Respondents Brief — Madeirense do Brasil, S/A v. Stulman-Emrick Lumber Co.

MAY 10 194

IN THE

Supreme Court of the United States

October Term, 1944.

No. 1186.

MADETRENSE do BRASIL S/A,

Petitioner,

AGAINST

STULMAN-EMRICK LUMBER CO.,

Respondent.

=e

BRIEF FOR RESPONDENT.

——o——[C={[=—=a=a=a=aBa=anDBnBnBRBama—

Morry C. Becker,

Counsel for Respondent.

Irvine Moupaver,

Of Counsel.

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| Lopes ArrraL Prrss, Inc., 65-67 Duane St., N. ¥. O., Tel. WOrth-2-0689

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INDEX.

ee SN DD. Kiva kde i Sarksseskeus cies

IOI is cus ca vanced ducancacnes in kaueedan een

Pornt I—The question of damages was not in dis-

pute at the time of the submission of the orig-

inal motion for summary judgment. Even if it

were in dispute, the result would necessarily

manee Deine Wie Gs os 6a Sa edsikebstuxdcknad

Pornt II.—Respondent did not admit that there was

any balance due the petitioner ...............

Point III.—Respondent contracted on the basis of

the language of its order forms (Exhibits ‘‘B’’,

“DP”, ““M’? and ‘*N’’ [pages 112-14, 116-17,

126-7, 128-9]) Petitioner, by accepting the let-

ters of credit furnished by the respondent, un-

dertook to be bound thereby (Exhibits ‘‘F’’,

“<E, T,X, “SY? [pages 119-90, 195, 136-

7, 141-2, 142-31]). Actually, it matters not

whether respondent’s order forms or petition-

er’s order forms or both sets of forms are used

as the basis for the contract. There was a clear

breach which petitioner recognized as such ....

CoNCLUSION ......... Shrine Rieees canals hua bes

11

13

17

pis dist Sear to.

il INDEX.

CASES CITED.

Aetna Life Insurance Co. V. National Drydock and

Repair Co, Inc., 280 App. Div. (N. Y.) 486 ....

Boerner v. U. S., 26 F. Supp. \, Beererererrey rsa

Busch vy. Stromberg-Carlson Tel, Mfg. Co. (C. C. A.

G) 217 F. 328, S30 ......seenenererninerercers

Dietz v. Glynne, 221 App. Div. (N. Y.) 329 ....---

Dooley v. Pease, 180 U. S. 126, 131, 132, 21 S. Ct.

329, 45 L, Ed.'457 ...2eeeececeeseeeesnee ns ees

Engl v. Aetna Life Insurance Co., 139 F. (2d) 469..

4 Fordham Law Review, 180, 208, 209 (Shientag, J.)

Fox v. Johnson Winsatt Inc., 12 F. (2d) 729 ......

Geller v. Transamerica Corp., 53 F. Supp. 625 ....

Harrison v. United States, 42 F. (2d) 736 .....-+--

Howbert v. Penrose (C. C. A. 10) 38 F. (2d) 577, 578

Insurance Co. v. Dutcher, 95 U. S. 269, 273 ......-

Lawrence v. Fox, 20 N. Y. 468 ....---++-++ece-ee"

Lehigh Valley R. R. Co. v. State of Russia (C. C. A.

2) 21 F. (2d) 406, 408 .....----eeeeeeeeerrees

Nicoll v. Sands, 131 N. Y. 19, 24 ...----++eeeeeeees

People’s Bank v. International Finance Corp. (C. C.

A. 4) 30 F. (2d) 46, 47 .....---+eseereseceres

Phoenix Ins. Co. v. Bakovie (C. Cc. A. 9) 2 F. (2d)

It, i pakak Ak oh RECA EES EES EOEEED

Plaut v. Plaut, 255 App. Div. (N. Y.) ee ry

Rudolph v. John Hancock Mutual Life Ins. Co., 251

WM. Wi BOR BED iwc cc cvisceacs es evesccacsssesss

Sartor v. Arkansas Natural Gas Co., 321 U. S. 620

Seagram-Distillers Corporation v. Manas, 25 F.

Be, BBD oe on coin cas vn sn dc antes snes sesee ss?

