APPEAL by the defendant, the Stecher Lithographic Company, from a judgment of the Supreme Court in favor of the plaintiff, entered in the office of the clerk of the county of Oswego on the 7th day of April, 1910, upon the verdict of a jury rendered by direction of the court; also from an order entered in said clerk's office on the 31st day of March, 1910, denying the
defendant's motion for a new trial made upon the minutes, and also from an order entered on the 7th day of April, 1910, amending the plaintiff's complaint.
Werner & Harris and John Desmond, for the appellant.
Charles W. Tooke and D. Raymond Cobb, for the respondent.
The plaintiff, a paper manufacturer, agreed to manufacture and sell to the defendant fifty-two twenty-ton carloads of paper board, known as bleached manilla lined chip, to be delivered one carload a week commencing January 1, 1908, at forty-two dollars per ton, delivered F. O. B. Rochester, N.Y. , to be of the same grade as was furnished by the plaintiff to the defendant prior to October, 1906; and it was contemplated that it was to be made according to specifications furnished by the defendant. There were other matters involved in the contract, but they are not material to the controversy here.
The plaintiff delivered eleven of the fifty-two cars and offered to furnish the remainder, but the defendant refused to receive the same. The defendant paid for all the material which it received and kept. A controversy arose between the parties as to whether the paper board furnished was up to grade and in accordance with the specifications, and it finally resulted in the plaintiff taking back some of the paper board, and, as the defendant claims, in the modification of the contract in the particular to which I will call attention presently.
The action is brought to recover the damages for the refusal to receive the remaining forty-one cars. There are two principal questions on this appeal. One relates to the damages and the other whether the evidence was sufficient to show that the contract had been modified. The trial judge directed a verdict for the plaintiff, holding that the evidence was insufficient to show a modification of the contract and that there was no question of fact as to the amount of damages.
I think the case should have been submitted to the jury upon both questions. The rule of damages as finally adopted was the difference between the cost of manufacturing the product and the contract price. I think the correct rule was applied.
( Parsons v. Loucks, 48 N.Y. 17; Haddam Granite Co. v. Brooklyn Heights R. R. Co., 186 id. 247.) But the cost of manufacture was proven by an interested witness, and I think the circumstances were such as to make the question of the cost of manufacturing and supplying the paper board a question of fact.
Upon the other question it appeared that the president of the plaintiff met the president of the defendant at Rochester on May 18, 1908, when an attempt was made to adjust the differences between the parties over the kind and quality of paper board furnished. The latter testifies that he then told the president of the plaintiff that they would not continue with the contract; that they would cancel the contract and not go ahead with it any further, and that the plaintiff's president asked for another chance and said that he would show that he could make satisfactory board, whereupon the defendant's president told him that if it went on it must be with the understanding it must be satisfactory to them and if it was not they would stop just as soon as the plaintiff would send something that was not satisfactory; to which the plaintiff's president replied that would be satisfactory to him and would be all right. The plaintiff challenges this testimony by testimony and circumstances to the contrary.
I think, if this interview actually took place, it amounted to a modification of the contract, so that the paper board furnished must be satisfactory to the defendant. Not that the defendant could capriciously or unreasonably cancel the contract (Duplex Safety Boiler Co. v. Garden,101 N.Y. 387; Russell v. Allerton, 108 id. 288; Crawford v. Mail & Express Publishing Co., 163 id. 404, 409; Gearty v. Mayor, etc., 171 id. 61, 72); and defendant does not claim it could. But as bearing upon its good faith in that regard, it offered to show ...