Willis B. Horton, Appellant, v. Erie Preserving Company, Respondent

Willis B. Horton, Appellant, v. Erie Preserving Company, Respondent. Estoppel — acquiescence in the continuance of the execution of a contract, without objection — time, not of the essence of a contract — counterclaim,—representations of an agent, made without authority or the knowledge of his principal. November 31,1899, an association of business men in Irving, Chautauqua county, N. Y., entered into an agreement with a preserving company, which provided that a committee of such association would procure a conveyance to the preserving company of certain land in the Seneca Reservation and would, on or about January 1, 1900, procure the passage of an act of Congress approving the conveyance, such an act being necessary to perfect the title. The committee also agreed to secure from the residents and farmers of Brie and Chautauqua counties on or before February 1, 1900, subscriptions amounting to at least. $10,000 to be paid to the preserving Company in fruits, produce, labor, team work, or cash, within a period of three years from the time the preserving company should commence the operation of a canning factory on the lands in question, The preserving company, pn its part, agreed to locate a canning plant on the lands and to begin canning operations thereat during the season of 1900. The committee procured $7,000 in subscriptions, which was regarded by the preserving company as a compliance by the committee with the obligations imposed upon it. The subscription agreement obligated the signers to pay the sum of $100 in produce during the years of 1900, 1901 and 1903 “ for the; purpose of inducing said Erie. Preserving Company to locate their new canning factoryat Irving, Hew Fork.” It also recited that the preserving company was willing to locate its plant at.Irving, “ provided a certain suitable site can be seemed, and a reasonable subscription signed by the produce growers, workers and others who will be directly benefited by the location of their plant and business at Irving.” Immediately after the execution of the contracts, the committee of the business men’s.association procured a conveyance of the lands in question and the introduction in Congress of a bill for the ratification of the title. Being unable to secure the speedy passage of the bill, the committee extended the time for the erection of the canning factory. The bill was passed on February 37, 1901, and the preserving company immediately commenced the construction of its plant and was ready for business in 1903. Held, that one Horton, a signer of the subscription agreement, who stood by and saw the plant erected, without, in any manner, protesting or attempting to cancel his subscription because the plant was not erected in 1900, was estopped from repudiating his subscription upon that ground ; That the time- when the factory in question was to be erected was not of the essence of the contract, but that the true meaning of the contract was.that the preserving company would erect the factory as soon as title to the premises upon which it was to be built could be perfected; That in an-action brought by Horton against the preserving company to recover for produce which he had sold' to the preserving company during the year 1903 under a written contract; the preserving company was entitled to interpose a counterclaim for the sum of thirty-three dollars and thirty-four cen,t£i, representing one-third of Horton's liability upon the subscription, it not appearing that the written contract contained a provision which would bar the preserving company from asserting that counterclaim; That a representation made by the agent of the preserving company to Horton at the time the. contract of. sale was entered into, to the effect that no part of the value of the produce so bought would be deducted on account of the subscription agreement, was not binding upon the preserving company, it not appearing that the agent had authority -to make such representation, or-that the .preserving company receive,d the produce with knowledge of such representation. Appeal by the plaintiff, Willis B. Horton, from a judgment of the Supreme Court, entered in the office of the clerk of the county of Chautauqua on the 20th day of May, 1903, upon the decisión of the court rendered after a trial before the court without a, jury at the Chautauqua Trial Term, adjudging that the plaintiff recover a certain sum deposited in court by the defendant before the commencement of the action, with interest, and awarding costs to the defendant. The action was commenced on the 2d day of February, 1903, to recover for produce sold and delivered to the defendant during the season of 1902, under a contract in writing bearing date the 10th day of February, 1902, by the terms of which the plaintiff agreed to raise and deliver to the defendant, at its factory, the peas and corn which might be grown during the season of 1902 upon certain lands of the plaintiff, at a price specified in the contract; and the defendant on its part agreed to pay to the plaintiff any balance that might remain unpaid upon such crop or produce on the 22d day of January, 1903. Upon such date, under the terms of the contract, there was concededly due and owing to the plaintiff a balance of $175.23. The plaintiff demanded payment of said sum from