United Railways & Electric Co. v. Henry Wehr & Co. , 103 Md. 323 ( 1906 )

This is a suit by the appellees against the appellant for an alleged breach of contract by the latter, in refusing to deliver certain scrap iron to the former, or to permit them to remove it from the power house of the appellant. The power house was destroyed, or at least very seriously damaged, by the great fire in Baltimore in February, 1904. The appellant, through a letter of its purchasing agent, dated June 7th, 1904, invited a bid from the appellees for the scrap iron, and they made an offer by letter dated June 14th, which was accepted by telephone. The Court granted three prayers and a motion to strike out certain testimony offered by the plaintiffs and rejected four prayers offered by the defendant. The only bill of exceptions in the record presents the rulings of the Court on the prayers and that motion. The case was tried before the Court, sitting as a jury, and resulted in a verdict in favor of the plaintiffs. This appeal was taken from the judgment rendered on that verdict.

Other questions presented by the record being of minor importance, we will first consider the plaintiff's motion to strike out the testimony, in connection with their fourth and the defendant's second prayer. The motion granted was "to strike out all testimony of the witness Staub so far as said testimony is offered for the purpose of establishing terms of the contract between the plaintiffs and defendant by means of conversations had prior to the writing of the letter of June 14th." The plaintiff's fourth prayer prayed the Court to rule "that by the true construction of the contract between the parties, the plaintiffs bought and the defendant sold all the scrap iron in the Pratt street power house of the defendant (not excepting the boiler room) save the material excepted in the letter of June 7th, 1904, from Staub to the plaintiffs;" and the defendant's second prayer asked the Court to rule as a matter of law that all of the terms of the contract "are not contained in the letters of June 7th and 14th" (and that) "it is the duty of the Court, sitting as a jury, to find from all the evidence in the case what the contract was, and in so doing it can consider all the evidence in the case, written as well as oral." The quotations from those prayers and the motion suggest the theories of the respective parties, and it is only necessary to add that the principal question is whether oral testimony was admissible to show that the appellant did not sell to the appellees the structural iron in the part of the power house known as the boiler house. As the motion to strike out the testimony goes to the root of the controversy, we will first consider that.

Mr. Staub was the purchasing agent of the defendant, and as such wrote the following letter dated June 7th, 1904, to the appellees:

"Gentlemen: I would be pleased to receive from you bid for the scrap iron, not including engines, generators, valves or piping, in our damaged Pratt street power house, same to be made at a price per ton as the scrap lies. The weights on our scales at the power station to govern. The successful bidder must be prepared to make a payment, satisfactory to us, in advance, and when material to this amount has been received, make another payment in like manner, and so on, until the entire lot has been received and paid for. The company reserves the right to reject any and all bids, also to retain any part of this material, as it is turned over, that it may consider what can be used by it. Your proposition must be in my hands not later than twelve o'clock noon, Tuesday, the 14th instant. I will gladly furnish any further information you may desire in connection with this matter."

Henry Wehr, one of the appellees, by appointment met Mr. Staub at the power house for the purpose of seeing the scrap, with a view to making a bid, and on June 14th wrote the following letter to him:

"Dear Sir: Replying to yours of June 7th we are pleased to offer you $9.00 per gross ton for all the old material which you have for sale at the Pratt street power house, as per specifications mentioned therein. Advise us promptly by return mail whether this offer is accepted or not, and oblige."

That bid was accepted about June 17th over the telephone. If the letter of June 14th had omitted the words "which you havefor sale" and nothing had occurred but the writing of the two letters and the acceptance by telephone, a very different question from what the record presents might arise. But Mr. Wehr testified that he went to the power house to make an examination — that "his purpose in making this examination was to see whathad to be sold, because you cannot buy things in scrap iron unless you look at them;" that "Mr. Staub pointed out what was for sale and what was not for sale; he bought everything that was left in the iron line, with the exceptions he made." Again he said "that his offer of June 14th of $9 a ton was the resulting bid from his examination of the premises * * * in making his bid of $9 per ton he considered that he would not have to wreck the power house; that the railway company would have to take the power house down; he explained this fully to Mr. Staub, saying, when you get to work to take the power house down, leave that work there, and we will work with you." His cross-examination as stated in the record concludes thus: "When asked how much it would have cost to have wrecked the building and get out the structural steel, he replied he did not have to wreck the building under his contract, they were to take the building down, and he was to work at that time and cut out the structural material as they went along; that this understanding was had with Mr. Staub, the only person he dealt with; this understanding was had when he first went through the building with Staub and not at the time of the acceptance of his offer; that Staub agreed on behalf of the railway company to tear down the building and give him the structural steel, as it was taken down."

