New York County NyArchives Court.....Almy, Frederick Vs. Michaelis Simonson 1889
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Source: Reports Of Cases - New York
Written: 1889

First Department, May Term, 1889.

FREDERICK ALMY and Others, Respondents, v. MICHAELIS SIMONSON and THEODORE 
WEISS, Appellants.

Auction sale — evidence of the value of the goods sold, — sale within a 
reasonable time.

The court will take judicial notice of the fact that a sale at auction, in the 
course of the mercantile affairs of a large city, is the most conformable to 
usage and the method best adapted to determine the market-price for which goods 
at the time can be sold.

In an action to recover the difference between the contract-price at which the 
defendants had agreed to purchase certain goods of the plaintiffs and the amount 
obtained therefor at auction, after a tender of the goods to the defendants, 
which was refused by them, and, after a notice that they would be so sold at 
auction, giving the time and place of such sale, and stating that the defendants 
would be held liable to the plaintiffs for the expenses of the sale and the 
deficiency arising thereon, the price received upon such auction sale is binding 
upon the defendants. (Brady, J., dissenting upon the ground that the sale was 
not made within a reasonable time)

The question whether the sale was made within a reasonable time is to be 
determined by the facts and circumstances of each particular case; and where the 
party making the sale acts in good faith, to the best of his judgment, without 
any unnecessary delay, the price obtained at the sale will be accepted by the 
court as the actual value of the goods thus sold. (Brady, J., doubting.)

Appeal by the defendants from a judgment, entered upon the verdict of a jury 
rendered at the New York Circuit in favor of the plaintiffs, which judgment was 
entered in the office of the clerk of the county of New York on the 31st day of 
May, 1888, and also from an order denying the defendants' motion to set aside 
the verdict of the jury and for a new trial, which was entered in the said 
clerk's office on the same day.

Samuel J. Crooks, for the appellants.

Freling H. Smith, for the respondents.

Daniels, J.:

The verdict was recovered for the difference between the amount obtained upon a 
sale at auction of cloakings, contracted to be sold by the plaintiffs to the 
defendants, and the price for which they were to be received. For a quantity of 
the cloakings it was held by the court that the plaintiffs were not entitled to 
recover, for the reason that the contract of sale for that quantity was within 
the statute of frauds. As to other quantities they were received and paid for by 
the defendants, but the residue, included within the contracts of sale, was 
refused, although they were offered and tendered to the defendants during the 
month of October, 1886. The bills it was agreed should be dated on the first of 
October of that year, although the contracts for the sales were previously made 
and entered into, and the indebtedness was finally to become due in sixty days 
from the 1st of October, 1886. After the goods, which were refused, were, in 
this manner, tendered to the defendants, about the middle of October, 1886, and 
on the second of the following month of December, the plaintiffs gave a written 
notice to the defendants that they would be sold at auction, at noon, on the 
seventh day of the month at No. 9 Greene street, in this city, at the store of 
Underhill & Scudder, and that the defendants would be held for the expenses and 
the deficiency. After this notice was served the goods were advertised in two 
public newspapers; and the sale took place, the defendants not being present, 
and giving it no attention. And at the trial it was held that the prices 
produced by this sale were to be accepted and acted upon by the jury as the 
amount, after deducting expenses, to be credited upon the purchase-price, and 
that the defendants were to be held liable for the residue. 

There is no question, neither was there any made at the trial, but that the sale 
was regularly made in good faith. But the court was asked to direct the jury 
that there was no evidence warranting the sale of the goods at public auction in 
the manner in which it was done and detailed in the evidence. This was declined, 
and the defendants excepted.

The court was also asked to direct the jury that they could not estimate the 
damages, if they came to the conclusion that the defendants were liable in any 
form, or arrive at a verdict, based upon the result of that sale. This was also 
declined, and the defendants excepted. That there was any irregularity whatever 
in the sale was not insisted upon, or suggested, by either of these requests. 
Neither was it suggested that the sale had not been made as expeditiously as, 
under the circumstances, the defendants had the right to expect it would take 
place. But what seems to have been intended, although it was most obscurely 
expressed, if, indeed, it was expressed at all, was that the sale of the goods 
at auction was not binding upon the defendants, and afforded no criterion by 
which the amount for which the verdict might be rendered could be gauged. It is 
true that it was held in Pollen v. Le Roy (30 N. Y., 549), that the sale should 
be made according to the usages of the trade. But it was not assumed or 
intimated that the ordinary usages of trade for the sale of merchandise would 
not justify a sale at auction. The defendants themselves intimated no objection 
to the right to sell in that manner, or to the justice of the sale itself, in 
the way of ascertaining the market-value of the goods.