the defendant, which was refused, and instead the defendant tendered to the plaintiff the sum of $141.89 and $1.63, as interest, which the defendant claimed was the full amount of its indebtedness to the plaintiff, the defendant claiming the right to deduct from the amount due and owing to the plaintiff under the contract above referred to the sum of $33.34, being the amount, as is claimed, for which the plaintiff became indebted to the defendant by virtue of a subscription or agreement made by him, and which amount was set up as a counterclaim in defendant’s answer. Such counterclaim, by the judgment appealed from, was allowed to the defendant, and its allowance raises the only question presented for review by this appeal. . George E. Towne, for the appellant. Charles J. Bissell and P. M. French, for the respondent. [MAJORITY — McLennan, P. J.:] McLennan, P. J.: The principal facts are not in dispute. On the 21st day of [November, 1899, the Business Men’s Association of'Irving, Chautauqua county, N. Y., entered into an agreement in writing with the defendant, signed by the president and secretary of such association, which provided, in substance, that a committee of such association, named in such agreement, would procure a conveyance to the defendant of fifteen acres of land therein described, which was a part of the Seneca reservation, and was owned by one Dennis, a Seneca Indian; and would procure the transfer of the title to such lands to be approved by act of Congress, which was necessary in order to perfect the same. Ratification or confirmation by Congress Avas agreed to be procured on or about January 1, 1900. Such committee also agreed to secure “ from the residents and farmei's of Erie and Chautauqua Counties, on or before February 1, 1900, a subscription list amounting in value to at least the sum of Ten Thousand Dollars, ($10,000) said sum to be paid to said Erie Preserving Company in fruits, produce, labor, team work or cash,, within a period of three years from the time said Erie Preserving Company shall commence the operation of a canning factory on the above site.” The defendant company on its part agreed to locate a canning plant on said site, and to begin canning operations, thereat during' the season of 1900. On November 23, 1899, by another instrument in writing made between the parties, said first agreement was modified so as to provide that in case the committee did not secure in subscriptions the full amount of $10,000, if they used their best endeavors in that, regard, the amount which they did raise would be accepted by the defendant in lieu of such $10,000, and would be regarded as a compliance by the committee with the obligation imposed upon it under the first contract. On said 23d day of November, 1899, the defendant executed or, caused to be executed and delivered to the committee a bond conditioned, in substance, for the faithful performance by the defendant of the obligations which it had assumed under such contract. Immediately after the execution of the contracts in question, and the delivery of the bond executed by the defendant, the committee ,of the Business Hen’s Association undertook to secure subscriptions from the farmers of Erie and Chautauqua counties, as they had obligated themselves to do by the provisions of such contracts. The plaintiff, with many others, thereupon signed a subscription or agreement by which he obligated himself to pay to the defendant the sum of $100 in produce, during ,the years 1900, 1901 and 1902 equally, “ for the purpose of inducing said Erie Preserving Company to locate their new canning factory at Irving, New. York.” It was recited in such subscription or agreement that the defendant had shown willingness to locate, a canning plant at Irving, N.. V., by giving a committee of the citizens of the village of Irving1 a bond in the sum of $1,000 to show its good faith, “ provided a. certain suitable site can be secured, and a reasonable subscription signed by the produce growers, workers and others who will b& directly benefited by the location of their plant and business at Irving.’* The plaintiff insists that such subscription or agreement signed by1 him was not enforcible in favor of the defendant, for the reason that the canning factory which, under its agreement with the committee, was to have been erected and ready for operation during the season of 1900, was not so erected and put in operation. Of course, the defendant could not erect and put its factory in operation upon the site described in the contract until title thereto was perfected, and that, as we have seen, depended upon ratification by act of Congress. Immediately after the execution of the contracts in question the committee diligently set to work to procure title to the premises upon which the canning factory was to be erected. It procured a conveyance from Dennis,' and the. approval of the same by the council of the Seneca Indians, and a bill was introduced in Congress for the ratification of such title. All parties, so far as appears* were equally zealous in procuring the passage of such act, but for some reason it was not passed at that, session of Congress, nor until the 27th day of February, 1901. After the title in the defendant had been confirmed by the passage of such act, the defendant went on and erected the canning plant upon the premises in