Thompson & Alix Ltd. v. Smith

Thompson & Alix Ltd. v. Smith
Collection
Supreme Court Judgments
Date
1933-02-07
Report
[1933] SCR 172
Judges
Rinfret, Thibaudeau; Lamont, John Henderson; Smith, Robert; Cannon, Lawrence Arthur Dumoulin; Crocket, Oswald Smith
On appeal from
New Brunswick
Subjects
Contract
Decision Content
Supreme Court of Canada
Thompson & Alix Ltd. v. Smith, [1933] S.C.R. 172
Date: 1933-02-07.
Thompson and Alix, Limited (Plaintiff) Appellant;
and
B. F. SMITH (Defendant) Respondent.
1932: October 18, 19; 1933: February 7.
Present: Rinfret, Lamont, Smith, Cannon and Crocket JJ.
ON APPEAL FROM THE SUPREME COURT OF NEW BRUNSWICK, APPEAL DIVISION
Contract—Sale of goods—Contract for sale of potatoes to be delivered in carload instalments—Rejection by purchaser of carloads shipped, as being of inferior quality—Question whether these carloads were shipped on account of the contract—Question whether rejection amounted to repudiation of the whole contract—Jury’s findings—Sale of Goods Act, R.S.N.B., 1927, c. 149, s. 28 (2).
By contract dated September 3, 1927, respondent agreed to sell and appellant to buy 20 carloads of white potatoes, Cobblers or Green Mountains, Canada Grade A, at 90 cents per 90 pounds, bulk, delivered at rate of 5 cars per week, payment to be made in cash against documents. All cars were to be Government inspected and certificate of grading was to accompany the draft for each car as shipped. The contract did not specify time of shipment, but no Government certificate as to grade could be obtained before October 1 (Root Vegetables Act, R.S.C., 1927, c. 181, s. 19). On September 17 the broker who had arranged the contract wired respondent: “Thompson and Alix (appellant) would like you ship one car this coming Monday against their contract can you do so if not kindly wire immediately present price and conditions,” to which respondent replied: “Will ship one car Thompson and Alix 90 per bag bulk to-morrow or Tuesday best can do.” A car was shipped on September 21 and was followed by another. Appellant refused to accept and pay for these, claiming they were of inferior quality, whereupon respondent refused to make further shipments. Appellant sued for damages. The jury found that the two cars were shipped under the contract, that the potatoes therein were grade A, that respondent did not commit a breach of the contract, that respondent, by appellant’s statements and conduct, was justified in repudiating the contract and relieved from making further delivery under it; but the trial judge held that, on interpretation of the documents, the two cars were not shipped under the contract, and, notwithstanding the jury’s findings, ordered judgment for appellant. The Supreme Court of New Brunswick, Appeal Division (4 M.P.R. 245), set aside the judgment and ordered a new trial. Appellant appealed, and respondent cross-appealed, to this Court, each asking for judgment in its or his favour and (there having been already two trials) for a final decision that would avoid further trials.
Held (Lamont J. dissenting): Appellant had not repudiated the contract, and was entitled to damages for non-delivery by respondent.
Per Smith, J.: Assuming the first car of potatoes was shipped on account of the contract (requirement of certificate of grading being waived as to it), and was of the required quality, appellant’s rejection of it (though making him liable for breach in respect of that car) was not, and there was no evidence on which the jury could find that it was, a refusal to carry out the contract. The second car was never ordered, had not the necessary certificate, and appellant was not bound to accept it, and there was no evidence justifying the jury’s finding in reference to it.
Per Cannon and Crocket JJ.: Assuming the two cars were shipped on account of the contract (Cannon J. was clearly of opinion they were not; Crocket J. thought there might be justification for a finding that the first was, but none for a finding that the second was), and was of the required quality, appellant’s rejection of them was merely a “severable breach giving rise to a claim for damages,” and was not, and a jury could not, on the evidence, reasonably find that it was, a repudiation of the contract.
