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Delafield v. J.K. Armsby Co.

Supreme Court of New York, Appellate Division

April 8, 1909


Appeal from Trial Term, New York County.

Action by Richard Delafield and others against the J. K. Armsby Company. Judgment for plaintiffs, and defendant appeals. Affirmed.

[116 N.Y.S. 72] William N. Cohen (Messmore Kendall, on the brief), for appellant.

John Vernon Bouvier, Jr. (William B. Ellison, Arnold L. Davis, and Dudley Davis, on the brief), for respondents.



This action was brought to recover damages sustained by the plaintiffs in consequence of a breach by the defendant of a contract by which the defendant sold to the plaintiffs 28,000 cases of red Alaska salmon. The questions of fact in this case were submitted to the jury by a very full and satisfactory charge, to which the defendant took no exception, except in relation to the measure of damages adopted by the trial court, which is the main question presented upon this appeal.

[116 N.Y.S. 73] The facts as testified to by the plaintiffs were as follows: The defendant was the sole representative in the United States for the purchase and sale of canned salmon packed in Alaska and elsewhere by a California corporation known as the " Alaska Packers' Association." For many years prior to 1900 the plaintiffs had had transactions with the defendant, purchasing from it canned salmon, which had been resold both in this country and foreign countries without any restriction whatever. In August, 1900, the plaintiffs received a circular from the defendant stating that it had special information in regard to association brands 1900 packed salmon, and stating the price of the various brands and the terms it had for sale; that an enormous demand for red salmon was certain, and that the association would be sold out immediately, with a note stating that:

" English market bare; American market practically bare; three great armies in the field, all eating red salmon. Our best advice is for trade to buy double their usual supply of red Alaska."

On August 21, 1900, the plaintiffs received a telegram from the defendant asking whether they wanted to buy red Alaska salmon that year, and stating that the present price would be the lowest for the season, and that the defendant felt certain that red Alaska would sell for $1.25 before summer. This telegram was followed by a letter, dated the same day, giving the reasons for the expected advance in price. The plaintiffs had been dealing in the English market for several years prior to 1900, and had agents in England. After this correspondence a Mr. Stubbs, who was the salesman of the defendant in New York, and through whom the plaintiffs had purchased salmon for at least a year before from the defendant, called to see the plaintiffs and urged them to purchase salmon. The plaintiffs told Stubbs that they were doing a large export business at that time, and wished to purchase a large quantity. Stubbs replied that he would endeavor to make purchases for the plaintiffs so that they could ship to Great Britain. In the latter part of August, Mr. Armsby, vice president of the defendant, and Stubbs, defendant's agent, had an interview with Mr. McGovern, one of the plaintiffs. Armsby stated to McGovern his views of the condition of the salmon market, especially the foreign condition, and said that he could secure for the plaintiffs several rates of freight to cover up the shipments as going to England, so that the plaintiffs could ship under the local bill of lading from San Francisco to New York and have it exchanged upon arrival in New York for a through bill of lading from San Francisco to destination, and it was there agreed that plaintiffs should purchase 28,000 cases. The plaintiffs then dictated a statement outlining the terms of purchase, naming the brands and quantities they desired, together with the price and terms of payments, which was written out and handed to Armsby, who handed it to Stubbs, telling him to make out a contract in accordance with the memoranda, and Stubbs took the statement away. The next day Stubbs came to the plaintiffs with the contract filled out in accordance with the agreement. One copy of this contract was signed " J. K. Armsby Co., per Stubbs," and the other was then signed by the plaintiffs; Stubbs taking away the contract signed by [116 N.Y.S. 74] the plaintiffs, and plaintiffs retaining the contract signed by the defendant. This contract was in the form of a letter of the defendant to the plaintiffs, stating: " Dear Sirs: Please enter our order for" -the salmon purchased, specifying the brands and the price, and containing the conditions and terms of sale. This was signed by the plaintiffs. A corresponding letter was addressed to the plaintiffs, stating: " Dear Sirs: We have entered your order for" -also specifying the number of cases, brands, and price, with the same terms and conditions of sale, and signed by " J. K. Armsby Co., per Stubbs." At the head of both these letters were the words: " Salmon Sold for Domestic Consumption." Immediately after Stubbs left their office, McGovern noticed the words " for Domestic Consumption" at the head of the contract, and within an hour or two he saw Stubbs, and called his attention to the words " Sold for Domestic Consumption" at the head of the letter. Stubbs at once struck out the words " for Domestic Consumption" on both letters, the plaintiffs taking one letter and leaving the other with Stubbs, but by mistake took their own letter instead of one signed by the defendant. Some time after this mistake was noticed, when the plaintiffs went to the defendant and offered to exchange contracts, they to take the one signed by the defendant, but before this mistake was discovered the defendant had refused to carry out the contract, and declined to make the exchange.

