Hobbs v. Columbia Falls Brick Co. , 157 Mass. 109 ( 1892 )

Morton, J.

We think that, upon the facts which were agreed, and upon those which appeared in evidence from the testimony of its president and treasurer, the defendant was entitled to go to the jury on the question whether there had been an abandonment of the contract by the plaintiffs and their assignees, which was assented to by the defendant. The court ruled generally, upon the evidence thus disclosed, that it would not constitute a defence. If, therefore, the defendant can avail of it in any aspect as a defence, it is entitled to a new trial.

As the case was left, it appeared that after the contract was entered into the plaintiffs became insolvent, and made a voluntary assignment for the benefit of their creditors, of which they gave notice to the defendant. They afterwards took the benefit of the insolvent act, and compounded with their creditors by composition proceedings. No reference to the contract was contained in the schedule of assets which they filed in the insolvency court, and there was no allusion to it in the statement of their assets which was made by them at a meeting of their creditors. The contract was an executory one, and the plaintiffs knew that the brick were to be made at the defendant’s place in Maine. They gave no notice directly or indirectly to the defendant till May 12, more- than four months after the notice of their assignment, that they should claim performance, and did not till then offer to pay or secure the defendant under the contract. The defendant sold the brick some time in April. We think it would have been competent for the jury to find, under these circumstances, that the plaintiffs had abandoned the contract, and that the defendant had assented to and acted upon such abandonment. The jury properly could have regarded the giving of the notice of the assignment as equivalent to the plaintiffs saying that they could not go on with the contract, especially when taken in connection with all the other circumstances. Morgan v. Bain, L. R. 10 C. P. 15. In re Phœnix Bessemer Steel Co. 1 Ch. D. 108. Ex parte Stapleton, 10 Ch. D. 586. Ex parte Chalmers, L. R. 8 Ch. 289.

While the fact that the plaintiffs became insolvent after entering into the contract would not of itself have terminated the contract, it was competent for the jury to find that the notice which they gave to the defendant of the assignment and their subsequent conduct justified the defendant in the assumption that they had abandoned the contract. The conduct of the assignees, assuming that the contract passed to them, does not put the matter in any better shape for the plaintiffs. It was their duty within a reasonable time after the assignment to elect whether to proceed or not with the contract, and to notify the defendant accordingly. Ex parte Chalmers, L. R. 8 Ch. 289. Ex parte Stapleton, 10 Ch. D. 586. They did not do this. On the contrary, when the defendant’s treasurer inquired whether they were going to claim the contract, the reply which he got left on his mind the impression that they were not. They did nothing to indicate that they were going to claim it, and did not offer to pay or in any way secure the defendant for the performance of the contract. They continued to hold the property assigned to them till April 17, without taking any action in reference to the contract, when they reconveyed it to the plaintiffs, who could derive no higher right from the assignees than they themselves possessed.

Inasmuch as there must be a new trial, and the case may then go off on the ground which we have indicated above, or the facts relating to it may not then be as now stated, we have not considered the effect of the testimony offered by the defendant tending to show that the plaintiffs were hopelessly insolvent at the time when they made the contract, and knew themselves to be so, and concealed the fact from the defendant, who was thereby induced to enter into the contract.

Exceptions sustained.