Per Lamont J. (dissenting): The jury was justified on the evidence in finding that the two cars were shipped on account of the contract and were of the required quality, and, in view of the contract, letters and other evidence, it was open to them to find that appellant’s refusal to accept and pay for them evidenced an intention to repudiate the whole contract unless respondent would ship Green Mountains (instead of Cobblers as shipped) which the contract did not require him to do.
The Sale of Goods Act, R.S.N.B., 1927, c. 149, s. 28 (2); Freeth v. Burr, L.R. 9 C.P. 208, at 213, and other cases referred to.
As to the Court finally determining on this appeal the issue between the parties, Cannon J. referred to Order 58, Rule 4, and Order 40, Rule 10, of the New Brunswick Rules of Court, and to Skeate v. Slaters, 83 L.J.K.B. 676, at 680-681, 686, and Banbury v. Bank of Montreal, [1918] A.C. 626.
APPEAL by the plaintiff from the judgment of the Supreme Court of New Brunswick, Appeal Division[1].
By a contract in writing dated September 3, 1927, the defendant agreed to sell and the plaintiff to buy 20 carloads of white potatoes, Cobblers or Green Mountains, Canada Grade A, at 90 cents per 90 pounds, bulk, delivered at Sherbrooke, Quebec, at the rate of five cars per week, payment to be made in cash against documents. All cars were to be Government inspected and certificate of grading was to accompany the draft for each car as shipped. The contract was arranged by a broker in Sherbrooke. No date was specified in the contract as to the time of shipment, but no Government certificate as to grade could be obtained before October 1 (Root Vegetables Act, R.S.C., 1927, c. 181, s. 19). On September 17, the broker wired defendant:
Thompson and Alix [the plaintiff] would like you ship one car this coming Monday against their contract can you do so if not kindly wire immediately present price and conditions.
to which defendant replied:
Will ship one car Thompson and Alix ninety per bag bulk to-morrow or Tuesday best can do.
A car of potatoes was shipped on September 21, and was followed by another. The plaintiff refused to accept and pay for these cars, claiming that they were of inferior quality; whereupon the defendant refused to make any further shipments.
There was considerable correspondence other than the above, much of which is set out in the judgments now reported.
The plaintiff brought action for damages, claiming the sum of $3,290, as being the difference between the contract price and the price paid by the plaintiff in the open market at the time of the alleged breach by defendant.
The action was tried twice, each time before Le Blanc J., with a jury. On the first trial, the jury gave a general verdict for the defendant and judgment was entered in his favour. The Appeal Division set aside that verdict and judgment and ordered a new trial[2]. On the second trial the jury answered the questions submitted to them in favour of the defendant, finding (inter alia) that the two cars sent were shipped under the contract, that the potatoes therein were grade A, that defendant did not commit a breach of the contract, and that defendant, by the statements and conduct of the plaintiff, was justified in repudiating the contract and relieved from making any further delivery under it. But the trial judge held that, on interpretation of the documents, the two cars were not shipped under the contract, and, notwithstanding the jury’s findings, ordered judgment to be entered for the plaintiff for $3,290. The Appeal Division set aside this judgment and ordered a new trial[3].
The plaintiff appealed to the Supreme Court of Canada, asking that the judgment of the Appeal Division be set aside and the judgment of the trial judge restored. The defendant cross-appealed, asking that, in so far as the judgment of the Appeal Division ordered a new trial, it be varied and that judgment be entered for the defendant. Both parties asked that this Court, if possible, put an end to the litigation and render a final judgment.
P. J. Hughes, K.C., and W. J. West for the appellant.
W. P. Jones, K.C., and G. McDade for the respondent.
Rinfret, J.—There have already been two trials in this case. The Appeal Division of the Supreme Court of New Brunswick has again ordered a new trial[4]. The parties have requested us, if possible, to put an end to the litigation and to render a final judgment.
I agree with my brothers Cannon and Crocket that there was no repudiation of the contract by the appellant and that the appeal should be allowed and the cross-appeal dismissed with costs throughout, judgment being entered in favour of the plaintiff for the sum of $3,290, the amount of damages assessed by the jury.
Smith, J.—I agree with my brothers Cannon and Crocket that there was no repudiation by the appellant of the contract.
