Cook & Bernheimer Co. v. Hagedorn

Appellant brought this action upon a check, payable to its order for the sum of $548.24, dated July 10, 1917, and drawn by appellee on the American Trust Company of South Bend, Indiana. The complaint is in a single paragraph with the usual allegations for such an action, and was answered by a general denial. Appellee also filed two paragraphs of set-off, designated as first and second, each of which was subsequently amended. The said first paragraph of set-off is based on an alleged breach of an oral agreement, by which appellee claims to have purchased twenty-five barrels of whisky of appellant. The averments of this paragraph are not set out, as they were withdrawn from the consideration of the jury. In the amended second paragraph of set-off, appellee admits the execution of the check in suit, but alleges, in substance, among other things, that it was given in part payment of certain whiskies which he had purchased of appellant prior to its execution; that on March 15, 1917, he wrote and delivered to appellant the following letter: "You can enter my order and ship to me at your earliest convenience: (Here follows a designation of 25 barrels of whiskey of three brands, with the price of each). Send various brand labels all sizes for bottling above. I agree to report to you at the end of each sixty days, following receipt of above goods, and remit to you for whatever goods are sold. You agree to allow me to return to you at your expense any of the above goods remaining on my hands unsold, April 1, 1918, at your expense." That on March 25, 1917, appellant wrote and delivered to him a letter, (a copy of which was made a part of said paragraph of set-off as an exhibit), by which it accepted said order, and agreed to deliver to him said twenty-five barrels of whisky on the terms he had proposed. That said letters constitute a contract by which appellant sold him twenty-five barrels of whisky; that in compliance therewith, appellant, on March 28, 1917, shipped him ten barrels of such whisky, amounting to the sum of $802.06 at the agreed price; that subsequently, on June 9, 1917, he gave appellant instructions to ship the remainder of said whisky so purchased at once; that appellant, although failing to do so, did not refuse at that time to comply with said contract, but requested him to anticipate payment of the whisky already shipped, stating that, owing to heavy demands, it was impossible for it to fill all orders received; that on June 25, 1917, he again requested appellant to deliver the remainder of said whisky, but it failed to do so, and agreed to ship other goods in lieu thereof, which agreement it failed to keep; that in July, 1917, he again requested the shipment of the remainder of said whisky, and was promised by appellant that the matter would receive prompt attention, but there was a failure so to do; that subsequently, on December 19, 1917, appellant gave him notice that it would not deliver the remainder of said whisky, and repudiated said contract; that appellant has always refused, and still refuses to ship or deliver the remaining portion of said whisky according to the terms of said contract, although frequently requested so to do; that he has fulfilled his part of said contract in every respect, and was ready and willing up to April 1, 1918, to accept and pay for said remaining fifteen barrels of whisky; that shortly after he had purchased said whiskies of appellant, the price thereof increased throughout the State of Indiana, and elsewhere in the United States, to such an extent that its market value was one dollar per gallon more than the price agreed upon in said contract; that by reason of the failure of appellant to deliver to him the remaining fifteen barrels of whisky so purchased, he had sustained damages in the sum of $1,000. The paragraph concludes with a prayer that he have a set-off against any amount found due appellant upon the check in suit, and that he have judgment against appellant for any excess found due him on account of his alleged damages. Appellant filed motions to make said first paragraph more specific, and to strike out parts of said second paragraph, each of which was overruled. Each of said paragraphs was answered by a general denial, and the latter by an affirmative paragraph, based on appellee's failure to pay the check in suit, which it alleged was given for the unpaid balance due on said ten barrels of whisky. To this affirmative paragraph of answer, appellee filed a reply in general denial. The cause was submitted to a jury for trial, resulting in a verdict and judgment in favor of appellee. The jury returned with its verdict answers to certain interrogatories submitted by the court, on which appellant unsuccessfully moved for judgment in its favor notwithstanding the general verdict. Appellant also filed its motion for a new trial, which was overruled, and it now prosecutes this appeal on an assignment of errors which requires a consideration of the questions hereinafter determined.

Appellant predicates error on the action of the court in overruling its motions to make the first paragraph of 1, 2. appellee's set-off more specific, and to strike out parts of the second paragraph thereof. The ruling on the motion addressed to said first paragraph was not reversible error, as the court withdrew said paragraph from the consideration of the jury by an instruction requested by appellant. The ruling on the motion addressed to said second paragraph, being a motion to strike out parts thereof, was not reversible error. Jones v. Bryan (1913), 53 Ind. App. 550;Portland, etc., Mach. Co. v. Gibson (1916), 184 Ind. 342.

