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Mo. App. 5, an action for slander, it a witness against defendant in this appeared that the defendant's broth- case, and that Hagans brought to deer, against whom a similar action fendant a letter written on Ku Klux was pending, had requested one Guffy Klan paper, a few days before the to urge a witness, a Mrs. Hesford, who was to be called, threatening had been subpænaed by the plaintiff, Hagans and warning him to stay out to leave the state, so as to be absent of court; that defendant was a memfrom the trial. The court said: “It ber of the Klan; that Hagans told deseems to us that even if it were true fendant he believed defendant had that the conversation between Guffy something to do with sending the and Mrs. Hesford was carried on in letter out; and that when Hagans the absence of the defendant, yet it presented the letter to him defendant was of such a character as rendered tore off the part on which the threat it admissible. The defendant's re- was written, and handed back the quest was as much in his own inter- other part. All of these questions est as in that of his brother. The and all of this matter were objected issues involved in both suits were then to by defendant, and the objections the same, and both were on the docket were sustained. In this we think the of the court for trial. The evidence trial court erred. The facts and cirdiscloses an attempt to induce a wit- cumstances offered to be shown furness, whose testimony was material nished a satisfactory basis for the for plaintiff, to absent herself from inference that defendant was a party the state. It was unquestionably an to sending the letter, by way of an attempt on the part of the defendant implied admission." to suppress material evidence for In Muenkel v. Muenkel (1919) 143 plaintiff. It was not error to admit Minn. 29, 173 N. W. 184, it was held the testimony to which the defend- to be proper to ask a witness whether ant's objections relate."
one of the parties to the action had In Loftus v. Sturgis (1914) Tex. not told him to say, “I don't know," Civ. App. -, 167 S. W. 14, an action to all questions asked while he was on for fraud and deceit, the court held the stand, and to receive his affirmato be admissible evidence that the de- tive answer. fendant had induced a witness to And in Cruikshank v. Gordon (1888) leave the state to prevent his testify- 48 Hun, 308, 1 N. Y. Supp. 443, an acing in the case, as this was a circum- tion of slander, the court, holding to stance tending to show the defend- be admissible evidence of an attempt ant's guilt of the charges made by the by the defendant to induce a witness witness.
not to "remember," as an admission of In Maynard v. Bailey (1920) 85 the speaking of the slanderous words, W. Va. 679, 9 A.L.R. 981, 102 S. E. said: “It is difficult to conceive of a 480, the court, holding admissible a case where an offer to suppress a witletter urging the absence of the ad- ness is inadmissible." dressee, a witness, from the trial, and Evidence that a motorman had realleged to have been written by the fused to appear before the coroner's plaintiff, said that if written by him jury, because he had been advised not the letter reflected on his credibility, to testify by the defendant, was held and might have resolved the conflict to be admissible in Kamoss v. Kansas in the evidence against him.
City & W. B. R. Co. (1918)
Mo. App. In Powell v. Smith (1923) 209 Ala. 202 S. W. 434, an action to recover 254, 96 So. 135, the court said: for the death of the plaintiff's hus“Plaintiff's counsel offered to show, band by the defendant's car, the court by questions addressed to the defend- observing that the evidence tended to ant on cross-examination, that the show that the cause of death was witness Hagans had been summoned as sought to be concealed.
(239 N. Y. 172, 146 N. E. 194.) Sale, $ 1 - arrangement for letter of credit.
1. Under a contract for sale of goods for cash upon a specified letter of credit expiring on a specified date, with the provision that in case delivery is impossible within the life of the letter of credit the buyer agrees to arrange for extension of the credit, the buyer is not bound to arrange for extension without notice of impossibility of shipment before its expiration.
[See note on this question beginning on page 608.] Contracts, $ 204 construction expiring on a specified date, with a rules.
provision for extension if it was im2. Contractual obligations are fixed possible for seller to deliver before solely by the parties, and the language its expiration, where buyer receives of a business contract must be con- no notice of the necessity for extenstrued in the light of what a busi- sion. ness man would reasonably expect to
Contracts, § 442 right to rely on give or receive and perform or suffer
good faith. under its terms.
