Summary
In Seaver v. Lindsay Light Co. (233 N.Y. 273) the Court of Appeals stated the rule as follows: "Unless there is something in a c.i.f. contract to indicate to the contrary, the seller completes his contract when he delivers the merchandise called for to the shipper, pays the freight thereon to point of destination, and forwards to the buyer bill of lading, invoice, insurance policy and receipt showing payment of freight."
Summary of this case from Penick Co. v. Helvetia Commercial Co., Inc.Opinion
Argued March 23, 1922
Decided April 18, 1922
I. Maurice Wormser and Isaac Hyman for appellant.
Hiram R. Steele and George E. Miner for respondent.
The defendant, in October, 1915, was located and doing business at Chicago, Ill., and plaintiff's assignor was located and doing business in London, England. About the time named they entered into a written contract, consisting of letters and cablegrams passing between their respective brokers, by which defendant agreed to sell and deliver to plaintiff's assignor 5,544 pounds of thorium in six monthly shipments at the price of $4 per pound, c.i.f. London dock. Each shipment was to be paid for in Chicago in advance. Three shipments were made and paid for according to the contract, but defendant refused to ship the balance, 2,772 pounds. This action was thereupon brought to recover the damages alleged to have been sustained. At the trial the sole issue was the proper measure of damages, the plaintiff contending it was the difference between the contract and market price at London dock at the time of the breach, and defendant contending it was the difference between the contract and market price at Chicago at that time.
If the former contention were correct, then plaintiff was entitled to recover $8,316, besides interest; if the latter contention were correct, then he was entitled to recover only $868.50, besides interest, the different amounts being the difference between the market price at London dock and Chicago at the time of the breach.
The trial court held that defendant's contention was correct, and thereupon gave judgment for the plaintiff in accordance therewith. Plaintiff appealed to the Appellate Division, which reversed the judgment and ordered a new trial, holding that the measure of damage was as contended by plaintiff. Defendant now appeals to this court.
The meaning of the letters c.i.f. in an executory contract is, and at the time the contract in question was made were, well understood in the commercial world. They mean the cost of the merchandise, insurance thereon, and freight charges to point of destination. ( Thames Mersey Ins. Co., Ltd., v. U.S., 237 U.S. 19.) Unless there is something in a c.i.f. contract to indicate to the contrary, the seller completes his contract when he delivers the merchandise called for to the shipper, pays the freight thereon to point of destination, and forwards to the buyer bill of lading, invoice, insurance policy and receipt showing payment of freight. ( Mee v. McNider, 109 N.Y. 500; Smith Co., Ltd., v. Marano, 267 Penn. St. 107; Ireland v. Livingston, L.R. 5 H.L. 395; Klipstein v. Dilsizian, 273 Fed. Rep. 473; Williston on Sales, secs. 407, 408; Mechem on Sales, vol. 2, sec. 1736.)
Where was the delivery of the thorium in the present case to be made? Was it at Chicago or at London dock? If delivery were to be made at the former place, then the measure of damage was as found by the trial court. If at London dock, then it was as found by the Appellate Division.
I am of the opinion that the trial court was right. When the correspondence and cablegrams are all construed together, as they must be, then it seems to me they clearly indicate an intention on the part of both parties that the delivery was to be made at Chicago and when defendant delivered to a carrier at that point, paid the freight to point of destination, and forwarded the other necessary documents, he had fully completed his part of the contract. Failure to make delivery at that place obligated it to respond in damages in an amount corresponding to the difference there between the contract and market price of thorium at the time of the breach plus the cost of insurance and freight. There certainly is nothing in this contract to indicate that a delivery was to be made only at point of destination. Concededly if the merchandise had been lost intermediate the delivery to the carrier and point of destination, the loss would have fallen upon the buyer and not upon the seller. That Chicago was to be the place of delivery seems to me not only to follow from the contract itself, but especially from that provision of it which required each shipment to be paid for in advance at Chicago. The trial court found as a fact that was the meaning and intention of the agreement. This finding is sustained by the evidence and a finding to the contrary would be against the evidence.
In reaching the above conclusion, Staackman, Horschitz Co. v. Cary ( 197 Ill. App. 601), upon which the respondent principally relies, has not escaped my attention. I do not think that authority correctly states the law. It certainly is not binding upon this court and ought not to be followed.
The judgment appealed from should be reversed and the judgment of the trial court reinstated, with costs in this court and in the Appellate Division.
HISCOCK, Ch. J., HOGAN, CARDOZO, POUND, CRANE and ANDREWS, JJ., concur.
Judgment reversed, etc.