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Eliscu v. Fiber.

decided: August 21, 1946.


Before BIGGS, McLAUGHLIN, and O'CONNELL, Circuit Judges.

McLAUGHLIN, Circuit Judge.

This is a contract action based on diversity of citizenship. Plaintiffs are New York wholesalers of various merchandise including fastening devices for women's garments. Defendant, a resident of and in business in New Jersey, controlled the production of a particular type of such device. On January 20 or 21, 1943, these parties entered into a written contract providing that Eliscu purchase from Fiber, in the period of three months starting February 1, 1943, not less than 100,000 yards of certain button placket tapes with approximately 8,000 yards to be delivered each week. An option to Eliscu was set out as follows:

"7. Upon condition that Eliscu faithfully and promptly performs its obligations during the aforesaid period of three months or until the exercise of the option hereinafter mentioned, Eliscu will have the option for a period of three months from the date hereof to do and have the following:

"a. For a period of nine months after the expiration of the three months period above mentioned the exclusive right to purchase Fiber's production of these plackets, without buttons, for sale and distribution within the territorial limits of the United States, reserving to Fiber the right, however, to sell the eylet tapes (the tape containing the button-holes) to others, on condition that Eliscu will purchase and accept delivery of a minimum of 80,000 yards of the Fiber product each calendar month at 14 cents per yard, and pay promptly for the same net 10 days E.O.M., not less than 1,000 yards to a color, credit subject to approval by a New York City commercial factor.

"c. If Eliscu desire to exercise this option they will so advise Fiber by registered mail addressed to her at 640 Broadway, Paterson, New Jersey, not later than April 20, 1943."

On March 27, 1943, Fiber had delivered to Eliscu only about half the contract quantity of plackets which should have been furnished by that time. On that date plaintiffs sent a registered letter to the defendants which is the crux of this litigation. It reads in part:

"In accordance with the terms and conditions provided in a certain agreement entered into between us in writing, dated January 21, 1943, which terms and conditions we have fully and faithfully performed on our part, we hereby serve notice that we are exercising the Option contained in Paragraph 7, a-b and c of said agreement said Option to take effect the 1st day of April, 1943, as follows:

"a. We hereby agree to purchase a minimum quantity of 80,000 yards of the Fiber product, not less than 1000 yards to a color, each calendar month for a period of nine months from the date said Option goes into effect, and to pay for same at the rate of 14› per yard, net, 10 days E.O.M."

On April 2, 1943, there was a conference at the office of defendant's then attorney, between Samuel Eliscu, the defendant's husband and her attorney. Eliscu complained about the irregularity of defendant's deliveries. The defendant through her husband demanded a higher price. Defendant's attorney on cross examination as to what changes in the contract were discussed at that meeting and mentioning that price was one of them, explained what he meant by this as "The price at which the goods were to be sold to Mr. Eliscu during the nine-months period." After the April second talk the defendant made additional manufacturing arrangements which "gave us more production, and then I would have been able to take care of the 80,000 yards per month. I had made all preparations to do that." On April 20, 1943, plaintiffs wrote defendant another letter which reads:

"Will you please advise by return of mail when we are to expect delivery of our orders February 17th, March 1st, 6th and 25th which, according, to our contract, were supposed to be delivered at the rate of 8,000 yards per week. To-date, we have received a total of 39,780 yards, whereas according to our contract we should have received 72,000 yards.

"Under Paragraph 7 of our contract of the 21st of January, we elected to exercise our option, which we performed by sending you our letter dated March 27, 1943. Under said option, you are required to cease selling the Fiber button placket without buttons to anyone but Eliscu & Co., and you are further required to turn over your entire stock to us and bill and deliver all of Fiber button plackets manufactured after the above mentioned date."

Defendant replied on this on April 21, 1943 claiming that it had been mutually agreed at the April second conference to cancel the contract. Plaintiffs answered April 24, 1943, insisting on performance of the agreement.

Plaintiffs thereafter sued the defendant alleging exercise of the option. Defendant denied this in her answer. The matter was tried without a jury on September 26 and 27, 1945. Plaintiffs' opening claimed exercise of the option by their letter of March 27, 1943. Defendant's opening especially emphasized that the option had not been properly exercised first because the letter of March 27th stated that it was to take effect April 1st and second because plaintiffs had insisted on the additional condition of a performance bond. No testimony was offered on behalf of the plaintiffs to explain the language in their March 27th letter, reading "* * * said Option to take effect the 1st day of April 1943." At the end of the whole case, the Court granted the defense motion to dismiss plaintiff's claim on the ground that the option had not been properly exercised.

Under the facts that question is one of New York law. Dacosta v. Davis, 24 N.J.L. 319, 328; Roubicek v. Haddad, 67 N.J.L. 522, 524, 51 A. 938.The Uniform Judicial Notice of Foreign Law Act, N.J.S.A. 2:98-28 et seq., makes that law judicially noticeable. And see Franzen ...

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