Lehigh Zinc & Iron Co. v. Trotter , 42 N.J. Eq. 678 ( 1887 )

The opinion of the court was delivered by

Reed, J.

The decree appealed from was made upon a petition filed in this cause. The facts involved in the suit which are important in respect to the question raised by the petition are substantially the following:

Trotter, the respondent, in 1881, entered into an agreement with one Heckscher that he would deliver to Heckscher twelve thousand tons of franklinite ore in regular monthly shipments of one thousand tons each month, said shipments not to fall short of nine hundred and ninety tons, nor be in excess of one thousand and ten tons.

The agreement further provided that, after the expiration of the time mentioned for the delivery of the above twelve thousand tons, Heckscher, upon notice to Trotter, should have the right to the delivery to him of such quantities of ore as he indicated in his notice, under certain specified conditions.

On the 6th day of August, 1881, Heckscher assigned all his interest existing under this agreement to the appellants, the Lehigh Zinc and Iron Company.

On the 22d of May, 1882, the said company gave notice to Trotter that they would take twelve thousand tons of the said ore annually, in monthly shipments of not less than nine hundred and ninety tons nor more than one thousand and ten tons, until the year 1907, under the same terms, covenants and conditions as contained in the agreement of June 2d, 1881.

The agreement provided that the prices of the said ore should be graded according to the percentage of oxide of zinc it was found to contain by the test made by an assayer or assayers to be appointed by the parties.

A disagreement arose in 1882 in respect to the accuracy of the assays, and Trotter, alleging that money was due him which the company refused to pay, stopped the shipment of ore. He then filed a bill for the specific performance of the agreement, and the company filed a cross-bill for the same purpose and for the appointment of a receiver of the mine.

The court, in August, 1882, appointed a manager for the purpose of seeing that the ore was delivered and paid for according to the terms of the contract.

This was in accordance with the prayers of both parties.

The zinc company failed to pay for the ores shipped under the contract for the month of December, 1884, and on January 15th, 1885, the manager ordered shipments to stop, and they thereupon stopped.

The reason assigned by the zinc company, in their answer to the petition, for the cessation of payments, is based upon the , following alleged existing facts:

That Trotter, when he entered into the agreement to deliver ore, was a lessee of the land from which the ore was to be taken. His lessor was James L. Curtis, who had the legal title to the premises.

Curtis conveyed his reversion to the Franklinite Steel and Zinc Company, and that company sold the same to Heckscher.

Under one of the two leases made to Trotter, rents and royalties were reserved, and Heckscher, as the assignee of the reversion, claimed these from Trotter.

Attachments were issued both in this state and in the state of Pennsylvania for their collection.

Under the last-mentioned writ, the moneys due from the Lehigh Zinc and Iron Company, in Pennsylvania, to Trotter, were attached. After the service of this writ of attachment, the Lehigh Zinc and Iron Company held back the December payment. This was followed, as we have observed, by a stoppage of the shipments of ore. Trotter then filed the present petition. In it was set forth the issuance of the writs of attachment and that the claim of Pleckscher for royalties was unfounded; that the moneys due were required to operate the mine.

The petitioner prayed that Heckscher might be enjoined from prosecuting his writs of attachment; that he be decreed in contempt for the issuing of the same, and that the zinc and iron company might be decreed to have forfeited their right (which had been decreed to them in the suit) to detain in the court of chancery moneys due to the petitioner. The petitioner prayed to be advised whether, by reason of the foregoing acts of Heck-scher and the company, he was not justified in abrogating the °ontract made for the delivery of and payment for the ore.

. Upon the hearing upon the petition and answers, it was decreed that Heckscher was in contempt for issuing the attachment in Pennsylvania. It was further decreed that Trotter should ship to the Lehigh Zinc and Iron Company, each month, the number of tons called for in the contract, and also should deliver, in addition thereto, at least two hundred and fifty tons of ore each month until the whole number of tons of ore due to the defendants for the months of January, February and March should have been shipped, but no more in any month unless defendants required it. It is from this part of the decree, namely, the order for the extra shipments of ore, that this appeal is taken by the Lehigh Zinc and Iron Company.

The action of the manager in stopping the shipments of quotas of ore for the months of January, February and March was in- . duced by the failure of the defendants to pay for the previous' December shipment. He acted upon the supposition that the failure of the company to pay for one or more justified him in refusing to deliver any subsequent quota until the previous dues were liquidated.

In this view he was supported by the court, which, by an intermediate order, approved his conduct in this respect. It was upon the assumption that the stoppage of the shipments was justified by the default of the defendants, and for the purpose of restoring' to the petitioner what he had lost by the cessation of shipments for three months, that the part of the decree appealed from was made.

It seems plain, however, that under the contract, the failure of the defendants to pay for the December shipment did not justify a refusal to deliver the quotas due in each of the succeeding three months.

"When this cause was. before this court on a previous occasion it was held that a default in payment for one instalment of ore did not excuse the non-delivery of a subsequent portion, unless the conduct of the defaulting party was such as to evince an intention to abandon the contract. Trotter v. Heehsher, IS Stew. Eq. 612.

No facts are apparent which indicate such an intention on the part of the defendants, but on the contrary, all the circumstances display the absence of such an intent.

But even if it be admitted that an unjustifiable refusal to pay for the December shipment afforded a legal ground for the refusal to make deliveries during the three subsequent months, yet the facts appearing in the petition and the answer to the petition relieve the defendant from responsibility for the failure to make the payment.

The money due upon the December delivery was impounded in the hands of the defendants by legal process from the courts of Pennsylvania. Although the attachment under which this was done was sued out by Hecksher, and although he was held to be in contempt by the court of chancery for this conduct, yet no complicity between him and the defendants in carrying out this scheme is proven.

After the garnishment of the money due for the December delivery the defendants were powerless to do aught except to hold the money to answer the purposes of that proceeding, until the attachment was dissolved or otherwise terminated.

It seems clear, therefore, that the defendants were not responsible for the failure to pay for the December quota of ore, and also that the petitioner was inexcusable for not delivering the quotas for the months of January, February and March. The decree, therefore, compels a party not in the wrong and against his wish and presumably to his disadvantage, to accept ore at times and in quantities uncalled for in his contract, for the purpose of aiding the party who, without excuse, refused to deliver the ore according to his agreement.

In this view of the question involved, the decree seems to be erroneous.

Nor does this seem the less true because of the existence of the circumstance that by the assent of both parties the court of chancery had placed a manager in charge of the business, whose duty it was to make deliveries of ore and to collect pay for them, and it was the manager who stopped the deliveries during the three months.

It is obvious that the manager was not appointed to modify the terms of the contract between the parties, but for the purpose of executing that instrument. And the power of direction over his conduct which existed in the court of chancery, would be exercised in the light of the rights of the parties under the provisions of their agreement. It already appears that under

the contract, the circumstances which surround the present transaction afford no ground for the present order. And if the manager be regarded, in respect to his previous conduct, as the representative of both parties to the contract, then no act on his part can be the subject-matter of complaint by the petitioner, nor can the result of such be visited upon the defendants in the shape of this adverse decree.

In any aspect in which the cause can be viewed, I think that the decree is erroneous, and should be reversed.

Decree unanimously reversed.