The first car of potatoes shipped was not government inspected and had no certificate of grading, as required by the terms of the contract; but appellant, by his telegram asking for the shipment of this car, waived the requirement as to that particular car because of his knowledge that there could be no such inspection at that time. The appellant was entitled to reject this car if the contents were not in compliance with the terms of the contract. The jury, however, has found that the contents were in fact in compliance with the terms of the contract, and that appellant was not entitled to reject it. Appellant, therefore, remained accountable to the respondent for that car of potatoes at the contract price, or for the loss sustained by its rejection; but that is the full extent of its liability for its refusal to accept that particular car, whether shipped as part fulfilment of the contract or on an independent contract resulting from the telegram. It was not a refusal to carry out the contract, and there was no evidence before the jury on which they could come to any such conclusion. The second car was never ordered, had not the necessary certificate of inspection, and appellant was not bound to accept it; and there is no evidence justifying the finding of the jury in reference to it.
The jury has assessed the damages for respondent’s breach of contract at $3,290. I therefore agree that the judgment of the trial judge should be restored, with costs of this appeal and of the appeal to the Appeal Division to the appellant.
Cannon, J.—The plaintiff’s claim is for damages for non-delivery of potatoes, under a contract dated the 3rd September, 1927, for twenty minimum carloads of white potatoes, Cobblers or Green Mountains, Canada Grade A, at the price of ninety cents per ninety pounds, and ten cents per bag extra, to be delivered at the city of Sherbrooke, in the province of Quebec, or some other point with equal freight, the same to be shipped at the rate of five carloads per week, mostly over the Canadian National Railways. All potatoes were to be Government inspected, and the certificate of the grading was to accompany the draft of defendant and bill of lading for each car shipped. The potatoes were to be paid for by the plaintiff with cash against documents of title and bills of lading. According to the plaintiff, the defendant refused to deliver and compelled the plaintiff to purchase in the open market at an advanced price, whereby the plaintiff suffered damages for $3,290.
The defendant pleads in substance that he had the right to fulfil his contract with the plaintiff by shipping Cobbler potatoes or Green Mountain potatoes, or both, at his option, of a certain quality and description; and that defendant, at the request of plaintiff, did ship a portion of said potatoes, being Cobbler potatoes conforming to such quality and description; whereupon the plaintiff refused to accept and pay for such portion so shipped by the defendant, who was entitled to treat the said contract as having been repudiated by the plaintiff. The defendant also pleaded a custom, ancient, general, uniform, certain, notorious and universally recognized and acted upon in the potato trade, that when a carload of potatoes, being a perishable product, is shipped from one province to another province in Canada, as one instalment under a contract providing for the shipment of several instalments, where each instalment is to be paid for separately, and if such carload answers the requirements of the contract, the buyer must take delivery of the carload; and if in doubt as to whether or not the potatoes in such carload answer the requirements of the contract, the buyer must unload the potatoes; and if the buyer does not unload the carload and take delivery of the same, subject to claims, the seller is justified in regarding the whole contract as having been repudiated by the buyer; and the seller may, under such circumstances, refuse to ship the other instalments.
I may say immediately that there is no evidence of such general and uniform custom. I have quoted this paragraph to show that defendant himself considered that this contract provided for shipment of several instalments where each instalment had to be paid for separately.
The case was tried twice before Leblanc, J., with a jury; and the Court of Appeal of New Brunswick has twice ordered a new trial. Both parties come before us requesting that judgment should be rendered on the merits of the case and are both dissatisfied with the order for a third trial. The trial judge, after the second trial, ordered a verdict to be entered in favour of plaintiff, although the jury’s answers to the questions put to them by the trial judge were mostly favourable to the defendant. The Court of Appeal, in its second judgment[5], disapproved of the course followed by the trial judge; but instead of rendering judgment for the plaintiff or for the defendant, as they had the power to do, notwithstanding the verdict of the jury, ordered a new trial.
We stand in the position of the Court of Appeal and have power to draw inferences of fact and to give any judgment and make any order which ought to have been made, under Rule 4 of Order LVIII of the Rules of the Supreme Court of New Brunswick, which have been numbered to conform, as far as possible, to the English Judicature Rules of 1883.