Treacy v. Melrose Paper Stock Co., 269 N. Y. 155 ..

Wabash Ry. Co. v. So. Daviess County Drainage

Dist. (C. C. A. 8) 12 F. (2d) 909, 913, 914 .....

IN THE

Supreme Court of the United States

Ocroser Term, 1944.

No. 1186. 4

—___

MaperreNsr do Brasu, S/A,

Petitioner,

AGAINST

Stutman-Emricxk Lumper Co.,

Respondent.

BRIEF FOR RESPONDENT.

To the Honorable, the Chief Justice, and the Associate

Justices of the Supreme Court of the United States.

The petition concerns itself with no question of sub-

stantial interest. The decision of the Circuit Court of

Appeals is not in any way in conflict with applicable de-

cisions of this court or with the weight of authority. Peti-

tioner, at the time the original motion was argued, had

already waived its right to a jury trial and, therefore,

had no right to have a jury assess damages nor did it by

affidavit request a jury trial on the issue of damages or

raise any controversial factual issue. The purported

issues of fact now being urged were raised after the orig-

inal motion for summary judgment had been decided and

even then, the statements alluded to as indicating a factual

WE SADIN a STEERS NOTES RS Tt AGT HARE Hi IR BS ERROR

ET

contlict. are either absent from the record or are state-

ments of counsel made for the first time in his aflidavit

on the motion for reargument, without counsel asserting

that he had any personal knowledge of the facts or making

any showing indicating that he might have had personal

knowledge of the facts. The statements in the affidavit on

the motion for reargument even if proper are therefore

of no probative value.

The Opinions Below.

The United States District Court, Southern District of

New York, handed down its opinion granting respondent

motion for summary judgment and denying petitioner’s

cross-motion for summary judgment on December 20, 1948

(R, 149-151). Its opinion on petitioner's motion ivr Te-

argument is dated February 7, 1944 (R. 170, 171). Both

opinions are unreported, The opinion of the Cireuit

Court of Appeals. Second Cireuit handed down on Janu-

ary 9, 1945 is reported at 147 ¥, 2d, 399 and is printed

in the reeord at pages 185 to 202.

Statement,

Respondent, a lumber dealer at Brooklyn, New York,

in October, 1940, ordered 450,000 square feet of Brazilian

pine to be shipped by petitioner from Brazil to New York

(R, 111-122). Brazilian Mineral and Timbers Corpora-

tion, a corporation with its offices in Manhattan, New

York City (hereinafter referred to as Brazilian) solicited

the order of respondent for petitioner’s benefit and having

obtained a commitment from respondent in terms ac-

ceptable to petitioner, communicated the commitment by

cable and letter to petitioner and received its acceptance.

This order was subsequently increased to 500,000 square

feet of which 160,000 feet were kiln dried lumber at $40

per thousand, C. & F. New York, and 340,000 feet were

FD EEE EY AMER HIE Ka RL AEG OE IRE, RR I

air dried lumber at $38.00 per thousand feet, C. & F,

New York (R. 114, 117, 127). Payment was to be made

by letter of credit for 90% of the FOB value, the bal-

ance of 10% after arrival of the shipment in New York

and the freight charges estimated at $12 per thousand

feet were to be paid in New York by respondent for peti-

tioner’s account and deducted from the total price. Al-

though shipment was to be made immediately, petitioner

delayed, and subsequently insisted that Brazilian procure

from respondent an order for an additional 250,000 feet

of air-dried lumber in order to make up an entire ship-

load and thus ensure delivery of the first 500,000 feet.

The additional 250,000 feet of air-dried lumber was to be

at $40 C. & F. New York to cover the increase of $2.00

per thousand square feet in the freight rate. Respondent

in order to ensure delivery of the original 500,000 feet,

ordered the additional 250,000 feet at the inereased price

(R. 62, 65, 66, 70, 72, 74, 77, 80, 81, 85, 90, 107, 128-132),

The modus operandi followed by Brazilian was to procure

informal commitments by letter, eable or orally between

petitioner and respondent and to follow that up by pro-

curing respondent's formal order on its order form and

then by procuring petitioner’s formal confirmation on

Brazilian’s order form. The formal orders upon which

plaintiff relies appear from Exhibits 2 (R, 42, 43), 3

(R. 46), 18 (R, 56), 18 (R. 60), 25 (R. 72; 78), Re-

spondent’s order forms appear as Exhibits B (R. 112-114),

1) (R. 116, 117), M (R. 126, 127), N (R. 128, 129),

As each order was placed, respondent procured a let-

ter of credit in favor of petitioner for 90% of the FOB

value, the FOB value being ascertained by deducting from

the total gross price the estimated cost of freight (R.

