods, but also the 128 and 144 needle goods, and further that the letter of Hecht of that date contained the terms of the contract. It was further insisted that this contract for the two kinds of goods was indivisible and could not be relied on in part and rejected in part, and further, that if the defendants in good faith believed that the contract embraced the 128 and 144 needle goods and the plaintiff be-lieved. otherwise, there was no meeting of the minds of the parties, and hence no contract.. The plaintiff denied that there had been any such verbal contract, and contended that the letter of anuary 5th was a mere proposal concerning matters which the parties had discussed, that it did not contain the time and terms of payments or the duration of the contract, and that the plaintiff was free to accept any portion.or all of the proposals; that the acceptance or rejection could be made within a reasonable time, and could be either oral or in writing; that, through its manager, Holden, it orally declined to accept the proposal as to the 128 and 144 needle goods; and that by the letter of January 15, 1915, it accepted the proposal as to-the 76 needle goods upon the terms therein stated. Evidence was introduced to sustain each of these contentions, and the trial court fairly and fully submitted the question to the jury by instructions to which neither party objected. By instruction B, given for the plaintiff, the court told the jury:

“The court instructs the jury that in order to constitute a contract there must be an agreement of the parties, or ■meetings of the minds—upon the particular question at issue. A mere proposal, without an acceptance would not create a contract.”

By instruction D, given for the plaintiff, the court told the jury that if they believed from the evidence that no time was specified during which the plaintiff was to furnish the 128 and 144 needle goods, it had the right to terminate the order at the end of any week. Instruction 5, given for the defendants, was „as follows:

“The court instructs the jury that if they believe from the evidence that the plaintiff understood that the contract between it and the defendants only contemplated the making and delivery by the plaintiff at the rate of 150 dozen per day of half hose made on 76 needle machines and the defendants on their part understood that the contract between the plaintiff and defendants contemplated in addition to the 76-needle goods, the making and delivery by the plaintiff, at the rate of not less than 750 dozen per week of half hose made on 128 and 144-needle machines, that then and in that event there was a mistake as to the subject matter of the contract, the result of which was that there was no meeting of the minds of the parties, and the jury shall find for the defendants.”

The verdict of the jury, in effect, sustained the contention of the plaintiff, and with that finding we'cannot interfere. This finding eliminates any further consideration of the 128 and 144 needle goods.

[14] There was much evidence tending strongly to show that the contract had been abandoned by both parties to it, but whether or not it had been so abandoned was plainly a question for the jury whose verdict enforcing the contract cannot be disturbed.

As hereinbefore pointed out, nondelivery prior to February 23rd was waived, but the jury had further to consider whether or not there was a breach of the contract by the defendants on or after February 23rd which gave the plaintiff a right of recovery. On February 24th the plaintiff tendered to the defendants a sample of the half hose to be manufactured accompanied by a letter, skying, “These are scoured very hard and as you see are very dry, so you will find they will gain nearly two (2) ounces going across the water. They are very clean.” These samples the defendants rejected and returned because they did “not like the look of this 'dozen goods at all.” ■ Thereafter the plaintiff made no enquiry as to any other objections to the sample, furnished no other sample, made no other tender or delivery under the contract and manufactured no more goods under the contract, but relied upon what it had done as a sufficient tender of performance on its part. Viewed from the standpoint of a demurrer to the evidence, the defendants made no demand for any further samples, gave no further explanation for the rejection of the sample furnished and made no further demand upon the plaintiff for the goods. The defendants offered evidence to prove that while the contract called for goods containing fifty per cent, wool, the sample furnished contained only wool waste, that the plaintiff knew the goods were for the French Government, and that they were of such character that if they had accepted them they would have been rejected and thrown on their hands by the French Government. There was evidence on behalf of the plaintiff that the sample conformed to the contract, that the wool was of the same character as that used in all other contracts with the defendants and was such as any well organized plant would have put into them under a like contract.

[15] If the goods conformed to the contract of the parties, it is immaterial what the French Government would have done upon inspection. The verdict of the jury for the plaintiff was, in effect, a finding that the sample conformed to the contract, and cannot be disturbed. This finding of the jury is a finding of a breach of the contract by the defendants. A breach of contract by one of the parties thereto, however, is by no means a rescission. It is a mere offer to rescind which the other party may either accept or reject. The offer must be accepted before rescission is complete. It takes the assent of both parties to rescind. Rescission is the undoing of a contract, and the assent of both parties to it is as essential as it is to its making.