question, and in all respects in accordance with the requirements of the contracts which it had entered into with the committee, the subscriptions of the plaintiff and other subscribers having been previously delivered , to the defendant. The evidence clearly indicates that when it was found that the lease could not be, or was hot, ratified by Congress within the time specified in the contract, the committee urged the defendant to still go on with the enterprise and erect a canning factory, and that all the parties to the agreement assisted as far as possible in procuring the ratification of such lease under the date above referred to. In other words, the defendant was given to understand by the com-. mittee with which it contracted that if the lease was approved by, act of Congress, although at a date subsequent to that mentioned in the original contract, all the terms of such contract would be regarded as of full force and effect. In fact, as between the committee and the defendant, there is apparently no dispute. The time when the lease should be confirmed was not regarded as of the essence of the agreement, but the purpose was to secure a canning' factory to be erected upon the premises in question at the earliest time practicable, and immediately upon the ratification of the lease of the premises, which was in February, 1901, the defendant entered upon the construction of its plant and was ready for business for the season of 1902. The defendant, in the erection of its canning factory, has expended upwards of $50,000, and we think it must be held, upon the evidence, that such expenditure was induced by the subscriptions made by the plaintiff and others similarly situated, and thus such subscriptions became valid and binding obligations in favor of the defendant. (Keuka College v. Ray, 167 N. Y. 96.) The chief contention on the part of the plaintiff is that the failure -of the defendant to build the factory in 1900 released him from his subscription. The failure to so build was not due to any neglect or omission on the part of the defendant. It resulted because of circumstances which, as appears by the evidence, neither of the parties-to the contract could control. The defendant was ready and willing to proceed with the erection of its canning plant as soon as title was obtained to the premises upon which it was to be built, and we think the plaintiff is not in a position to assert the invalidity of his subscription because of the failure of the defendant to erect its plant within the time specified in the contract. After the time in which defendant had agreed to erect its factory had elapsed for the reasons above indicated, the plaintiff stood by and saw it erected,' presumably because of his and other subscriptions which were to contribute to and insure such erection, without in any manner protesting or attempting to cancel his subscription because such plant was not erected-in 1900. instead of 1901. He stood by and saw the work go on, knowing as he must that it was in reliance, in part at least, upon the subscriptions which he and his neighbors had made, amounting in the aggregate to over $7,000; and he should be estopped from now claiming that his subscription was invalid and of no force or effect, because of defendant’s failure'to erect and put in operation its factory at the time specified in the original agreement. (Trustees, etc., v. Smith, 118 N. Y. 640.) The time when the factory in question was to be erected was not of the essence of the contract. The true meaning of the agreement was that the defendant would erect such factory as soon as title could be obtained to the premises upon which it was to be built. Such plant,was regarded by the plaintiff and other subscribers, as recited in the instrument executed by them, of great value to them and to the community,, and we think it ought not to be held that they should be relieved from the obligations assumed by them, simply because the factory in question was not erected at the time specified in the contract entered into between the defendant and the committee, when, as clearly appears, the time of performance was extended by the committee. It is also insisted that, when the plaintiff entered into the contract for the sale of his produce to the defendant, the agent of the defendant represented to him that no part of the value of the produce so bought would be deducted by reason of the subscription or agreement which the plaintiff had made. There is no evidence tending to show that defendant’s agent had any right or authority to make such agreement, and there is no evidence which indicates that when the defendant received the produce of the plaintiff it knew or had any reason to believe that its agent had made any such representation or agreement. Besides, the plaintiff in this case declared upon a written contract, and it is nowhere alleged that it was induced by fraud or that it contained any provision which would bar the defendant from asserting any claim which existed in its favor against the plaintiff, and which, under the Code, was a proper subject of counterclaim. We think the evidence fully justified the conclusion that a proper tender was made of the full amount of the defendant’s indebtedness to the plaintiff. It follows that the judgment appealed from should be affirmed, with costs. All concurred. Judgment affirmed, with costs.