Mr. Staub testified amongst other things that "the first response received from H. Wehr Co. was the request by Mr. Harry Wehr to meet him at the power house and designate exactly what was covered by the letter; that he met Mr. Wehr and took him over and showed him exactly what was to go; that the meeting with Mr. Wehr was in the interval between the time the request for the bid was sent and the receipt of the bid on June 14th." Again he said, "But in no case was he taken into the boiler room, because that was not included; that the engine room is separated from the boiler room by a brick wall running north and south, which was standing at the time of the visit, and apparently had not been injured; that he did not take Mr. Wehr into the boiler house at all; that the purpose of the visit was to point out to Mr. Wehr exactly what he was to bid on." On cross-examination he said the boiler room was not mentioned in the conversation with Mr. Wehr, and in answer to a question, "Why was the boiler room not included, what reason have you for seeking to give us the impression that the boiler room was not included in the sale of scrap iron at the power house?" he replied, "Because the boiler room was considered by our people intact, not damaged." He was corroborated by other witnesses as to the condition of the boiler house.

Mr. Wehr and Mr. Staub contradicted each other flatly as to the boiler room and some other matters, but we see from Mr. Wehr's own testimony that he went to the power house for the purpose of ascertaining what was to be sold, and its condition, and that Mr. Staub pointed out "what was for sale and what was not forsale." That being proven by one of the plaintiffs, and especially as his testimony was permitted to remain in why should that of Staub have been stricken out? The letter of June 7th concluded by saying "I will gladly furnish any further information you may desire in connection with this matter." Wehr did call upon him for further information, and Staub pointed out what was for sale and what was not, and then the appellees wrote the letter of June 14th, in which they bid "for all the old material which you have for sale at the Pratt street power house, as per specifications mentioned therein." The words"which you have for sale" meant something, and when taken in connection with the testimony of both Mr. Wehr and Mr. Staub were of the utmost importance in determining the controversy between these parties. The letter concluded by saying "as per specifications mentioned therein," referring to the letter of June 7th, but it cannot be and is not pretended that there were such specifications in that letter as were necessary to inform the appellees what was for sale. Mr. Wehr's evidence is to the contrary, and he went to the power house for the very purpose of finding out and to enable him to bid intelligently, if at all. The "old material which you have for sale," certainly did not mean something which the companydid not have for sale, and inasmuch as it is conceded that what was for sale was pointed out, but the two contracting parties differ as to what that was, it is difficult to understand how that could be determined without oral testimony. It was necessary to show what was for sale — what was pointed out — in short what the appellees were offering to buy in the letter of June 14th, and what the appellant's agent agreed to sell when he accepted the offer by telephone.