4. Business men in the performance [See 6 R. C. L. 841; 2 R. C. L. Supp.
of their contracts have a right to rely 222; 5 R. C. L. Supp. 373.]
on the good faith and ordinary pruSale, § 161 expiration of letter of
dence of those with whom they deal. credit right to cancel contract. 3. The failure of a buyer to ex
Parties, $ 19 — right of agent to main
tend his letter of credit the day it
tain action. expires, followed by notice from the 5. An agent contracting in his own bank of its expiration and request for name for the purchase of goods may its return, does not justify the seller maintain an action in his own name in canceling the contract where it pro- for breach of the contract, although vided for cash upon a letter of credit he is acting for a disclosed principal.
APPEAL by plaintiff from an order of the Appellate Division of the Supreme Court, First Department, reversing a judgment of a Trial Term for New York County in his favor and directing dismissal of the complaint in an action brought to recover damages for alleged failure and refusal of defendant to ship certain merchandise. Modified.
The facts are stated in the opinion of the court.
Messrs. Abraham P. Wilkes and Assuming that it was impossible Frank Walling, for appellant:
for the defendant to ship the merPlaintiff was not required to make chandise within the life of the letter arrangements for an extension of the of credit, and that the contract itself letter of credit until the defendant did not require notice from the defirst gave him notice that it was im- fendant to extend, plaintiff's failure possible to ship the merchandise with- to extend the letter on or before Dein the life of the letter of credit and cember 31, 1919, was not a breach of requesting him to extend it.
the contract in point of time of sufWilliston, Contr. $ 894; 31 C. J. 635; ficient importance and materiality to Vyse v. Wakefield, 6 Mees. & W. 442, justify defendant's refusal to per151 Eng. Reprint, 485; E. W. Bliss form after plaintiff subsequently tenCo. v. United States Incandescent Gas- dered the extension. light Co. 149 N. Y. 300, 43 N. E. 859. Williston, Contr. § 869; Helgar Corp. v. Warner's Features, 222 N. Y. credit. Payment: Against invoice 449, 119 N. E. 113; Fossume v. Requa, with railroad bill of lading." 218 N. Y. 339, 113 N. E. 330; John F. The defendant did not acknowlTrainor Co. v. G. Amsinck & Co. 236 edge or formally accept the order N. Y. 392, 140 N. E. 931; Brede v.
until November 14. On November Rosedale Terrace Co. 216 N. Y. 246,
13, the Bank of Taiwan, Limited, 110 N. E. 430. Defendant continued the contract
sent the defendant an irrevocable alive after December 31, 1919, and
letter of credit which was numbered could not therefore terminate the con
357, and which authorized the detract afterwards without notice to fendant "to value upon the Bank of plaintiff requiring him to perform. Taiwan, Ltd., New York, for account
Taylor v. Goelet, 208 N. Y. 253, 101 of Messrs. Nakazawa & Co. for any N. E. 867, Ann. Cas. 1914D, 284; John sum or sums not exceeding in all F. Trainor Co. v. G. Amsinck & Co. eleven thousand five hundred seven236 N. Y. 392, 140 N. E. 931; Brede
ty-five dollars eighty-eight cents, acv. Rosedale Terrace Co. supra; Mawhinney V. Millbrook Woolen Mills,
companied by all negotiable railroad 234 N. Y. 244, 137 N. E. 318; Draper
bills of lading marked 'For Export v. Oswego County Fire Relief Asso.
together with invoices covering 190 N. Y. 12, 82 N. E. 755; Williston,
shipment from New York Contr. § 1335.
if presented on or before December The letter of credit delivered to the 31, 1919." defendant herein is a separate and On Nevember 14, the day after distinct contract, independent of the the letter of credit was sent to the contract between the parties hereto. defendant, the defendant wrote the The bank could not be deemed the agent of the plaintiff with respect to
plaintiff that it accepted the order its acts subsequent to the date of the
subject to certain conditions, statissuance of said letter of credit.
ing: "We will endeavor to make Frey & Son v. E. R. Sherburne Co. shipment of this material in about 193 App. Div. 849, 184 N. Y. Supp. eight weeks from date, sooner or 661.