And in Sands v. Taylor (5 Johns., 395), on the authority of which this latter 
case was substantially decided, the sale was made at auction, and it was held by 
the court to furnish the criterion by which the amount of the verdict might 
legally be regulated. In Fisher v. Lilly (2 Sup. Ct. [T. & C.], 672), the direct 
question was presented whether a sale of goods made at auction would bind the 
vendee as to the amount he should pay by way of damages for the non-performance 
of the contract of purchase, and it was decided that it would. And no authority 
appears to have arisen at variance with the correctness of this conclusion. The 
court may well take notice, as the fact is one generally known and accepted in 
trade, that a sale at auction in the course of the mercantile affairs of a large 
city will be the most conformable to usage, and the best adapted to determine 
the market-price for which the goods at the time could be sold. It is true that 
the sale to bind the vendee for the difference should be made within a 
reasonable time. And that was generally held to be the law in Smith v. Pettee 
(70 N. Y., 13), and it was so acted upon in Hoyden v. Demetz (53 id., 426.) But 
what shall be considered a reasonable time has never been certainly fixed by the 
authorities. That is to be judged and ascertained by circumstances; and where 
the party making the sale acts in good faith and to the best of his judgment, 
without any unnecessary delay, the price obtained at the sale will be accepted 
by the court as the value of the goods then sold. (Lewis v. Greider, 51 N. Y., 
251; Dustan v. McAndrew, 44 id., 72.) In the case of Sands v. Taylor a longer 
delay intervened than that between the tender of these, goods and the time when 
the auction actually took place. And in Lewis v. Greider (supra) the barley was 
sent from the interior of the State to the city of New York, and there sold 
after quite a long period of delay, and the sale was held to be binding and 
operative upon the defaulting vendee.

There was evidence upon the trial that the market for the goods had a downward 
tendency from about the fifteenth of November. But it was not proved that any 
substantial depreciation took place in their value between the middle of 
November, at which date the defendants were chargeable with no unreasonable 
delay, and the time when the sale was made. If there had been a substantial 
depreciation after the refusal of the defendants to receive and pay for the 
goods before the sale was made, that should have been definitely proved upon the 
trial, and upon that proof the defendants might then have raised the question 
whether the loss, in that manner accruing, should be borne by themselves or the 
plaintiffs. As the case was tried, no such question was raised. Neither were 
there any grounds upon which the position could be successfully taken. Beyond 
that, the plaintiffs appear to have acted on the supposition that they had no 
right to sell the goods on the responsibility of the defendants until the time 
for the payment of their purchase-price had expired. Whether this would have 
been a legal excuse for the delay before or after the middle of November, and up 
to the seventh of December, if the price had fallen in that time, was an 
objection not made at the trial nor presented by the requests to charge. If it 
had been, the point, as a question of fact, would, no doubt, have been submitted 
to the decision of the jury. As the case was disposed of, no injustice whatever 
has been done to the defendants. They failed to fulfill their agreement for the 
purchase of these goods, and refused to receive them, and became liable for 
whatever difference there was between the price they were to pay and the market-
price at the time when the goods were offered to them. Up to that time a 
depreciation had taken place. Whether it increased in any sensible degree, after 
that and before the sale, was not proven. By the sale the extent of the 
liability of the defendants was exhibited, and no more than that was secured to 
the plaintiffs through the verdict.

The judgment and order should be affirmed, with costs.

Van Brunt, P. J., concurred.

Brady, J. (dissenting):
It appears that on the 16th of June, 1886, and on July nineteenth of the same 
year, the plaintiff sold to the defendants certain pieces of merchandise at 
prices agreed upon, which were to be delivered as called for by the defendants, 
and to be paid for sixty days from October 1, 1886, less five per cent. It also 
appeared that the entire purchase of June sixteenth was delivered and paid for, 
excepting twenty-seven of one lot, and of the purchase of the nineteenth of 
July, all were delivered excepting seventy-two pieces, which the defendants 
declined to receive upon the ground that they were too late for their business. 
On the eighteenth of October the bills for the goods not delivered were inclosed 
in a letter from the plaintiffs, and were dated October 1, 1886, payable at 
sixty days, but were returned by the defendants to the plaintiffs on the same 
day, accompanied by this statement in writing: "We return these bills with 
thanks, but cannot accept them, goods coming too late now." On the second of 
December, the term of credit having expired, the plaintiffs wrote defendants 
that unless they paid the balance due they should, at a stated time and place, 
sell the goods at auction for their account. No payment having been made the 
goods were advertised and sold at auction December 7, 1886, of which the 
defendants had due notice, and the amount realized on such sale was credited on 
their account. The defendants admitted upon the trial that the purchases of June 
sixteenth, and a part of the alleged purchases on July nineteenth, were made, 
claiming, however, that the purchases of the sixteenth of June were conditional, 
namely, that they were bound to pay only for those pieces for which they sent. 
The issues created by these conflicting statements of the transactions were 
submitted to the jury, who found in favor of the plaintiffs for the difference 
between the prices of the pieces that were absolutely sold to the defendants and 
the amount realized at the auction sale thereof, with interest. The amount 
claimed by the plaintiffs was reduced, in consequence of the ruling of the 
court, as to thirty pieces of merchandise ordered upon July nineteenth, for 
which the plaintiffs could not recover as the purchase was within the statute of 
frauds.

