Wheelock v. Pacific Pneumatic Gas Co.

By the Court, Crockett, J.: The court finds that the plaintiff stipulated in the contract to put up the gasoline for shipment in first-class cases; and that this stipulation was violated in respect to several of the shipments, and by reason thereof the defendant suffered damage and loss in a sum exceeding the plaintiffs demand. [226]No such damage is alleged or claimed in respect to the last shipment, for the price of which this action is brought. But the defendant sets up the damage suffered from this cause on the prior shipments by way of counter-claim. The court, however, finds that the defendant accepted the shipments in the defective cans, with full knowledge of the defects and of the loss occasioned thereby; and, as a conclusion of law, the court finds that the counter-claim is not valid, because the defendant regarded the loss as its own, and that by paying for these shipments it waived all objections to the cans. The conclusions of law are not supported by the facts found. The price of each shipment was to be paid by the defendant on the arrival of the bills of lading, in due course of mail; and the payment was not made to depend upon the arrival of the cargo in good condition or otherwise. The covenant by the plaintiff as to the cans, and by the defendant as to payment, were independent covenants, to be performed at different times. The shipments in defective cans did not, in fact, arrive until after they had been paid for, and, of course, the defendant had no opportunity to examine the cases until after payment. The payment, therefore, can in no sense be deemed to be a waiver of the defendant’s objection to the cans, or of their claim to damages for a breach of the contract by the plaintiff. Nor do we find anything in the letters from the defendant to the plaintiff which cau be held to be a waiver of the claim for damages. But if they had contained an express waiver, it would have been void for want of consideration.

We are also of opinion that the claim for damages constituted a valid counter-claim, under the second subdivision of section four hundred and thirty-eight of the Code of Civil Procedure. The action is upon contract, and the counter-claim is a “cause of action arising also upon contract,” and existing at the commencement of the action. Nor will it make any difference, if the damages arising from the breach of the contract were unliquidated, as they are alleged to have been. They nevertheless constituted a valid counter-claim. (Pomeroy on Remedies and Remedial Rights, pp. 815 and 817, and authorities there cited.)