But apart from what we have said, how could the plaintiffs recover for the structural material still attached to the building on June 14th without oral testimony? Mr. Wehr testified that Mr. Staub agreed that the company would tear down the building and give them the material, as it was taken down. There is nothing whatever in the letter of June 14th on that subject, and Mr. Staub swore that "no such arrangement was made." Yet the motion granted by the Court was comprehensive enough to exclude his evidence on that subject, while that of Mr. Wehr still remained in. It may be said that the defendant did not ask to exclude the evidence of Mr. Wehr, but we do not find in the record that any of this evidence was admitted subject to exception, or that it was admitted upon the assurance of counsel that it would be followed up by other testimony which would show it to be proper, or that the right to move for its exclusion had been reserved. The general principle is well settled that unless evidence is objected to when offered, it cannot be afterwards excluded, unless its inadmissibility is not apparent at the time it was offered and when that appears it is objected to within a reasonable time. Without deeming it necessary to depart from the main question and determine whether it was too late to entertain this motion, if objection was not made to the testimony until the prayers were offered (and the record does not show it was made before), surely it was not right to then exclude the evidence of Staub and permit that of Wehr to remain in. If the contention of the plaintiffs is correct, that they bought all the material including the structural iron still in the walls of the boiler house, it was not only relevant but necessary to prove which of the contracting parties was to tear down the building, as the cost would necessarily affect the damages to be recovered and the defendant would not be in default for material still attached to the house, unless it had agreed to tear the building down or refused to permit the plaintiffs to do so. The letters of June 7th and 14th are entirely silent on this subject, unless the expression in that of June 7th — "same to be made at a price per ton as the scrap lies" — be held to control the question, and, if that be conceded, the defendant was under no obligation to demolish the building at its own cost. Although the motion was not very definite, it was broad enough, as we have said, to exclude the testimony of Staub on this subject, as it certainly tended to establish the terms of the contract on this important question, and was an absolute denial that he had agreed, in the conversations prior to the writing of the letter of June 14th, that the company would tear down the building. It cannot be denied that if a part of the evidence excluded by the motion was admissible, it was error to strike all of it out. 2 Poe, 296 A, and cases cited.

The letter of June 7th asked for a bid for "the scrap iron, not including the engines, generators, valves or piping in our damaged Pratt street power house." It is, to say the least, peculiar that there was no exception of the boilers, if the boiler house was to be included. It is true that the company reserved the right "to retain any part of this material, as it is turned over, that it may consider can be used by it," but the engines, etc., were expressly excepted and Mr. Wehr testified he understood they were to be repaired. There is other evidence tending to show that it was not the intention to sell the structural material in the boiler house; and it seems to us to be clear that a jury, or a Court sitting as a jury, could not accurately, if at all, determine what was intended to be sold and purchased without the aid of oral testimony. If it be true that the boiler house was not damaged more than the evidence offered by the defendant tended to show, it would be an unreasonable construction of the language used to say that the letters of June 7th and June 14th necessarily included the structural material in the boiler house, which could only be obtained by demolishing the building. The fact that it was subsequently demolished by the Potomac Engineering and Contracting Company, under its agreement of March 7th, 1905, does not necessarily throw any light on it. That might be explained in various ways — the railway company may have subsequently concluded it was best to build a new plant, possibly the city might have needed part of it in the improvements made in the burnt district, or there might be other reasons. When we look at that agreement and the one made by the Contracting Company with Henry A. Hitner's Sons, both of which were offered in evidence by the appellees, we can form some idea of the cost of demolishing the building. The Railway Company paid the Contracting Company $2,450, and gave it the building and structural materials remaining in the building and Henry A. Hitner's Sons paid the Contracting Company $7,000 for "the metal contained in and forming a part of the frame work and structure of" the part of the power house that the Contracting Company was to remove. We see therefore how important it would have been to provide in the contract who was to tear down the building, if the appellee's theory be correct as to what they purchased, yet it is not mentioned in either of the letters.