later, subject to any unavoidable dePlaintiff has the right to prosecute lays which may be incurred due to the action in his own name.
shortage of cars, labor conditions, Symmers v. Carroll, 207 N. Y. 632,
strike situations, or otherwise. 47 L.R.A. (N.S.) 196, 101 N. E. 698,
"In the event that it is impossible Ann. Cas. 1914C, 685; Duncan v. China Mut. Ins. Co. 129 N. Y. 237, 29 N. E.
for us to make delivery within the 76; Middleton · v. Wohlgemuth, 141
life of the letter of credit, it is unApp. Div. 678, 126 N. Y. Supp. 734;
derstood and agreed that you will Stanley V. Chappell, 8 Cow. 235; make arrangements for extension of Portoghese v. Illinois Surety Co. 81 this credit through your bankers in Misc. 211, 142 N. Y. Supp. 500; Par- New York." ker v. Paine, 37 Misc. 768, 76 N. Y. On the same day the plaintiff Supp. 942; Considerant v. Brisbane, wrote the defendant, acknowledging 22 N. Y. 389; International Harvester
receipt of its letter and stating: Co. v. Champlin, 155 App. Div. 847,
“We note that you will endeavor to 140 N. Y. Supp. 842.
Mr. Walter M. Schwarz for respond- ship in about eight weeks from date ent.
or sooner. We trust you will use Lehman, J., delivered the opinion shipment go forward at the earliest
every possible effort, to have this of the court:
possible date, and we will appreciate On or about October 30, 1919, the
prompt shipment.” plaintiff sent to the defendant a
No shipments were ever made by signed order for 100 gross tons of
the defendant, and the letter of cred"black sheets: U. S. gauge 28, 36 by it was not extended upon its ex72.” The order provided: “Ship- piration. On January 26 the plainment: Four to eight weeks. Terms: tiff wrote to the defendant, remind1 per cent cash discount establish- ing it that the time provided in the ing banker's irrevocable letter of contract for delivery of the mer
(239 N. Y, 172, 146 N. E. 194.) chandise had expired, and asking for failure of the plaintiff to extend the information whether the goods had letter of credit, coupled with a notice been shipped from the mill. A day sent by the bank on January 8 askor two thereafter there was a tele- ing the return of the letter of credit phone conversation between repre- for cancelation, constituted a breach sentatives of the two parties, as a of contract on the part of the plainresult of which the plaintiff wrote tiff, which justified the defendant in to the defendant on January 29 that regarding the contract as abandoned they were ready to extend the letter and in refusing to proceed with it. of credit if the defendant had no- The trial justice denied the motion tified them, and adding: “We have and directed the jury to bring in a to-day extended credit and request verdict in favor of the plaintiff for you to ship our order No. 13.” On such sum as they might find reprethe same day the bank wrote to the sented the damages suffered by dedefendant that the letter of credit fendant's failure to deliver the merwas extended to February 20, 1920. chandise. Upon appeal this judgOn February 4, 1920, the defendants ment was reversed "upon questions wrote the plaintiff that they regard- of fact and of law," and the comed the contract as canceled, and plaint dismissed. "this matter has been closed and dis- The contract between the parties posed of.” In that letter they stat- did not come into existence until the ed: "On January 8, 1920, we re- interchange of the letters on Novemceived word from your bankers, the ber 14, in which the defendant acBank of Taiwan, advising us that cepted the plaintiff's order of Octhe letter of credit issued in our fa- tober 30, subject to stated condivor had expired on December 31, tions, and the plaintiff accepted 1919, and requesting the return of these conditions. The order of Octhe same for cancelation.
tober 30 called for delivery by the As this was equivalent to notice that defendant of the merchandise within you no longer desired the materials four to eight weeks and the estabordered, and in the absence of any lishment of a letter of credit by the other or different instructions from plaintiff to insure payment when you, and by reason of this cancela- goods were shipped. The letter of tion of credit, your order was can- credit which was issued on Novemceled. Not until the receipt of your ber 13, though it expired on Decemletter of January 29, 1920, and a ber 31, was sufficient to insure payletter of even date from the bank, ment of any goods shipped in acdid we receive any indication from cordance with the order of October you that you desired to keep the 30 within four to eight weeks of the order in force and to continue the date of the order. By the interletter of credit."
