Union Bleaching & Finishing Co. v. Barker Fuel Co. , 124 S.C. 458 ( 1923 )

[EDITORS' NOTE: THIS PAGE CONTAINS HEADNOTES. HEADNOTES ARE NOT AN OFFICIAL PRODUCT OF THE COURT, THEREFORE THEY ARE NOT DISPLAYED.]

[EDITORS' NOTE: THIS PAGE CONTAINS HEADNOTES. HEADNOTES ARE NOT AN OFFICIAL PRODUCT OF THE COURT, THEREFORE THEY ARE NOT DISPLAYED.] May 28, 1923. The opinion of the Court was delivered by Action for damages resulting from the alleged breach of a contract involving the purchase of a lot of coal by the plaintiff from the defendant.

It appears that on June 21, 1919, the parties entered into a contract, whereby the defendant, Barker Fuel Company (hereinafter referred to as the "coal Company"), agreed to ship to the Union Bleaching Finishing Company (hereinafter referred to as the "Bleaching Company") a quantity of 4-inch run of mine coal, at the price of $2.22 per ton, f. o. b. the mines at Straight Creek, Ky. The quantity contracted for was stated in the contract to be, "Requirements, 6,000 tons, more or less, to April 30, 1920," and deliveries were to be at the rate of 2 cars weekly until further notice, with an immediate shipment of 15 additional cars. The limit of time was April 30, 1920. Delivery at Greenville, S.C.

The Bleaching Company's claim is that the coal company failed to ship the quantity of coal due under the contract, and that it became necessary to purchase from other sources a total of 2,745.85 tons, at a cost of $4,288.52 more than would have been the cost under the contract.

After the expiration of the contract the coal company sold to the bleaching company 7 carloads of coal, at the regular market price, for $2,260.06. There is no contest as to this transaction. The bleaching company admits it, but claims the right to set off its liability on account thereof against its claim for damages on account of the breach of the contract, and sues for the difference between $4,288.52 and $2,260.06, $2,028.46. The coal company contends that it did not breach the contract, and that the bleaching company is indebted to it for the price of the 7 carloads delivered outside of the contract, $2,260.06.

At the conclusion of the evidence on both sides the defendant moved for a directed verdict upon the counterclaim of $2,260.06, on the ground that there was no evidence in the case substantiating the claim of loss to the plaintiff under the contract, which motion was refused. The jury rendered a verdict of $660.69 in favor of the plaintiff, and from the judgment entered thereon the defendant has appealed. The exceptions will be reported. The verdict of the jury, taken in connection with the admitted liability of the bleaching company for the 7 carloads of coal purchased outside of the contract, amounting to $2,260.06, must be interpreted as a finding that the bleaching company was damaged by the coal company's failure to comply with the contract in the sum of $660.69 plus $2,260.06, $2,920.75.

The contract called for the delivery of 15 carloads immediately, and a shipment of 2 carloads per week during the life of the contract, June, 1919, to April, 1920, and more if the needs of the bleaching company required it, and notice be given to the coal company. There was no effort on the part of the defendant to show that the agreement had been carried out. The evidence for the plaintiff tends to show the contrary. The evidence for the defendant shows that the price of coal steadily advanced during the life of the contract, and their statement shows that during that period they sold on open market 60,670 tons and upon their contracts only 54,507 tons, which doubtless accounts for the shortage in the plaintiff's contract. If not conceded, there is abundant evidence from which the jury may have concluded that there was a breach of the contract. There are no exceptions raising any issue as to this, and it will be treated as an admitted fact in the case.

THE FIRST AND SECOND EXCEPTIONS These exceptions assign error in refusing the defendant's motion for a directed verdict upon the counterclaim of $2,260.06.

The counsel for the appellant thus state their position:

"Our fundamental proposition on this point is that plaintiff has wholly failed by competent evidence to prove any damage growing out of defendant's alleged breach of contract."

They specify the grounds of such alleged failure to be:

(1) There is no evidence of the delivered price of the coal bought by the plaintiff to supply the alleged deficiency in the execution of the contract.

(2) There is no evidence of the price of other coal at Straight Creek, Ky., the place of delivery under the contract.

(3) There is no evidence of the market price of coal at Straight Creek, Ky., the place of delivery under the contract.

(4) There is no evidence of the freight charge on coal at Straight Creek, Ky.

The specifications appear to have been drawn to meet either construction of the contract as to be delivery point; the first upon the theory that the delivery was to be made at Greenville, S.C.; the other three at the mines, Straight Creek, Ky.

The coal company agreed to ship the coal from the mines at Straight Creek, Ky., to the bleaching company at Greenville, S.C. In the absence of some qualifying provision, the point of delivery would be Greenville. It is contended that the expression, "Price $2.22 f. o. b. mines," is such a qualifying provision as to make the point of delivery at the mines, Straight Creek, Ky. We do not so consider it, but construe that expression as simply a provision determinative of the party liable for the freight charges, as it appears to have been inserted for the purpose of fixing the price, with which it is directly connected, and not the delivery, with which it has no connection, and which is distinctly provided for.

