"We have on hand several carloads of your material, and our use for it at the present time is very limited, for the reason that it has not given satisfaction. The concerns to whom we expected to supply it largely have turned it down. We are still working on them, but, so far, without satisfactory results. We are using a small amount, but, at the present rate, it will take us several months to use up one-half the amount we have. Mr. Hall told the writer that you recently said that you were glad that we had no orders at the present time as you were far behind on your orders, and were able to dispose of your entire product at better prices and that you were far behind even at that. Therefore, it occurred to me that you might be very willing to take back, say, two carloads of the stock and which we would like to get rid of, or else, leave it here on consignment until we can dispose of it. It certainly does not give the satisfaction represented. We would like to use it, and it would help us very much if we could, as we are short of casein, but we have had so many complaints we do not dare to take the chances."

Also another by its President, W. A. Hall, viz:

"Replying to your favor of December 29th. We will not care for any shipments during the month of January, as we have a number of carloads of your material on hand now, and do not know what disposition to make of it. Sorry that we have met with such poor success. As soon as I return to New York I want to take up the question of the special customer with you, and see if we can bring any trade from that direction. Although we are very short of casein, we are using only a few hundred pounds a week of your material, as we have had trouble wherever we have put it out. We are working, however, to overcome the difficulties and try to get it into better shape for the purpose."

January 2, 1904, the plaintiff made reply as follows:

"New York, N. Y., Jan. 2d, 1904. "Casein Co. of America, Bellows Falls, Vt.-Gentlemen: Your esteemed favor of the 1st at hand, contents carefully noted, and with our increased manufacturing capacity, we are now fully up to our orders, and in fact have written to your New York office on the 29th ult., that we could spare one or two carloads for shipment the early part of this month. Thus we are not for the present in need of any of our Paper Coating. We are however, anxious to know if you intend to push our product with the Paper Coating Manufacturers, for if not, we would like to do so ourselves, knowing quite well that the goods we are now turning out will give good satisfaction for that purpose.

"We are gentlemen, always with pleasure to your favors,

"Yours very truly,

Amalgamated Gum Co."

January 6, 1904, Mr.Hall, President, replied as follows:

"Amalgamated Gum Company, Troy, N. Y.-Gentlemen: Replying to yours of the 2nd inst., which has been referred to me from Bellows Falls office. You ask if we intend to push your paper coating product, and if not you will do so yourselves, and I note you say that you know that the goods you are now turning out will give good satisfaction for the purpose. I would like to see a sample of the goods which you are now turning out. Judging from your letter, these must be an improvement on those which we have had. We are certainly prepared, and only too glad, to push the goods provided they will give our customers satisfaction. So far, they have utterly failed in that respect, but we have not been fully satisfied that all the adverse reports sent us were due to the quality, and we are still working on the customers who turned them down. We lost considerable trade because you were unable to fill the orders in accordance with your promise. The reasons which you gave for your inability in that direction were satisfactory, but that did not help us or our customers. I fully explained this to you in letters written at the time. We commenced to use your goods on several orders and then, not receiving any more at the time promised, we were compelled to fill our

orders without its use. Changing from one to the other and back again caused much dissatisfaction on the part of our customers, who declined to make any more experiments, and who insisted upon no further changes. I fully explained to both Mr. Connors and Mr. Ducas the 'special customer' matter,that we had been relying upon a large consumption from this concern, and who suddenly turned down the article, claiming all sorts of inferiority for the goods which were produced with it. We are still working on this customer on the lines outlined by me to Mr. Ducas, and if you wish us to continue we will be glad to do so. As it is, we have on hand some 4 or 5 carloads of your material, for which we have at present time but little use, and through no fault of ours. We would like to return these goods to you, or we will be willing to store them for you without expense and work them off to the best of our ability. If we could get the trade of this 'special customer' we could move the entire amount very soon. We have delayed paying for the goods for the reason that they did not do the work which you claimed for them, and, as above stated, because your failure to ship as promised caused us the loss of much of the trade that we did obtain.

"Yours very truly,

And March 24, 1904, again:

Wm. A. Hall, A. W. P."

"We are willing to release you from the contract if you will take off our hands a portion of the gum which we bought of you. We have been working it off very slowly and can, I think, work it all off in time, but it would be much more difficult for us to dispose of it if you were released from the contract, and were enabled to sell against us. Therefore we should not care to release you unless you relieved us of a certain amount of this material. We do not ask you to take it all. We are willing to limit the amount to three carloads. You have insisted that this article which you have sold to us was your first quality and that it was sold to us at a low price. Therefore, if you are very anxious to be relieved of this contract, we should not think that the requirement to take back so small an amount would stand as any very great obstacle."