118-125, 131-143). When the freight rate increased, the

amount of the letter of credit was reduced pro tanto in

order to allow respondent to retain here a sum equal to

the amount which would have to be paid to the steamship

tase ee

4

company. It is incorrect to state that “Neither contract

provided which party should bear the cost of any increase

‘n the freight rate, * * *°’* (petition, p. 5), since these

were C. & F. New York prices and the seller was com-

mitted to delivery at the contract price and to absorb

any freight increase. It likewise would have had the

benefit of any freight decrease. Both courts below have

so found (R. p. 153; R. 189, 192, 193).

Petitioner’s order form for the 500,000 feet provided that

the lumber was to be “Clean lumber, perfectly dry, free

from knots and from any other defects due to kiln drying

or natural drying”’ (R. 43); for the 250,000 feet, ‘*Clean

lumber, perfectly dried, tree from knots or any other de-

fect’? (R. 73). (Emphasis ours.) Both orders recited

“Sold to: Stulman-Hmrick Lumber Co. Ine. Brooklyn,

New York”’. Respondent's order forms provided Ali

jumber shipped by vessel must be stowed below deck.

* * * Stock must be thoroughly dry and well manufac

tured in every respect”’ (R. 116, 117, 128, 129).

Before shipping the 500,000 feet, petitioner sought to

pass the increase on to respondent and when respondent

refused to be liable therefor, petitioner acknowledged

that under its contract, it was required to absorb the in-

crease in freight rate, agreed to do 80 and requested

respondent to change the letters of eredit and reduce the

amount thereof so that respondent could retain in New

York City a sum equivalent to the aggregate freight charge

at a freight rate of $16.98 per thousand feet (R. 58, 59,

63, 70, 71, 80-84, 93, 118-122, 181-148). On receipt of

these corrected letters of credit, petitioner cabled that it

could ship the 500,000 feet under deck but could only

ship the 250,000 feet on deck and would only ship the

250,000 feet on deck ‘‘at buyer’s responsibility any de-

terioration’’ (R. 84). Respondent, having refused to ac-

cept responsibility for deterioration of the lumber which

petitioner proposed to ship on deck (R. 108), Brazilian

cabled ‘‘Pixe on Deck ApsoLuTELy UNaccEPYABLE. Sup

ee ie So er ee

5

Onty 2042 1x true Honp’’ (R. 84, 85). Had the lumber

been shipped on deck, it would have completely deterio-

rated by the time it arrived here (R. 85, 88, 108). Peti-

tioner thereafter refused to ship the 250,000 feet and re-

quested Brazilian to procure respondent’s consent to a

cancellation of the commitment for this lumber, unless

respondent would agree to purchase on an F.O.B. basis

of $28 per thousand square feet and agree to pay the

freight rate applicable at time of shipment, which freight

rate was then quoted at $33.13 per thousand square feet

(R. 86, 89, et seq.).

Neither party demanded a trial by jury and petitioner’s

right to trial by jury as a matter of right has been waived

(Rule 38 [d] Rules of Civil Procedure). The moving

affidavit of respondent’s counsel asserted:

“Mr, Ring, (petitioner’s counsel) on June 4, 1943,

told me that he intended trying this case on the

correspondence; that he had no witnesses to pro-

duce other than the correspondence and the deposi-

tion of my elient which he proposed to take as soon

as issue was joined. No depositions have been

taken in this ease, It is my opinion from a study

of the various documents contained in the demand

and in the moving papers that the contentions of

both parties can be fully and completely disposed

of on the basis of these documents; that no oral tes-

timony is required and that therefore, no trial is

required’? (R, 147),

This statement was not controverted, In fact, petitioner

served no affidavit in opposition to respondent’s moving

papers when the motion for summary judgment was origi-

nally brought on. Instead, it served merely a cross-notice

of motion for summary judgment reciting that petitioner

was relying on respondent’s moving papers (R. 148).