change of letters on November 14, As the price of goods had ad- terms of shipment, other than those vanced materially since the original contained in the order, were suborder was given the
, the plaintiff stituted in the actual contract of the brought this action to recover dam- parties, and the defendant was reages for the defendant's failure and quired to make shipments only “in refusal to ship the merchandise. At about eight weeks from date [Nothe trial there was no substantial vember 14] sooner or later, subject dispute between the parties, except to unavoidable delays," etc. The letas to the market value of the goods ter of credit delivered the previous in January, 1920. All the other ma- day, which expired on December 31, terial facts were proven by docu- of course, was insufficient to insure mentary evidence. At the close of payment for shipments which, unthe plaintiff's case, and at the close der the terms of the contract, the of the whole case, the defendant defendant had the right to make aftmoved to dismiss the complaint sub- er December 31. The defendant stantially on the grounds that the might have insisted in the contract
upon the delivery of a new letter of event that it was “impossible" for credit to insure payment of any the defendant to make delivery shipments that might be made, but within its life. That clause must be instead it substituted for the provi- given
given a reasonable construction. sion of the order, “Terms: 1 per The plaintiff was called upon to cent cash discount establishing make arrangements for the extenbanker's irrevocable letter of cred- sion of the letter of credit only in it,” a new provision contained in the one event that
Sale-arrangethe letter of November 14: “Terms: it is “impossible" ment for letter 1 per cent for cash against our in- for the defendant to voice and railroad B/L upon your make deliveries. Unless in some letter of credit No. 357 of Novem- manner the plaintiff received notice ber 13." Under this provision of of circumstances which would renthe contract "Letter of credit No. der the delivery within the life of 357 of November 13" became the the contract impossible, he could not stipulated banking credit to insure know until the close of banking to the plaintiff payments of any hours on December 31 that the shipshipments it might make. The ment would not be made and the plaintiff had no obligation to furnish draft with bill of lading and invoices any other credit except as such ob- attached would not be presented at ligation might arise under the sub- the bank. Until that time apparentsequent provision of the contract ly only the defendant had actual that "in the event that it is impos- knowledge of the fact that delivery sible for us [the defendant] to make would not or could not be made delivery within the life of the letter within the life of the letter of credof credit, it is understood and it, and the defendant did not see fit agreed that you (the plaintiff] will to impart that knowledge to the make arrangements for extension of plaintiff. this credit through your bankers in Contractual obligations are fixed New York."
solely by the parties, and the lanConcededly the plaintiff did not guage of a business
Contract extend the letter of credit on Decem- contract must be construction
-rules. ber 31, when it expired, even though construed in the no shipments had at that time been light of what a business man would made by the defendant, and the ap- reasonably expect to give or receive, pellate division has held that at that to perform or suffer, under its time the plaintiff breached the con- terms. Here it is evident that the tract, and that this breach was so parties could not have expected that material that it justified the defend- the plaintiff would extend the letter ant in abandoning the contract with- of credit until he had knowledge, acout giving the plaintiff notice of re- tual or constructive, that the conscission or opportunity to remedy tingency had arisen which would any default. We do not so construe give rise to an obligation on his part the rights of the parties under the to make arrangements for its extencontract. Ordinarily a provision sion. It is urged, however, that for a letter of credit in a contract of when the letter of credit expired on sale is intended to provide complete December 31, while the defendant assurance to the seller that he will still had time to make delivery unbe paid whenever he complies with der the contract, the plaintiff was his contract. In the present case, bound to know that delivery was as pointed out above, the seller did then impossible within the life of the not stipulate for a letter of credit letter of credit, and was under an which would provide such assur- obligation forthwith to extend the ance, but was content to rely upon letter of credit, and his failure to the plaintiff's promise that he would do so on that day constituted a make arrangements for extension breach of the contract which itself of the existing letter of credit in the justified the defendant in refusing