CHARLES H. DUDLEY vs. WILLIAM H. WYE.

DE COURCY, J. This action was brought to recover damages for failure of the defendant to manufacture and deliver to the plaintiff a lot of Shaker knit sweaters; and the trial judge found for the defendant. The original contract, made on February 14, 1916, was for one hundred and fifty dozen, made up of seven specified grades, embracing different sizes and colors, deliveries to be in July, August and September. The terms of the sale were thirty days' credit with a discount of three per cent on bills paid within ten days. Subsequently orders were given for eight white and for twenty green sweaters, to be made and delivered at once; and these were delivered on March 9 and 11. Certain correspondence followed, and the defendant on May 9 notified the plaintiff to "consider the order for Fall cancelled."

1. The judge specifically found that the contract of February 14 was modified by an agreement that the eight white and twenty green sweaters ordered later should be deemed to be a portion of the one hundred and fifty dozen sweaters called for by that original order. In our opinion there was evidence in the correspondence between the parties to warrant the finding. Before these orders were sent (February 28 and March 6) the plaintiff had been

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notified by the defendant that no more orders could be taken at the old prices, and an order sent on February 25 had been returned. On March 7 the plaintiff expressly wrote the defendant to "take these [the green sweaters] from my summer order." In the defendant's reply appears, ". . . I absolutely refuse to accept any more orders. . . . I will make the two orders for you, the White and the Green, and shall deduct them from the original order." The plaintiff expressed no dissent from this, and these sweaters were made, delivered and accepted.

The plaintiff, having failed to sustain his contention that the orders filled on March 9 and 11 were separate and distinct from the contract of February 14, now argues that these two items, even if considered as part of the original contract as modified, are severable from the original order. No such question of the divisibility of the contract appears to have been raised by the plaintiff before the auditor or the trial judge. But, assuming that this contention were open, it would not avail the plaintiff under the findings of the court. There were seven different styles of sweaters specified in the original order, each style number indicating a certain weight and grade of garment. The twenty-eight special sweaters did not correspond with any of the seven kinds. While it was agreed, that they should be regarded as a part of the modified original contract, the parties did not specify which of the seven styles they should be considered as taken from. They could only be taken from the contract as a whole; and the contract as modified was an entire one. A failure of part of the consideration, regarded as the inducement to enter into the contract, was a failure of the whole. Mersey Steel & Iron Co. v. Naylor, Benzon & Co. 9 App. Cas. 434. Norrington v. Wright, 115 U. S. 188. Cases like Barlow Manuf. Co. v. Stone, 200 Mass. 158, involving separable contracts, are not applicable.

2. The trial judge also found that "under this contract as so modified the sum of $36.67 became due on April 9, 1916, for the white sweaters and the sum of $90.83 on April 11, 1916, for the green sweaters; and that the plaintiff broke his contract in that he failed to pay these amounts until May 6, 1916, when he paid $123.67 and May 24, 1916, when he paid the "balance $3.83." Plainly this finding was warranted by the evidence.

3. Upon the facts as found the judge ruled, that the plaintiff's breach of the contract was important enough to excuse the

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defendant from further performing the contract; and therefore found for the defendant.

In determining whether the defendant was justified in cancelling the plaintiff's order on May 9, 1916, and refusing further to perform the contract it is important to view the facts then existing. Before the order of February 14, 1916, there had been no business dealings between the parties. The defendant's production of Shaker sweaters was only about twenty-five dozen per week. He knew nothing of the plaintiff's financial ability. According to his testimony he told the plaintiff that "the only reason he was open for more business was because he was dissatisfied with the people with whom he had been doing business; that if he did business with the plaintiff his terms would have to be strictly 3/10 net 30; that he would not do business under any other conditions." And again that "if he did not live up to his agreement the defendant would drop it regardless of the result." The bill for the first shipment, $36.67, was not paid when it became due April 9. Nor was the second, for $90.83, which became due on April 11." In response to the defendant's request (April 27) for payment the plaintiff wrote: "Will send check now within a very few days. Weather conditions up in this part of the country during April have been frightful, putting business and collections in very bad shape." Later the excuse given for the delay was (May 6) "with reference to these first small invoices, I laid them out nearly three weeks ago for payment and through an oversight they became mislaid." When the plaintiff sent a check (May 6) to pay the long overdue accounts he deducted the discount, to which he was not entitled.

The trial judge aptly summed up the situation as follows: "When the defendant wrote his letter of May 5, he was in this position. He was about to begin manufacturing for the plaintiff nine thousand dollars' worth of goods of a special kind not commonly found on the market, for which he was not to be paid for several months. The work necessitated a considerable outlay for stock and labor. The plaintiff was nearly a month in default in paying two small bills for the first instalment of goods and had written (apparently about a week before) promising to 'send check now within a very few days' and excusing the delay on the ground that weather conditions had been bad 'putting business and

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collections in very bad shape.' Under these circumstances the defendant well might have thought that the plaintiff was obliged to rely on his collections to raise the money to pay a bill of $127 and that this default boded ill for the security of future payments. It cannot be fairly said I think that this breach was of such slight importance as to require the defendant, under circumstances justly warranting an inference that the plaintiff was hard up, to proceed with his contract and assume the risk of loss, the possibility of which was made evident by this default. The plaintiff was a trader and his failure to pay these small bills promptly under circumstances indicating difficulty in raising the money gave an importance to such breach quite out of proportion to the actual amount involved. I must believe that the promise of prompt payments was a material and important inducement to the defendant to make the contract."

In substance the judge has found that the promise of prompt payment for goods as delivered was an essential inducement to the defendant to enter into the contract. As it is often expressed, the plaintiff's breach went to the root of the contract, or to the whole consideration. While the case is close, we are of opinion that the ruling of the judge was correct in view of his findings of fact. As was said by this court in a similar case: "In such a state of things it can fairly be said that justice did not require the seller to continue to deliver goods, but that the default of the buyer was so serious and so far connected with the substance or consideration of the contract as to justify the seller in refusing to be further bound by it." Eastern Forge Co. v. Corbin, 182 Mass. 590, 593. National Machine & Tool Co. v. Standard Shoe Machinery Co. 181 Mass. 275. Morison, Principles of Rescission of Contracts, 55, 56, 89.

What has been said disposes of all the questions raised by the plaintiff's requests and not rendered immaterial by the findings of fact.

Exceptions overruled.