Petitioner thereby adopted this statement. Further facts

will be discussed under the respective point headings.

PR ga.

POINT I.

The question of damages was not in dispute at the time

of the submission of the original motion for summary judg-

ment. Even if it were in dispute, the result would neces-

sarily have had to be the same.

On the original motion, petitioner gave no concern at all

to the question of damages. It addressed itself solely to

the question of liability. It was only after the motions had

heen decided adversely to petitioner that it sought by mo-

tion for reargument to have the court reconsider the ques-

tion of damages, and even then its position was not that

the parties were at issue on the question of damage, but

merely that ‘plaintiff has made no statement of market

value’? (R. 164) and that «* * * defendant never paid the

freight and has never sustained the damage”’ (R. 160;

see also R. 172-176, 178).

The record before this court is barren of any asser-

tion that petitioner desired an opportunity to cross-exam-

ine respondent’s president on his statement of market

value or was in any Way in dispute with its own state-

ment of market value. The majority opinion in the Cir-

cuit Court points out that ‘‘It seems not to be doubted

that plaintiff has never had any intention of attacking

its own figures; at the very least, there has certainly been

no attempt, or even suggestion of an attempt, to ‘con-

descend upon particulars’ as the procedure requires’’ (R.

196). It also points out that there was no necessity for

cross-examination of respondent’s president since the Dis-

trict Court relied upon petitioner’s admissions and not

the statement of market value offered by respondent’s

president (R. 193-196).

As the record was presented to the District Court, it

was established without dispute that petitioner had agreed

to sell and deliver 250,000 feet of jumber at $40 per thou-

7

sand feet C. & F. New York or an entire price of $10,000;

that petitioner had breached its agreement in January,

1941 and that the breach was completed by January 31,

1941 (R. 171) and that in January, 1941, and thereafter,

petitioner made statements as follows: The freight rate

Was $33.15 per one thousand sq. ft. and ‘“Our FOB price

is on the basis of $28 per one thousand sq. ft.’’ (on Janu-

ary 9, 1941) (R. 86). Ferreira, petitioner’s president, wrote

Alvarez of Brazilian on the same date to the same effect

(R. 88, 89). On January 22, 1941, it wrote **Regarding

the 250,000 feet, please proceed in accordance with our

letter of January 9 as the Lloyd continues for the mean-

time to maintain the freight rate of $15 per 40 cubic feet

** "9 (R. 94). [This is equivalent to $33.13 per one

thousand sq. ft. (R. 86)]. To the same effect see Exhibit

43, item 4 (R. 95) dated January 23, 1941 and Exhibit 48

(R. 101) at folios 302, 303, wherein petitioner refers to

two other firms who shipped on a basis of a freight rate

of $33.13 per thousand sq. ft. or $15 per 40 cubic feet.

These were admissions against interest,—one of the highest

forms of proof available in law. True, the statements

were not conclusive. Petitioner might have submitted an

affidavit in which it offered an explanation thereof; but

no such offer was made. If it intended to contest any

factual issue it should have presented in affidavit form

facts showing that there was a substantial isstie. Its fail-

ure so to do warranted the court in accepting as true re-

spondent’s affidavits and the admissions contained in the

various letters (Engl v. Aetna Life Ins. Co., 139 F. 2d 469;

Geller v, Transamerica Corp., 53 F. Supp. 625; Rudolph v.

John Hancock Mutual Life Insurance Co., 251 N. Y. 208,

213).

See also Harrison vy. United States, 42 F. 2d 736, where

the court at page 737 stated of such an admission:

‘Since appellant was a party to the action, this

statement not only impeached him but it constituted

cag hg te take Menge in

i (EF fee ihn ek Gein ah see tt hen

sites i ae BR Laie Oia Gs og eka PN AS OK BT ah

—_ vane ee. REI EN e as RS

substantive evidence against him. Jones Commen-

taries on Evidence (6th Kd.) §$2412, 2414.’

