Gerseta Corp. v. Mogi , 17 F.2d 699 ( 1927 )

HOUGH, Circuit Judge

(after stating the facts as above). The scheme of pleadings and some uncontradieted facts have been set out at some length, because we think that background, with some holdings by us on the force and effect of the evidence, will avoid discussion of several legal points.

The vital question is whether Gerseta showed legal excuse or justification for its repudiation of contracts made on June 3d. At that date Mogi had in New York City and in warehouse silk of the brands and in the amounts that Gerseta should have taken, had it observed the delivery dates originally agreed upon. The Argus of contract 934 (or that substituted for it) was not deliverable until August, and 30 bales of the Yuen Shi Kai of contract 1044 not until September, so that Gerseta had no cause of complaint on that head.

Mogi's readiness to deliver was not prevented or hindered by any bank title or liens other than that of Guaranty Company as to 20 bales Sin Shu under contract 785. It is true that much, if not most, of the silk held for Gerseta, had come into the country under bills of lading controlled by, if not to the order of, the Yokohama Specie Bank; but that institution, by a system of trust receipts and standing orders on the warehousemen (too familiar to need description), had enabled Mogi to sell and deliver the silk with perfect freedom, so far as buyers were concerned. As long as Gerseta could get what it had bargained for when entitled to it, the relations between Mogi and the bank were irrelevant. This situation was clearly proved.

The quality of the silk was sufficiently evidenced by showing with no contradiction that it was of known brands, and that those brands import, and are known in the trade to import, silk of the quality signified by the brand name. The goods were bought by the names, and quality was not questioned by the terms of the letters of repudiation. It was made entirely clear that Gerseta did not object to quality, and gave no evidence of poor quality; it did not want to pay the prices agreed on before the price collapse. There was nothing on this point for the jury.

It may be considered as proven that in* many, if not most, instances Mogi did not notify Gerseta, when delivery dates arrived, that it was ready to deliver, but neither did Gerseta call for the silk due. While time in commercial contracts is usually of the essence, we think it here plainly proven and uncontradieted that by agreement in this matter time of notification was not of the essence. This result is aided by considering the rule of the Silk Association above quoted. Indeed, we go further and hold that by the letters written by Gerseta it requested and obtained from Mogi the privilege of having the silk stored until it was wanted. There was no just cause of cancellation under this head. This arrangement was not extraordinary, because by the contract terms Gerseta agreed to pay interest on purchase price.

The evidence is clear and uncontradicted that the silk was timely in New York; the testimony from the warehouse is full on this point. So, also, is the evidence that silk of proper brands was allotted to these contracts; such allotment was on the books of Mogi.

The points now enumerated (i. e., actual silk on hand; ability to deliver promptly goods allocated to these contracts and of the quality [i. e., brands] agreed on) show that as to all the silk as to which Mogi had judgment, and for which the. delivery dates were past on June 3, 1920, there was readiness,ability, and willingness to deliver. As to the goods to be delivered 'in August and September, 1920, we think the proof too clear to require comment:

Observing that questions of value and amount of damages were submitted to the jury, we see no error in directing verdicts in respect of matters thus far treated. The rule is that, if cmy verdict contrary to the evidentiary results above indicated must have been set aside, a directed verdict is proper. Such was the case here.

Having now held that there was no evi- , denee requiring jury submission of the question of fact whether Mogi was ready, able, and willing to perform, we consider some questions of law. .

It is urged, in substance, that it was a prerequisite to recovery by plaintiffs below that the title to the silk should, as between the parties, have passed to Gerseta, semble by allocation of goods and notice thereof to the buyer.

It is enough to say that'we discover no words in contract or correspondence indicating any intent to do or require this. It satisfled the agreement of parties that Mogi had the goods by delivery date, and was then and thereafter ready, able, and willing to deliver according to contract.

Next is urged the assertion that in some way, by virtue of some talks before or on May 24,1920, the 55-bale transaction should be regarded, or a jury might have found it to be, a single entire contract, which in its entirety Mogi could not perform, and therefore could not recover on any of contracts 709, 785, and 805. We think there is no evidence showing a new or different contract; the original written agreements were separate contracts, containing independent promises. On May 24 Gerseta called on Mogi to complete or fulfill all three; as to two of them full performance was made, and judgment went for Mogi; as to the other, performance was not made within a reasonable time, and judgment went against the seller. This was right.

The causes of action based on contract 1044 raise the last question in this case. Plaintiff in error objects to the stating of three causes of action based on this contract; but, since the document contains several independent promises to buy separate and different kinds of goods at differing prices, we think the procedure right. The contract was divisible or separable. Williston, Contracts, §■873- _

_ By insisting erroneously on the entirety of contract 1044, Gerseta seeks to justify a counterclaim, dismissed below, which is as follows: Agreement was to buy 105 bales of silk; i. e., the aggregate of Gold Mountain, Double Phoenix, Buffalo, and Yuen Shi Kai. Gerseta took and paid for 25 bales; then Mogi was not ready, able and willing to deliver all of the remaining 80 — i. e., as to 10 Double Phoenix, 30 Buffalo, and 10 Yuen Shi Kai there was no timely allocation of silk to Gerseta’s contracts within the original delivery periods; wherefore, under section 125 of Personal Property Law of New York (Laws N. Y. 1911, c. 571), Gerseta, not being liable to pay for the undelivered balance, can recover from Mogi the difference between what it paid under the contract and the reasonable value of the said 25 bales, (semble) at the time of such payment. On a market falling so rapidly as was that for silk in 1920, the difference between reasonable — i. e., market — value and cost price was very substantial. The interpretation of the statute relied on is set forth in Guaranty Co. v. Gerseta, 212 App. Div. 76, 208 N. Y. S. 270.

In its entirety this counterclaim cannot be approved, because it seeks to treat contract 1044 as entire; but, as the greater includes the less, it did present the question whether, since the trial court gave judgment for defendant as to the 10 bales of Yuen Shi Kai, defendant was or was not entitled to recover the difference between the contract price and reasonable value of the 5 bales of that brand delivered and paid for.

We think that to this extent defendant below was entitled to be heard, yet we do not find it necessary to consider the interpretation of section 125 of the Personal Property Law (Laws 1911 N. Y. c. 571); for, admitting arguendo that, if defendant was entitled to judgment as to the 10 bales, it was entitled to counterclaim as to the 5, the question remains whether the judgment for defendant as to the 10 was right. The point is necessarily involved in and by this writ, which attacks the propriety of dismissing the counterclaim.

' We think that the proof was full that the correspondence between the parties, first above alluded to, proved that Gerseta had agreed that Mogi need not be ready to deliver the 10 bales until the buyer called for it; wherefore plaintiff below, and not Gerseta, should have had judgment as to the 10. If this be so, plaintiff in error cannot complain; indeed, it escaped with a smaller judgment than should have been awarded.

Finally, we find no error in the allowance of interest, a subject which has received so much and so recent attention in this court that we need not dwell upon it.

Judgment affirmed, with costs. ■