LAGERLOEF TRADING CO., Inc., v. AMERICAN PAPER PRODUCTS CO. OF INDIANA, 291 F. 947

BAKER, Circuit Judge (after stating the facts as above). Among the conditions of the contracts the fifth provided that each shipment was to be considered a separate contract and that default on one or more shipments should not invalidate the rest of the contract. Seller, intending to plead in conformity to the Indiana Code, filed a complaint in two paragraphs. Each paragraph stated the facts with respect to one of the two contracts. Each contract covered three shipments or installments. Buyer makes the point that separate consideration of the several installments required six paragraphs of complaint.

Buyer further criticizes the complaint by insisting that it proceeds on the theory that seller, on receiving notice of buyer’s anticipatory repudiation, elected to rely on making full and strict performance in accordance with the terms and conditions laid upon seller by the contracts. We find that the complaint set forth buyer’s repeated, persistent, and unrepented repudiations of any and all obligations under the contracts, alleged seller’s willingness and ability to perform, and counted on buyer’s attitude and conduct as excusing full and strict performance.

We do not burden these pages with an investigation of the requirements of the Indiana Code or with a copy of the complaint, because the finding of facts carries the presumption, in the absence of any contrary showing in the record, that the trial court received evidence on which to base the.finding, without any objection on buyer’s part as to form or substance of the complaint or as to variance between pleading and proof. The only question, therefore, is: What are the rights of the parties on the facts as found?

As to the third and last installment, we note from the record that the complaint was filed on March 28th. Under the ninth finding, showing that shipments from Finland to New York took from 21 to 40 days, buyer’s time to repent its anticipatory rejection of the last installment would not expire until April 9th, giving buyer the full limit of grace. . Seller’s act of bringing suit before buyer’s time of grace had expired converted the anticipatory rejection into an anticipatory breach, for which seller was entitled to recover.

Respecting the second installment, the tenth finding shows that seller in due time had shipped the proper quantity and quality of pulp from Finland. On February 18th seller informed buyer (seventh finding) that the shipment was then on the Atlantic. Expecting the vessel to arrive at Philadelphia on or before February 21st, seller in its message of the 18th informed buyer that it would hold the pulp for buyer until the close of business on the 21st, and asked to be advised if buyer wished to withdraw its cancellation and accept the merchandise.

Buyer (eighth finding) made no response and thereby maintained its positive and unequivocal refusal (second and sixth findings) to do anything whatsoever in fullfillment of its equally positive and unequivocal obligations. In order to appraise the effect of buyer’s aforesaid conduct upon seller’s performance, then fully embarked upon and in process of fulfillment, it is proper to notice some of the terms of the contract in the light of the situation of the parties. Seller was in Finland. It had factories, but no ships.

Seller engaged to manufacture in Finland certain quantities and qualities of pulp, and at certain times to deliver the pulp to ocean carriers for transportation to any port on the American Atlantic seaboard. Seller had no responsibility as to departure and arrival of vessels. Buyer was in Indiana. When seller’s agent in New York was informed by seller that a shipment was on the water and headed for a certain port, it was the agent’s duty on behalf of seller to inform buyer in order that buyer might'be at the dock to receive the pulp.

Seller was obligated to see that the pulp was unloaded at the dock, and buyer was obligated to be there to receive it and arrange for its transportation to Indiana, either through its own agents or through seller’s agent acting for buyer. Compare Kokomo Co. v. Republic of France (C. C. A.) 268 Fed. 917. Seller, in performance of its obligation, made proper pulp and shipped it in due time, notified buyer of expected time of arrival, and asked buyer to be present to receive the pulp.

Now, because the arrival of the shipment was some days later than originally expected, and because seller did not again demand that buyer be present at the dock in Philadelphia to receive the pulp, buyer insists that it rightfully escapes on the ground of seller’s nonperformance. With the goods at Philadelphia and buyer in Indiana, seller could not make an actual tender without going beyond its duty under the contract and thereby unnecessarily increasing the damages. Buyer had been notified to be present to receive this very shipment.

Buyer’s refusal to attend was a breach of duty on its part which prevented or excused (immaterial which view is taken) seller from further performance. Tender of goods on account of the first installment was less nearly perfect than on the second installment. Fourth, fifth, twelfth, thirteenth, and fourteenth findings.

