APPEAL by the defendant, James Talcott, from a judgment of the Supreme Court in favor of the plaintiff, entered in the office of the clerk of the county of Orange on the 14th day of February, 1911, upon the report of a referee, and also from an order entered in said clerk's office on the same day granting the plaintiff an extra allowance.
Arthur C. Rounds, for the appellant.
Benjamin N. Cardozo [M. J. Stroock with him on the brief], for the respondent.
The plaintiff has recovered damages for defendant's breach of a contract for the purchase by him of all the embossed plushes made between June 13 and October 1, 1907. The defendant accepted some goods, made payments thereon, but finally, after protesting their quality, refused further deliveries of similar goods, as well as payment for past deliveries, and demanded deliveries in accordance with contract. But in this action the defendant alleges (1) that there was no contract, (2) that there was a contract, and that plaintiff did not fulfill it. The defendant bases his contention of no contract made upon the fact that he made an offer by letter of June 13, 1907, and that a letter of June fifteenth written by plaintiff was not such unconditional acceptance of defendant's proposal as to complete the contract. But plaintiff's letter of June fifteenth, although written by plaintiff and supposed by it to be sent, was never sent, nor did defendant, either in his partial fulfillment of a contract or in refusing to accept and to pay for the goods plaintiff sent and offered to send, know the contents of the letter or place any reliance thereon. As concerns the defendant the letter was as to all the transactions as if it had not been written. And yet to the plaintiff its letter of June fifteenth was an acceptance of the defendant's offer as contained in his letter of
June thirteenth. When the defendant was by the plaintiff deemed in default, the latter wrote of its acceptance of defendant's proposal on June fifteenth, thereby referring to the letter of that date, and in the complaint the defendant's letter of June thirteenth and the plaintiff's letter of June fifteenth are declared to be the contract, and it was not until the end of the trial, wherein it appeared that no such letter had been received, and no evidence of its mailing was given, although plaintiff believed that it had been mailed, that the complaint was amended to plead an oral unconditional acceptance by plaintiff, and thereupon the referee found an acceptance 'on June 15, 1907, and also prior thereto.' The referee had power to allow the amendment, and the evidence does sustain the finding of an oral acceptance. A writing similar to the letter of June thirteenth was by Stroock, plaintiff's agent, handed to Kessel, defendant's agent, with a statement that it 'is the contract that we made; it is all satisfactory; you sign it and then get Mr. Talcott's signature to it.' Later, the proposal of June thirteenth, executed by Kessel and Talcott, was returned, but as the form of Talcott's execution did not conform to the paper first submitted, the executed paper was, after some telephonic conversation between the parties, submitted to defendant and later returned executed in the satisfactory form. The defendant's evidence contradicts essentially plaintiff's evidence, but the referee was justified in finding as he did. On the same day the letter of June fifteenth was written, but is not in evidence. It was given to the office boy to be mailed, but there is not evidence of its mailing, but there is evidence that it was not received and the answer so states. The letter indicates a state of mind, and is usable in considering the credibility of Stroock's testimony that he orally expressed approval of the contract subject to the correction that was made. It might well be concluded that the letter, supposed to be sent after the oral communications, embodied the plaintiff's final reply to defendant's proposition, especially as it and it alone was declared in the complaint to be such. But when the plaintiff was unable to establish it as such, and defendant denied it, then it was necessary to ascertain what contract in fact was made, for
some contract was made, as both parties contend, and was acted upon and acknowledged in correspondence, and for the sale of goods, and relied upon for demands and counterdemands. Admittedly plaintiff's letter of June fifteenth was not in defendant's mind a part of the contract, and never operated upon defendant, unconscious of its existence. The defendant regarded his proposal as accepted, and acted accordingly. How did he think that it had been accepted unless orally or by the delivery of goods pursuant to the proposal? But the goods could be made only upon his initiation by designation of styles. So, under date of June fourteenth there is a letter notifying plaintiff of styles, showing that some understanding had then been reached, and under date of June twentieth a letter inquires for first anticipated delivery. So there are two more letters in June relative to expected deliveries. Starting with July second, the defendant continued his writings in the use of some contract, and plaintiff made relevant replies. On July twenty-sixth the defendant in writing made definite statement of complaints that the embossing was not permanent but practically disappeared in pressing, and refusal further to accept or retain such goods is found in later letters until, under the date of July thirtieth, defendant wrote that the goods were unmerchantable, and that 'it will be impossible for me to accept of any further quantities of the embossed plushes until such time as you can take the matter up with your manufacturer, in order to have the embossing created permanently,' and on July thirty-first the notice of refusal to accept goods in 'their present condition' is repeated. On August first the plaintiff wrote, 'We acknowledge receipt of yours of the 31st ulto. as to 27-inch embossed plushes ordered by you of us under contract dated June 13th, 1907, and accepted by us June 15th, 1907,' and among other things it is written, 'We beg to repeat that we have in every wise fulfilled the terms of that contract on our part and that we are prepared to continue so to do, if you will permit us,' and that it will proceed 'to manufacture and complete all goods now in process of manufacture under said contract and shall seek to deliver the same to you,' and that it will hold defendant 'liable in damages for breach of contract.' On August twelfth
the defendant replied that he would not further accept goods such as had been delivered and 'We also beg to notify you that our loss because of the defective quality of the goods delivered has already reached substantial figures for which we shall hold you responsible, and that unless you are able speedily to supply us with the goods contracted for of merchantable character and adapted to the purposes for which they were intended our claim against you for the resulting damage will be very large.' On August thirteenth the plaintiff answered, in recognition of a contract, and that, in view of defendant's refusal to accept more goods, 'we will complete that portion of your order which is now in the process of manufacture, and hold you for the same,' etc. Later the plaintiff sued, and defendant among other things alleged that the goods were purchased pursuant to his proposition and the goods delivered were not the goods specified in defendant's offer. The defendant did regard the contract as closed, since he acted under it, and insisted upon plaintiff's performing it pursuant to its terms. All that was done by defendant without knowledge of the letter of June fifteenth. The plaintiff's evidence of an oral acceptance is, in effect, a statement to defendant that if he would make one correction or addition the proposal would be satisfactory, which was done, and the proposal so changed returned and the contract went into use. This, if credited, was an acceptance, and the later acts of the parties and practical use of the contract indicate that there had been an acceptance and in themselves tend to show an acceptance. ( Phillip v. Gallant, 62 N.Y. 256, 263; O'Donnell v. Clinton, 145 Mass. 461, 463; Anson Cont. [ 1st Am. ed.] 17.)
The next inquiry is, did the goods delivered accord with the contract? The complaint, which led defendant to refuse deliveries, was that the embossing was not permanent and disappeared upon pressing, and it is alleged in the amended answer that the agreement implied that the goods would be merchantable for the purpose of manufacture into clothing, that they were not, and that the defect was latent and not discoverable upon inspection. The facts inducing the ...