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Mo. App. 5, an action for slander, it appeared that the defendant's brother, against whom a similar action was pending, had requested one Guffy to urge a witness, a Mrs. Hesford, who had been subpoenaed by the plaintiff, to leave the state, so as to be absent from the trial. The court said: "It seems to us that even if it were true that the conversation between Guffy and Mrs. Hesford was carried on in the absence of the defendant, yet it was of such a character as rendered it admissible. The defendant's request was as much in his own interest as in that of his brother. The issues involved in both suits were then the same, and both were on the docket of the court for trial. The evidence discloses an attempt to induce a witness, whose testimony was material for plaintiff, to absent herself from the state. It was unquestionably an attempt on the part of the defendant to suppress material evidence for plaintiff. It was not error to admit the testimony to which the defendant's objections relate."

Tex.

In Loftus v. Sturgis (1914) Civ. App. 167 S. W. 14, an action for fraud and deceit, the court held to be admissible evidence that the defendant had induced a witness to leave the state to prevent his testifying in the case, as this was a circumstance tending to show the defendant's guilt of the charges made by the witness.

In Maynard v. Bailey (1920) 85 W. Va. 679, 9 A.L.R. 981, 102 S. E. 480, the court, holding admissible a letter urging the absence of the addressee, a witness, from the trial, and alleged to have been written by the plaintiff, said that if written by him the letter reflected on his credibility, and might have resolved the conflict in the evidence against him.

In Powell v. Smith (1923) 209 Ala. 254, 96 So. 135, the court said: "Plaintiff's counsel offered to show, by questions addressed to the defendant on cross-examination, that the witness Hagans had been summoned as

a witness against defendant in this case, and that Hagans brought to defendant a letter written on Ku Klux Klan paper, a few days before the case was to be called, threatening Hagans and warning him to stay out of court; that defendant was a member of the Klan; that Hagans told defendant he believed defendant had something to do with sending the letter out; and that when Hagans presented the letter to him defendant tore off the part on which the threat was written, and handed back the other part. All of these questions and all of this matter were objected to by defendant, and the objections were sustained. In this we think the trial court erred. The facts and circumstances offered to be shown furnished a satisfactory basis for the inference that defendant was a party to sending the letter, by way of an implied admission."

In Muenkel v. Muenkel (1919) 143 Minn. 29, 173 N. W. 184, it was held to be proper to ask a witness whether one of the parties to the action had not told him to say, "I don't know," to all questions asked while he was on the stand, and to receive his affirmative answer.

And in Cruikshank v. Gordon (1888) 48 Hun, 308, 1 N. Y. Supp. 443, an action of slander, the court, holding to be admissible evidence of an attempt by the defendant to induce a witness not to "remember," as an admission of the speaking of the slanderous words, said: "It is difficult to conceive of a case where an offer to suppress a witness is inadmissible."

Evidence that a motorman had refused to appear before the coroner's jury, because he had been advised not to testify by the defendant, was held to be admissible in Kamoss v. Kansas City & W. B. R. Co. (1918) — Mo. App.

202 S. W. 434, an action to recover for the death of the plaintiff's husband by the defendant's car, the court observing that the evidence tended to show that the cause of death was sought to be concealed. R. S.

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(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 rules.

2. Contractual obligations are fixed solely by the parties, and the language of a business contract must be construed in the light of what a business man would reasonably expect to give or receive and perform or suffer under its terms.

[See 6 R. C. L. 841; 2 R. C. L. Supp. 222; 5 R. C. L. Supp. 373.] Sale, § 161 expiration of letter of

credit right to cancel contract.

3. The failure of a buyer to extend his letter of credit the day it expires, followed by notice from the bank of its expiration and request for its return, does not justify the seller in canceling the contract where it provided for cash upon a letter of credit

expiring on a specified date, with a provision for extension if it was impossible for seller to deliver before its expiration, where buyer receives no notice of the necessity for extension.

Contracts, § 442 - right to rely on good faith.

4. Business men in the performance of their contracts have a right to rely on the good faith and ordinary prudence of those with whom they deal. Parties, § 19 — right of agent to maintain action.

5. An agent contracting in his own. name for the purchase of goods may maintain an action in his own name for breach of the contract, although 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 Frank Walling, for appellant:

Plaintiff was not required to make arrangements for an extension of the letter of credit until the defendant first gave him notice that it was impossible to ship the merchandise within the life of the letter of credit and requesting him to extend it.

Williston, Contr. § 894; 31 C. J. 635; Vyse v. Wakefield, 6 Mees. & W. 442, 151 Eng. Reprint, 485; E. W. Bliss Co. v. United States Incandescent Gaslight Co. 149 N. Y. 300, 43 N. E. 859.

Assuming that it was impossible for the defendant to ship the merchandise within the life of the letter of credit, and that the contract itself did not require notice from the defendant to extend, plaintiff's failure to extend the letter on or before December 31, 1919, was not a breach of the contract in point of time of sufficient importance and materiality to justify defendant's refusal to perform after plaintiff subsequently tendered the extension.