It should be noticed that, under Rule 10 of Order XL, upon a motion for judgment, or upon an application for a new trial, the Court may draw all inferences of fact not inconsistent with the findings of the jury; and, if satisfied that it has before it all the materials necessary for finally determining the questions in dispute or any of them, give judgment accordingly.
These two rules have been discussed by the Court of Appeal in England, in the case of Skeate v. Slaters[6], where Lord Reading said:
There (under Order XL, Rule 10) the power to draw inferences of fact is limited, when there is a verdict of a jury, to such inferences as are not inconsistent with the finding of the jury. The application before us is not for a new trial, but is an appeal from the decision of the Judge. It is, however, important to consider whether the powers of this Court on appeal from a trial by a jury are limited to those formerly exercised by the King’s Bench Division under Order XL, rule 10. Millar v. Toulmin[7] decided that under Order LVIII, rule 4, greater powers are given to the Court of Appeal than were conferred under Order XL, rule 10, and, in the words of Lord Esher, included “the power, if all the necessary materials are before the Court, of giving that judgment which in the opinion of the Court ought to be the judgment between the parties, even though such judgment be inconsistent with the findings of the jury.” In that case the Court of Appeal entered judgment for the plaintiff, which was deciding affirmatively the rights of the plaintiff without the assistance of the jury, and left the question (if any) as to the amount to be decided by the Master. Lord Halsbury in the same case in the House of Lords criticised the exercise of this power. The other Lords expressed no opinion upon this point, and the House of Lords did not reverse the judgment upon that ground. In Allcock v. Hall[8], the Court of Appeal again considered the question with the assistance of the observations of Lord Halsbury, and came to the conclusion that they had such powers and exercised them by entering judgment for the defendants. Be it observed that Lord Justice Lindley added that the Lord Justices deciding that case had consulted their colleagues in the other branch of the Court, who had carefully considered the point and agreed with the decision. Lord Loreburn in Paquin, Ltd. v. Beauclerk[9], referring to these two cases, said: “Obviously the Court of Appeal is not at liberty to usurp the province of a jury; yet, if the evidence be such that only one conclusion can properly be drawn, I agree that the Court may enter judgment. The distinction between cases where there is no evidence and those where there is some evidence, though not enough properly to be acted upon by a jury, is a fine distinction, and the power is not unattended by danger. But if cautiously exercised it cannot fail to be of value.”
The authority of Allcock v. Hall[10] was approved by Lord Loreburn there and is clearly binding upon us; and I am of opinion that this Court, if satisfied that it has all the necessary materials before it, and that no evidence could be given at a re-trial which would in this Court support a verdict for the plaintiff, ought to enter judgment for the defendants. And, in the same case, Lord Phillimore, L.J., said at page 686:
The result, I think, is that the cases lay down that when the Court to which the motion for new trial is made sees that the verdict was wrong, and sees also that upon the admitted facts, or the only possible evidence that could be given, the verdict should be the other way, and has all the materials before it, it may conclude the case, dispense with another trial by a jury, which will either result in a verdict for the applicant or be itself set aside and so toiies quoties, and at once give judgment.
I would also refer to Banbury v. Bank of Montreal[11].
I believe, in view of the request of both parties, who have, after two trials, adduced all the evidence that they could possibly place before the court, that we should finally determine the issue and put an end to this litigation.
The plaintiff carries on business in Sherbrooke, in the province of Quebec, and purchased from the defendant, carrying on business in East Florenceville, in New Brunswick, the potatoes described in their contract for October shipment through Dastous & Company Registered, who were acting as brokers for both parties. After the signing of the contract, 3rd September, 1927, the defendant, on the 8th of the same month, wrote that the only assurance they could give was that they would have potatoes inspected as loaded and each car would carry a certificate of Canada Grade A. Now, it is common ground that no such certificate could be obtained under section 19 of the Root Vegetables Act, R.S.C., 1927, c. 181, for new potatoes shipped between the 1st day of June and the 30th day of September, both dates included. It would, therefore, appear clear, to my mind, that the jury could not reasonably find that the two cars shipped in September were shipped under the contract. The telegrams covering the first car satisfy me that they referred to a separate sale independent of the contract. They read as follows:
Sherbrooke, Que., Sept. 17th/27.
