Cutting Packing Co. v. Packers' Exchange

California Supreme Court Dec 2, 1890 No. No. 12337Published

Before: Works

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Holding. An assignee of a non-negotiable contract who voluntarily accepts the benefits of the contract impliedly assumes the burden of the obligations therein, rendering the assignee liable to the assignor for damages resulting from a breach of those obligations.

Issues

Whether an assignee of a non-negotiable contract is liable to the assignor for the performance of the contract's obligations after accepting the benefits of the assignment.
Whether an assignor who remains liable to the original party may recover damages from an assignee who fails to perform the assumed obligations.

Disposition. affirmed

Quotations verified verbatim against the opinion

“A voluntary acceptance of the benefit of a transaction is equivalent to a consent to all the obligations arising from it, so far as the facts are known, or ought to be known, to the person accepting.”

“it then follows that, from the assignment, an implied contract arose between the plaintiff and defendant, whereby the latter became bound to the former to receive and pay for the apricots according to the terms of the original contract.”

Synopsis

Assignment—Non-negotiable Contract of Sale. — A non-negotiable contract of purchase and sale may be transferred by indorsement, so as to transfer all the rights of the assignor, subject to all equities and defenses of the other party to the contract at the time of the indorsement.

Id.—Burden of Obligation — Novation. — The assignor of the contract cannot, however, be released from his burden of obligation to the other contracting party, if he refuses to consent to a novation.

Id. — Obligation of Assignee — Suretyship of Assignor. — When the assignee takes the benefit of the contract, he also assumes its burden, so far as it is apparent upon the face of the contract, and the assignor, if not released from liability, stands in the relation of a surety for the performance of the obligation by the assignee, who is bound to fulfill the terms of the contract.

Id. —Implied Contract between Assignor and Assignee. —An implied contract arises between the assignor and assignee of a non-negotiable instrument, whereby the latter becomes bound to the former to perform the contract according to its terms.

Id. — Breach of Implied Contract —■ Assignment of Crop — Action by Assignor — Damages. —If the assignee of a contract for the purchase and sale of a crop of fruit refuses to accept and pay therefor, the assignor may sue him for breach of his implied contract, and recover as damages the difference between the price paid by him under the contract of purchase and sale, and that realized from the sale of the fruit in open market at current rates.

Id. — Contract for Sale of Future Crops — Potential Existence. — When crops of fruit contracted to be sold for a series of years are to be the product of trees owned by the vendor at the time the contract was made, they must be considered as having a potential existence, and as being subject to sale; and an assignee of such contract acquires the right to purchase the fruit for each of the seasons subsequent to the assignment, and assumes the burden of paying the contract price therefor.

Works, J. — This appeal is brought here on the judgment roll, which includes a bill of exceptions, from a judgment rendered in favor of plaintiff in an action for damages for breach of contract tried before the court without a jury.

In September, 1881, the plaintiff and one William C. Blackwood made the following contract of purchase and sale: —

“San Francisco, September 17, 1881.

“ Bought of W. C. Blackwood his crop of apricots at Haywards, for the seasons of 1882,1883,1884,1885, and 1886, not less than seventy-five tons and not exceeding two hundred tons per annum, at three cents per pound f. o. b„ Haywards. Cutting Packing Company,

“ By A. D. Cutter.”

“ San Francisco, September 17, 1881.

“Sold Cutting Packing Company my crop of apricots at Haywards, for the seasons of 1882, 1883,1884,1885, and 1886, not less than seventy-five tons and not exceeding two hundred tons per annum, at three cents per pound f. o. b. Haywards. Wat, C. Blackwood.”

Plaintiff assigned its interest in the contract to the defendant about March 15, 1882, but Blackwood refused to accept the defendant in place of plaintiff.

Blackwood, between July 10, and August 15, 1884, in performance of the contract upon his part, delivered to plaintiff, in different lots, 235,693 pounds of apricots, which the plaintiff, from time to time as they were delivered to it, tendered to the defendant, which refused to accept or pay for each or any lot so tendered.

Plaintiff, as each lot was refused, placed it on sale in open market, and realized from the whole, after the cost of freight and seller’s commissions were deducted, the net sum of $4,770.50. This sum was $2,300.29 less than the amount it was compelled to pay Blackwood.

The two papers, above set forth, were construed in Blackwood v. Cutting Packing Company, 76 Cal. 212, 9 [576]Am. St. Rep. 199, to be a contract of purchase and sale. It was a non-negotiable contract in character, but under section 1459 of the Civil Cod.e, it could be transferred by indorsement, the same as a negotiable instrument. “ Such indorsement,” the same section further provides, “shall transfer all the rights of the assignor under the instrument to the assignee, subject to all equities and defenses existing in favor of the maker at the time of the indorsement.”

Cutting Packing Co. v. Packers' Exchange

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