On December 27, 1927, Canadian Industrial Alcohol Co. (Canadian) (plaintiff) placed an order for approximately 1,500,000 gallons of molasses from Dunbar Molasses Co. (Dunbar) (defendant). Delivery of the molasses was to begin after April 1, 1928, and shipments were to be spread out during the warm weather. After April 1, 1928, Dunbar made periodic deliveries of a total of 344,083 gallons of molasses to Canadian. Dunbar stated that its failure to deliver more molasses to Canadian was due to a lack of willingness by Dunbar’s supplier, the National Sugar Refinery at Yonkers (refinery). Canadian brought suit in New York state court against Dunbar seeking damages for Dunbar’s failure to deliver the total amount of molasses ordered by Canadian. Dunbar argued that its duty to deliver was conditioned upon the production by the refinery of molasses in a sufficient quantity to fulfill Canadian’s order. Dunbar stated that its duty to supply molasses according to its contract with Canadian was discharged when the refinery reduced its output of available molasses. The trial court granted judgment for Canadian, and Dunbar appealed.