Concerning both the first and second installments, on which suit was begun after date for complete performance, the partial performances above set forth are only useful in emphasizing seller’s willingness and ability to perform, and the decision actually turns on the question of law whether buyer’s repudiation before seller started performance, and buyer’s continuous repudiation after seller had embarked upon performance, prevented or excused seller from making strict and perfect tender on the due date.

What burden and risk of “election” should a promisor’s anticipatory repudiation of his fair and binding promise cast upon the promisee? The promisor’s proposal to cancel the promisee’s obligations would, if accepted, be a good consideration for the promisee’s release of the promisor’s obligations. But it takes two to make the new bargain of mutual release.

And if the promisor’s proposal of cancellation is made when no benefit could possibly accrue to any one except himself, when by reason of his power in the business world to award future prizes or inflict future pains he expects or hopes to force the promisee to stand the loss, the only “election” which the law should permit to.be cast upon the promisee is to say yes or no to the promisor’s proposal of mutual releases. If the promisee says yes, the matter is at an end.

If he says no (meaning thereby that he declines to submit to the arbitrary and unjust demand), he should not be held to be digging pitfalls for himself and building isles .of safety for the repudiator. And he is so betrayed, if the law makes more of his no than this: “I refuse to accept your proposal of mutual releases. I am able and willing to go ahead, with our arrangements as originally agreed upon, except chat It may he necessary to count out the loss of time occasioned by your recalcitrance: This is the only ‘election’ or notice of my intention to which you are entitled.

It is no concern of yours whether I sue you to-day on ‘anticipatory breach’ or on any other day down to the due date. If I do not sue you on ‘anticipatory breach,’ you may take my action in that regard as a continuing invitation to you to repent. Indeed, I may -from time to time down to the due date repeatedly urge you to repentance, but only in the interest of your morality, not to increase your immorality by permitting you to-claim immunity through my courtesy and fair dealing. I am giving you the opportunity to repent, and in that sense I am ‘keeping the contract alive for your benefit,’ but in no other sense.

If despite your recalcitrance I do things looking toward performance, that is only to show my willingness and ability, for I realize that the law will not permit me to increase the damages by doing unnecessary things.

And, finally, if by the due date you have not repented, I shall then and thereafter count on what had stood as your continuous anticipatory repudiation as having ripened into a completed breach.”' We say that, in our judgment, the law should so pronounce, because-the law should not be regarded as crystallized strata of a dead past, but as a living force that pulses in response to preponderant convictions of morality. Commercial law should reflect commercial morality, Over the portals of commerce no longer swings the ancient warning.

Associations of commerce, leagues of advertisers, and of advertising publishers, courts of equity developing rules of fair trade, and the people through their representatives in Congress setting up a commission to promote and emphasize commercial morality in a broader sweep than is possible for courts, all these help to make plain the preponderant conviction of to-day. Repudiators of fair and solemn and binding promises are commercial sinners. If they are unrepentant, courts should hold them to the full consequences of their sins.

While promisees- should be encouraged to hold open the door to repentance, courts should be vigilant to see that repudiating promisors do not use that very door as an exit to immunity. We say further that, in our judgment, the law has already so pronounced. It is quite impossible, within any reasonable limits, to analyze the authorities, to pick out the dicta, to compare case with case. In the margin we set out the citations which the able and painstaking counsel of these opposing parties have discussed at length.

In our opinion the weight of authority is in line with what we regard as the sound reason of the matter. The judgment is reversed, with the direction to enter judgment for plaintiff on the findings. The promisee's failure to say yes is one means of saying no. Seller cited: Allegheny Valley Brick Co. v. C. W. Baymond Co., 219 Fed. 477, 135 C. C. A. 189; Alpena Portland Cement Co. v. Backus, 156 Fed. 944, 84 C. C. A. 444; Anvil Mining Co. v. Humble, 153 U. S. 540, 14 Sup. Ct. 876, 38 L. Ed. 814; Bernstein v. Meech, 130 N. Y. 354, 29 N. E. 255; Bigler v. Morgan, 77 N. Y. 312; Bradley v. Newsom, Sons & Co., [1919] A.

