Wausau Canning Co. v. Woodruff

207 N.W. 421, 189 Wis. 184, 44 A.L.R. 435, 1926 Wisc. LEXIS 80

• Court: Wisconsin Supreme Court
• Decided: February 9, 1926
• Status: Published

Opinion

Owen, J.

The principal question to be considered is that of the right of the plaintiff to recover damages as and for a breach of the contract. It is claimed that the contract was breached in the first place when the defendant failed to plant sufficient seed to produce the amount of peas which he had contracted to deliver to the Wisconsin' canneries. It does not seem necessary for us to determine with precision the exact effect of defendant’s failure to plant sufficient seed to produce the amount of peas which he had contracted to deliver to Wisconsin canneries. Granting that it was such a breach as would justify the plaintiff in terminating the contract and making other arrangements for securing its peas, the fact remains that it did not terminate the contract, and it further appears that the defendant offered to deliver to plaintiff practically, if not exactly, the amount of peas to which it was entitled under the contract. The peas planted by the defendant yielded a return available for delivery under the contract of eighty-three and one-third per cent, of the amount of peas planted. Had defendant planted 2,200 bushels of peas — the amount which he should have planted with a reasonable expectation of producing the amount of peas which he had contracted to deliver, — he would have had a yield of 1,850 bushels available for delivery on his contracts aggregating 11,100 bushels. Plaintiff’s pro rata proportion of 1,850 bushels would have been represented by the fraction 20-111, or 333 bushels, which is exactly the amount that the defendant offered to deliver by its letter of January 18th. We hold, therefore, that no breach of the contract can be predicated upon the failure of the defendant to tender the amount of peas to which the plaintiff was entitled under the contract.

We should perhaps refer to a contention made by the appellant in this connection. It appears that the defendant planted a quantity of “Alaskas” in the state of Washington for the purpose of producing a stock of seed peas for his own purposes. Appellant contends that the amount of peas produced from this planting should be considered in arriving at the amount of peas to which plaintiff is entitled. This cannot be so. The plaintiff is not entitled to a pro rata Share of all peas planted by the defendant in the state of Washington‘during the season of 1922. It can demand a delivery of only the pro rata proportion of the yield which would have been available to fill plaintiff’s and all similar contracts had the defendant planted sufficient peas to reasonably produce the yield required by such contracts. As we have already seen, that amounts’ to 333/6 bushels, which amount the defendant by his letter of January 18, 1923, offered to deliver.

The appellant further contends that the letter of January 18th, written by defendant to plaintiff, prescribes a peremptory and arbitrary method of payment not justified by the terms of the contract, and one with which the plaintiff •was under no obligations to comply. It will be noted that the contract authorized the defendant to demand cash payment before shipment. With this condition plaintiff was under obligations to comply, unless compliance therewith was excused or the attitude of the defendant indicated that compliance therewith would be a futile proceeding. It is conceded that plaintiff did not at any time tender cash in payment of the peas. The letter of January 18th, written by the defendant to the plaintiff, contains the following:

“The terms of the contract provide that we reserve the right to demand cash for these peas, and the Wausau Canning Company have agreed that they will pay cash for the peas, less a discount of one and one-half per cent, before the peas are shipped.

“The financial standing of the Wausau Canning Company is unknown to us, and we do not care to ship these peas under any other conditions.

“We therefore hand you herewith invoices for the peas.

“We request that you establish á credit with the Irving National Bank of New York for the amount of these invoices, payment to be made to us upon our delivery to said bank of bills of lading covering the above quantity of seeds. Your failure to do this will necessitate our selling the peas upon the open market, and will also necessitate our looking to you for any loss incurred.”

We construe this language to be a peremptory and arbitrary demand that plaintiff do something not required of it by its contract. While the contract reserved to the defendant the right to demand payment .in cash before shipment of the peas, it did not authorize it to demand that the plaintiff establish a credit with a bank in the city of New York, or elsewhere, as a condition precedent to the shipment of the peas. It is argued that the purport of this language was but .a suggestion on the part of the defendant that the establishment of credit with the New York bank would be accepted as cash payment, that it did not foreclose the plaintiff from tendering cash payment, and that a reasonable course on the part of the plaintiff would have been to have answered this letter protesting against the requirement imposed, and to again give assurance that it was prepared to make the cash payment required by the contract. However, we think it very clear that the language of the letter was in the nature of a final ultimatum which definitely advised the plaintiff that unless it established a credit with the New York bank the peas would be sold upon the open market and that the defendant would look to the plaintiff for any loss incurred. Plaintiff’s letter to defendant of January 17th conveyed assurance that it was prepared and was ready and willing to live up to the letter and spirit of this agreement. There was just as much obligation on the part of the defendant to answer plaintiff’s letter, withdrawing the demand that credit be established with a New York bank, as there was on the part of the plaintiff to protest against the unauthorized demandin fact, the failure of the defendant to reply to the letter of the 17th was thoroughly consistent with the final tenor of its demand.

In 2 Williston on Contracts, § 676, it is said that there are three clear grounds which will excuse the non-performance of a condition of a contract, the third of which is, “facts showing that even if the condition were performed, the promise would not have been kept; and that for this reason only the condition had not been performed.” It is quite clear that the plaintiff was justified in construing the terms of this letter as an ultimatum with reference to the manner of payment and that further efforts or negotiations in this respect were useless.