The Cireuit Court said ‘*That this was a definite and

clear-cut admission, made at or about the time of the

breach, seems clear’? (R. 199). With this proof, and noth-

ing to contradict it, how can it be said that there was an

issue of fact as to market value or as to the item of dam-

age. (Fox v. Johnson Winsatt Inc., 127 F. 2d 729; Shien-

tag, J. 4 Fordham Law Review, 180, 208, 209.)

Petitioner’s assertion that it might be found that there

was evidence in the record that the market price of lum-

ber at the time of the breach was less than the figure de-

termined by the District Court is without foundation for:

(a) The statement referred to in the November 28, 1940

letter from Brazilian (item 3, p. 14, Petitioner’s brief) has

no probative value since it was a statement made by

one not a party to the action, was obviously based on hear-

say (Boerner v. U. S., 26 F. Supp. 769) and was any-

wheres from six weeks to two months before the date of

the breach; (b) The statement (item 4, p. 14, Petitioner’s

brief) in the letter of January 9, 1941 from petitioner’s

president to Alvarez, if it were a statement of market

value would be a self-serving declaration. Actually, it

merely expresses an inability to understand how a com-

petitor was able to sell lumber with a freight rate of

$33.13 per thousand feet. (ec) The statement in Alvarez’s

letter of January 16, 1941 (Item 9, at p. 15 of Petitioner’s

brief) was made by one not a party, is not binding on

respondent and again merely expresses incredibility that

the freight rate had gone up so much. The fact remains

that the freight rate did go up to $33.13 per thousand

square feet and nobody disputes that.

However, assuming that all of these statements re-

ferred to at pages 14 and 16 of petitioner’s brief had some

probative value, the ruling must necessarily have been the

ETC, pe oe carte ety

; PRE IEEE) PV TUR BARI

9

same. Petitioner has waived its right to a jury trial here,

au fact undoubtedly overlooked by the learned dissenting

Judge below. The court was not obliged to impanel a

jury to assess damages. The exception in Rule 56 (e)

Rules of Civil Procedure, applies only where a jury has

been demanded and the party has an absolute right to have

the jury pass upon damages in dispute, or else where

the court of its own volition impanels a jury to aid it in

determining the issue of damage (Rule 39 [b] [ec], Rules

of Civil Procedure), Petitioner made no request on the

original motion for a jury trial on the question of dam-

ages. At that time it was content to adopt the statement

contained in our moving affidavit (R. 147) that the corre-

spondence constituted the full proof on both sides. The

District Court had the right to assume that counsel for

both parties had submitted to the court all proof available

or which they deemed necessary.

The District Court was, therefore, in the same situa-

tion as if there had been a trial before it without a jury

and both parties had rested and moved for judgment.

In Harrison v. United States, supra, where the plain-

tiff sought to recover disability benefits, the government

offered in evidence a ‘Declaration of Soldier’? in which

he answered ‘‘No” to the inquiry as to whether on a cer-

tain day he was suffering from the effects of any wound,

injury or disease. The court pointing out that he made

no attempt to explain such statement, stated that his

claim of disability was in irreconcilable conflict with the

statement in the ‘Declaration of Soldier”? offered by the

defendant and stated at page 737:

“Tt follows that the findings of the trial judge

were supported by substantial evidence. In an

action at law, alleged errors in the findings of the

trial court are not reviewable here, when such find-

ings are supported by substantial evidence. Dooley

ee ee ee ae ee ee

MAN RAPS GEL LE NEE ENON TIERCE

10

y. Pease, 180 U. 8. 126, 131, 182, 21 S. Ct. 329, 45

L. Ed. 457; Howbert v. Penrose (C. C. A. 10) 3s FP.

Drainage Dist, (C. C. A. 8) 12 F. (2d) 909, 9135,

914. In the trial of an action at law without a jury,

the decision of a court upon the weight of conflict-

ing evidence is not reviewable on appeal. Busch v.

Stromberg-Carlson Tel. Mfg. Co. (&. C. A. 8) 217 F.

328, 330; People’s Bank v. International Finance

Corp. (C. C. A. 4) 30 F. (2d) 46, 47; Phoenix Ins.