And April 12, 1904, as follows:

"Gentlemen: I understand from Mr. Showerin that either you or Mr. Ducas told him that you could readily sell your product to the Champion Coated Paper Co. of Hamilton, Ohio. I would state that we will give you permission to do so, and will assist you in any way that is in our power, provided you will utilize for that purpose the material which we have on hand, which we purchased from you? If that concern can use it at all, they can use very many carloads, and the three or four cars that we have, and would like to dispose of would go very quickly. Furthermore, if you succeed in getting their trade and will take off from our hands the few cars which we have, we will release you from the contract which you have with us and you can then sell the material to coating mills where you choose, as long as it does not interfere with any of our patented processes."

And September 29, 1904, again, as follows:

"The Amalgamated Gum Company, Troy, N. Y.-Gentlemen: Referring to the conversation that I had with Mr. Connors several months ago, I would state that we have since that time consistently exerted ourselves toward the establishment of a demand for your paper coating adhesive, but with very little success, and practically no encouragement, which leaves on our hands a very considerable stock of your goods which we have bought and paid for, which we would be very glad to sell to you at a reduced price. We are informed that you have offered your goods to the coating mills direct, notwithstanding the contract which we have with you to the contrary. We, however, will make no issue on this point, and as we are unable to do anything with it, we herewith release you from any obligation

on your part not to sell or offer for sale the same to the paper coating trade, excepting as such might be in the infringement of any of our patents. "Yours truly, Casein Co. of America, William A. Hall, President."

October 7, 1904, the plaintiff made reply as follows:

"The Casein Mfg. Co., Hanover Bank Bldg., Pine & Nassau Sts., New York City.-Gentlemen: Upon the receipt of your letter of date the 29th ult. we submitted it together with a copy of the contract, to our attorney for his advice. We are advised that the product which we have manufactured for you and concerning which we have given you repeated notifications and request for shipping orders you are required to take under the terms of the contract. It would be a strange construction of the contract that we should be compelled to go out of business for a year upon your refusal to take goods up to the last moment and then hand us an order for the entire output during the year. We do not believe that any such construction can be placed upon the contract and certainly it was not the intention when it was made. The fact is that we have nine months of our product ready for you which we have been holding at considerable expense to ourselves and which you were required to take under the terms of the contract made. We cannot release you from your obligation to take that product for otherwise it would be necessary for us to admit that the contract gives you the privilege of practically keeping us out of the market and out of business for a period of nine months without any redress. If, however, you are willing to liquidate the damages which have been done or to take the product which we have manufactured for you, then we will consider your proposition of cancelling the contract as of the first of October. Whatever we do, however, in the course of negotiations upon that subject must be strictly understood not to interfere with our rights under the contract or your obligation as we view it to take the full quantity of our out-put up to the end of the first year of the contract. If you are disposed to either take the goods or negotiate an adjustment for the losses which you have imposed upon us in case you do not take the goods and pay for them, we will be glad to enter upon such negotiations with you.

"Yours very truly, Amalgamated Gum Co., William Connors, Treas."

October 11, 1904, the defendant replied as follows:

"The Amalgamated Gum Co., Troy, N. Y.-Gentlemen: Replying to yours of the 7th, there is apparently little that we can say on this subject that has not already been said. We have diligently endeavored to push the sale of your goods and dispose of not only the large quantity which we had on hand (and still have on hand) and which we had paid you for, but also to find a market for further quantities of your material which you stated you were ready and able to furnish, and it is much to our regret that we have found it impossible to accomplish this. We never have made any contract with you to take any specified amount of goods. We did start off taking large quantities, but it did not give satisfaction. We notified you immediately that our customer reported the goods did not answer the requirements, and that they did not do what you represented they would. We gave you permission to sell direct to the coating trade a long time ago provided you would first draw on the material of your manufacture which we had on hand, and which we had paid for, and for which we had no use. Therefore we have not debarred you from selling your product. If you had any demand for it you could have easily disposed of the amount we had, and could have then drawn on your own freshly made goods. We did not hang you up in any way. We notified you also months and months ago that we did not care for any more of this material until either you or we could make it work successfully, and neither you nor we have been able to do this. We are perfectly satisfied with our position, and which has been very clearly outlined to you.

"Yours truly,

William A. Hall, President."

