Wheeler v. New Brunswick C Railroad Company/Dissent Blatchford

by Samuel Blatchford

United States Supreme Court

115 U.S. 29

Wheeler  v.  New Brunswick C Railroad Company

BLATCHFORD, J., dissenting.

Justices FIELD, HARLAN, MATTHEWS, and myself are unable to concur in the judgment of the court in this case. When the directors of the railroad company came to consider, as a board, the transaction between Murchie and Wheeler & Co., they took it up, as their resolution states, as a sale by Murchie to Wheeler & Co., and confirmed it on behalf of the railroad company, as a sale of tons of 2,000 pounds. When Wheeler & Co. received Murchie's letter inclosing a copy of the resolution of the board, their letter of reply of February 28, 1880, states their understanding to be that the sale was not made subject to approval by the railroad company, and that the ton was 2,240 pounds, and that they look for the delivery of the rails in gross and not net tons. But the resolution of the board expressed the contrary view, as to the ton, and so the letter proceeds to say that Wheeler & Co. make no doubt that Murchie's understanding of the contract, as he had made it, is in accord with that of Wheeler & Co., and that, in so far as the resolution of the board fixed 2,000 pounds for each ton, it did so by an oversight on the part of the directors. This was a plain appeal to Murchie to bring his understanding of the contract to bear on the directors, to induce them to change their view and their statement of the contract in respect to the tons; and it was followed up by the closing words of the letter: 'We hope to hear from you at your earliest convenience.' The whole tenor of this letter was to throw the matter into the field of negotiation and arrangement, where the railroad company asked to have it put. That company plainly said to Wheeler & Co.: 'If you regard the ton in this contract as a gross ton, we do not; and if you do, we do not think there is any contract.' Wheeler & Co. replied: 'We do and we think such was Mr. Murchie's view at the time, and that your directors have committed an oversight in their resolution which 'fixes' the ton at 2,000 pounds; but, in view of all this, we ask to hear from you at your early convenience about it.' At that date old rails were $33.50 to $34 a ton of 2,240 pounds, without duty. The contract price was $30 and $28, without duty. The contract was a good one for Wheeler & Co., if they could then sell the rails, for future delivery, at the market rate of that date, and if the tons of the contract were 2,240 pounds. So it was important for them to know whether the railroad company would adhere to the view stated in the resolution or would recede from it; and they sought to learn. But they received no reply from Murchie or his company. They had a right to take the company at its word, and to act on its solemnly announced understanding of the contr ct. They did so, and refrained from turning the contract to any benefit by a resale of the rails. They were dealers in rails and bought only to resell. They did not buy to use otherwise. This the railroad company and Murchie knew.

Now, what is the finding of the circuit court? It is that Murchie in fact understood that the tons of the contract were 2,240 pounds, as did Wheeler & Co.; that the company, while not misunderstanding, intended to induce Wheeler & Co. to think it misunderstood, for the purpose of having Wheeler & Co. agree that the tons should be 2,000 pounds; that this conduct was 'disingenuous;' and that the natural effect of a failure to reply to Wheeler & Co.'s letter was to create 'great uncertainty' on the part of Wheeler & Co., and to cause 'annoyance and pecuniary loss' to them. On these facts, it is held that when the market price of the rails has fallen to one-half of the contract price, the company can insist on compelling Wheeler & Co. to take the rails at the contract price, because the company then chooses to turn around and say: 'The ton was and is 2,240 pounds. We were wrong all the time, and you were right; and we now reply to your letter, by saying that we did committan 'oversight' in our resolution, as you suggested.'

We can sanction no such view of the rights of the parties to a commercial transaction. The company made statements, in its resolution and letter, which the circuit court finds were not true, as to its understanding regarding the ton; and which that court finds it knew were not true; and which that court finds it intended should be regarded by Wheeler & Co. as honestly made; and which it is clear it intended Wheeler & Co. should act upon; and which they did act upon, to their injury. The actual ground of recovery by the company in this case is based on proof of the untruth of the assertions made by the company, followed by the proposition the Wheeler & Co. had no right to believe and rely on those assertions. Every element exists to estop the company from denying the truth of those assertions, and from insisting that Wheeler & Co. should not have relied on them. There is not a suggestion impeaching the good faith and fair dealing of Wheeler & Co. They were not guilty of any deceit or misrepresentation; they held out no false lights; they did not attempt to procure an advantage by an untrue statement of their understanding of the contract; they did not mislead the other party to his injury. Their letter to Murchie of February 28th, was a model of mercantile candor and fair dealing. It demanded a reply. The absence of a reply was no ground for supposing that the company had abandoned the position it took in the resolution, for Wheeler & Co. did not then know, what they learned afterwards, that the resolution was a sham and a false pretense.

The conclusion seems to us to follow inevitably, under the findings of the circuit court, that the company had lost its right to recover on the contract; and we therefore dissent from the judgment of affirmance.