B. F. Smith,
East Florenceville, N.B.
Thompson and Alix would like you ship one car this coming Monday against their contract can you do so if not kindly wire immediately present price and conditions.
Dastous and Co. Regd. Defendant answered as follows:
East Florenceville, N.B., Sept. 18.
Dastous & Co. Regd.
Sherbrooke, Que.
Will ship one car Thompson and Alix ninety per bag bulk to-morrow or Tuesday best can do.
B. F. Smith.
Although plaintiff, perhaps in ignorance of the impossibility of securing a certificate before the 1st October, asked, on the 17th September, to ship one car against their contract, it is evident that Smith knew that he could not do so and accordingly wired that he would ship one car giving the price and the date. He also shipped on the 23rd of September a car that had never been ordered. Whether or not the potatoes shipped in September were equal in quality to potatoes that might, in October, have been graded by the Government Inspector as Canada One does not, to my mind, affect the issue between the parties. Even assuming, as found by the jury, that these two cars were shipped under the contract and that the plaintiff should have accepted delivery thereof, this does not in law help the defendant in any way to establish his plea of complete repudiation or rescission by the plaintiff of this contract by instalments.
Paragraph 2 of sec. 28 of ch. 149 of the Revised Statutes of New Brunswick, 1927, respecting the sale of goods, reads as follows:
(2) Where there is a contract for the sale of goods to be delivered by stated instalments, which are to be separately paid for, and the seller makes defective deliveries in respect of one or more instalments, or the buyer neglects or refuses to take delivery of or pay for one or more instalments, it is a question in each case depending on the terms of the contract and the circumstances of the case, whether the breach of contract is a repudiation of the whole contract or whether it is a severable breach giving rise to a claim for compensation, but not to a right to treat the whole contract as repudiated.
I quite agree with the views of Mr. Justice White, in the first judgment of the Court of Appeal[12], where he says:
No one, I think, could reasonably infer that the plaintiff would not accept delivery of potatoes under the contract when the same were certified as Grade “A” by the inspector, merely because the plaintiff had refused to accept the potatoes in the car sent, where the question as to whether the potatoes were, or were not, equal in quality to Grade “A,” was one the answer to which must depend upon the opinions of those who had examined the potatoes. The contract provided that each separate shipment was to be paid for in cash.
When defendant, on September 23rd, learned by wire (Exhibit “T”) that plaintiff refused to accept the first car sent and thought that possibly it had been shipped in mistake, he did not inform the plaintiff that the car was shipped against the contract, and that unless the plaintiff accepted it he would treat the contract as repudiated. It was not until September 30th that the plaintiff learned from defendant’s wire (I.2) that he did not propose shipping plaintiff any potatoes. Assuming that the potatoes shipped in the first car were equal in quality to Grade “A,” then from the facts in evidence I myself, sitting as a jury, would have had no hesitation in finding that the breach occasioned by the plaintiff’s refusal to accept the potatoes was, in the words of the Sale of Goods Act, “a severable breach giving rise to a claim for damages but not to a right to treat the whole contract as repudiated.”
But the question is not one of law merely but one of mixed fact and law, and therefore to be determined by the jury under the instructions of the Court as to the law. At the same time, I think, that under the evidence in this case, no jury properly instructed as to the law, could reasonably find that the breach was other than a severable one entitling the defendant to damages but not entitling the defendant to repudiate the whole contract.
Reference was made by defendant to the letter of the 26th September wherein the brokers stated that plaintiff would not accept the car as the buyers in Sherbrooke will not use any more of these potatoes (Cobblers). The defendant claims that this is a repudiation of the contract.
It is clear, as pointed out by White, J., that this statement referred to the potatoes shipped in the second carload, which were not shipped under the contract at all; and refusal to accept the same would not imply a repudiation of the contract.
