STROOCK PLUSH CO. v. N.E. COTTON YARN CO

Contract, What constitutes, Construction. A cotton broker made and signed a sale note showing a sale by a manufacturer of cotton yarns, for whom he might have been found to have been acting, of a quantity of cotton yarn to be delivered before November 1 of a certain year, shipments to be specified by the purchaser, who agreed to give at least one month's notice of deliveries required. The broker sent duplicates of the note to the manufacturer and to the purchaser by letters. The manufacturer at once informed the broker that he would accept the note as written with the understanding that the purchaser would not call for more than a certain number of pounds per month, and the broker so informed the purchaser by letter. The purchaser replied at the same time both to the broker's letter enclosing the sale note and to that stating the manufacturer's proposed modification of the agreement, stating that he was unwilling to accept the modification. There was much correspondence between the parties through the broker which finally ended in a letter from the purchaser stating a certain amount of yarn which, he was "quite sure," would "be the maximum" that he would require in any month. This the manufacturer understood to be an agreement by the purchaser not to ask for more in any month than the amount so stated as a "maximum." The purchaser, on September 17, asked for shipments in excess of the "maximum" stated. The manufacturer shipped a certain sum less than such "maximum." In an action by the purchaser for the difference between the contract price and the market price of the yarn which he had ordered and which had not been delivered, the manufacturer admitted liability as to the amount less than the maximum which he had shipped in the last month of the contract. Held, without determining whether any contract was made by the parties, that the defendant's liability did not exceed what he admitted.

SHELDON, J.

It is sufficiently manifest that the sale note, so called, drawn by Prendergast and Company, is not to be regarded as a contract between the parties. The authority of Prendergast to act for the defendant was certainly not clearly shown. But if it be said that there was some evidence of such authority, or at any rate some evidence that the defendant, in previous transactions with the plaintiff, had so far held out Prendergast as its agent that it could not now deny his authority, yet there was no evidence that he could bind the plaintiff, or that the plaintiff in any way had adopted the terms of the sale note before it was reduced to writing and communicated to the plaintiff on November 12, 1908, by Prendergast's sending to it a duplicate of the sale note. The utmost effect that could be given to the sale note, therefore, was to treat it as an offer made by the defendant to the plaintiff. But on the same day the defendant through Prendergast modified the offer by adding a stipulation that the plaintiff must not call for more than fifteen thousand pounds of yarn per month. The plaintiff's letter of November 13 to Prendergast establishes the fact that it received this modification before it had accepted the defendant's original offer. The plaintiff was unwilling to accept the offer as thus modified, and there was considerable further correspondence. Finally the plaintiff wrote a letter which, rightly or wrongly, the defendant regarded as a stipulation by the plaintiff that it would not call for more than twenty thousand pounds of yarn per month, and the defendant consented to this in writing, its consent was communicated to the plaintiff; and deliveries began to be made by the defendant to the plaintiff.

Under these circumstances, it is plain that either there was no binding contract between the parties because the original offer had been modified before its acceptance and their minds never had met upon the offer as modified, or else that the contract contained a stipulation that the plaintiff should not require the delivery of more than twenty thousand pounds of yarn per month. In the former case, the plaintiff cannot maintain its action at all, and judgment must be for the defendant.

On the latter hypothesis, the defendant would be liable for the non-delivery of about eight thousand four hundred pounds. As at the argument before us the defendant conceded its liability to this extent, we need not determine which alternative was correct.

The result is that the defendant's seventh request for instructions should have been given; the exceptions must be sustained; and there must be a new trial on the question of damages only.

So ordered.