It may be said, in limine, that upon the dispute as to the character of the 
contract, in relation to the goods, whether ordered conditionally or otherwise, 
the verdict of the jury is conclusive, there being no such preponderance of 
evidence in favor of the defendants' version as would justify the court in 
disturbing the verdict. The only question of import, therefore, presented for 
our consideration, arises upon an exception to the charge made by the learned 
judge below. It appears, from the evidence given on behalf of the plaintiffs by 
their salesman, resulting from his redirect-examination, that the market-price 
for the goods, which the defendants declined to accept, had fallen off in price 
in the month of October, and that it was difficult to effect sales at that time; 
and to a question asked by the court, namely, "What was the market-price?" 
answered, "In the vicinity of a dollar for what we call the 'browns,' and eighty-
five cents for the 'blacks.'"

The defendants, on the question of value, introduced evidence to show that the 
market-price of the goods in question began to decline about the fifteenth of 
November. That they were worth less in November than in October, and less in 
December than in November; that in October the market-price depended upon the 
demand, and that in that month there was always a demand for the goods, the 
season being in that month at its height; and the witness also, on that subject, 
stated that goods of that class, were more salable in October than in June or 
July. Whatever conflict this may create on the subject of the market-value in 
October, it appears, from the evidence of the salesman of the plaintiffs, that 
in October the goods had gone off in price, and although the defendants 
absolutely declined to accept the undelivered goods on the eighteenth of 
October, which were then tendered to them, the plaintiffs made no sale of them, 
and, so far as it appears, made no attempt to sell them until the seventh day of 
December at public auction, and this at a time when it would appear there was 
little or no demand for them.

Assuming these facts to be true, the delay of the plaintiffs in the exercise of 
their right to resell the merchandise was unjustifiable. Where that right is to 
be exercised it is incumbent upon the vendor to sell for the best price that can 
be obtained at the earliest practicable period. (Tilt v. The La Salle Silk Mfg. 
Co., 5 Daly, 27; Pollen v. Le Roy, 30 N. Y., 549.) And this rests upon the rule 
stated in Pallen v. Le Roy (30 N. Y., 556), that "the difference between the 
agreed price of an article and its market-value at the time of delivery is the 
actual damage sustained by a vendor upon the refusal by a vendee to accept the 
property sold, and the vendor may ascertain or liquidate this amount by a 
resale, taking all proper measures to secure as fair and favorable a sale as 
possible."

Notwithstanding these facts and this leading principle, the learned justice in 
the court below in charging the jury said to them: "This question about the 
value of the goods in October has nothing really to do with this case, except so 
far as to furnish a motive for the defendants in refusing to comply with this 
contract, if they made one, because the law gives a man the right when there is 
an absolute sale of goods, the law gives the vendor a right, upon tendering the 
goods if they are refused, to take them and sell them at auction, giving the 
parties notice of the time and place of sale, and upon such sale the vendee is 
liable for any deficiency, and that was the course adopted here. It was a 
perfectly legal and proper course for the plaintiffs to take if there was a 
contract, and the defendants become absolutely liable for the difference between 
the contract-price and the amount realized on the sale, to which an exception 
was duly taken."

It will be observed that the right to make the sale is unlimited in time by 
these observations, and that the value of the goods in October was disregarded, 
although twelve days of that month still remained after the refusal to accept 
the goods, and within which time they could have been sold at auction, and, 
when, according to the evidence, there was a demand for them and they were 
salable. And the effect ,also, of the charge was to assert the absolute legality 
of the sale at auction whi«h took place, and the absolute liability of the 
defendants for the difference between the contract-price and the amount realized 
on the sale.

In addition to this, it may be said that the authority to sell at auction, 
unless evidence be given of such a custom, or of some unavailing effort to sell 
them at private sale and in the usual course of business, is not free from 
doubt. (See Pollen v. Le Roy, supra, 556, 557.) And, further, that the 
proposition declaring the defendants, as to value, absolutely bound by such a 
sale, unless there be no other evidence of value, is also questionable as a 
legal proposition.

The result of this consideration of this element of the case is, that the 
charge, under the facts and circumstances, was erroneous.

The judgment must, therefore, be reversed and a new trial ordered, with costs to 
appellants to abide event.

Judgment and order affirmed, with costs.

Additional Comments:
Reports of Cases Heard and Determined in the Supreme Court of the State of New 
York. Marcus T. Hun, Reporter. Volume LIX, 1889, HUN 52. Banks & Company, 
Albany, NY. 1901.

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