Co. v. Bakovic (C. C. A. 9) 2 F. (2d) 894, Lehigh

Valley R.R. Co. v. State of Russia (C. C. A. 2) 21

F. (2d) 406, 408.”’

Sartor v. Arkansas Natural Gas Company, 321 U.S. 620,

is not at all in conflict with the ruling below. If it were, the

court could never assess damages on a motion for summary

judgment without a jury. In the Sartor case, there had

been several trials and various other proceedings. The

issue was whether the market value of gas was in excess

of 3¢ per one thousand eubie feet. The defendant had

paid 3¢ for a number of years and suit was brought to

recover the difference between the amount paid and re-

ceived and the alleged market value. The evidence offered

on market value was solely that of officers ot the defendant

or others whose interest with respect to the subject mat-

ter of the litigation were similar to that of the defendant,

all of whom had given like testimony at a previous trial

of the ease wherein a jury had found contrary to their

testimony. There, the issue of market value was depend-

ent on statements of the moving party. Here, it was de-

pendent on statements of the opposing party; which state-

ments by their adoption on the cross motion were re-

iterated. In the Sartor case, this court held that opinion

evidence of that nature ‘‘where the undisputed facts leave

the existence of a cause of action depending upon ques-

11

tions of damage * * * should not be accepted summarily,

but that a jury should pass on the issue. Presumably,

the parties had a right to a trial by jury. Here, the ex-

istence of the cause of action does not depend on the

question of damage. Here, even if defendant established

no damage, it would be entitled to a judgment adjudicating

the breach of contract and an award of nominal damage.

But what is more important is that the evidence in this

record is such that even if there were a jury trial, a jury

would not be at liberty to disbelieve the evidence which the

court has believed and in fact, the District Court would

have been required to direct a verdict. The Cireuit Court

so found (R. 196, 197).

The assertion that we have not sustained the burden of

proving our damages is answered by the authorities cited

at page 193 of the record. Whether the point of delivery

be New York or Brazil is immaterial. The result is the

same,

POINT II.

Respondent did not admit that there was any balance

due the petitioner.

The theory of petitioner’s Point IT based upon the in-

correct assertion at page 7 of its petition that the bal-

ance of 10% was admittedly due is entirely fallacious. Re-

spondent by denials placed in issue the allegations of the

complaint except insofar as it admitted that it had only

paid $18,201 on account of the 500,000 feet of lumber

shipped (Answer, paragraph 11, R. 9, 10). It urged tech-

nical defenses in law in defeat of plaintiff’s cause of

action (R. 6, 7, 10) which for the purposes of the summary

judgment motion the District Court side-stepped (R. 151,

152) and it urged that plaintiff had failed to completely

perform its contract—a condition precedent to recovery,

ERT URN ROSE Sitar TM

‘ —

12

in that the contract was an entire contract for 750,000

feet, only part of which had been shipped (R. 10, 151). I

was on that theory that respondent consented to offset

the amount of $1,078.98 against its recovery (R. 173). The

briefs in both courts below show that respondent mili-

tantly took that position, The District Court found that

the contract provided for the delivery of a total of 750,000

feet (R. 152, 153) although the Cireuit Court in its opinion

spoke of two contracts as if each order were a separate

contract.

Furthermore, while the court is given discretion to

award summary judgment on a cause of action alleged

in a complaint prior to the final determination of issues

raised by a counterclaim, there is only one case that we

are able to find (Seagram-Distillers Corporation v. Manas,

25 Fed. Supp. 233), where that was done; and in that case,

it was obvious that the defendant never intended to try its

counterelaim. Even there, the court required the plaintiff

to furnish a bond conditioned for the payment of any

damage the defendant might sustain by reason of the

prior enforcement of the plaintiff’s judgment. In the

New York State courts, it has been held that the existence

of a counterclaim is in itself sufficient to defeat an appli-

cation for summary judgment. Treacy v. Melrose Paper

Stock Co., 269 N. Y. 155; Dietz v. Glynne, 221 App. Div.

399: Aetna Life Insurance Co. Vv. National Drydock and

Repair Co.. Tnc., 230 App. Div. 486, Plaut v. Plaut, 255

App. Div. 375.

13

POINT III. :

Respondent contracted on the basis of the language of ;

its order forms (Exhibits ". ——". “M’’, and on”? .

