FOSS-SCHNEIDER BREWING CO. v. BULLOCK et al., 59 F. 83

TAFT, Circuit Judge, (after stating the facts.) The plea of the statutes of limitation was properly held bad. The argument on behalf of the defendant below was that, if the Burger contract was in force against the brewing company, that company bad repudiated it early in the year 1885, so that Bullock & Co. might have brought an action for its breach in January or February of that year, more than six years before the filing of the petition. The fallacy of this argument is that the action is here for goods actually sold and delivered to the brewing company.

Such an action accrued upon the delivery of the goods, and not before. It is true that, where a contracting party gives notice of bis intention not to comply with the obligation of his contract, the other contracting party may accept this as an anticipatory breach of the contract, and sue for damages without waiting until the time mentioned for the completion and fulfillment of the contract by its terms; but, in order to enable the latter to sue on such an anticipatory breach, be must accept it as such, and consider the' contract at an end.

If be elects to consider the contract still in force, he cannot recover thereafter without performing all the conditions of the contract by him to be performed. These principles are well settled, and there are decisions by the supreme court, of the United States which leave no doubt upon the subject. Rolling-Mill v. Rhodes, 121 U. S. 255, 264, 7 Sup. Ct. 882; Dingley v. Oler, 117 U. S. 490, 6 Sup. Ct. 850; Smoot’s Case, 15 Wall. 36; Johnstone v. Milling, 16 Q. B. Div. 467; Elsas v. Meyer, 21 Wkly. Cin. Law. Bul, 346; Leake, Cont. 872, and cases there cited.

As Bullock & Oo. did not elect to treat the attempted cancellation by Burger and the brewing company of the Burger contract, as a repudiation of it, no right of action whatever accrued to Bullock & Co. until they had.delivered the rice thereunder. The second and important question for our consideration is whether, on the undisputed facts of the case, there'was in law an acceptance by the brewing company of tlie two car loads of rice, for the price of which recovery is sought.

We have no difficulty in reaching the conclusion that the contract of ¡November, 1884, made through Burger, had been abrogated by the subsequent conduct of the parties. Burger had notified Bullock & Co. in nevera! letters in January of 1885 that the contract made through him had been canceled by the brewing company because the condition of that contract had been that the price named therein was the bottom price, whereas, but a few weeks subsequent, rice .was sold by Bullock & Oo. directly to the brewing company at five cents per hundred less.

The right to cancel this contract was denied by Bullock & Co. in their correspondence with Burger. But by letter of January 6th the brewing company notified Bullock & Co. that it had countermanded and canceled all orders through Burger, to which, in the letter of January 10th, no answer was made by. Bullock & Co. More than this, under the Burger contract of ¡November, 1S84, of the four cars, (he first was to be delivered the first week in December, and the others were to follow when ordered, about two weeks apart.

It is quite clear in our minds that the brewing company insisted, and Bullock & Co. acquiesced in the view, that the contract of December 20th, by which five cars of rice were sold with the option of 10 cars more at |2.80, was a substitute for so much of the contract through Burger as remained unperformed; and we feel quite certain that, had Burger not collected his commission through legal proceedings by garnishment from money of Bullock & Co. in the hands of the brewing company, Bullock & Co. would not have insisted upon delivering the other two cars under the Burger contract.

Bullock & Co. assumed that the surrender of Burger’s commissions to him by the brewing company had been with the acquiescence of the brewing company, though in the form of legal proceedings. Their position, evidently, was that the brewing company had recognized the existence of the Burger contract by paying Burger’s commissions, and charging them to Bullock & Co. Communicating with their lawyer in Cincinnati who had charge of this garnishment proceedings, they were advised to ship the two carloads .to the brewing company, which they did.

Up to the time that the rice was received at Cincinnati, we are of the opinion that there was no obligation on the part of the brewing company to accept it. Tt is also clear that the company’s receipt of (he rice, and the storing it in its warehouse, were under a mistake. It is just as dear, however, that by the 5th of December, or earlier, the company knew that the rice had been taken into the company’s warehouse, and was then stored there.

These facts, it knew, would he communicated through the agents of the railroad company to Bullock & Co.; and, unexplained, they constituted a clear acceptance of the rice,'rendering the brewing company liable for it, under the contract upon which Bullock.& Co. claimed to have the right to deliver the rice, namely, the Burger contract of November, 1884, at the price of $2.85 per hundred. . The company was under an obligation, if it; did not intend to accept the rice, to notify Bullock & Co. of the mistake within a reasonable time. What was a reasonable lime, under the circumstances? There was no excuse for delay.