To this October 20, 1904, the plaintiff made reply as follows: "The Casein Manufacturing Co., Hanover Bank Building, New York City. -Gentlemen: Your letter of date the 11th inst. is received and contents noted. We cannot agree with your interpretation of our contract. It is perfectly plain to us that by that contract you agreed to take certain quantities of our product in each of the years referred to in the contract and your failure to comply with those provisions will be a breach of the contract on your part. We have lived up to the contract in every respect and have been prepared to supply your orders up to the limit of the contract requirements. It is no answer to our position for you to say that you have given us permission to dispose of our product to the trade provided we would dispose of the material which you have on hand and which we delivered to you. That would be a peculiar state of affairs if it should be for a moment seriously considered as a business proposition. You are certainly well aware that we never accepted any such unbusiness-like suggestion, never acted upon it and would not, as very likely you expected that we would not. So that there may be no misapprehension on your part and no misunderstanding between us, we desire again to call your attention to the terms of the contract between our companies and to notify you that the contract must be lived up to to its fullest extent and that we have not done and have not intended to do and will not do and do not intend to do anything to release you from the terms and requirements of that contract in any respect.

"Yours very truly, Amalgamated Gum Co., William Connors, Treas."

It should be remarked that the uncontradicted evidence in the case establishes that this product sent to defendant and received and finally paid for by it was, mostly, worthless for the purpose for which intended and was not saleable in the market. From this correspondence it is evident that the defendant claimed from the very beginning that it had not agreed to take and pay for any amount of this product unless specially ordered; that it could stop taking or dealing in it at any time. That its obligation was to pay for what it did take; that this was a joint agreement or undertaking of the parties by which the plaintiff was to make the product and in effect make the defendant, with slight exception, its sole customer and salesman to push the same in the market and in the paper trade and in consideration thereof defendant was to have control of its sale in the United States and Canada. That defendant undertook on its part to push its sale and use in the paper trade, and to pay for all it did accept or take a certain specified price, and, as a condition of this undertaking on its part, was to have the entire output of plaintiff in case it took the quantities specified in each year named, but not otherwise, so as to have exclusive control of its sale. This construction and interpretation was not for a long time, months, controverted by plaintiff, but it finally did take the ground, as appears from the recited correspondence, that defendant had absolutely agreed to take, accept, and pay for the quantities specified in the contract. But this would seem to have been after the product had proved a failure for the use intended. It is not established that the parties changed the contract in its main features in any respect material here or that any particular construction by conduct of the parties was placed upon it, although the long acquiescence in, or failure of the plaintiff to dispute defendant's construction, is entitled to its due weight in the case. The only material The only material change that bears on its interpretation will be noted later.

The first clause or paragraph provides:

* * *

"The said party of the first part agrees to sell unto the said party of the second part, upon condition that the said party of the second part shall accept from the party of the first part but in case the said party of the second part shall not accept from the said party of the first part the quantity of said products hereinbefore set forth in any of the years above described, then and in that case it is understood and agreed that the said party of the first part shall be and is at liberty to sell its paper coating products in the United States and Canada without reference to the said party of the second part except to protect the said party of the second part with such customers of the party of the second part as shall be supplied with said products of the said party of the first part direct by the party of the second part."

I fail to discover any good and sufficient reason for the insertion of this language if there was or was supposed to be an outright and absolute agreement on the part of defendant to take the product in the amounts specified. It seems to me to be a provision that demonstrates the plaintiff did not understand defendant was binding itself to take the product. Then comes an agreement to supply further quantities if asked for and due notice given. If a special amount in excess of that named was ordered by defendant, it of course became obligated to accept or take it. Hence the use of that word in the last clause of the contract hereafter referred to. Then, "The said party of the first part further agrees not to sell any of its paper coating products to the paper coating trade in the United States or Canada, either directly or indirectly, so long as the said party of the second part shall accept from the said party of the first part in the times specified the quantities of said products above specified," and also language that imposes an obligation to withdraw the product from the market so that none of same shall reach parties in the United States or Canada in competition with the defendant. The idea seems to be to encourage the defendant to build up and establish a trade and consumption of this article in the United States and Canada and protect it in so doing. The undertaking of defendant to do this might prove beneficial to it depending on the extent of its trade and the prices it should obtain. To build up such a trade and a demand for this new product of plaintiff made under secret processes would be beneficial to it. The second party is to control the market of this product in the United States and Canada if it takes the specified quantities in the years named, not otherwise.

The last clause of the agreement is in these words:

"It is hereby understood and agreed by and between the parties to this agreement that in case of fire, strikes, labor troubles, or the happening of other unforeseen events which shall impair the ability of either party to keep and perform the provisions of this agreement as to the furnishing or using of the quantity of products hereinbefore provided, then, and in that case, the said parties are relieved during the period of such disability from furnishing or taking said products in the quantities hereinbefore provided or otherwise than the capacity and ability of the said parties to supply or use the amounts referred.".

It will be noted that there is an absence of any covenant or agreement on the part of defendant to buy, purchase, take or accept any of this product whatever. Plaintiff's agreement to sell to defendant is.