Memphis Furniture Mfg. Co. v. Wemyss Furniture Co., 2 F.2d 428 (6th Cir. 1924)

*429 *430 *431 T. K. Riddick, of Memphis, Tenn. (M. C. Ketchum, of Memphis, Tenn., on the brief), for plaintiff in error.

Lovick P. Miles, of Memphis, Tenn. (Miles, Waring & Walker, of Memphis, Tenn., on the brief), for defendant in error.

Before DONAHUE and MACK, Circuit Judges, and SATER, District Judge.

SATER, District Judge (after stating the facts as above).

The defendant insists (1) that the arrangement between the parties under which the goods were to be manufactured and shipped was such as not to constitute a binding contract on the plaintiff, for want of consideration and mutuality that is to say, the arrangement was such that the plaintiff was at liberty to carry it out or not, as it might elect, and, as it was not binding on both parties, it was not binding on either; and (2) that, if there was a contract, the price was not fixed, but stated to be "subject to prices in effect on shipping date," or "prices prevailing at the time of shipment," which necessarily meant the market price, and not the price which the manufacturer might fix at the time of shipment.

To sustain its position as to the first of these propositions, the defendant relies on a series of cases, of which Cold Blast Transportation Co. v. Kansas City Bolt & Nut Co., 114 F. 77, 52 C. C. A. 25, 57 L. R. A. 696 (cited with approval in Willard Co. v. U. S., 262 U.S. 493, 43 S. Ct. 592, 67 L. Ed. 1086) is typical. That case arose on the defendant's counterclaim and was determined on the pleadings. A written offer was made, which was nothing but a price list, to deliver between certain dates at stated prices manufactured goods in unnamed quantities. The offer was accepted. There was no averment in the answer that either of the parties paid any consideration or performed any act to induce the contract, except the transmission of plaintiff's offer and of defendant's acceptance. There was no agreement to deliver, or to order and receive, any quantity or amount of the articles specified. It was therefore held that the contract, being for the future delivery of personal property, was void for want of consideration and mutuality, because the quantity to be delivered was conditioned by the will, wish, or want of one of the parties. The familiar rule was recognized that a promise is a good consideration for a promise, that no promise constitutes such a consideration which is not obligatory on the party promising and binding on the promisor, so that the promisee may maintain an action for its breach, and that, if such obligatory feature is wanting, the contract is of no effect and void. The case is readily distinguishable from this.

In the instant case, an order was given for a specified quantity of goods. The plaintiff accepted that order, designating the price to be paid and the rate of discount for prompt payment. Both parties knew the fabrication and shipment of the goods would be delayed on account of the plaintiff's duty to fulfill prior contracts. The time of performance was not fixed. The law, therefore, fixed a reasonable time in which it was to be performed, and what was a reasonable time is a question to be determined in view of all the circumstances which may have been supposed reasonably to have been in contemplation of the parties. Gill Mfg. Co. v. Hurd (C. C.) 18 F. 673; Clark, Contracts, 408; Williston on Sales, § 462. The expression "due to the uncertainty of manufacturing" did not relate to an uncertainty as to intention to manufacture at all, but to the uncertainty as to the time when, in view of prior orders and existing factory conditions as to labor and material, the goods could be produced. Janes and Miller were more anxious to buy than was plaintiff to sell, and were both told the factory was overloaded with orders. Janes knew, from the tardy fulfillment of his June order, that the time of performance would be delayed and uncertain, but the intent and the obligation to perform were present. Nor is the language "subject to * * * our ability to ship" susceptible of the meaning that shipping facilities might not be available for want of a common carrier to serve plaintiff. The allusion to freight charges from Evansville bespeaks the presence of a railroad or railroads in that city, whose services for transportation purposes were obtainable. That language, considered in connection with the uncertainty as to the time of manufacture, means no more than uncertainty as to the time when plaintiff would be able to ship, and is in any event mere surplusage, adding nothing to the preceding language of the contract.

The ruling made in La Grange Grocery Co. v. Lamborn & Co., 283 F. 869, 872 (C. C. A. 5), is helpful. The contract involved in that case for the purchase of a certain quantity of sugar at a fixed price per pound, to be delivered at stated periods, provided: *432 "Terms: * * * Terms and withdrawals subject to the approval of the seller's credit department." The purchaser defended on the ground that withdrawals covered all the sugar purchased, that no sugar could be furnished without the approval of the seller's credit department, and that therefore the tract was unilateral and without binding effect because compliance with it was optional on the part of the seller. It was held the contract was binding, and not wanting in mutuality, and that the withdrawals referred to meant merely the taking or drawing out of some amount of the sugar bought less than the whole amount to be shipped at any of the specified dates of delivery.

