Maurer Co. v. Tubeless Tire Co. , 225 F. 713 ( 1922 )

DONAHUE, J.

Epitomized Opinion

This was an action by the Maurer Co. to recover damages for breach of two contracts. Both contracts were made during the period that the United States was at war with the central powers of Europe. The contract of May 3, 1918, provided that the defendant agreed to buy rubber of the plaintiff to be delivered in equal monthly quantities in the months speciled. It also provided that the contract would be subject to all rules and regulations imposed by the U. S. The second contract of May 14, 1918, provided for the delivery of rubber from the East Indies on certain specified months of that year. This contract also provided that it would be subject to all rules and regulations imposed by the U. S. and that the buyer would furnish seller with manufacturing import license. Four days after the making of the first contract, the government prohibited the importation of any new rubber for delivery to private customers unless such customer obtained an allocation certificate from the War Industries Board. As the defendant could not procure such an import license, only small deliveries were made by plaintiff at irregular intervals. In Sept. 28, 1918, the defendant refused to accept one of these shipments. In April, 1919, the plaintiff tendered to the defendant the balance of the rubber due on both contracts. As the price of rubber was then much lower, the defendant refused to accept. The plaintiff then sued claiming that the war merely operated to postpone performance, while the defendant claimed that the war terminated the contract. The parties, in writing, waived a jury and the court found for defendant. The plaintiff then prosecuted error to the U. S. circuit court, which in sustaining the lower court held:

1. Where the war regulations, which were anticipated by both parties, prevented delivery of all but a small and inconsequential part of the rubber at the time stipulated, the effect was to terminate the contracts, and not merely to postpone delivery.

2. Where, by reason of such regulations, the seller was in default for failure to deliver several monthly installments due under the contracts, and necessary to keep the buyer’s factory in operation, the latter could not be required thereafter to accept delivery of a lump quantity to apply on such past due installments.