Under such circumstances as we have stated, we are aware of no principle of law that would make oral evidence inadmissible. The offer to buy "all the old material which you have for sale," etc., after the two representatives of the contracting parties had gone over the premises, and had seen what was for sale, necessarily required the parties to go outside of the letters to show what that was, and the law, as announced by this Court, permits proof of extraneous facts to explain the real situation, in order to enable the tribunal which is to determine the question to ascertain the intention and meaning of the parties in the use of the language found in the writings. Of course parol evidence cannot be offered to contradict or vary the terms of a written contract, whether it be embodied in one writing or a number of them, but it is equally well settled that it is admissible to prove anything pertaining to the contract that is not included in or covered by the writings, or to explain any elements of the contract that are left ambiguous and uncertain. In Roberts v. Bonaparte, 73 Md. 191, this Court said in speaking of the two papers then before it, "It is manifest that these papers are ambiguous and uncertain in many important particulars, and need the aid of extrinsic evidence to render them intelligible. It is, moreover, a familiar principle that Courts, in the construction of contracts, look to thelanguage employed, the subject-matter and the surroundingcircumstances. They are never shut out from the same light which the parties enjoyed when the contract was executed, and in that view they are entitled to place themselves in the same situation as the parties who made the contract, so as to view the circumstances as they viewed them, and so as to judge of the meaning of the words and of the correct application of the language to the things described." The latter part of that quotation is taken from Nash v. Towne, 5 Wall. 699. See alsoMachen v. Hooper, 73 Md. 342; Scott v. B. O.R.R. Co.,93 Md. 498. In the Bonaparte case the appellants contended that the entire contract was embodied in two written papers, while the appellee contended that they did not contain the entire contract, that there was a verbal agreement between them, made at or before the date of the papers, to the effect that his liability was to be limited to seeing that the money advanced to him by the appellants should be applied by Claggett, a packer of corn and tomatoes, to canning and not to any other purpose. The appellant had agreed in one of the writings to furnish the appellee certain amounts of money, for the purpose of enabling Claggett to pack the corn and tomatoes, "at six per cent per annum during the season of 1888." This Court held that parol evidence was admissible under the principles above stated, and many other authorities might be cited for similar conclusions.

When we consider "the language employed, the subject-matter and the surrounding circumstances," and place ourselves "in the same situation as the parties who made the contract," as we are authorized to do, we can have no doubt of the admissibility of this evidence. The circumstances disclosed by this record present an unusually strong case to justify the introduction of parol evidence, for, in addition to what we have said, it is by no means certain that the term "scrap iron" necessarily includes structural material in a standing building. It certainly would not include it in a building in good condition which was not to be torn down. If the boiler house was in the condition that Staub and other witnesses of the defendant said it was, it would be giving the term "scrap iron" a very broad meaning to apply it to girders and other such material used in the construction of that part of the building. We are then of the opinion that there was error in striking out the testimony of Staub referred to in the motion; and it follows that the plaintiff's fourth prayer should not have been granted. The defendant's second prayer was properly refused. It was for the Court sitting as a jury to determine whether all the terms of the contract between the parties were contained in the two letters, and not for the Court to rule as a matter of law. Bonaparte's case, supra.

It will not be necessary to discuss in detail the other prayers. The plaintiff's first should be modified in some respects. In view of the contradiction between the witnesses Wehr and Staub as to whether the defendant had agreed to tear down the house, that should be considered in connection with the demand of the plaintiffs for the delivery of the scrap iron. Then it does not except such scrap as the defendant may have reserved, although Mr. Frederick Wehr's testimony indicated that some had been reserved, and some verbal changes would make the prayer clearer, in view of what we have decided about the admissibility of the oral testimony. Their second prayer also ignores the contradiction of the witnesses spoken of, but if it intended the market price of the iron "as it lay in said power house" to refer to the market price while it is in the walls, or connected with them, the defendant could not well be injured by that. The expression "which the defendant failed and refused to sell to the plaintiffs" was intended, we suppose, to mean todeliver, for the plaintiffs' case was based on the theory that the defendant did sell all of the scrap iron.

The defendant's first and first A and fourth prayers were properly rejected, because there was sufficient evidence of the several matters referred to in them. Its third assumes that all the cost of preparation for delivery was to be paid by the plaintiffs, and was properly rejected. The second of the plaintiffs' proceeded on the theory that the measure of damages was the difference between the market price at the time of therefusal and the contract price, while in the defendant's third it asked the Court to say it was the difference between the contract price and the market price of the scrap iron "where it was to be delivered at the time of the delivery." That is the general rule when the place where and the time when are fixed, by the contract, for delivery, but no time was fixed for the completion of this contract or for the delivery of the iron. It was therefore to be taken or delivered within a reasonable time, and as there is nothing to show there was any unreasonable delay, the theory of the plaintiffs' prayer that it was the time ofrefusal would seem to be the correct one, under the peculiar circumstances of this case, as that was the time of the alleged breach. Williams v. Woods, 16 Md. 259. It follows from what we have said that the judgment must be reversed.

Judgment reversed and new trial awarded, the appellees to paythe costs.

(Decided March 27th 1906.)