Williston, Contr. § 869; Helgar

Corp. v. Warner's Features, 222 N. Y. 449, 119 N. E. 113; Fossume v. Requa, 218 N. Y. 339, 113 N. E. 330; John F. Trainor Co. v. G. Amsinck & Co. 236 N. Y. 392, 140 N. E. 931; Brede v. Rosedale Terrace Co. 216 N. Y. 246, 110 N. E. 430.

Defendant continued the contract alive after December 31, 1919, and could not therefore terminate the contract afterwards without notice to plaintiff requiring him to perform.

Taylor v. Goelet, 208 N. Y. 253, 101 N. E. 867, Ann. Cas. 1914D, 284; John F. Trainor Co. v. G. Amsinck & Co. 236 N. Y. 392, 140 N. E. 931; Brede v. Rosedale Terrace Co. supra; Mawhinney v. Millbrook Woolen Mills, 234 N. Y. 244, 137 N. E. 318; Draper v. Oswego County Fire Relief Asso. 190 N. Y. 12, 82 N. E. 755; Williston, Contr. § 1335.

The letter of credit delivered to the defendant herein is a separate and distinct contract, independent of the contract between the parties hereto. The bank could not be deemed the agent of the plaintiff with respect to its acts subsequent to the date of the issuance of said letter of credit.

Frey & Son v. E. R. Sherburne Co. 193 App. Div. 849, 184 N. Y. Supp. 661.

Plaintiff has the right to prosecute the action in his own name.

Symmers v. Carroll, 207 N. Y. 632, 47 L.R.A. (N.S.) 196, 101 N. E. 698, Ann. Cas. 1914C, 685; Duncan v. China Mut. Ins. Co. 129 N. Y. 237, 29 N. E. 76; Middleton v. Wohlgemuth, 141 App. Div. 678, 126 N. Y. Supp. 734; Stanley v. Chappell, 8 Cow. 235; Portoghese v. Illinois Surety Co. 81 Misc. 211, 142 N. Y. Supp. 500; Parker v. Paine, 37 Misc. 768, 76 N. Y. Supp. 942; Considerant v. Brisbane, 22 N. Y. 389; International Harvester Co. v. Champlin, 155 App. Div. 847, 140 N. Y. Supp. 842.

Mr. Walter M. Schwarz for respond

ent.

Lehman, J., delivered the opinion of the court:

On or about October 30, 1919, the plaintiff sent to the defendant a signed order for 100 gross tons of "black sheets: U. S. gauge 28, 36 by 72." The order provided: "Shipment: Four to eight weeks. Terms: 1 per cent cash discount establishing banker's irrevocable letter of

credit. Payment: Against invoice with railroad bill of lading."

The defendant did not acknowledge or formally accept the order until November 14. On November 13, the Bank of Taiwan, Limited, sent the defendant an irrevocable letter of credit which was numbered 357, and which authorized the defendant "to value upon the Bank of Taiwan, Ltd., New York, for account of Messrs. Nakazawa & Co. for any sum or sums not exceeding in all eleven thousand five hundred seventy-five dollars eighty-eight cents, accompanied by all negotiable railroad bills of lading marked 'For Export' together with invoices invoices covering shipment from New York if presented on or before December 31, 1919."

On Nevember 14, the day after the letter of credit was sent to the defendant, the defendant wrote the plaintiff that it accepted the order subject to certain conditions, stating: "We will endeavor to make shipment of this material in about eight weeks from date, sooner or later, subject to any unavoidable delays which may be incurred due to shortage of cars, labor conditions, strike situations, or otherwise.

"In the event that it is impossible for us to make delivery within the life of the letter of credit, it is understood and agreed that you will make arrangements for extension of this credit through your bankers in New York."

On the same day the plaintiff wrote the defendant, acknowledging receipt of its letter and stating: "We note that you will endeavor to ship in about eight weeks from date or sooner. We trust you will use every possible effort, to have this shipment go forward at the earliest possible date, and we will appreciate prompt shipment."

No shipments were ever made by the defendant, and the letter of credit was not extended upon its expiration. On January 26 the plaintiff wrote to the defendant, reminding it that the time provided in the contract for delivery of the mer

(239 N. Y. 172, 146 N. E. 194.)

chandise had expired, and asking for information whether the goods had been shipped from the mill. A day or two thereafter there was a telephone conversation between representatives of the two parties, as a result of which the plaintiff wrote to the defendant on January 29 that they were ready to extend the letter of credit if the defendant had notified them, and adding: "We have to-day extended credit and request you to ship our order No. 13." On the same day the bank wrote to the defendant that the letter of credit was extended to February 20, 1920. On February 4, 1920, the defendants wrote the plaintiff that they regarded the contract as canceled, and "this matter has been closed and disposed of." In that letter they stated: "On January 8, 1920, we received word from your bankers, the Bank of Taiwan, advising us that the letter of credit issued in our favor had expired on December 31, 1919, and requesting the return of the same for cancelation.