It also appeared that prior to the time of this interview with Armsby, and while plaintiffs were negotiating with Stubbs, the plaintiffs had cabled to Great Britain and entered into negotiations there for a sale of this salmon, and within a day or two after this contract was made the plaintiffs closed a contract in that country for the sale of 28,000 cases. As soon as the plaintiffs received the cable from Great Britain that the contract was closed, they called Armsby up on the telephone and told him that the plaintiffs had sold 28,000 cases in Great Britain, and asked if the defendant could get the plaintiffs 15,000 cases more. Armsby congratulated the plaintiffs on making the sale, and said he would take it up with the Chicago office at once and let the plaintiffs know. Subsequently Armsby informed the plaintiffs that as they had sold so much salmon they could not sell them more than the 28,000 cases. Prior to the execution of the contract the plaintiffs told Armsby and Stubbs that they had been cabling to find out whether they could place this large block of salmon in England; that they had sold some 40,000 or 50,000 cases for export at that time, and were then cabling to find out how much more the market would take, and at what price; that they were offering this salmon for export, intending to ship it to Great Britain, and that as soon as the contract between the plaintiffs and the defendant was made he would confirm the sale in Great Britain by cable. On August 31st, the day after the contract was signed, the plaintiffs cabled to their representatives in England to make the sale, which cable resulted in the plaintiffs, through their English agents, making a sale in London for the full 28,000 cases of salmon at 21 shillings per case. On September 7, 1900, Armsby wrote to the plaintiffs from Chicago stating that on his arrival at Chicago he found a telegram from the San Francisco [116 N.Y.S. 75] office to the effect that the plaintiffs were offering their new Alaska purchases from the association in England, and that:

" Mr. Fortman was very much disturbed over the matter, and refuses to deliver a case of it if sold for English shipment, as they have an ironclad contract with Messrs. Balfour, Guthrie & Co., for such representation in the United Kingdom, and naturally would not do anything to break that contract. Now our position in the matter is simply this: We are the association agents. We are only allowed to sell this salmon for domestic consumption and not for export to the United Kingdom. If any of the people we sell to see fit to ship this abroad, of course they do it at their own risk and if the association find it out and refuse to deliver the goods it is not our fault nor can we help the matter in any way, shape or manner.*** I write this letter so that you will understand our exact position, viz., that we are agents for the association and obliged to conform to their wishes and rules.*** Whatever we are obliged to do in this matter will not be of a personal nature or in the way of antagonizing you, but solely as acting agents for our clients, the Alaska Packers' Association."

The Mr. Fortman named in this letter was the president of the Alaska Packers' Association.

The plaintiffs further testified that they did not know the defendant was the agent of the Alaska Packers' Association beyond the statement in the circular that the plaintiffs received from the defendant. Subsequently, and on September 8, 1900, the defendant wrote a letter to the plaintiffs stating that the contract which Mr. Stubbs had prepared was not in accordance with the verbal contract agreed upon and that under no circumstances could the defendant allow the provisions of the contract, namely, the clause, " Sold for Domestic Consumption," to be stricken out of the contract. And this position was restated in a letter written by the defendant to the plaintiffs dated September 22, 1900. It appears that these brands of salmon indicated quality, and had a much better market in Great Britain than other salmon; that some brands of equal grade would sell 20 per cent. higher than other brands of the same grade on account of the reputation of the packers. Subsequent to the refusal of the defendant to complete the contract, the plaintiffs tried to get this red Alaska salmon at every place and from everybody, but could not obtain any. Subsequently the purchasers in Great Britain refused to accept any brands except those of the Alaska Association, and the plaintiffs were actually unable to procure any of these brands to fulfill their contract. That the profits on this transaction, if the defendant had delivered the salmon to the plaintiffs, and plaintiffs had delivered it to the London purchaser, would have been $9,450.

There was also evidence by one of the plaintiffs that on the 31st of August he talked with Armsby about the sale of this salmon in England, and that Armsby said to the witness, " We put the knife into Balfour, Guthrie & Co. good that time." The plaintiffs' agent in London testified that he had received a cable offering salmon for sale subject to confirmation on August 27, 1900, upon which he opened negotiations with purchasers in London; that Hooper & Co. of London took the offer under consideration; that on the 31st of August, on receipt of the cable from plaintiffs, the witness made a formal offer to Hooper & Co., of 28,000 cases of red Alaska salmon, shipment from [116 N.Y.S. 76] Pacific Coast by rail to New York, then by steamer to London or Liverpool, at 21 shillings per case, and on the same day cabled to New York that Hooper & Co. wanted 28,000 cases; that on the following day, the 1st of September, the witness received in London a cable from the plaintiffs confirming the sale of 28,000 cases, and on the same ...

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