In 5 Page on Contracts (2d ed.), § 2904, it is said that “If, however, one party manifests his intention in unequivocal language not to perform the contract unless the adversary party consents to a modification thereof, this may Amount to a breach, but it cannot relieve him from liability under his contract,” and reference is made to cases sustaining and illustrating the doctrine in the following language:

“If one of the parties to the contract notifies the adversary party that he will not perform unless such adversary assents to- the modification of the contract by the addition of certain new terms, such conduct amounts to a renunciation of the contract. Trowbridge v. Jefferson Auto Co. 92 Conn. 569, 103 Atl. 843; Johnson Forge Co. v. Leonard, 3 Penn. (Del.) 342; Stephenson v. Cady, 117 Mass. 6; Blackburn v. Reilly, 47 N. J. L. 290, 1 Atl. 27; National C. Co. v. Hudson River W. P. Co. 192 N. Y. 209, 84 N. E. 965. If a party to a building contract demands that the adversary party assent to the modification of the plans before he proceeds with performance, such conduct is renunciation which the adversary party may treat as breach. National C. Co. v. Hudson River W. P. Co. 192 N. Y. 209, 84 N. E. 965. If A. has agreed to construct an ice plant and refuses to complete it unless the adversary party will waive a claim for damages, such refusal is a breach. Bryson v. McCone, 121 Cal. 153, 53 Pac. 637. A refusal to perform a contract of sale unless the adversary party consents to a modification of the price, amounts to a renunciation of the contract. Trowbridge v. Jefferson Auto Co. 92 Conn. 569, 103 Atl. 843. If a contract for the sale of goods provides for its sale on credit, the refusal of the seller to deliver the goods unless the buyer will deliver notes for the purchase price thereof before such goods are delivered, amounts to a renunciation of the contract (Petersburg F. B. & T. Co. v. American C. M. Co. 89 Ohio St. 365, 106 N. E. 33, L. R. A. 1915 B, 536), especially if the seller demands that such notes be delivered at a place other than that fixed by the contract for the delivery of the goods. Petersburg F. B. & T. Co. v. American C. M. Co., supra.”

While the demand made by the defendant in the instant case was not in express terms, a demand that the terms of the contract be rewritten, it was nevertheless a refusal to perform unless the plaintiff did something not required by the terms of the contract, which was in eifect a demand for a change in the terms of the contract. Our conclusion is that the demand contained in the letter of the 18th constituted a breach of the contract on the part of the defendant. It excused further performance on the part of the plaintiff, and upon the defendant’s failure to deliver, the plaintiff had a good cause of action for the breach of the contract. The only question of fact to be submitted to the jury on this cause of action was the question of plaintiff’s damages by reason of ’the breach.

During the course of the trial plaintiff offered to prove its damages by reason of the f ailure of the defendant to deliver any and all of the peas spe cified in the contract. The court, however, confined proof ini this respect to the loss sustained by the plaintiff by reason of the failure to deliver the Alaska peas only. This was en.'or. The contract is entire. New Richmond R. M. Co. v. Arnquist, 170 Wis. 130, 174 N. W. 557; Washburn-Crosby Co. v. Kubiak, 175 Wis. 291, 185 N. W. 162. Plaintiff’s «fatnage is the loss it has sustained by reason of the fail ifo deliver not only the Alaska but all other peas specif inn the contract.

The disputed is'jtte involved in the counterclaim was whether plaintiff h- A£| converted 300 pounds of beet seed and 347% bushels of Rice’s No. 13 pea seed. The testimony upon this subject w.as conflicting and plainly constituted an issue for th £ jury. This is really not seriously controverted, but ap pellant claims that there was no evidence upon which the jr¿ry coul.d find the value either of the beet seed or of the Tpea seed at the time of conversion. The only testimony jn the ca .se concerning the value of the seed was that of † defends .nt, who testified that at the time the beet seed crime into possession of the plaintiff it was worth sixty cents, a pound, anc 1 that upon the occasion of the first de-ma md made by the; defendant on the plaintiff for the pea f^ed it was worth, ffrom $4.50 to $5 per bushel. Appellant ^pntends that the yj due of the beet seed at the time it came into the possession of the plaintiff furnishes no evidence of the value thereof at the time of its conversion, which was several months later, and that, similarly, the value of the pea seed at the time of the first demand constitutes no evidence of the value of the pea seed at the time of the conversion, because the actual conversion took place some months thereafter. Upon this point we think appellant is in error. There is no presumption that the value changed during the interim, and if plaintiff was not satisfied with the value of the seed as fixed by the testimony of the defendant it was at perfect liberty to show that the value of the seed upon the 'respective dates testified to by the defendant was not the true value thereof at the time of the conversion. In the absence of any such testimony the jury was warranted in finding that the value of the seed was the same at the time of conversion as upon the dates to which the defendant testified.

It is quite apparent that the second cause of action set forth in plaintiff’s complaint, and the causes- of action set forth in defendant’s counterclaim, were properly tried and submitted to the jury, and that the verdict correctly disposes of those causes of action. The trouble with the verdict is that the jury evidently disallowed plaintiff any damages upon the first cause of action. A new trial should be had as to that cause of action, but it seems unnecessary that the parties should be put to the expense of retrying the second cause of action set forth in the complaint and the causes of action contained in the counterclaim. A new trial will be granted, therefore, upon the first cause of action set forth in plaintiff’s complaint. The verdict of the jury will stand as a disposition of the second cause of action set forth in plaintiff’s complaint and of the causes of action set forth in defendant’s counterclaim.

By the Court. — Judgment reversed, and cause remanded with instructions to grant a new trial upon the first cause of action set forth in the plaintiff’s complaint: the verdict of the jury herein to stand as a disposition of the issues raised upon the second cause of action set forth in the plaintiff’s complaint and of the causes of action set forth in defendant’s counterclaim.