In Freeth v. Burr[13], Coleridge, C.J., said:
In cases of this sort, where the question is whether the one party is set free by the action of the other, the real matter for consideration is whether the acts or conduct of the one do or do not amount to an intimation of an intention to abandon and altogether to refuse performance of the contract. I say this in order to explain the ground upon which I think the decisions in these cases must rest * * * I think it may be taken that the fair result of them is as I have stated * * * Now, nonpayment on the one hand, or non-delivery on the other, may amount to such an act, or may be evidence for a jury of an intention wholly to abandon the contract and set the other party free.
The principle thus stated by Lord Coleridge was accepted and approved in The Mersey Steel & Iron Company v. Naylor, Benzon & Co.[14]. Mr. Benjamin, speaking of this latter case, says:
All their Lordships as well as the Lords Justices accepted the principle stated by Lord Coleridge in Freeth v. Burr[15] as the true test; or, as it was expressed in the words of Lord Selborne: “You must look at the actual circumstances of the case in order to see whether the one party to the contract is relieved from its future performance by the conduct of the other. You must examine what that conduct is, so as to see whether it amounts to a renunciation, to an absolute refusal to perform the contract, such as would amount to a rescission if he had the power to rescind, and whether the other party may accept it as a reason for not performing his part.”
The terms of the contract and the circumstances of the case clearly show, without evidence to the contrary, that plaintiff never had the slightest intention of repudiating or rescinding the contract. On September 28, Dastous & Co. wrote to defendant as follows:
P.S. With regard to shipments against contract for Messrs. Thompson & Alix which are to commence the 1st of October, will you kindly note to ship the first car to them at Sherbrooke and the second two cars to be billed to Magog notify them at Sherbrooke and you will of course make all drafts with bill of lading attached on Messrs. Thompson & Alix at Sherbrooke.
To which defendant, on September 30, answered as follows:
We do not propose shipping Thompson Alix any potatoes.
(Signed) B. F. Smith.
On the same day, Dastous answered as follows:
Sherbrooke, Que., Sept. 30, 1927.
B. F. Smith,
East Florenceville, N.B.
Your wire received upon communicating contents to Thompson and Alix they require and insist that you fill contract they have with you they have number cars sold for early October delivery therefore request that you make first shipments as specified our letter twenty-eighth instant and previous wire to-day.
Dastous and Co. Regt.
Sherbrooke, Que., 30th Sept. 1927.
Canada.
B. F. Smith, Esq.,
East Florenceville, N.B.
Dear Sir,
We confirm our wires to-day as per copies attached and specially with reference to your wire in which you state as follows—”We do not propose shipping Thompson Alix any potatoes,” to which we have wired you as per copy attached advising you that upon communicating contents of your wire to Messrs. Thompson they require and insist that you fill the contract as per our contract form duly signed by them which has been forwarded you.
Messrs. Thompson & Alix of course presume that your attitude is taken largely on account of the two cars which have arrived at Sherbrooke from you and which they have not accepted. In the first place, only one of these cars was ordered for them as there has evidently been some oversight on the part of your office in billing two cars to Sherbrooke when only one was ordered.
With regard to Messrs. Thompson and Alix not accepting either of these cars we would just like to mention that we have been doing business with these friends for a number of years and they are as straight a firm as can be found and certainly would not turn down any shipments unless they had mighty good reason for doing so and they wanted the potatoes very badly too as they had orders awaiting to be filled but after examining these cars and finding so much rot in them the writer personally went with Mr. Thompson and examined second car and in casually picking up at least a dozen of the large size potatoes and even some not as large, when they were cut there were at least ten or eleven which were all rotted in the centre so they said they could not handle these potatoes as they had had a great deal of trouble with the previous shipments already.
Under these circumstances we do not see how this has any thing to do with the contract, especially as the contract calls for Grade A Stock and it was understood that these would be government inspected and the Inspector’s certificate would be attached to your draft on the Buyers.
We therefore trust that we may hear from you promptly that you are making shipments as we have already specified against contract for Messrs. Thompson & Alix, otherwise they will take immediate action to protect themselves in the matter, especially as we mentioned in our wire they have a number of cars sold for early October delivery.
