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Supreme Court, December, 1921.

[Vol. 117 1921 and 1922 seasons. The receiver's commissions on the delivery of a valuable live animal are not limited or to be computed upon the cash collected by him; $5,000 upon a $200,000 or $250,000 live animal is just, proper and reasonable. Matter of Smith Co., 31 App. Div. 39, 40-43; Moe v. McNally Co., 138 id. 480, 487. How are such commissions to be paid or allowed? In several states the rule is that the costs of a receivership incurred by the assertion of a wrongful claim which is determined or found to be wrongful may be taxed against whichever party asserted such wrongful claim instead of being taken from the receivership funds. Radford v. Folsom, 55 Iowa, 276, 287; Highley v. Deane, 168 Ill. 266, 271, 272; Link Belt Machinery Co. v. Hughes, 195 Ill. 413, 418; City of St. Louis v. St. Louis Gas Light Co., 87 Mo. 223; Cutter v. Pollock, 7 N. Dak. 631, 632-635, cited with approval in Atlantic Trust Co. v. Chapman, 208 U. S. 360, 374; Espuela Land & Cattle Co., Limited, v. Bindle, 11 Tex. Civ. App. 262-264. By the affirmance of the mandatory injunction and its execution the plaintiff has been adjudged the winner and has prevailed, with the right to keep the horse during the seasons of 1921 and 1922. He is, therefore, entitled to be reimbursed for the taxable expenses caused by defendant's unwarranted acts. The cases holding that where a receiver was illegally appointed and his appointment was vacated the party procuring his appointment must pay him (Weston v. Watts, 45 Hun, 219, 220-222; Pittsfield Nat. Bank v. Bayne, 140 N. Y. 321, 329-331) have no application to the case at bar, where the appointment of receiver was the object of the action, and as such has been sustained on appeal. Receiver's fees fixed at $5,000; those of his counsel at $500; to be paid by defendant.

Ordered accordingly.

Mise.]

Supreme Court, December, 1921.

WARNER, BARNES & COMPANY, LTD., Plaintiff, v. WarNER SUGAR REFINING COMPANY and ORIENTE SECURITIES COMPANY, Defendants.

(Supreme Court, New York Special Term, December, 1921.)

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Sales - contracts c. i. f."- construction of — reformation of contract for sale of sugar shipped by steamer- demurrer equity — “ landed weights" diminished by loss or damage due to risk of voyage.

66

at a customary safe
directed by buyer.
allowance.

In an action for the reformation of a contract in writing which provided for the sale of "about 2,000 tons Philippine Is. Dry Sugar, May, June, July shipment by str. or steamers for New York, landed weights, tare 2 per cent., cost insurance and freight. Payment by buyers opening confirmed New York credit for approximate amount of invoice at 90 days sight, against which sellers to draw for not exceeding 90 per cent. of invoice amount; full shipping documents, including policy of insurance for invoice value plus 10 per cent. attached to draft. Payment for balance of invoice to be made in New York after completion of delivery and settlement of outturn weights and tests. Delivery to be tendered ex vessel wharf or refinery in port of New York as Damaged, if any, to be taken at a fair In event of total loss buyers to collect insurance and effect settlement with sellers for the full amount of invoice," the complaint alleged that the writing did not represent the real contract, but that the words "damaged, if any, to be taken at a fair allowance" were inserted through inadvertence and mutual mistake. It was further alleged that plaintiff presented full shipping documents covering the 2,000 tons of sugar and a policy of insurance with draft attached and had received payment in a certain sum. The full value of the sugar shipped, at the agreed price, including, however, the sugar lost in transit by the stranding of the vessel amounted to a larger sum than that received by plaintiff who asked judgment for the difference. Held, upon overruling a demurrer with leave to serve an answer, that if the contract was reformed as prayed for it would be susceptible of the reasonable construction that though the seller was required to deliver goods at a

Supreme Court, December, 1921.

[Vol. 117.

customary wharf in New York and the price could not be finally determined until the goods were landed, yet that the property in the goods and the risk of loss was intended to pass when the full shipping documents were presented, including an insurance policy.