Appellant contends that the court erred in overruling its motion for judgment on the answers to the interrogatories returned by the jury, notwithstanding the general 3-5. verdict. It bases this contention on a claim that such answers show that appellee had failed to perform his part of the contract set up in his second paragraph of set-off, in this, that he had not made the reports at the end of each sixty days as required by the terms thereof, and, by stopping payment of the check in suit, he had failed to pay for the goods received from appellant thereunder. In determining this contention, we must bear in mind that answers to interrogatories will not prevail over a general verdict unless the conflict between the two is such that no possible evidence under the issues could reconcile them. Williams v. Lowe (1916), 62 Ind. App. 357. Under this rule, appellant's contention cannot be sustained on the grounds stated, for the following reasons: The evidence may have shown that the making of the reports mentioned in the contract was waived. Such evidence would have been competent under the allegation of performance. Union Frat. League v.Sweeney (1916), 184 Ind. 378; Kenefick v. Schumaker (1917),64 Ind. App. 552. The evidence may also have shown that, by the agreement of the parties, the check in suit was accepted by appellant in payment of the balance due for the whisky theretofore shipped under the contract. This would have had the effect of extinguishing the debt for which it was given. Sutton v. Baldwin (1896),146 Ind. 361. For the reasons stated, the court did not err in overruling the motion under consideration.

Appellant also contends that the court erred in overruling its motion to instruct the jury at the close of the evidence to return a verdict in its favor for the amount of the check 6. in suit. This action of the court does not constitute reversible error, since the mere overruling of such motion worked no injury to appellant, but the substantial and available error, if any, was in refusing to give such an instruction.Getchel v. Chicago, etc., R. Co. (1902), 29 Ind. App. 410;Smith v. Cleveland, etc., R. Co. (1917), 67 Ind. App. 397, 117 N.E. 534.

Appellant further contends that the verdict is not sustained by sufficient evidence. It asserts that as to the contract alleged in the second paragraph of set-off, there is no proof of 7-10. performance on the part of appellee, or facts showing a valid excuse for such failure, and hence appellee has failed to show a right of recovery, as the first paragraph was withdrawn from the consideration of the jury. We recognize the well-established rule on which this contention is based, but it should be borne in mind that a defense based on the fact that the complaining party has failed to perform his part of a contract may be waived, and a recovery had notwithstanding such failure.Kenefick v. Schumaker, supra, and cases there cited. With this in mind, we will direct our attention to the evidence relating to any such failure of performance on the part of appellee, and the waiver on the part of appellant of any defense which might have been based thereon. The failure of performance on which appellant relies is based on a claim that the evidence shows that appellee did not make the report and payment required by the contract with reference to the ten barrels of whisky which it delivered appellee thereunder. The undisputed evidence in this regard shows that appellee received said ten barrels on April 11, 1917; that thereafter, on June 15, 1917, he paid appellant $227.54 thereon, and on June 25, 1917, executed and delivered to appellant the check in suit for $548.24, which was the balance due on said ten barrels of whisky; that appellee stopped the payment of said check on July 7, 1917, and the same has never been paid. The jury found, as shown by the answers to the interrogatories, that said check was given by appellee in payment of the balance which he owed appellant for said ten barrels of whisky. As there is evidence tending to sustain this finding, it is our duty to accept it as a fact in determining whether the verdict is sustained by the evidence. Barr v. Sumner (1915),183 Ind. 402; Baltimore, etc., R. Co. v. Mangus (1920),74 Ind. App. 373, 126 N.E. 863. While it is the general rule that a check delivered by a debtor to his creditor does not extinguish the debt for which it is given, still a check may be given and received by agreement of the parties as payment of a debt, and, when this is done, the debt for which it is given is thereby extinguished. If a check so given and accepted is not paid for any reason, the right of action is on the check, and not on the indebtedness for which it is given. Sutton v. Baldwin, supra. It will be noted that appellee not only received the check in question in the first instance, but retained it, notwithstanding payment of the same had been stopped, and instituted this action to enforce its collection. It must, therefore, be taken as an uncontradicted fact in this case that the check in question was not only given by appellee in payment of the balance due for said ten barrels of whisky, but that appellant accepted the same as payment thereof. This being true, the debt for which it was given was extinguished, and appellant could not maintain an action based thereon.

Having concluded that the undisputed facts show that the balance due appellant for the ten barrels of whisky delivered to appellee under the contract in question, had been fully 11-13. and finally settled by the check in suit, there could have been no duty on the part of appellee to make any report to appellant thereafter with reference to said ten barrels of whisky. It thus appears that, at the commencement of this action, appellee had performed all the obligations resting on him by reason of said contract, although he had failed to make the report and payment due from him with reference to said ten barrels within the time specified therein. It only remains to be determined whether the delay shown by the evidence in that regard is available to appellant as a defense to appellee's set-off in this action. The undisputed evidence shows that appellant did not refuse to ship the remaining fifteen barrels of whisky embraced in the contract in question because of such delay, but that the real reason for such refusal was that appellee had stopped payment on the check in suit. This evidence is found in a letter, written on behalf of appellant to appellee's attorney, containing, among others, the following statements: "In view of Mr. Hagedorn's refusal to meet his obligations which are now past due, in other words, to make good upon the check which he stopped payment, clients feel that there is no further obligation resting upon them to complete the order until Mr. Hagedorn shows a disposition to live up to his part of the agreement. * * * They insist that Mr. Hagedorn should instruct the bank to honor the check, and upon receipt of information from yourselves that this has been done, and that payment will be made on presentation, they will ship the balance of the order as accepted." This discloses that appellant was demanding that appellee pay a check, given and accepted in payment of the balance due for said ten barrels of whisky, as a condition upon which it should ship the remaining fifteen barrels — a thing not within the provisions of the contract. Appellant having based its refusal on that ground, waived its defense on any other ground, and hence cannot defend on the ground that appellee did not make the report and payment as to said ten barrels of whisky promptly, or within a reasonable time.Kenefick v. Schumaker, supra. The evidence shows that appellant never shipped the remaining fifteen barrels of whisky to appellee. The jury found that, in so doing, it committed a breach of the contract in question, and as there is evidence to support such finding, it is conclusive on appeal. Gibson v.City of Indianapolis (1918), 68 Ind. App. 89. We conclude that neither of the contentions made by appellant that the verdict is not sustained by sufficient evidence and is contrary to law is well taken.

