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CAYUGA CONSTR. CORP. v. VANCO ENGG. CO.

November 10, 1976

CAYUGA CONSTRUCTION CORPORATION, CAYCON CONSTRUCTION CO., INC., ATLAS MACHINE & IRON WORKS, INC., a joint venture, Plaintiffs
v.
VANCO ENGINEERING COMPANY, a corporation, Defendant



The opinion of the court was delivered by: SNYDER

 I. BACKGROUND

 The Plaintiff, a joint venture of Cayuga Construction Corporation, Caycon Construction Co., Inc., and Atlas Machine & Iron Works, Inc. [hereinafter Cayuga], used this Vanco proposal in their successful bid on the Baltimore highway project.

 Vanco was a material supplier of steel and related metal products for the building industry and had close ties with Granco Steel Products Company (Granco), which was a unit of National Steel Corporation with offices in Houston, Texas, and fabricating facilities in Delanco, New Jersey, near Philadelphia. Vanco's proposal was based on a bid from Granco, subject to Vanco's acceptance within 30 days from April 19th, so that in this instance Vanco would have purchased the forms from Granco and resold them to Cayuga.

 On April 29, 1974, the President of Caycon called Granco's District Office in New York, and David L. Mekeel III, General Sales Manager of Vanco, returned the call to answer an inquiry as to what the escalation figure would be on the Vanco proposal for delivery after June 30, 1975. It is noted that this telephone call was made five days after the City of Baltimore bid closing date of April 24, 1974. Mekeel gave a quotation of "5% per quarter or every 3 months after June 30, 1975 delivery". On May 9, 1974, Mr. Patchett of Cayuga inquired of Mekeel if the 30 day acceptance time was firm and Mekeel told him that it was. Patchett also inquired about some technical matters as to whether the bid included shop drawings and where the materials were to be fabricated. Patchett further inquired if Vanco could store the materials at their shop to avoid paying the escalation and Mekeel advised that they could not. On May 10th, Donald Unbekant, General Manager of Cayuga, called and repeated some of the same questions and asked Mekeel for the names of erectors. On May 15, 1974, Unbekant telephoned Mekeel "that he had decided to accept" the Vanco proposal and that a letter of intent would be coming. Mekeel insisted it must be received by May 19th. Vanco then telegraphed acceptance of the Granco proposal on May 15th but shortly thereafter, on the same date, was notified by Granco that it could not deliver the steel at the proposed price. Vanco did nothing to notify Cayuga of Granco's notice at that time.

 Four days later, on May 21st, Mekeel called Cayuga and informed them that he couldn't do the job for the price quoted. On May 24, 1974, Unbekant, for Cayuga, again wrote Vanco of the acceptance of the original offer (Addendum II), acknowledged receipt of the telephone call of May 21st that Vanco would not honor the original bid and notified Vanco that they would be held responsible for any loss, cost, expense or damage flowing from their failure to honor the contract. About three or four weeks later, another telephone conversation was had between Unbekant and Mekeel at which time Mekeel asked for an additional 15% increase in price, and additionally any escalation in price in effect at the time of shipment.

 It is the Defendant's position that the Plaintiffs failed to accept their bid within the time specified, that Plaintiffs' purported acceptance was conditional and thus ineffective, and that the Plaintiffs have failed to prove their damages.

 II. THE PROPOSAL AND ACCEPTANCE

 The Plaintiff contends that it sent to the Defendant a written acceptance, mailed May 17, 1974, in full compliance with the requirements of the proposal.

 Under the general rule that the place of contract is the place where the last act necessary to the completion of the contract was done, the New York Plaintiff's letter accepting the foreign Defendant's offer, which is effective upon its dispatch in New York, makes New York the place of contract. Product Promotions, Inc. v. Cousteau, 495 F.2d 483 (5th Cir. 1974); Berkshire Engineering Corp. v. Scott-Paine, 29 Misc.2d 1010, 217 N.Y.Supp.2d 919(1961); § 97 Williston on Contracts, 3d ed. Vol. 1, p.358. Thus, in the instant case as counsel agreed, we will determine the effect of the written acceptance under New York law.

 The offer required written acceptance by the buyer within 30 days. Where an offer does not specify the manner in which the offeree must communicate its acceptance, mailing of the notice of acceptance completes the contract. United States v. Sabin Metal Corporation, 151 F. Supp. 683 (1957), aff'd 253 F.2d 956 (2d Cir. 1958). Cf. Krawez v. Stans, 306 F. Supp. 1230 (E.D.N.Y. 1969).

 The evidence is clear that an acceptance was in fact mailed to, and received by Vanco. Vanco produced the envelope attached to the May 17th letter, which is postmarked May 21, 1974, two days after the offer had expired. *fn1" But Unbekant testified (Tr. pp. 75, 79-80):

 
"A Well, this [the letter of May 17th] is the writtin [sic] acceptance of his offer.
 
Q And what date was it sent from your offices?
 
A May 17.
 
Q And to who [sic] was it directed?
 
A Mr. David Mekeel of Vanco Engineering Company."
 
* * *
 
"Q . . . Now, we are up to the point where you had spoken with Mr. Mekeel on May 15 and told him you were accepting it, but he told you he needed a written acceptance, is that correct?
 
A Yes, sir.
 
Q And thereafter you sent Plaintiffs' Exhibit 9 to Mr. Mekeel, which you mailed from your office, you said, on May 17, is that correct?
 
A Yes, sir."

 No further testimony was offered on the mailing.

 In the case of William Gardam & Son v. Batterson, 91 N.E. 371, 198 N.Y. 175 (1910), the New York Court stated the rule as follows:

 
"There was no proof of an actual deposit of the originals in the post office, and there was no sufficient proof of a course of office practice or of business, from which a presumption might be legally indulged, that the letters had been carried to the post office and that they, therefore, had been received in due course of the mails . . ."
 
* * *
 
". . . where the question is whether a letter was sent by mail at a certain time, in the absence of any evidence as to its being deposited with the post office authorities, . . . the proof shall establish the existence of a course of business or of office practice, according to which it naturally would have been done."

 And in Uni-Serv Corp. v. Frede, 271 N.Y.Supp.2d 478, 50 Misc.2d 823 (1966), the Court stated:

 
"The defendant could not possibly have knowledge of the claimed mailing . . . . The facts as to the claimed mailing are peculiarly within the plaintiff's knowledge, and the proof as to whether plaintiff mailed the card -- even if assumed [contrary to fact] undenied -- would present a fact issue for [the Court's] determination."

 In this case, it cannot be argued that the evidence established was sufficient for the Plaintiff to obtain the benefit of the mailing rule to show acceptance within the time required. Since the burden on this issue fell to the Plaintiff and this Court finds against him on that point as ...


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