In case the goods were totally lost then by the express terms of the contract the buyers were to pay the full amount of invoice, and if the goods were partially lost, as here, then it was fairly inferable that while payment was to be made according to "landed weights," the seller should not be deprived of the right to show that these "landed weights" were diminished by loss or damage due to the risk of the voyage.

ARGUMENT of demurrer to complaint in suit for reformation of contract.

Lord, Day & Lord (Allen Evarts Foster and Franklin Grady, of counsel), for plaintiff.

Henry A. Rubino, for defendants.

LEHMAN, J. It is alleged in the complaint herein that the plaintiff shipped 2,000 tons of sugar from the Philippine Islands to New York city in accordance with a contract between itself and these defendants, but the steamship on which the sugar was shipped stranded on one of the Hawaiian Islands and 840,191 pounds of said shipment of sugar was lost. The contract between the parties was in writing, and provides for the sale of "about 2,000 tons Philippine Is. Dry Sugar, May, June, July shipment by str. or steamers for New York, landed weights, tare 2 per cent., cost insurance and freight. Payment by buyers opening confirmed New York credit for approximate amount of invoice at 90 days sight, against which sellers to draw for not exceeding 90 per cent. of invoice amount; full shipping documents, including policy of insurance for invoice value plus 10 per cent. attached to draft. Payment for balance of invoice to

Misc.]

Supreme Court, December, 1921.

be made in New York after completion of delivery and settlement of outturn weights and tests.

ance.

Delivery to be tendered ex vessel at a customary safe wharf or refinery in port of New York as directed by buyer. Damaged, if any, to be taken at a fair allowIn event of total loss buyers to collect insurance and effect settlement with sellers for the full amount of invoice." It is further alleged in the complaint that the plaintiff presented full shipping documents covering said 2,000 tons of sugar shipped from the Philippine Islands, and a policy of insurance with draft attached, and has received payment in the sum of $628,740. The full value of the sugar shipped, at the agreed price, including, however, the sugar lost in transit by the stranding of the vessel, amounts to $648,187.38, and the plaintiff has brought this action for the difference.

The plaintiff claims that it was the intention of the parties that the risk of loss or damage during the voyage should rest upon the defendants, but under the written instrument as signed by the parties, it is evident that the risk of damage prior to the delivery of the sugar in New York would fall upon the plaintiff, for it is expressly provided in the contract that delivery is to be made "ex vessel" and that payment is to be made on " landed weights" and " damaged if any to be taken at a fair valuation." The complaint, however, alleges that the written instrument does not represent the real contract between the parties but that the words "damaged, if any, to be taken at a fair allowance" were inserted in the written instrument through inadvertence and by mutual mistake, and the plaintiff therefore asks for a reformation of the contract in this respect.

The defendants have demurred to the sufficiency of the complaint, urging that even if these words were

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Supreme Court, December, 1921.

[Vol. 117.

inserted by mutual mistake and should be eliminated, yet under the written agreement even in its amended form the risk of loss would still fall on the plaintiff, and the meaning of the contract at least in this respect would not be altered.

It seems to me that the demurrer must be sustained if the written contract when reformed would still as a matter of law unambiguously cast the risk of loss upon the plaintiff, but must be overruled if the written contract when amended would be ambiguous on this point, and the plaintiff has properly alleged that under the contract as amended the risk of loss was intended to fall upon the defendants.

The contract as pointed out above calls for payment of a price which includes cost insurance and freight, and such contracts, popularly described as "c. i. f." contracts, ordinarily require the seller merely to make shipment, and the property in the goods and risk of loss passes upon such shipment to the buyer, for the seller has done everything he is called upon to do under his contract. In the recent case of Willits & Patterson v. Abekobei & Co., Ltd., 197 App. Div. 528, the Appellate Division of this department has, however, pointed out that though usually under such contracts the risk of transportation rests upon the buyer, "if, however, there be anything in the contract which shows that such was not the intention of the parties, the contract will be construed according to their intention." In that case the contract provided for "net landed weight" "Price $15.00 per 100 lbs. c. i. f. San Francisco," and the court held that these terms showed an intent that "the weight at the point of landing, to wit, San Francisco, must accord with the requirements of the contract," and that the ordinary meaning of the expression c. i. f. must be deemed modified so as to make the contract

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