The facts were all known to the company. The company waited from December 5th until January 9th, when if wrote the letter, which did not reach Bullock & Co. until January 12th, in which Bnlloclc & Co. were notified that the goods had been received under a mistake, and were held subject to their order. In the letter of January 4th die brewing company did not explain its acts, but simply asserted that it had not accepted the rice.

For at least a month, then, it knowingly kept the rice in its storehouse without advising Bullock & Co. that it did not intend to receive and accept.it, a fieri! lmd acted with respect to the rice as’only an owner could. It is true (hat the letter of November 25th, refusing to accept the idee, was written after one cur load had been received in the storehouse; hut it was written upon the same day upon which the freight was paid, and was written before the brewing company was aware that Bullock & Co.’s rice had been received.

The brewing company had once before repudiated a contract, and then complied with it, so that its acceptance of the rice after its letter of November 25th was not: surprising to Bnlloclc & Co. The priceof rice was flue tuating, and was affected by the change of freight rates between the seaboard and Cincinnati, and of this fact the brewing company had been advised by Bnlloclc & Co. It was important, therefore, if the rice was to he rejected hv the brewing company, that Bulloclc & Co. should know it at once.

The brewing company could not; lie by for a month, with the rice in its storehouse, after it apparently had accepted the rice, and then claim that the acceptance had been under a misapprehension of facts known to- it for a month. It is well settled that receipt of goods will become an acceptance of them, if the right of rejection is not exercised within a reasonable time. Benj. Sales, (Corbin's Ed.) p. 916, § 1051, and cases cited. To the knowledge of the brewing company, the rice was delivered to it by Bullock & Co. under the claim of right to do so by virtue of the contract with Burger of November, 1884.

Acceptance of it, therefore, or conduct; equivalent to acceptance of it, implies, not only an agreement to pay for the rice, hut to pay for it in accordance with the contract under which it was avowedly delivered. In Manufacturing Co. v. Hayes, (Pa. Sup.) 26 Atl. 6, a consignee took goods consigned to him out of the possession of the carrier, and had them hauled to his own place of business. He sent his check to the consignor for other goods purchased by him, without any reference to the goods so taken possession of by him.

It was held by the supreme court of Pennsylvania that even 'if it was conceded that he had not ordered the goods in question, yet because he took possession of them from the railroad company, and had them hauled to his own place of business, and failed to notify the consignor of the mistake, he accepted the goods, and the instruction of the court below to find a verdict for the plaintiff for the full amount of the claim was sustained.

It is objected to the action of the court below in directing a verdict, that the facts were not so clearly proven that the case should not have been left to the jury, upon proper instructions. It is said that there was evidence tending to show that the brewing company had advised Bullock & Co. as soon as they became aware of the mistake under which these car loads of rice had been received by them into their custody.

The argument is based on the statement of Overbeck that the two cars from Bullock & Co. were taken into the company’s house by mistake, and that of all this the company notified Bullock & Co. at once by letter, stating that the rice was stored at their expense, and that the company refused acceptance of same. Such a statement, of course, was not competent, without showing that the letter had been lost. All of the letters of either party were introduced in evidence. The correspondence is complete.

There is no room in it for a letter between that of November 25th from the brewing company to Bullock & Co., and that of Bullock & Co.’s letter of January 2d to the brewing company. Overbeck’s statement can only be explained on the theory that he had forgotten when the letter first advising Bullock & Co. of the mistaken receipt of the goods was written. This was not evidence sufficient to go to the jury, because it was neither competent, nor of any weight. Nor do we .think that, under the circumstances of this case, the question of reasonable time was one for the jury.

There was no excuse for any delay, after the brewing company learned of its mistaken action in regard to the rice, in notifying Bullock & Co. of it; and we have no hesitation, as a matter of law, in holding that 30 days’ delay in the rejection of rice — a commodity fluctuating in its market price — was altogether unreasonable. Wiggins v. Burkham, 10 Wall. 127. The conclusions thus reached make it unnecessary for us to con-' sider the other assignments of error. They are founded on the action of the court in the admission and rejection of evidence relating to the cancellation of the Burger contract.

Whether the contract was in fact canceled or not could not, as the case turned out, affect the brewing company’s liability, because its conduct in accepting the rice under the contract was a waiver of any cancellation, if it had taken place. Objection is made to the testimony as to the fluctuation of prices in rice. This was competent to make clear the obligation upon the brewing company of promptly notifying Bullock & Co. of the rejection of the rice. An examination of the whole record satisfies us that the judgment must be affirmed.