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

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## Record

- **Collection:** Supreme Court brief
- **Document type:** Respondents Brief
- **Published:** January 1, 1945
- **Citation:** 325 U.S. 861

## Text

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.

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

SSE Say SR SSS aa INSET SEIS GLEE ARC

SAVE AE DORSET PN PI SxS ee ate

aot a

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

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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

I A GR tens SAS fo can

NONE ARO EGP BAI RE ek. Re BES ol es Rs Se DO SOG AREA OGM SS —

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.

args et ening CORR

Pa bd

Kiet Salas SSNs a AR ea la a

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Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40386416_0076%3A3. Public record. Not legal advice.