Federal Coal & Coke Co. v. Coryell , 223 Mass. 430 ( 1916 )

De Courcy, J.

1. The fifth paragraph of the contract between the Federal Coal and Coke Company (herein called the plaintiff), and J. K. Dimmick and Company (herein called the defendants), reads as follows:

“Fifth: Quality. The Seller agrees to furnish the Buyer with 48 hour furnace coke made at their ovens located at Grant Town, West Virginia, and in case the consignee finds at any time during the life of this contract that a fair average quality of the coke materially deteriorates from the quality of the coke shipped during the first one or two months of this contract, then the Buyer has the privilege to cancel any unshipped portion of this contract.” The shipments were to be made in about equal monthly proportions of two thousand tons each, beginning January 1, 1910, and continuing until December 31, 1910; and the consignee was the Wellston Steel and Iron Company, to whom the Buyer (J. K. Dimmick and Company) resold the coke, under a written agreement. The contract in question was prepared by the defendants. In the first draft was inserted a provision that “should the Wellston Steel & Iron Co. at any time during the life of the contract find the coke is unfit for their blast furnace, then we have the option of cancelling any unshipped portion of the contract.” This the plaintiff’s representative refused to sign; and wrote “I would be willing to insert in the contract a paragraph to the effect that the average quality of the coke, shipped during the first two months, be taken as a fair average sample of the coke, and subsequently should the coke be of inferior quality from said average sample, then the Wellston Steel and Iron Co. would have the right to cancel same.” And the defendants thereupon drafted the present contract.

We are of opinion that the true construction of paragraph Fifth is, that an average was to be taken of the coke shipped during the first month or two, and that such average would establish the standard up to which all subsequent shipments must measure. When early in January the Wellston Company found that samples of the coke sent to it analyzed 1.35, 1.65 and 1.68 sulphur, it stopped the shipments, acting presumably under the provision in its contract with J. K. Dimmick and Company, that "in case the Buyer finds this coke unfit for blast furnace use, then the buyer has the option on due notice to the Seller to cancel any unshipped portion of this contract.” There was no such provision however in the contract between this plaintiff and defendant. It follows that the exception to the trial judge’s construction of the contract must be sustained.

There was conflicting testimony as to the trade meaning of “48 hour furnace coke” as used in paragraph Fifth, some of the witnesses stating that it must be a coke that does not exceed 1.25 per cent in sulphur for blast furnace use, while others testified that it carried no guarantee of sulphur content. So far as the record shows this issue was not submitted to the jury. Putting this aside, we find no warranty in the contract as to the quality of the coke to be delivered during the first one or two months under the contract. Such omission may be due to the fact that the defendants had expected the plaintiff to sign a contract similar to that which they had with the Wellston Company containing a cancellation clause. Failing to obtain this Gano, who represented the defendants in the negotiations, apparently was content to rely upon the oral statements of Page, representing the plaintiff, as to the quality of coke it expected to ship.

2. The alleged misrepresentations of the plaintiff’s vice-president, Page, relied on by the defendants, to the effect that the coke would not be over 1.25 per cent in sulphur, were promissory in nature and insufficient to entitle them to avoid the contract on the ground of fraud. As Gano knew, the plaintiff’s coke ovens were not operating at the time, and were about to start under a new management. American Soda Fountain Co. v. Spring Water Carbonating Co. 207 Mass. 488. And as to the alleged analyses shown by Page, of coke made from the federal coal at the by-product ovens in Everett, there was no evidence that these were false. On the evidence the plaintiff was entitled to have its third request given in substance.

3. The other exceptions are of lesser importance and may be disposed of briefly. There was no error in refusing to give the plaintiff’s eighth request, in view of the memorandum of analyses in Page’s book, shown to Gano. The other requests have not been argued, but we find no error in the refusal to give them.

As to the exceptions to evidence: It is difficult to see how copies of the docket entries and declaration or “statement” in the Pennsylvania suit tended to show a lack of good faith in maintaining the-present action. However,, as the evidence in substance had already appeared without objection in the examination of the witness Page, the plaintiff does not appear to have been harmed. The unanswered letters of the defendants, dated December 13, 1909, and January 21,1910 (exhibits 4 and 7), both written long after the date of the contract, were self-serving statements and inadmissible. Maloney v. Philpot, 219 Mass. 480.

The record shows that in the cross action a verdict was rendered by order of court for the plaintiff, James B. Coryell, trustee in bankruptcy of J. K. Dimmick and Company, and for some unexplained reason no exception appears to have been taken thereto. As there was error in the main action with reference both to the issue of breach of contract and that of false representations and the defendant’s cross action was for breach of the same contract, and the two were tried together as one case, a new trial should be granted as to both.

Exceptions sustained.