The contract did not specifically state the price to be paid for the goods on delivery. To constitute a sale the price need not be definitely fixed at the time the sale is effected, if the agreement contains express or implied provisions by which it may be rendered certain. 23 R. C. L. 1278; Leutkemeyer v. Murdock, 267 F. 158 (C. C. A. 6); Chenoweth Hardware Co. v. Gray, 104 Ala. 236, 15 So. 911, 53 Am. St. Rep. 37; McMahon v. Mayor, 22 App. Div. 113, 47 N.Y.S. 1018; McCann v. City of New York, 52 App. Div. 358, 65 N.Y.S. 308. Whether the price to be paid was the market price at the time of delivery, as claimed by defendant, or the price fixed by the plaintiff at its factory, as plaintiff asserts, the data for determining the price was present and easily ascertainable. Which of the contentions made is correct is immaterial, in view of the verdict (hereafter to be considered) returned by the jury and the failure of the plaintiff to assail its action.

The defendant, at all times down to the commencement of this suit, treated the contract as valid. Its request for delay carried with it the implication of willingness to perform at a later date. Its direction to cancel was also a recognition of the contract's binding force. With full knowledge that the plaintiff had undertaken its fulfillment, and had incurred expense in that behalf, and contemplated full performance, it suggested no infirmity in it, or intention to escape liability if damages were sought for its breach. The situation was such as to give full force to the rules of construction tersely stated in American Sugar Refining Co. v. Newnan Grocery Co., 284 F. 835, 836 (C. C. A. 5), as follows:

"A contract will be given that construction which will make it valid and binding, instead of a construction which would make it void or unenforceable. Hobbs v. McLean, 117 U.S. 567, 6 S. Ct. 870, 29 L. Ed. 940. Likewise a contract should be construed in favor of mutuality. 13 C. J. 539; Minn. Lumber Co. v. Whitebreast Coal Co., 160 Ill. 85, 43 N.E. 774, 31 L. R. A. 529. A construction which makes confused verbiage intelligible will be adopted. Senter v. Senter, 87 Ohio St. 377, 101 N.E. 272."

See, also, La Grange Grocery Co. v. Lamborn & Co., 283 F. 869, 872 (C. C. A. 5).

Error is predicated upon the fact that in the court's general charge the jury was told that under the contract the price to be charged was, in conformity to defendant's contention, the market price at the time of shipment, which instruction was not at any time withdrawn, and that at the conclusion of such charge, and after inquiring if counsel had anything to suggest, the court thrice instructed the jury, with some variation in phraseology, that the contract price was the plaintiff's price in effect at its factory at the time when the goods were ready for delivery. Inconsistent and contradictory instructions, such as were given, tend to confusion and misapprehension, and, generally speaking, are ground for reversal, if given on a material point. 13 Standard Ency. Proc. 800, 802; Deserant v. Cerillos Coal R. R. Co., 178 U.S. 420, 20 S. Ct. 967, 44 L. Ed. 1127. Had the jury allowed the price for the goods as fixed at the plaintiff's factory at the time the furniture was ready for shipment, its verdict would have been for $6,521.42, and, if interest had been computed on that sum, for more than $7,100. Its verdict, however, for $3,756, was manifestly based on the market price at that date, as that price was determined by the jury, to which fact plaintiff has entered no objection. If the verdict returned included interest as prayed for, and which the court said the jury might allow or not, as it deemed proper, if it found for the plaintiff, the plaintiff's factory price was reduced by the jury by just about 25 per cent. If interest was not included in the verdict, the reduction was a trifle less than 23 per cent. The divergence in the evidence as to the extent the market prices were below the list prices was great, being from 15 per cent. to 50 per cent. The jury having determined to base its verdict upon the difference between the market price and the sum realized by plaintiff on the sale of the goods, it was for it to say what the market price was, and how much the decline had been from the plaintiff's price as fixed at the factory. If the decline was fixed at the rate of 23 or 25 percent., there is evidence to justify its action. *433 Inasmuch as it adopted the rule as to the controlling price at the time of delivery for which the defendant has at all times contended, and of which the plaintiff does not complain, no benefit can accrue to defendant by the granting of a new trial, notwithstanding the contradictory nature of the charge.

We find no prejudicial error, and the judgment of the trial court is therefore affirmed.