Appellant asserts that it was error to allow the witnesses Hagedorn and Cohen to testify as to the market value of whisky at South Bend, Indiana, on August 10, 1917. The reason urged 14. in the trial court against the admission of this evidence was, that appellee was not entitled to introduce evidence as to the market value of whisky on several different dates, but must determine for himself when the contract was breached and confine his proof of the market value of whisky to such time. When appellant breached the contract, if at all, was a question for the jury under the evidence, and appellee was entitled to such a range of time, in making proof of market value, as would enable the jury to determine his damages, if it found the alleged breach had been committed. August 10, 1917, was within such range, and hence no error was committed in the admission of such evidence.

Appellant also asserts that the court erred in admitting the evidence of the witness Potter as to the time when parties, contracting in March, 1917, before the declaration of war, 15. had a right to expect delivery, where a shipment was made from New York City to South Bend, Indiana. We fail to find any error in the admission of this evidence. The time when it is claimed that the fifteen barrels of whisky in question should have been shipped was some time after the declaration of war was made. And inasmuch as the undisputed evidence showed that it took a much longer time for shipments between said points after the declaration of war, it would be unreasonable to assume that appellant was harmed by the admission of such evidence. At most it was immaterial, and the admission of immaterial evidence, if harmless, is not reversible error. Indiana, etc., Traction Co. v. Hiatt, Admr. (1916), 65 Ind. App. 233.

Contention is made that the court erred in giving instructions numbered 1, 2, 3 and 4, requested by appellee. A number of reasons are urged as the basis of this contention, but we 16-18. deem it unnecessary to consider all of them, or any of them, at length, as they are mostly technical rather than substantial. No. 1 informed the jury that the burden was on appellant to prove the material allegations of its complaint. This was not, as appellant contends, in conflict with another instruction given, by which the jury was told, in effect, that this burden had been sustained. Nor is said instruction erroneous as appellant asserts, because the facts with reference to the breach of the contract, on which appellee's set-off is based, are not set out therein in more detail. It suffices in that regard to say, as the instruction does, "that plaintiff has always refused to comply with its contract in reference to the shipment of said 15 barrels." No. 2 does not assume facts, as appellant contends, which the jury had to determine, as such facts were to be given effect only "if proved by a fair preponderance of the evidence," as stated therein.

By said instruction No. 3, the court informed the jury, in effect, that where a party buys goods of another, to be delivered to him at a fixed price, and the party who sells, without 19. the fault of the buyer, fails to deliver such goods, he is liable for the damages sustained by the buyer by reason of such default. By said instruction No. 4, the court informed the jury, in effect, that if it found from the evidence that appellee had been damaged by appellant's breach of the contract alleged in his set-off, and that such breach was not caused by any default on his part, then he would be entitled to recover such damages as he may have sustained by reason thereof. Appellant claims that each of these instructions is erroneous, because their effect would be to lead the jury to believe that it would be justified in finding in favor of appellee on his set-off regardless of whether he had fully performed his part of the alleged contract, or shown a valid excuse for having failed to do so. However, if it be admitted that these instructions would have the effect for which appellant contends their giving was harmless in view of the fact that, under the undisputed evidence, as we have heretofore shown in considering the sufficiency of the evidence to sustain the verdict, appellee owed appellant no obligation under the contract in question, and any defense which might have been based on delay in performing its obligations thereunder has been waived.

Appellant also contends that the court erred in refusing to give instructions Nos. 6, 7, 8 and 9 requested by it. Said instruction No. 6 was properly refused, as it ignores 20, 21. the fact that appellant accepted the check in question as payment. No. 7 was also properly refused, as it would have informed the jury that appellee's inquiry as to how much payment appellant required on the first shipment of whisky before it would ship more released appellant from the request for immediate shipment contained in the same letter. There was no error in refusing to give either of said instructions Nos. 8 and 9. The first makes a strict compliance with the contract on the part of appellee as to making report and payment with reference to the ten barrels of whisky shipped him, an essential to the right of recovery, thus eliminating any waiver of a defense because of delay in compliance. The latter relates to the right of appellant to rescind the contract, and, if given, would have informed the jury that appellee would have no right of recovery if such right to rescind existed, whether it was exercised or not. We find no reversible error in the record.

Judgment affirmed.