C. 16, 53 ; Braithwaite v. Foreign Hardwood Co., [1905] 2 K. B. 543; Brown v. Muller, L. R. 7 Exch. 319; Canda v. Wick, 100 N. Y. 127, 2 N. E. 381; Bank of Columbia v. Hagner, 1 Pet. 455, 7 L. Ed. 219; 13 Corpus Juris, pp. 655, 656, note 82; Cort v. Ambergate Railway Co., 17 Q. B. 127; Cutter v. Powell, 2 Smith’s Lead. Case, 1212; Daniels v. Newton, 114 Mass. 530, 19 Am. Rep. 384; Danube & Black Sea Railway v. Xenos, 11 C. B. (N. S.) 152; 13 C. B. (N. S.) 825; Donati v. Cleveland Grain Co., 221 Fed. 168, 137 C. C. A. 68; Duffy v. Patten, 74 Me. 396; Dunkirk Colliery Co. v. Lever, 41 L. T. 633; 43 L.

T. 706; Ford v. Tilley, 6 B. & C. 325; Franchot v. Leach, 5 Cow. (N. Y.) 506; Frost v. Knight, L. R. 7 Exch. 111; Golden Cycle Mining Co. v. Rapson Coal Mining Co., 188 Fed. 179, 112 C. C. A. 95; Gorton v. Moeller Bros., 151 Iowa, 729, 130 N. W. 910; Habeler v. Rogers, 131 Fed. 43, 65 C. C. A. 281 Hickman v. Haynes, L. R. 10 C. P. 598; Hinckley v. Pittsburgh Steel Co., 121 U. S. 264, 7 Sup. Ct. 875, 30 L. Ed. 967; Hochster v De la Tour, 2 E. & B. 678 ; Honck v. Muller, 7 Q. B. D. 91; Johnstone v. Milling, 16 Q. B. D. 467; Kingman v. Western Mfg. Co., 92 Fed. 486, 34 C. C. A. 489; Krauter v. Simonin (C. C.

A.) 274 Fed. 791; Lake Shore By. Co. v. Richards, 152 Ill. 59, 38 N. E. 773, 30 L. R. A. 33; Levey & Co. v. Goldberg, [1922] 1 K. B. 688; Louisville Packing Co. v. Crain, 141 Ky. 379, 132 S. W. 575; Mersey Steel & Iron Co. v. Naylor, Benzon & Co., 9 App. Cas. 434; Michael v. Hart & Co., [1902] 1 K. B. 482; Niekoll & Knight v. Ashton, Eldridge & Co., [1900] 2 Q. B. 298; Paducah Cooperage Co. v. Arkansas Stave Co., 193 Ky. 774, 237 S. W. 412; Pierson & Co. v. American Steel Export Co., 194 App. Div. 555, 185 N. Y. Supp. 527; Polson Logging Co. v. Neumeyer, 229 Fed. 705, 144 C. C. A. 115; Railway Co. v.

McCarthy, 96 U. S. 258, 24 L. Ed. 693; Riendeau v. Bullock, 147 N. Y. 269, 41 N. E. 561; Ripley v. McClure, 4 Exch. 345; Robertson v. Garvan (D. C.) 270 Fed. 643; Boehm v. Horst, 178 U. S. 1, 20 Sup. Ct. 780, 44 L. Ed. 953; Roller v. George H. Leonard & Co., 229 Fed. 607, 143 C. C. A. 629; Roper v. Johnston, L. R. & C. P. 167; 23 Ruling Case Law, p 1410; Sedgwick on Damages (9th Ed.) § 636d; Select Pictures Cor. v. Australasian Films, Ltd. (D. C.) 260 Fed. 296; Shaw v. Republic Life Insurance Co., 69 N. Y. 286; Shaw’s Brow Iron Co. v. Birchgrove Steel Co., 6 T. L. R. 50; 7 T. L. R. 241; Skeele Coal Co. v.

