Kerber Straw Hat Corp. v. Lincoln , 239 A.D. 727 ( 1934 )


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  • O’Malley, J.

    Additional essential facts to those contained in the opinion of Mr. Justice Untermyer will be stated in the course of this opinion.

    Plaintiff’s motion for judgment on the pleadings was made upon the complaint, the answer and the reply. No counter-motion for the dismissal of the complaint was made.

    The answer denies in effect that the plaintiff is entitled to the refunds made or to be made and also the allegation that plaintiff has no adequate remedy at law. The first defense is to the effect that plaintiff has such remedy. The second defense is predicated upon an alleged custom or usage in the trade to the effect that an agreement that any change in rate in duty is for the account of the buyer has reference only to a change taldng place before the delivery of the merchandise and that the change in rate in the case involved was made subsequent to delivery. The third partial defense is to the effect that the defendants were required to pay fifty per cent of the amount of any refunds secured by them as attorneys’ fees. The reply admits this partial defense and makes claim to no more than fifty per cent of the refunds.

    The complete defenses alleged are insufficient. Plaintiff requires a decree in equity to obtain full relief. Only the defendants, the seller and importer, in the circumstances here disclosed could enforce the refunds, the plaintiff having had no relations with the government. (Hager v. Swayne, 149 U. S. 242; Solomon Tobacco Co. v. Cohen, 184 N. Y. 308, 314.) The plaintiff is entitled, therefore, to be placed in a position "where it may compel the defendants to proceed to collect if necessary. (Exton & Co. v. Home Fire & Marine Ins. Co., 249 N. Y. 258; Croker v. New York Trust Co., 245 id. 17, 20.) Only a court of equity may compel defendants to institute such proceedings.

    On the other hand, if defendants have collected in whole or part, plaintiff likewise properly resorts to equity. Under such circumstances the defendants have come into possession of funds of an unknown amount rightfully belonging to the plaintiff. It stands in the position of a fiduciary. The plaintiff is entitled to its more adequate remedy. (Fur & Wool Trading Co., Ltd., v. Fox, Inc., 245 N. Y. 215.)

    *729The defense of custom not only tends to contradict the plain and unambiguous terms of the contract but in addition seeks an interpretation of its language contrary to prior judicial construction of language of like import. (Solomon Tobacco Co. v. Cohen, supra.) In that case a purchaser’s right to refunds resulting from a change in rate of duty was not affected by reason of the fact that the change in rate which gave the right to the refunds did not take place until after the delivery and payment for the merchandise. Where the meaning of a term has been judicially determined its meaning when used in transactions had thereafter must be taken to be that of the judicial interpretation, and testimony tending to show a different meaning is incompetent. (Slocovich v. Orient Mutual Ins. Co., 108 N. Y. 56; Home Ins. Co. v. Continental Ins. Co., 180 id. 389, 396, 397; 17 C. J. 512.)

    These defenses being insufficient and the plaintiff having consented to accept fifty per cent of the amount of the refunds, it was entitled to judgment, unless, as is now suggested, the complaint itself is insufficient.

    Referring now to the language of the contract, it is to be observed that the purchase price was predicated upon the defendants’ paying present rate duty on present valuation at port of shipmeno.” The contract further provided that any change in such rate or advance or decline in value necessitating a change in the amount of duty was for the account ” of the plaintiff. No reference was made to “ legal ” rate. It was the “ present rate ” which was in the contemplation of the parties. The purchase price was to be increased to the extent' of whatever rate of duty defendants were required to pay in the first instance. The fact that the rate charged in the first instance was higher than that ultimately fixed upon a reclassification of the merchandise in question did not deprive the plaintiff of the benefit of its contract.

    Moreover, the defendants themselves, by their failure to urge the construction placed upon their contract by Mr. Justice Untermyer, have lent strong support to a contrary view.

    It follows, therefore, that the order should be affirmed, with twenty dollars costs and disbursements.

    Finch, P. J., and Martin, J., concur; Townley and Untermyer, JJ., dissent and vote to reverse and deny the motion.

Document Info

Citation Numbers: 239 A.D. 727

Judges: Malley, Untermyer

Filed Date: 1/19/1934

Precedential Status: Precedential

Modified Date: 1/12/2023