[pages 112-14, 116-17, 126-7, 128-9|). Petitioner, by accept- ci

ing the letters of credit furnished by the respondent, under-

tock to be bound thereby (Exhibits 5 as ee Cae

“Y¥’’ [pages 119-20, 125, 136-7, 141-2, 142-3]). Actually, it

matters not whether respondent’s order forms or petition-

er’s order forms or both sets of forms are used as the basis

for the contract. There was a clear breach which petitioner

recognized as such.

Aa AR FT ct

pee RES ge =

ae $5)

é ne

Clearly with knowledge of the fact that Brazilian was

practically out of business, petitioner, in framing its com-

plaint, elected to allege that its contract was with both

defendants. Then recognizing the possibility that respond-

ent might counterclaim against Brazilian and petitioner

or solely against Brazilian, and that Brazilian might plead

over against petitioner, it voluntarily dismissed its com-

plaint as to Brazilian. Thus, the effect of its present

pleading is that petitioner alleges that it has contracted

with respondent. If it contracted with respondent it could

only be on the theory that Brazilian was petitioner’s agent.

There must have been mutuality of contract. Cancededly,

there were order forms and correspondence executed and

transmitted by and between petitioner and Brazilian and

a separate set of order forms and correspondence executed

and transmitted by and between respondent and Brazilian.

While it is true that there is no evidence in the record

that order number 2330 was physically transmitted or

exhibited by Brazilian to petitioner, the record is replete

with evidence that the contents of order number 2330 were

communicated and transmitted to petitioner. The District

Court found that Brazilian was petitioner’s agent. That

finding has necessarily been affirmed by the Circuit Court’s

SA ir See Sno Sahel pe

ES el NES lem IS BE SS NS at

RP NI IS 2 EET, SEY SAAN SOMES

14

order for mandate even though the Cireuit Court in its

opinion did not specifically rule on the finding. Since

there was substantive evidence to support it, it is not

reviewable here. Ne ‘ie

The District Court also found that at all events, peti-

tioner by bringing this action on the grounds alleged had

foreclosed itself from asserting that Brazilian was not its

agent (R. 154). The enumeration at the bottom of page

19 and top of page 20 of petitioner’s brief is not the only

evidence bearing on the legal relationship of “Brazilian to

the parties. There is much aside from the form of the

complaint to substantiate the District Court’s finding that

Brazilian was petitioner’s agent and that it ratified Brazili-

an’s acts.

The entire import of Exhibits 1 to 48 indicates that

Brazilian was acting for and on behalf of petitioner. In

Exhibit 29, petitioner requests of Brazilian ‘‘that in the

future, you will do everything possible in order to minim-

ize this loss of ours by seiling our product at a price which

is more compensating for us’’ (R. 81). In Exhibit 31 (R.

83) petitioner requested Brazilian to have respondent

change the credits so as to reduce the amount of the

letters of credit and allow for retention at New York of a

sum sufficient to pay freight at the rate of $16.98. See

also Exhibit W (R. 140), Exhibit 38 (R. 90), Exhibit 46

(R. 98, 99) Exhibit 47 (R. 99, 100), Exhibit 48 (R. 100,

101).

The order forms on which petitioner relies specify

respondent as the purchaser. Respondent’s order, al-

though in form addressed to Brazilian, was clearly an

order for the sale of lumber by petitioner to respondent

and for the purchase of the lumber by respondent. Re-

spondent was not agreeing to pay Brazilian for the lum-

ber. All Brazilian was to get was a commission. Pay-

ment was to be made to petitioner who was to receive

a letter of credit and the letter of credit was actually

drawn in its favor. The entire chain of correspondence

15

indicates that where any diseretion or authority was dele-

gated to Brazilian, it was delegated by petitioner to

Brazilian, not by respondent, nor does the fact that we

were enabled to obtain Brazilian’s files indicate any

agency relationship between Brazilian and respondent.

