Mack v. . Snell , 140 N.Y. 193 ( 1893 )

The referee found and both parties concede that the contract between the parties was one of bailment and not of purchase and sale. The consequence follows that the title to the completed shears was at all times in the defendant. The materials added by the plaintiffs in performing their contract became by accession, when joined with the material furnished by the defendant, the property of the latter, he having furnished the principal part, the part furnished by the plaintiff being accessorial merely. (Pierce v. Shenck, 3 Hill, 28; Foster v. Pettibone,7 N.Y. 435; Merritt v. Johnson, 7 Johns. 473.) When, therefore, the plaintiffs delivered to the defendant in January, 1884, one hundred and forty-six pairs of completed shears, it was a delivery to the defendant of his own property, and the title to the undelivered shears, completed in March, 1884, was also in the defendant, notwithstanding his refusal to receive them. The plaintiffs agreed to manufacture the shears, using the handles furnished by the defendant, for the sum of seventy-four cents per pair, to be made in all respects like the sample. The referee found that the shears manufactured were not like the sample, but were defective by reason of not conforming thereto, whereby they were useless and of no value, and that the defects were not discoverable by inspection of the shears in their completed state, but that by unscrewing the nut which holds the parts of the shears together and separating them, the defects could be seen. It is also found that the defendant did not discover the defects in the shears until all the shears had been manufactured and were ready for delivery.

Upon these findings, which are supported by evidence, no action lies in favor of the plaintiffs to recover for work, labor or materials. They wholly failed to perform their contract in its true scope and meaning. It is plain that under the general rule no compensation can be demanded by the plaintiffs. The consideration upon which the defendant's promise rested has never been furnished. The defendant, it is true, has title to the shears, but this is because he owned the materials out of which they were made; the articles he contracted for have never been furnished. In place of these were furnished articles useless and valueless because of defects in construction not existing in the sample shears. The claim is made, however, that the plaintiffs are entitled to recover on the contract, not on the ground of performance, but by reason of the omission of the defendant to reject and return the shears delivered in January, 1884, or to notify the plaintiffs that they did not conform to the contract. The silence of the defendant, it is claimed, operated in law as an acceptance of the shears delivered, and precludes him from claiming that those subsequently manufactured of the same kind were defective. The plaintiffs seek to apply the principle governing executory contracts for the manufacture and sale of chattels of a specified kind, subsequently delivered by the vendor in performance of the contract. In such cases the law imposes upon the vendee the obligation to make examination for the purpose of ascertaining whether the articles delivered conform to the contract, and if he fails to make inspection within a reasonable time, he will, in the absence of fraud or express warranty, be concluded from afterwards setting up the existence of defects which an inspection would have disclosed. This rule has, we think, no application to a case like this. In the case of vendor and vendee under an executory contract, on delivery of the goods the title passes conditionally only to the vendee. It is necessary to the proper protection of the vendor that the vendee, if he rejects the goods and thereby throws them back upon the vendor, should act with reasonable promptness. It would be unjust to permit him to retain the goods after opportunity for inspection, giving no sign, and subsequently claim that they were not according to the contract. He is bound to express his dissent, and thus enable the vendor to protect his interests. The reason upon which the doctrine governing executory contracts for the sale of chattels subsequently delivered rests, is inapplicable to contracts for the manufacture of articles from materials furnished to the manufacturer by the other party to the contract. The title to the things manufactured is in the owner of the materials, whether they conform to the contract or not. The claim of the other party is for work and labor. The employer may await the presentation of the claim of the other party before acting. His retention of the articles manufactured is the exercise of an absolute right, and he is neither bound to inspect the articles nor to notify the other party of his objections. The omission to object may, in many cases, be material evidence on the question of performance, and in case of continuous deliveries of articles manufactured from time to time, the duty to speak after knowing the defects might arise. But in the present case the findings exclude the inference of bad faith on the part of the defendant, or that, knowing that the shears delivered were defective, he remained silent and permitted the plaintiffs to manufacture the others. The fact that the defendant retained the shears delivered and did not offer to return them after he discovered that they were defective, is no answer to the defense that the plaintiffs had not performed their contract. The defendant's possession followed the title, and the plaintiffs in no event were entitled to have the shears delivered returned to them. The owner of real property who has employed another to erect a house on his land, does not, by taking possession of the house and occupying it, preclude himself from denying that the builder has performed his contract. (Smith v. Brady, 17 N.Y. 173.) In like manner the owner of materials who employs another to manufacture them into garments or chattels of any description, does not lose his property in the materials, nor is he precluded by receiving the manufactured articles from asserting his title thereto, and at the same time resisting a recovery for the value of the work, on the ground that the workman had not performed his contract.

In respect to the judgment for the defendant on his counterclaim, we perceive no legal error. It represents the value of the contract to the defendant in case the plaintiffs had performed, measured by the difference between the price agreed to be paid by the defendant for the shears, and their market value if made according to the contract. The claim that as the title to the shears manufactured was in the defendant, the value of the materials should have been deducted, is not presented by any finding or exception, and it cannot be affirmed upon this record that the materials, in the condition in which they then were, were of any value to the defendant. The exception to the finding of the referee that there was an express warranty that the shears should conform to the sample, which warranty would survive an acceptance of the shears, need not be considered. The facts found show that the plaintiffs did not perform their contract and were not entitled to recover thereon. The result reached would not be affected by an error, if any, in characterizing the plaintiffs' contract to make the shears according to the sample as an express warranty which would survive an acceptance of the shears.

We find no error in the record and the judgment should be affirmed.