Kirwan v. Roberts

This is an action to recover damages for the breach of contract. Kirwan Riggs are manufacturers of tin cans, and Winfield W. Roberts is a packer of canned goods. On the 5th January, 1900, the former sold to the latter eleven hundred thousand tin cans of various styles and at various prices. The contract of sale is evidenced by bought and sold notes — one of which calls for seven hundred thousand and the other for four hundred thousand cans. The styles and prices and the rates of delivery are the same in each contract, and in both contracts the buyer was given the option to select the style of cans to be delivered. There is some difference in the method of payment prescribed by the two contracts, but these are not important to consider in the view we have taken of this case. Up to the 11th September, 1900, Roberts had called for and received about eight hundred thousand (800,000) of the eleven hundred thousand cans purchased under the bought and sold notes we have referred to. Subsequent to that time no further calls were made by Roberts, and Kirwan Riggs brought this suit in the Superior Court of Baltimore City to recover damages for his refusal to receive the balance of the whole number of cans sold by them to him, towit, 300,600 cans.

After all the testimony of both sides was before the jury the plaintiffs moved the Court to strike out certain testimony and offered three prayers. The motion as well as the prayers were refused — and at the instance of the defendant the Court took the case from the jury because no evidence had been offered legally sufficient to entitle the plaintiffs to recover.

It does not appear that the propositions of law contained in the plaintiffs prayers were questioned by the learned Judge of the trial Court, but it is conceded that the ruling he made taking the case from the jury was based entirely on the ground that there was no completed contract and, therefore, no cause of action. The judgment was in favor of the defendant and the plaintiff has appealed.

The single question, therefore, presented by this appeal is the propriety of the Court's ruling in granting the defendant's first prayer taking the case from the jury. And the solution of this question depends upon the answer to the further question whether there was or not a complete and perfect contract entered into by the plaintiffs and defendant when they signed the bought and sold notes before referred to.

Inasmuch as the decision of this case below was based entirely on the case of Wheeling Steel and Iron Co. v. Evans, 97 Md. 305, let us see exactly what the facts of that case were and what our decision was. The Marble Company wishing to purchase 100 tons of tack plate from 12 to 17 gauge, regular width, wrote to the Steel Co. for quotations or best price for that kind of tack plate. On the 15th September, the Steel Company answered by mail giving prices for 100 tons of various grades of the material mentioned. On the 20th September the Marble Co. wired the Steel Co. as follows: "Enter our order for 100 tons tack plate, if at prices quoted on 15th; specifications to follow." To this the Steel Co. replied, "We have your telegram and have entered your order for 100 tons of tack plate at prices quoted by us." These papers constituted the contract sued on in Wheeling Steel IronCo. v. Evans, and we said, C.J. McSHERRY, delivering the opinion of the Court. "The telegram of September 20th was not a direct and unequivocal proposition, which, by acceptance could become a complete contract. So far as the price and the gross number of tons were concerned, the telegram may be treated as an acceptance of an antecedent offer; but the superaddition of the words `Specifications to follow' left something essential for future action by the purchaser, and, therefore constituted, in legal effect, a new and independent offer requiring anacceptance by the vendor." Upon this general proposition we held that the contract in the case cited was not complete — and that, therefore, no suit could be brought thereon. Now let us briefly examine the contracts sued on in the case before us.

In the first place it is not contended that the contracts here involved are imperfect or incomplete in any other respect save that they fail to provide for the various styles of cans sold. But they do expressly provide how these important and essential elements of the contract shall be ascertained. The 700,000 bought and sold note says "Deliveries to be made as buyers may order during the season of 1900 — subject to the following schedule." Then follows the percentage of the whole number — (700,000) to be delivered in the respective months — that is to say the number of cans is definitely fixed and you the purchaser are to select the style. And so also the 400,000 note provides "Mr. W.W. Roberts (the defendant), to specify on first of each month the style of cans during said month" — with a provision setting forth the number of cans to be delivered each month. In our opinion the plain construction of these contracts is that the parties agree not only to sell and purchase respectively a certain fixed number of cans, but they also agree that the purchaser shall select the styles of cans to be delivered. All the other elements are provided for in the two papers constituting the contracts sued on — and there is nothing essential left for future action. If the defendant agreed to specify the styles of cans to be delivered, as we have said he did, then it might well be said, if he could thus escape his obligation it would indeed be a perversion of justice — for it would permit him to take advantage of his own wrong. It will be seen, therefore, that by the construction we have placed on the contracts before us every essential element was provided for including not only the right of the defendant to select the styles of cans to be delivered, but his duty to exercise that right reasonably and fairly. Hence it follows that a failure on the part of the defendant to make the selections was of itself a violation of the contract, and that a situation is here presented for a fair application of the ruling adopted in Jacobson v.Sullivane, 152 Mass. 480 (9 L.R.A. 508.) There was a contract for the sale of a clothing business to take effect at a future day, in which the vendor agreed to sell goods on his own account till that day, when he was to sell and and the purchasers to buy so much of the stock in trade "not exceeding $1,000 in value" as should then remain unsold. The contract contained the proviso that the purchasers should "be bound to take only such goods as they themselves shall select." It was held "that in view of the situation of the parties and the subject-matter and the purpose of the agreement that the clause in regard to selection was not intended to contradict the otherwise clear and definite provision of the contract as to the quantity to be sold and to nullify that part of the contract, but only to give the defendants the right to determine by selection what goods they would take to make up the quantity which they agreed to buy."

But again, even if it should be assumed ex gratia, that the contracts sued on gave the vendee a mere option to select and did not require him so to do, yet it must be conceded that after July, 1900, sometime before the defendant repudiated the contract, when he made a selection or specification of cans to be delivered, the contracts become complete. The testimony of the bookkeeper of the defendant is that in July the defendant told the plaintiff that from that time on all he would need would be extra peach hole cans, but that possibly he might use a few of the two-pound extra peach hole and the testimony of the defendant was to the same effect. And further that the plaintiff replied that it was all right and that he should have them. This, we think, was substantially an exercise of the power of selection. In Dambmann Bros. Co. v. Lorentz Rittler,70 Md. 382, the well settled principle is recognized and applied — that an agreement may be so framed as to leave one party an option and thus impose no obligation on the other party until the option is exercised so as to create an obligation." But when the notice is given and the option exercised a binding obligation is imposed on both parties — on the part of the vendor to sell and deliver and on the part of the vendee to accept and pay the stipulated price. Dambmann Bros. v. Lorentz Rittler, supra.

As we have already said the propositions of law contained in the plaintiff's prayers do not appear to have been passed upon but they were refused on the sole ground that there was no cause of action, the contract sued on not being complete. Nor were they discussed at the hearing nor in the brief of the appellee. We have not examined them critically but all of them, including the third which instructs the jury in regard to the proper measure of damages, appear to announce substantially correct principles of law.

The granting of the defendant's first prayer and the rejection of plaintiffs' prayers constitute errors by reason of which the judgment must be reversed.

Judgment reversed and new trial awarded.

(Decided June 8th, 1904.)