We also mentioned in our wire that we had sent on the bill of lading for the second car which was mailed from here on the 28th by registered mail so that same should have reached you before now. We did all we possibly could to try and get this car sent on, on a diversion order but it was impossible to make this arrangement.
We now await your further word and prompt reply also quotation on the five cars we have already mentioned for October shipment.
Yours very truly,
Dastous & Co. Reg.
Per G. W. Stevenson.
Then again, on October 3, 1927:
B. F. Smith,
East Florenceville, N.B.
Referring our letter twenty-ninth ultimo Please wire if car for Veilleux has been shipped if not will you be sure get it away to-morrow Thompson and Alix request immediate reply our wire and letter thirtieth ultimo you have not replied our request for quotations five cars October shipment.
Dastous and Co. Reg. and next day:
Oct. 4-1927
B. F. Smith
East Florenceville NB
Thompson and Alix requests immediate wire advice as to whether or not you have shipped cars against their contract as per instructions contained in our letter twenty eight ultimo will you therefore kindly wire us immediately advising.
Dastous and Co. Reg.
These two telegrams were confirmed by letter. Smith, the defendant, on October 5, notwithstanding this request, wired as follows:
Dastous & Co. Regd.
Sherbrooke, Que.
See my telegram thirtieth decision final.
B. F. Smith.
On October 6, through their solicitors, the plaintiffs notified the defendant that they were proceeding to purchase potatoes in the open market to supply their demand and would hold him responsible for all damages that they might suffer by reason of the breach of contract.
I therefore reach the conclusion that with the material before us, and even admitting that there might be sufficient evidence to support the finding of the jury that the first and second carloads of potatoes had been shipped under the contract and equalled Grade A potatoes and should have been accepted by the plaintiff, this would not be sufficient in law to support defendant’s contention, which he had to establish, that the whole contract had been repudiated. Nowhere in the record is found an absolute refusal by plaintiff to perform the contract such as would amount to a rescission, according to the test adopted by Lord Selborne in Mersey Steel & Iron Co. case above quoted. The onus has not been and could not be legally satisfied under the contract and the circumstances of the case, while the plaintiff has proven clearly: 1. the existence of the contract; 2. the breach of the contract; and 3. the quantum of damages.
No car was ever shipped with the required certificate. This certificate could be secured only in October and on the 30th September the defendant took upon himself to repudiate his obligation. I am not prepared to say that there was no evidence to go to the jury. But I am perfectly satisfied that the findings of the jury as to the two cars shipped (questions 2-3-4-5), as to the breach of the contract (question 6), as to the alleged custom (questions 7-8-9-10), as to part of question 11 that the contract was broken by plaintiff, as to justification and the absence of damages (questions 12-13), were either against the evidence or against the weight of evidence, and were such as no jury could reasonably find. We therefore remain with the written agreement, whose existence is affirmed by the jury in their first answer, and the damages which the jury assessed at $3,290, after the judge’s special request. The defendant, having failed to establish that he was legally justified in repudiating the whole contract as he did, must suffer the consequences of his conduct and reimburse to the plaintiff the difference between the amount paid for the twenty carloads which they purchased and the price they would have paid to the defendant under the contract for the same potatoes.
I would therefore allow the appeal and dismiss the cross-appeal and restore the order of the trial judge that judgment be entered for the plaintiff and against the defendant for $3,290, with costs throughout.
Crocket, J.—The whole substance of the defence to this action lies in the alleged repudiation of the contract of sale by the plaintiffs before the defendant’s admitted refusal to deliver the twenty carloads of potatoes contracted for. The decisive question, therefore, on this appeal is as to whether there was any evidence upon which the jury could reasonably find that the plaintiffs did in fact repudiate the contract and thereby relieve the defendant from his obligation thereunder.
