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Reading Pipe

On Saturday afternoon, M le Neveu and his Dartmouth chum, E**, stopped by to join me for a pot of Earl Grey. E**, who just started his second year of law school at Michigan, had come to town for an interview. He was spending his Saturday hopping around Manhattan, and I was flattered to be squeezed in. The visit lasted not quite an hour.

The conversation stuck pretty much to law school. I asked E** what his favorite course was, and he named Property Law, I got him to state the Rule Against Perpetuities to my nephew, whereupon we both piqued the latter's interest by assuring him that the Rule would make no sense to him and that he shouldn't even try to understand it. So much waving of red capes in front of bulls.

I asked E** if he had read "the Reading pipe case." He remembered it instantly, and together we related it to M le Neveu. This case, which is formally styled Jacob & Youngs v Kent (230 NY 239; 129 NE 889; 23 ALR 1429), appears early on in Contracts, another first-year course, in connection with the equitable remedy of specific performance. In 1914, an evidently wealthy man paid $77,000 for the construction of a country place. The contract required the contractor to use pipe manufactured by the Reading Manufacturinig Company. When the house was completed - with most of the pipe buried in the walls - it was discovered that all sorts of pipe had been used. The pipe was of uniform quality, "as good as" Reading pipe. But the buyer refused to pay the final few thousand dollars when the architect refused to issue a certificate of completion. The contractor sued. At trial, evidence of the uniformity of the nonconforming pipe was suppressed. The buyer-defendant won his counterclaim, which sought specific performance of the contract. Somehow, the contractor would have to rip out a lot of work and replace all the piping in the house. Not being an idiot, he appealed the judgment first.

Eventually, the case came to the New York Court of Appeals, New York State's highest court (just as our Supreme Court is the lowest, or trial-level court.), which was then graced by the genius of Benjamin Cardozo. By the time that I read his opinion in Jacob & Youngs, I was a connoisseur of Cardozo's prose style, even though we weren't very far into the semester. It was a style at once clear and literary. It illuminated the ideas upon which it rested as much as it argued them. Jacob & Youngs was decided in January of 1921. The issue, as issues on appeal usually are, was very narrow: should there be a new trial, at which evidence of the uniformity of the pipe might be admitted? Cardozo thought that there ought to be a new trial. If the pipe was all of the same quality, then let a jury of reasonable people decide whether or not the contractor must rebuild the house. In other words, submit the facts to the doctrine of substantial performance.

Those who think more of symmetry and logic in the development of legal rules than of practical adaptation to the attainment of a just result will be troubled by a classification where the lines of division are so wavering and blurred. Something, doubtless, may be said on the score of consistency and certainty in favor of a stricter standard. The courts have balanced such considerations against those of equity and fairness, and found the latter to be the weightier. The decisions in this state commit us to the liberal view, which is making its way, nowadays, in jurisdictions slow to welcome it (Dakin & Co. v. Lee, 1916, 1 K. B. 566, 579). Where the line is to be drawn between the important and the trivial cannot be settled by a formula. "In the nature of the case precise boundaries are impossible" (2 Williston on Contracts, sec. 841). The same omission may take on one aspect or another according to its setting. Substitution of equivalents may not have the same significance in fields of art on the one side and in those of mere utility on the other.

A dissenting judge by the name of McLaughlin wrote an impassioned dissent, based upon the "illiberal" view that Cardozo's opinion would replace. M le Neveu, when it was explained to him. agreed with the dissent. Many law students do the same. Tear the house down! If the contract stipulated Reading pipe, give the man Reading pipe! As the three of us talked about Jacobs & Young, I saw that its importance lies beyond the fact that it provides an instance of specific performance sought but withheld. The case matters - and figures early in the education of most attorneys - because it embodies a core principle of modern American jurisprudence. Obsessions, fanaticisms, and whims are not to be encouraged by the courts. If the owner of the new palazzo couldn't sleep at night because some of the pipes in his house were stamped "Cohoes" instead of "Reading," then, in the absence of any more substantial disappointment, that was his problem. Our system of justice will not going to require senseless destruction just to gratify an insignificant quibble. Everything about Cardozo's judgment steers away from the hard-and-fast implementation of rules and the unthinking imposition of rules, and toward the willingness, liberal indeed, to consider each case in context. In the facts at hand, Cardozo found a perfect opportunity for breaking with ironbound tradition, and he evidently persuaded a majority of his colleagues on the bench to make the break with him.

When I was in law school, I certainly never thought that the Supreme Court of the future would house the reactionary mentalities of Antonin Scalia and Clarence Thomas.

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Comments

I agree with M. that the place should be torn down. The contractor lied. And I remember what Cosmo says in "Moonstruck":

"There are three kinds of pipe. There's aluminum, which is garbage. There's bronze, which is pretty good, unless something goes wrong. And something always goes wrong. Then, there's copper, which is the only pipe I use. It costs money. It costs money because it saves money."

Give the man the pipe he asked for, was agreed to, and paid for!!!! I cannot sell Bond "A" and then go back and tell the client, oops, Bond "B" is different but just as good. That dog don't hunt in bonds.

But then I'm just a humble (!) bond trader and not a lawyer.

Bond traders in my experience have a number of good qualities not the least of which is the ability to make a substantial amount of money in an area fraught with complexity, but humility is not a quality I've seen in bond traders, perhaps my experience is limited. Pipe is a commodity item, if the pipe is substantially the same as requested, same material, same size, same technical specs as to performance and a sample can be shown to meet spec then it would seem that the decision of letting the issue be decided on the doctrine of substantial performance is sound and equitable. If, PPOQ, you and I have a close relationship as broker/trader and client and we have discussed the purchase of a particular bond and agreed that you should buy it for me when the time is right and the issue has closed, but you see a very similar issue with equally good prospects in your opinion, then what do you do? Hesitate, require specific performance, wait and call for my approval and in the meantime the opportunity passes, or use your best judgment and buy for me? It would seem that the owner had some responsibility to inspect the work for compliance as it went along, if his concern was specific performance as to materials. And, as is often the case, perhaps completion dates were an issue as well so that comparable materials could be provided on time where the requested material could not. Like you I am not an attorney, just a humble building materials salesman and former contractor. Perhaps we should both read the case and the commentary in a text RJ could recommend to us, eh?

People view money entirely differently than they do any other commodity. People are often perfectly willing to pay retail for, say, a tie for a beloved at Christmas, or for a Jaguar.

But money is entirely a different matter. We in the business are held to another standard. If I could not get, say a NYC bond in the new issue, unless I had signed discretionary papers could I substitute another bond without talking to the client. I once had to change two dozen confirmations over a trifling $50 because the salesman had been sloppy with the client and not matched the trades to the THIRD decimal point. I offered the client lunch at the restauranr of her choice to no avail!!

No, I am from the school if you tell me it is X then I expect X unless you call me up, say I can't get you X but Y is of the same quality. To ASSUME I would be satisfied is WRONG.

I do understand the practical nature of the law. In practice, however, if you tell someone they're getting a Whirlpool but then a GE is delivered, how happy are they going to be? People dislike being told one thing only to have another occur. It reminds me we were promised a compassionate conservative and instead we got a bumbling, uninterested buffoon who lies.

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