PROXIMITY MANUFACTURING CO. v. WOLF

Contract, Modification, Consideration, Construction, Performance and breach. Waiver. Election.

Where, because of disputes which arose between the parties to a contract in writing for the sale and purchase of cotton waste, another contract in writing is made by them modifying the terms of the original contract somewhat and providing that, after the expiration of the original contract and settlement by the purchaser for amounts shipped to him, the seller shall make a certain "cash settlement or rebate" to the purchaser, there is a sufficient consideration for such modifying contract.

A manufacturer agreed in writing to sell to a dealer his entire output of cotton waste for a year, the purchaser agreeing to make payments "on the tenth of each month for all waste shipped . . . during the previous month." Because of disputes between the parties a modifying agreement was made by which it was provided that, at the expiration of the original contract, the manufacturer would give the dealer "a rebate and after settlement by" the dealer "of the waste shipped or billed to" him at the end of the year, the manufacturer would "make cash settlement or rebate" to the dealer in a certain ratio. Held, that the dealer had no right to the rebate unless and until he had made at the specified times the payments called for by the original contract.

A manufacturer made an agreement in writing with a dealer for the sale of his entire output of cotton waste for a year, and thereafter the parties modified the agreement so that, after the dealer had made the payments called for by the contract, he should be entitled to a certain cash payment as a rebate. The dealer failed for several months to make the payments and the manufacturer wrote to him asking for an immediate payment of a sum shown to be due by a statement of account, enclosed with the letter, which included as a credit the rebate agreed upon. The dealer did not pay the sum demanded, and an attorney for the manufacturer wrote to the dealer stating that the dealer was not entitled to any rebate because of his failure to make the required payments. The manufacturer thereupon brought an action against the dealer to enforce payment. Held, that the manufacturer had not waived his right to insist upon the payments being made by the dealer before the giving of any rebate, and that he had not made a binding election to waive such right.

SHELDON, J.

We consider that under our decisions there was a sufficient consideration for the modifying agreement of September 24, 1907, and for the plaintiff's promise made therein to allow to the defendants the rebate therein mentioned. Some of these decisions are collected in Rowe v. Peabody, 207 Mass. 226, 234, and Tobin v. Kells, 207 Mass. 304, 311.

But by this agreement the defendants' right to that rebate was made conditional upon the defendants' payment of the amounts which should have become due and payable under the original agreement. The stipulation of the modifying agreement is that the plaintiff should "at the expiration" of the original agreement "give us [the defendants] a rebate and after settlement by us of the waste shipped or billed to us by them at the end of April, 1908, make for us a memorandum of the total quantity of waste shipped during the twelve months ending April 30th, 1908, and on 1/6 of this total quantity of [or] two months' output, make cash settlement or rebate [to] us" as therein stated.

These words can mean only that the defendants are to have this rebate after settlement by them of what had become due from them for waste shipped under the original agreement. And the only mode of settlement provided for in the original agreement was by payment to be made by sending a check "on the tenth of each month for all waste shipped to us [the defendants] during the previous month." No change was made in this provision by the modifying agreement of September 24. We cannot avoid the conclusion that the defendants' right to the rebate was to accrue only after making their monthly payments and only on condition of their doing so. It was not a discount to be allowed upon settlement, as in Commonwealth v. Strauss, 188 Mass. 229, and some other cases relied on by the defendants. It was a final rebate or cash payment to be made by the plaintiff to the defendants only after the termination of the period covered by the original agreement and after full settlement thereunder should have been made by the defendants. Lamb v. Lamb, 11 Pick. 371, 378. Hooper v. Hooper, 9 Cush. 122, 128. Treadwell v. Cordis, 5 Gray, 341, 353. State v. Schwarzschild, 83 Maine, 261, 265. It was not both a rebate and a cash payment that the plaintiff was to make, but only one allowance, and what was added in the modifying agreement after the word "rebate" was added by way of explaining the meaning in which that word was used. There is abundant authority for the view which we take. Tufts v. Kidder, 8 Pick. 537. Makepeace v. Harvard College, 10 Pick. 298. Colton v. Salomon, 38 Vroom, 73. Nassau v. Guttridge, 41 Vroom, 191. Perin v. Cathcart, 115 Iowa, 553. National Distilling Co. v. Cream City Importing Co. 86 Wis. 352. St. Louis San Francisco Railway v. Rierson, 38 Kans. 359. Missouri Edison Electric Co. v. Bry, 88 Mo. App. 135. Missouri Edison Electric Co. v. Steinberg Hat Fur Co. 94 Mo. App. 543. Olmstead v. Distilling Cattle-Feeding Co. 77 Fed. Rep. 265. Messenger v. Woge, 20 Col. App. 275.

We find no evidence of waiver or of a binding election by the plaintiff not to stand upon its right. It might have been willing to allow the rebate if the defendants had merely made some delay in payment; but that affords no evidence that it had bound itself to waive the stipulation that had been made in its favor. Lambeth Rope Co. v. Brigham, 170 Mass. 518, 523.

The defendants have argued only the question of their right to the rebate or allowance. Under the terms of the report, judgment must be entered for the plaintiff in the amount of $3,269.67, with interest from July 10, 1908.

So ordered.