Schleicher, Schumm & Co. v. Montgomery Light Co. , 114 Ala. 228 ( 1896 )

HEAD, J. —

The original complaint in, this caséis a plain, ordinary action for damages for the breach, by the defendant, of an executory agreement to purchase from the plaintiffs, and pay them the stipulated price thereof, the machinery therein described. The fact that the damages are laid at the same amount as the contract price, can exert no influence, in determining the legal character of the action — the allegations being clear and unambiguous, showing its character to be as above stated. No manner of demurrer could be properly sustained to the complaint, and the court erred in sustaining those interposed.

The count numbered 3, added by amendment, is in legal effect the same as the original complaint. The substance of the agreement on the part of the defeudant, as shown in this count, was, that it would purchase the machinery, at the agreed price, and receive delivery thereof on board cars, at Philadelphia, to be carried by its agents — the carriers — to Montgomery, Alabama, and there, by the defendant, to be set up and operated ; and the plaintiff agreed that the defendant, after testing the machinery, within thirty days, should have the right to rescind the contract, if the machinery should not be approved by it, for the purposes for which it was purchased. This, we say, is most clearly the substance and legal effect of the contract as it is stated in this count. The agreement was for a completely executed sale and purchase, to be consummated, on the part of the plaintiff, by delivery to the carriers in Philadelphia. The agreement for a rescission, or as the count states it, ‘ ‘the defendant to be released from the purchase,” &c., was a condition subsequent, which could only be effective after the event arose ; that is to say, after the defendant had tested the machinery, within the stipulated time, and found that it did not meet his approval for the purposes for which it was purchased. — Foley v. Felrath, 98 Ala. 176. It is too plain, therefore, for controversy, that it was the defendant’s duty (the plaintiff being in no default) to receive the machinery in the execution of the purchase ; and, if it desired to preserve its right to rescind, to put it' to the stipulated test in order to determine whether it received its approval — an approval not to be exercised or not, capriciously and without qualification, but approval "for the purposes for which it was purchased,” as the agreement stipulates. The defendant might, for many reasons, have desired to recant its purchase, and yet after making the test according to the agreement, might have found the machinery perfect in all the requirements of the contract, and entirely suitable to the purposes for which it was purchased, and thus have been forced to accord to it his approval. — Mobile Electric Light Co. v. Elder Bros., infra. In that event, the condition, upon which depended the right of rescission, would have failed.

There can be no doubt, therefore, that the defendant committed a breach of the contract when it refused to accept delivery of the goods, giving cause of action for recovery by the plaintiff of all damages proximately resulting from the breach., By this breach, it became impossible for the condition subsequent above discussed to transpire, and the rights of the parties, under this count, must be determined without reference to it. The court erred in sustaining demurrers to the count.

The effect of the fourth count is that the plaintiff should deliver the machinery to defendant, on board cars in Philadelphia, to be carried to defendant’s home, which the count, by inference merely, states was in Montgomery, Alabama ; that the defendant should try it to ascertain whether it was suitable for the purposes for which it was intended, and if it was approved 'by the defendant it was to pay the stipulated price. The count then avers that the defendant refused to receive the machinery after it was placed on the cars in Philadelphia, and this is the breach assigned.

It is observable under this version of the contract, that there was to be no completed sale until the happening of the condition precedent, that the defendant would try the machinery, and ascertain, &c., as above stated. There is no question of rescission involved in this count, but, on the contrary, the sale was not to take effect, at all, until the specified approval should take place. The delivery stipulated to be made was not to pass title to the defendant, in the execution of the proposed sale. It was to furnish the means by which the happening of the event, which was to operate to complete the sale and pass the title, would be rendered possible. So, the action is not for a refusal to complete the purchase, but for refusal to furnish the stipulated means by which it would be possible for the purchase to take effect. Had there been no refusal to receive and try the machinery, it would not have followed necessarily that a sale would have been consummated ; for the machinery might have properly failed to receive the defendant’s approval. The question then is, whether a refusal to take the stipulated steps without which a sale could not occur, and by which a sale might merely become possible, constitutes an actionable breach. We are unable to see why such an agreement is not mutually binding, giving rise to an action in favor of either party, for a breach by the other of any of its stipulations. It was a valuable right of the plaintiff that the defendant receive the machinery and try it, whereby, if approval followed, he would have made sale of his goods. It was a valuable right of the defendant that the plaintiff deliver the goods in order that it might effectuate a desirable purchase. The uncertainty that a sale would have resulted, had there been no breach, can not detract from the force of the promises which were broken. The difficulty, perhaps, lies not so much in determining that a cause of action exists, as the admeasurement of damages— a question we are not now called upon to consider. We are of opinion the court erred in sustaining the demurrers to the count.

The fifth count is substantially the same as the fourth, and the demurrers to it should be likewise disposed of.

The sixth and seventh counts, we think, are substantially the same as the third, and should be likewise disposed of.

This case is unlike that of Allen v. Mutual Compress Co., 101 Ala. 574, and not controlled by the principles there declared.

Reversed and remanded.