Whether the car which the defendant shipped to the plaintiffs after receiving their telegram of September 17 constituted a delivery under the contract, as the jury found in answer to question 2, or was an independent shipment outside the contract, is open to serious question, as the cogent reasoning of my brother Lamont in this regard so clearly demonstrates. It is apparent from the learned trial judge’s instructions to the jury on that point that the words “under the contract” as used in the question merely meant against or on account of the contract, and had no reference to its being shipped in compliance with all its terms. The jury could have understood nothing else. The question involved not only the interpretation of the defendant’s reply to the plaintiffs’ telegram of September 17, which, if it was in any way ambiguous, was a question for the court, but the consideration as well of the conduct of both parties in connection with the plaintiffs’ rejection of the shipment, which was a question for the jury. If the decision of the appeal depended on the validity of the jury’s answer to this question, I am not at all sure, upon a consideration of the terms of the two telegrams, and the conduct of the parties regarding the rejection and disposition of the shipment, that this finding could not be fully justified.
Be that as it may, the shipment by the defendant of one of the twenty carloads of potatoes and its refusal by the plaintiffs after their own inspection as being of unsatisfactory quality, falls far short, in the circumstances of this case, of satisfying the onus which lay on the defendant to prove a repudiation of the whole contract by the plaintiffs or an intimation to the defendant of their intention to abandon it entirely. Assuming that the first car was shipped against the contract and the second car as well—though there is, to my mind, no justification whatever for the finding that the second car was so shipped—the question as to whether the rejection of one or both these cars amounted to a repudiation of the whole contract or was a severable breach giving rise to a claim for damages, is one, which, under the provisions of subsec. 2 of sec. 28 of the New Brunswick Sale of Goods Act, depends on the terms of the contract and the circumstances of the case, as pointed out by my brother Cannon.
Although no time for delivery was mentioned in the contract itself, it is perfectly clear from the correspondence between the parties and from the fact that the contract provided for government inspection and that the defendant’s draft for each car as shipped should be accompanied by an official government certificate of grading, which was not possible under the terms of sec. 19 of the Root Vegetables Act, R.S.C., 1927, c. 181, before October 1, that the intention of the parties was that shipments under the contract should not begin before that date. Both parties must be taken to have known that no cars inspected and certified in accordance with the terms of the contract could be refused by the plaintiffs as of unsatisfactory quality upon their own inspection, as in the case of the two cars referred to. No question could arise between them as to quality, once a car was shipped, officially inspected and certified as the contract required. How the rejection of two cars shipped in the month of September, uninspected and uncertified, before the time for the performance of the contract had arrived, could be treated by the defendant as an absolute refusal on the part of the plaintiffs to accept and pay for inspected and certified cars, in accordance with the terms of the contract, or as an intimation of an intention on their part to wholly abandon the contract, I find it difficult to understand, when the terms of the contract itself and the circumstances of the case are considered.
I can find nothing in the letters or telegrams of the plaintiffs’ brokers (Dastous & Co.) to the defendant between September 23, when they advised him by wire of the rejection of the first car, and October 1, which could fairly or reasonably be taken to indicate any intention on the part of the plaintiffs of renouncing the contract. Having received an invoice for the second car after their telegram advising rejection of the first, they at once, in confirming this telegram, called the defendant’s attention to what they assumed to be an error in billing two cars to them as “there was only one ordered and possibly the one which has already arrived was not intended for Sherbrooke at all”. The defendant having wired them the following day that if the plaintiffs refused the first car, he would release to them and have them forward it to Montreal, they telegraphed that plaintiffs would not accept the first car but that they would accept the second if quality was satisfactory. On September 26 they wired the defendant again, advising him that they had diverted the first car to Montreal as instructed by him and that the second car had arrived and the plaintiffs would not accept as 90% of the large potatoes cut rotten inside, and requesting wired instructions, to which the defendant simply replied on September 27 that he was releasing second car to them and requesting them to forward this to Toronto. On the same date they telegraphed him asking if he could offer a car of good sound potatoes for immediate shipment and to wire price and what kind. To this defendant replied: “My experience Sherbrooke cannot book further orders”.
It is true that in a letter dated September 26, confirming their wire regarding the diversion of the first car and the plaintiffs’ refusal of the second, Dastous & Co. stated: “They (plaintiffs) will not accept the car as they state the buyers here will not use any more of these potatoes “, and added a statement of their own that