Arnold, 200 Fed. 393, 118 C. C. A. 545; Stanton v. Small, 3 Sandf. (N. Y.) 230; Traver v. Halsted, 23 Wend. (N. Y.) 66; Tredegar Iron & Coal Co. v. Hawthorne Brothers & Co., 18 T. L. R, 716; Tri-Bullion Smelting Co. v. Jacobsen, 233 Fed. 646, 147 C. C. A. 454; United Press Ass’n v. National Newspaper Ass’n, 237 Fed. 547, 150 C. C. A. 429; United States v. Illinois Surety Co., 226 Fed. 653, 141 C. C. A. 409; Illinois Surety Co. v. John Davis Co., 244 U. S. 376, 37 Sup. Ct. 614, 61 L. Ed. 1206; Vigers v. Sanderson, [1901] 1 K. B. 608; Wall Grocer Co. v. Jobbers’ Overall Co. (C. C. A.) 264 Fed. 71; Wieler v.

Schilizzi (1855) 17 C. B. 619; Williams v. Patrick, 177 Mass. 160, 58 N. E. 583; Williston on Contracts, §§ 683, 832, 1303. Buyer cited: Norrington v. Wright, 115 U. S. 188, 6 Sup. Ct. 12, 29 L. Ed. 366; Roehm v. Horst, 178 U. S. 1, 20 Sup. Ct. 780, 44 L. Ed. 953; Hochster v. De la Tour, 2 E. & B. 678; Cleveland Mill Co. v. Rhodes, 121 U S. 255, 7 Sup. Ct. 882, 30 L. Ed. 920; Foss-Schneider Co. v. Bullock, 59 Fed. 83, 8 C. C. A. 14; Bowes v. Shand, L. R. 2 App. Cas. 455, 46 L. J. Q. B. 561; Elliott on Contracts, § 2048; Inman, Akers & Inman v. Elk, 116 Tenn. 141, 92 S. W. 760; Brown v. Norton, 50 Hun, 248, 2 N.

Y. Supp. 869; Prescott v. Powles, 113 Wash. 177, 193 Pac. 680; 23 R. C. L. “Sales,” § 244; Galle v. Hamburg, 233 Fed. 424, 147 C. C. A. 360; H. B. Williams Cooperage Co. v. Scofield, 115 Fed. 119, 53 C. C .A. 23; Ruling Case Law Sales, § 258; Williston on Sales, §§ 495, 457; McNairy v. Bishop, 8 Dana (Ky.) 150; Weltner v. Riggs, 3 W. Va. 445; Spooner v. Baxter, 16 Pick. (Mass.) 409; Rogers v. Van Hoesen, 12 Johns. (N. Y.) 220; Frost v. Knight, L. R. 7 Exch. 111; 6 R. C. L. “Contracts,” § 385; Dambmann v. Lorentz, 70 Md. 380, 17 Atl. 389; 14 Am. St. Rep. 364; Krebs Hop Co. v.

Livesley, 59 Or. 574, 114 Pac. 944, 118 Pac. 165, Ann. Cas. 1913C, 758; Greenwall, etc., Co. v. Markowitz, 97 Tex. 479, 79 S. W. 1069, 65 L. R. A. 302; Ernst v. Schmidt, 66 Wash. 452, 119 Pac. 828, Am. & Eng. Ann. Cases 1913C, 389; Rubber Trading Co. v. Manhattan, 221 N. Y. 120, 116 N. E. 789; Gentry v. Margolius, 110 Tenn. 669, 75 S. W. 959; Rayburn v. Comstock, 80 Mich. 448, 45 N. W. 378; Habeler v. Rogers, 131 Fed. 45, 65 C. C. A. 281; Eastern Oregon Land Co. v. Moody, 198 Fed. 7, 119 C. C. A. 135; Ziehen v. Smith, 148 N. Y. 558, 42 N. E. 1080; Williston on Contracts, § 832; Thick v.

Detroit, etc., Co., 137 Mich. 708, 101 N. W. 64, 109 Am. St. Rep. 694; Pierson v. Crooks, 115 N. Y. 539, 22 N. E. 349, 12 Am. St. Rep. 831; Whitney v. McLean, 4 App. Div. 449, 38 N. Y. Supp. 793; Daniel on Negotiable Instruments (3d Ed.) 1734b, 1734c. <©cs>For other cases see same topic & KEY-NUMBER in all Key-Numbered Digests & Indexes;