The files were obtained by respondent’s counsel from

Brazilian’s counsel after the suit had been commenced

(R. 145, 146). Hither Biazilian was petitioner's agent or

it Was merely a middle-man and nobody’s agent. If there

Were two separate contracts, one between petitioner and

Brazilian, and the other between Brazilian and respond-

ent, then the situation would be as follows: Kither

Brazilian as agent for petitioner made a contract with re-

spondent which is mutually binding upon petitioner and

respondent (as the District Court found—and necessarily

so, since petitioner accepted respondent’s letters of credit

issued only in pursuance of respondent’s orders); or it

was not the agent and in such event, respondent is not

bound by orders numbered 2042 and 2049, Petitioner, nev-

ertheless, on elementary principles of contract law estab-

lished as far back as Lawrence v. Fox (20 N. Y. 468) and

ever since followed, would be still liable to respondent for

performance of orders numbered 2042 and 2049. Other-

wise, why allege, in its complaint, the failure to perform

2049 and an excuse therefor?

Such being the case, it matters not whether the con-

tract provision was that lumber had to be stowed below

deck. It does matter that petitioner was required to de-

liver ‘Clean lumber, perfectly dry” (R. 43, 73). It is

undisputed on this record that if the lumber were shipped

on deck, it would completely deteriorate (R. 85, 108).

(Note also Ferriera’s tacit acknowledgment of this at

page 88 of the record). Petitioner recognized that fact

when it sent its eable of January 8, 1941, Exhibit 33 (R.

84) Stating that it would ship the 250,000 feet on deck

“at buyer’s responsibility any deterioration’, Tf peti-

bie ee iia

dah cotta Si |

LPM TS ALTE IR

SATO ReaD

a

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16

tioner had the absolute right to ship on deck, it would

have shipped the lumber without sending this cable. It

recognized that it did not have such right, that deteriora-

tion was inevitable and that it was obligated to ship the

250,000 feet in the same manner as it was obligated to ship

the 500,000 feet. (In fact it was willing to do so if re-

spondent would pay the increased freight rate [R. 86, 89,

94].) The sending of this cable was a practical construction

by petitioner, of its contractual obligation, which is en-

titled to great weight if not almost conclusive as to the

meaning of the contract. Insurance Co. v. Dutcher, 99

U.S. 269, 273, Nicoll v. Sands, 131 N. Y. 19, 24. When we

bear in mind that there was specific reference to air-dried

lumber and kiln-dried lumber and that a premium was be-

ing paid for kiln-dried lumber, it is obvious that it went to

the essence of the agreement that the lumber be perfectly

dry and that the conjecture which petitioner requests this

court to indulge in by way of judicial notice (bottom of

page 20, top of page 21, petitioner’s brief) is entirely un-

warranted.

The statement that petitioner tendered the 250,000 feet

of lumber to a carrier is not warranted by anything in the

record. The Cireuit Court expressly so found (R. 191).

The learned Circuit Court embarked upon an extended

analysis of the term FOB in giving consideration below to

petitioner’s assertion that it had made a proper tender in

Brazil. But the analysis was unnecessary since this was

not an FOB contract, it was a C. & F. New York contract.

The term FOB was used solely for the purpose of ascer-

taining the amount which would have to be paid to peti.

tioner after the freight charges had been deducted from

the gross price in order that the final figure payable to

petitioner might be ascertained and a letter of credit for

90% thereof issued. The fact remains as the Circuit

Court found that petitioner’s obligation was to place on

board ship at Brazil 250,000 feet of lumber under such a

shipping contract as would reasonably assure the trans-

portation of this lumber under conditions such that bar-

17

ring an untoward event, the lumber would arrive in New

York clean and perfectly dry. It never did that. It of-

fered to deliver the lumber to a carrier to be transported

on deck, provided respondent would assume responsibility

for deterioration. That was a breach of contract whether

the contract be respondent's order forms, petitioner’s

order forms or whether it be spelled out of both sets of

order forms and the correspondence,

In fact, originally, petitioner, instead of claiming ten-

der of performance, asserted that performance had been

excused by either cancellation or non-availability of a boat

(R. 4, 5); and as late as June 18th, 1943, was unable to

make up its mind as to which of the latter it would assign

as its excuse for nonperformance (R. 26).

Conclusion.

No substantial question of law is presented for review.

The application for a Writ of Certiorari should therefore

be denied.

Respectfully submitted,

Murry C. Becker,

Counsel for Respondent.

Irvine MotpaveEr, :

Of Counsel.

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