As this was equivalent to notice that you no longer desired the materials ordered, and in the absence of any other or different instructions from you, and by reason of this cancelation of credit, your order was canceled. Not until the receipt of your letter of January 29, 1920, and a letter of even date from the bank, did we receive any indication from you that you desired to keep the order in force and to continue the letter of credit."

As the price of goods had advanced materially since the original order was given, the plaintiff brought this action to recover damages for the defendant's failure and refusal to ship the merchandise. At the trial there was no substantial dispute between the parties, except as to the market value of the goods in January, 1920. All the other material facts were proven by documentary evidence. At the close of the plaintiff's case, and at the close of the whole case, the defendant moved to dismiss the complaint substantially on the grounds that the

failure of the plaintiff to extend the letter of credit, coupled with a notice sent by the bank on January 8 asking the return of the letter of credit for cancelation, constituted a breach of contract on the part of the plaintiff, which justified the defendant in regarding the contract as abandoned and in refusing to proceed with it. The trial justice denied the motion. and directed the jury to bring in a verdict in favor of the plaintiff for such sum as they might find represented the damages suffered by defendant's failure to deliver the merchandise. Upon appeal this judgment was reversed "upon questions of fact and of law," and the complaint dismissed.

The contract between the parties did not come into existence until the interchange of the letters on November 14, in which the defendant accepted the plaintiff's order of October 30, subject to stated conditions, and the plaintiff accepted these conditions. The order of October 30 called for delivery by the defendant of the merchandise within four to eight weeks and the establishment of a letter of credit by the plaintiff to insure payment when goods were shipped. The letter of credit which was issued on November 13, though it expired on December 31, was sufficient to insure payment of any goods shipped in accordance with the order of October 30 within four to eight weeks of the date of the order. By the interchange of letters on November 14, terms of shipment, other than those contained in the order, were substituted in the actual contract of the parties, and the defendant was required to make shipments only "in about eight weeks from date [November 14] sooner or later, subject to unavoidable delays," etc. The letter of credit delivered the previous day, which expired on December 31, of course, was insufficient to insure payment for shipments which, under the terms of the contract, the defendant had the right to make after December 31. The defendant might have insisted in the contract

upon the delivery of a new letter of credit to insure payment of any shipments that might be made, but instead it substituted for the provision of the order, "Terms: 1 per cent cash cash discount establishing banker's irrevocable letter of credit," a new provision contained in the letter of November 14: "Terms: 1 per cent for cash against our invoice and railroad B/L upon your letter of credit No. 357 of November 13." Under this provision of the contract "Letter of credit No. 357 of November 13" became the stipulated banking credit to insure to the plaintiff payments of any shipments it might make. The plaintiff had no obligation to furnish any other credit except as such obligation might arise under the subsequent provision of the contract that "in the event that it is impossible for us [the defendant] to make delivery within the life of the letter of credit, it is understood and agreed that you [the plaintiff] will make arrangements for extension of this credit through your bankers in New York."

Concededly the plaintiff did not extend the letter of credit on December 31, when it expired, even though no shipments had at that time been made by the defendant, and the appellate division has held that at that time the plaintiff breached the contract, and that this breach was so material that it justified the defendant in abandoning the contract without giving the plaintiff notice of rescission or opportunity to remedy any default. We do not so construe the rights of the parties under the contract. Ordinarily a provision for a letter of credit in a contract of sale is intended to provide complete assurance to the seller that he will be paid whenever he complies with his contract. In the present case, as pointed out above, the seller did not stipulate for a letter of credit which would provide such assurance, but was content to rely upon the plaintiff's promise that he would make arrangements for extension of the existing letter of credit in the

of credit.

event that it was "impossible" for the defendant to make delivery within its life. That clause must be given given a reasonable construction. The plaintiff was called upon to make arrangements for the extension of the letter of credit only in the one event that Sale-arrangeit is "impossible" ment for letter for the defendant to make deliveries. Unless in some manner the plaintiff received notice of circumstances which would render the delivery within the life of the contract impossible, he could not know until the close of banking hours on December 31 that the shipment would not be made and the draft with bill of lading and invoices attached would not be presented at the bank. Until that time apparently only the defendant had actual knowledge of the fact that delivery would not or could not be made within the life of the letter of credit, and the defendant did not see fit to impart that knowledge to the plaintiff.

Contractual obligations are fixed solely by the parties, and the language of a business

Contracts

contract must be construction construed in the

-rules.

light of what a business man would reasonably expect to give or receive, to perform or suffer, under its terms. Here it is evident that the parties could not have expected that the plaintiff would extend the letter of credit until he had knowledge, actual or constructive, that the contingency had arisen which would give rise to an obligation on his part to make arrangements for its extension. It is urged, however, that when the letter of credit expired on December 31, while the defendant still had time to make delivery under the contract, the plaintiff was bound to know that delivery was then impossible within the life of the letter of credit, and was under an obligation forthwith to extend the letter of credit, and his failure to do so on that day constituted a breach of the contract which itself justified the defendant in refusing

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