[16] The act of the plaintiff in furnishing the sample was not a performance of the contract, but a mere tender of performance as far as performance was then possible. If the plaintiff relied upon the sufficiency of its tender to keep the contract alive and hold the defendants to complete performance it-was necessary for it to show that the tender had been made in good faith, with a present ability and willingness to perform, and that the plaintiff had kept itself ready to perform whenever called upon by the defendants to do so during the life of the contract. Inman v. Elk Cotton Mills, 116 Tenn. 141, 92 S. W. 760. It was also necessary, to entitle the plaintiffs to recover, that it should have done no ;a,ct waiving its rights against the defendants growing out of the breach aforesaid. The plaintiff’s manager testified on its behalf that the tender was made in good faith, and that on and after February 24, 1915, the plaintiff had the materials, the machinery and the labor necessary to perform the contract, that it was able, ready and willing to perform ever thereafter until February 1, 1916, the date of the expiration of the contract, that it took no orders from others for this class of goods bui kept itself free and open to carry out the terms of the contract, and would have been glad to have had the order as it would have made a good profit on it. There was some testimony on behalf of the defendants that they demanded of the plaintiff a part of the goods in the latter part of April, 1915, and could not get them, but this is denied by the plaintiff’s manager upon whom the demand was said to have been made, and who testified that, at the date of the trial, the plaintiff still had on hand some of the goods which were referred to in his letter to the defendants’ associates of April 29, 1915.

[17] While the contract required the plaintiff to ship or store the goods, it was relieved of this duty by the refusal of the defendants to accept the sample. It would have been an idle performance for the plaintiff to have manufactured goods which defendants had notified it in advance they would not accept. If after this breach the defendants changed their mind and desired the goods they should have so notified the plaintiff and given it a reasonable opportunity to perform the contract, but this they failed to do. Obviously, the verdict of the jury finding for the plaintiff on this question cannot be set aside.

Did the plaintiff, after February 24, 1915, treat the contract as rescinded, or release the defendants from their liability for its breach? For months after that date the plaintiff was repeatedly demanding of the defendants a check for $1,800—they had agreed to advance to pay for the machines to make the 76 needle goods. In addition to this, the correspondence between the parties is relied upon to show the continued readiness of the plaintiff to fulfill its contract, and the unwillingness of the defendants to take the goods. On March 27 Hecht wrote Holden:

“I am now very much at unrest on account of the lack of business for export, as I have such a large amount of my finances tied up in this business at this time and I am unable to make any further moves until future business develops.”'

In reply to this statement, Holden on March 30th wrote to Hecht as follows:

“We, of course, bought these machines with your promise to pay for them and also to take the production for one year! You have apparently disregarded taking the goods as agreed; and we hope you do not think of not paying for the machines.”

On April 12th Hecht wrote to Holden:

“So far we have not been able to get the new orders on heavy wool socks, on a satisfactory financial basis, but I haven’t any doubt that during the year we will get a great-deal of business.”

Holden wrote Hecht on April 17th: •

“You know you told me if we would buy these machines you would take our production on them for one year even if you could not use them during the summer.”

Hecht wrote Aetna Hosiery Company oh April 21st, as follows:

“I am in receipt of yours of the 17th. We have no orders on heavy w.ool hosiery at this time, but we expect to have very large business later on in the season, at which time, of course, I could readily use the output of your 76 needle machines. Until that time, however, I do not want any of the goods, and I am sure you don’t want me to think about taking them unless I can sell them.”

On May 17th, Hecht wrote Holden:

“It seems to me also that there should be an understanding between us that if we desire the product of these machines you will give us the same. We have booked some very large business recently, but it only covered, so far as the 84 needle product is concerned, actual merchandise that we had already made up in stock, but we have every reason to believe that we will have in the very near future some very large business for delivery September, October and November, of this year, in which case I will very probably need your assistance, and will advise with you concerning same later on. There is one point, however, that I might as well speak of at this timé, and that is that the day of very long profit on the export hosiery business has passed. * * '* It is no longer possible for me to give long profits to the manufacturer or to get long profits for ourselves.”

On May 19th Mr. Holden replied to this letter and said in part:

“In letters since, it sounds as though you wanted us to feel you were doing us a kindness in paying for these machines. At the time, you were very anxious to get goods, and make the profit, and you were willing to concede most anything to get the goods. But as soon as business began to slack up you then refused to take the goods.”

In reply to this letter Hecht, after acknowledging receipt of the letter of the 19th calling Hecht’s attention to the refusal to take the goods, Hecht said:

“Now, as regards the output of these machines, of course you will operate them, and I did not mean in my previous letter that you should depend upon us for the sale of the output of them. You, of course, will sell all you can, and if I can turn any business over to you that you want on new orders, which we, by the way, have none at this .time, certainly I will let you hear from me, but I would say this. I haven’t any doubt at all but what there is plenty of business coming this fall on wool socks for these machines.”

Upon this and other evidence in the case, the jury found a verdict in favor of the plaintiff, and with this verdict we have no right to interfere. Upon the whole case, we are of opinion to affirm the judgment of the circuit court.

Affirmed.