Supreme Court of Canada
Chandler & Massey v. Kny-Scheerer Co., (1905) 36 S.C.R. 130
Date: 1905-05-02
Chandler and Massey, Limited (Defendants) Appellants;
and
The Kny-Scheerer Company (Plaintiffs) Respondents.
1905: April 5, 6; 1905: May 2.
Present: Sedgewick, Girouard, Davies, Nesbitt and Idington JJ.
ON APPEAL FROM THE COURT OF APPEAL FOR ONTARIO.
Contract—Sale of goods—Lowest wholesale prices—Special discount.
By contract in writing whereby The C. & M. Co. agreed, for three years from the date thereof, to purchase for their business surgical instruments manufactured by The K.S. Co. only, the latter contracted to supply their products at “lowest wholesale prices” and for all goods furnished from New York to allow a special discount of 5 per cent from the prices marked in a catalogue handed over with the contract.
Held, that under this agreement The K.S. Co. could allow to purchasers of their goods in large quantities a greater discount from the wholesale prices than 5 per cent without being obliged to give the same reduction to the C. & M. Co.
APPEAL from a decision of the Court of Appeal for Ontario affirming the judgment at the trial in favour of the plaintiff
The material facts are stated in the above head-note and in the written opinions of the judges on this appeal.
R.F. Smith K.C. and Blackstock K.C. (Riddell K.C. with them) for the appellants, referred to Lindley v. Lacey; Wilson v. Windsor Foundry Co; Dunsmuir v. Lowenberg, Harris & Co.; Bank of England v. Vagliano.
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Shepley K.C. and Middleton for the respondents cited Ewart on Estoppel pp. 68-70; Jorden v. Money; Chadwick v. Manning.
SEDGEWICK J.—I am of opinion that the appeal should be dismissed.
GIROUARD J.—I concur with hesitation.
DAVIES J.—After a careful study of the evidence given by the respective parties and their witnesses and the judgments of the courts below I am of opinion that this appeal should be dismissed with the usual results.
I agree with the several findings of the trial judge as to the effect of the verbal conversations between the parties which preceded the preparation and entering into of the agreement of January and of the subsequent correspondence of February.
The written agreement entered info by the parties after prolonged interviews and consultations and from notes or memoranda prepared by the plaintiffs themselves contained no stipulation as to the establishment by the plaintiffs in Canada of a Canadian wholesale stock, and the conversations between the parties coupled with the written correspondence afterwards entirely failed in my opinion to establish any such collateral agreement. There were, no doubt, repeated statements on the part of the plaintiffs that it was their intention, part of their business policy, to establish such a branch, but there was no contract on their part binding them to do so. The plaintiffs, I think it is established, fully intended to do so as part of their business policy and the defendants assumed that they would and acted on the assumption. But it
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was quite open to the plaintiffs on the agreements made between the parties to change their minds and their policy as regards the establishment of this Canadian stock as subsequent changes of circumstances seemed to make it desirable for them to do so, without being liable to the defendants for any damages.
I do not think it necessary to go into the facts in detail as they are recited at length by the Chief Justice who tried the case and fully summarized in the judgment of the Court of Appeal. With these judgments on this branch of the case I fully concur. See the cases of Jorden v. Money; Rhodes v. Forwood; The Queen v. Demiers; Chadwick v. Manning; Ewart on Estoppel, pp. 689.
This conclusion practically disposes of the appeal, but there were some minor questions relating to the delivery of the catalogues and to the correctness of the prices at which the goods were charged defendants which were argued at some length.
On the question of the delivery of the catalogues I never entertained any doubt as to the conclusion of the Court of Appeal being the proper one.
On the other question respecting the wholesale prices charged defendants I have had considerable doubt. The contract provided for the sale by the plaintiffs to the defendants of their products “at lowest wholesale prices.” The clause reads as follows:
The Kny-Scheerer Company will supply Chandler & Massey, Limited, their products at lowest wholesale prices.
For all goods to be furnished from New York a special discount of five per cent will be allowed as a special inducement from the prices marked in the confidential wholesale catalogue which is handed to them with this contract. For all goods to be furnished from Montreal, either from Canadian stock or upon direct shipment from European factory, new
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prices will be made as soon as possible on the entire line and be subjected to the same discount.
It is not contended by the defendants that they were charged higher prices than those mentioned in the catalogue for the goods purchased in New York, or that the new prices charged for the goods obtained by defendants from the Canadian stock of plaintiffs were higher than the lowest wholesale prices charged other customers of plaintiffs. The discount to be allowed off the prices mentioned in the catalogue as also off those “new prices to be made” on Canadian stock was fixed at five per cent and the defendants’ contention, as I understand it, is that inasmuch as the evidence shewed the plaintiffs had allowed to a few of their customers who purchased their goods in very large quantities a greater discount than five per cent off the wholesale prices they, the defendants, were entitled to the increased or greater discount under the terms of their agreement.
The plaintiffs on the other hand submitted, and the trial judge and Court of Appeal upheld the submission, that while the true construction of the agreement entitled the defendants to the goods purchased by them at the lowest wholesale prices it did not entitle them to any higher discount than the five per cent expressly stipulated for and that nothing in the agreement prohibited the plaintiffs from allowing to other purchasers of their goods, not of the same class as defendants but buyers of very much larger quantities of goods, a greater discount than the stipulated discount provided for defendants without allowing them to share in such increased discount. In other words, so long as it was not a mere cloak or device for covering up a sale of goods at lower wholesale prices than those charged defendants, but was a bonâ fide discount allowed in consideration of the quantity of goods pur-
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chased, the plaintiffs could allow the additional discount beyond the five per cent without being compelled to concede same to defendants.
I fully agree with the courts below that the prices and discounts charged and allowed by plaintiffs in their dealings with their branch firms cannot be considered in determining the meaning of the clause.
The Court of Appeal seem to have considered that the parties themselves had by their actions and conduct put a construction on the agreement adverse to that now contended for by defendants and that in view of the dealings between the parties extending over a period of twenty months, and the numerous disputes and adjustments of the charges in the invoices rendered during that time from plaintiffs to defendants, it was now too late for the latter to attempt to open up these prices thus adjusted, fixed and settled by the parties.
While entertaining doubts as to the proper construction of the clause I do not feel that I would be justified under the facts in reversing the conclusions of the courts below, which I cannot say are clearly erroneous.
The appeal should be dismissed.
NESBITT J.—Had it not been that no useful purpose is attained by dissenting, I should have held that, in my view, the contract was based upon the agreement that an export stock should be established and maintained in Montreal and afterwards in Toronto. I do not think it was intention; I think it was bargain and I view the case as just one more instance of a party suffering for the general good by the enforcement of the salutary rule that business men should be careful to have their understandings in writing. Jorden v. Money is relied upon by the respondent as shewing that no matter how strongly one represents he intends
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to do so or so and induces another to act to his prejudice, he can, in breach of all principles governing men of common honesty, abandon his intentions. Such is the law, apparently, but I would unhesitatingly say, here, it was not intention but bargain. However, as the majority are for affirming I concur, as I assume I must be in error in my view.
Idington J. concurred in the dismissal of the appeal.
Appeal dismissed with costs.
Solicitors for the appellants: Beatty, Blackstock, Fasken, Riddell & Mabee.
Solicitors for the respondents: Macdonald, Shepley, Middleton & Donald.
5 H.L. Cas. 185 at p. 210.
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