Assuming, then, for the moment, that the point of delivery was Greenville, and assuming also the breach of the contract, the rule for the ascertainment of damages generally adopted is to ascertain the difference between the market price of the commodity at the time and place of delivery under the contract and the contract price.

It will be observed that the only exceptions to the plaintiff's evidence, so far as delivery at Greenville is concerned, is the failure to prove the "delivered price of the coal bought by the plaintiffs." This, under the rule stated, was not an element necessary to be proved in establishing the amount of damages.

But, if it should be held that the "delivered price" (cost?) at Greenville was an essential part of the plaintiff's evidence, the invoices of coal, bought elsewhere by the plaintiff to supply the defendant's default, were evidence of what the plaintiff paid for the coal, exclusive of the freight. They showed at least a part of the delivered cost. The defendant is not in a position to complain that the cost shown was not as great as it might have been shown.

Besides, as the contract requires the bleaching company to pay freight from the mines to Greenville, the defendant could justly be charged only with the excess of freight which the plaintiff had to pay over that freight. That this did not appear is not a matter of which the defendant can complain.

The admissibility of these invoices is questioned by the defendant. In the first place, the invoices were presented upon demand of the defendant after previous notice to produce; in the second place, while it appears that their introduction was objected to, no grounds of objection were stated; in the third place, counsel for appellant admit in their argument that they were admissible for what they were worth.

It will be noted that the evidence in Exhibit B has not been considered in the disposition of this question. But it appears that the ruling of the trial Judge was not in conformity with the construction we have placed upon the contract as to the point of delivery. He held "that the point of delivery was at the mines (contract so states, 'f. o. b. mines');" and it may plausibly be insisted that, as there is no exception to this ruling, it has become "the law of the case." Assuming this to be true, the three specifications above set forth, based upon the theory that the point of delivery was at the mines, Straight Creek, Ky., will be considered. We take it that the second and third specifications are practically of the same import, and make the point that there was no evidence tending to establish the market price of coal at the mines.

If the point of delivery was at the mines, it was incumbent upon the plaintiff to offer evidence of the market price there, if there was a market other than the price fixed by the mine itself; otherwise at the most available market.

The defendant itself has supplied at least sufficient evidence along this point to require a submission of the issue to the jury. The testimony of Barker, one of the defendants and manager of the business, was to the effect that between November, 1919, and April, 1920, the Government had fixed the price at the mines at $3 per ton. That of Anderson, auditor of the company, was to the effect that there was an open market at the mines from June, 1919, to November, the price ranging from $2,60 to $2.75; that it reached $4 in October, when the strike was imminent, and that during Government control it was $3 plus 15 cents per ton commissions, later with an allowance for increased wages. This certainly supplied the jury with some data with which to figure the market price at the mines.

The matter of the freight from the mines to Greenville, referred to in the fourth specification above, has not been argued by counsel, we assume for the reason that it appeared in the evidence to be $2.50 per ton, and was really a negligible factor in estimating the plaintiff's damages in the absence of evidence of freight rates from the points at which they bought outside coal.

Referring to the cost of coal purchased by the plaintiff as shown in the batch of invoices, counsel for appellant remark:

"This would give a total cost of $11,133.62 for the 2,745.85 tons, as against an admitted cost by (to?) plaintiff for the same quantity of coal if secured from the defendant of $12,960.41."

The inference suggested is that the plaintiff has suffered no damage as demonstrated by its own showing. But counsel lose sight of the fact that in arriving at the figures $12,960.41, the 2,745.85 tons are estimated at the contract price of $2.22 plus $2.50 per ton freight, total, $4.72, whereas the statement showing the cost from others of coal bought to supply the 2,745.85 tons deficiency does not include the freight. If that would be added, at the same rate the cost of the coal represented by the invoices would be $11,133.62 plus $2.50 per ton freight on 2,745.85 tons, $6,864.62, total, $17,998.24, as against $12,960.41; a loss of $5,037.83.

Arriving at the same conclusion another way: The invoices show that the bleaching company bought from other sources 2,745.85 tons at a cost to it, exclusive of the freight, of $11,133.62. If this coal had been delivered under the contract, it would have cost (2,745.85 tons at $2.22) $6,095.79, likewise exclusive of the freight, a difference of $5,037.83. There was evidence tending to show that the coal company had not complied with its contract as to weekly deliveries; that these purchases were necessary to meet such deficiencies in shipment, and that the prices paid were the best the bleaching company could obtain at the time.

We do not think, therefore, that there is any foundation for the position that there is no evidence of any damage to the plaintiff from the practically admitted default of the defendant, and that the motion for a directed verdict was properly denied.

THE THIRD EXCEPTION This exception assigns error in the admission in evidence of the testimony of J.W. Arrington:

"We had to buy elsewhere something over 4,000 tons. The average cost to us of the coal we bought outside was $4.72, and the contract price was $2.22."

The objection at the trial went only to "testimony as to comparative prices." The declaration of the witness, "We had to buy elsewhere something over 4,000 tons," was received without objection. The testimony as to comparative prices did not at the time it was given appear to have been taken from Exhibit B, but as the statement of a fact. If it had appeared subsequently that it had been made from Exhibit B, and that that statement was made up by others, doubtless the declaration of the witness would have been stricken out; but no such motion was made. As a matter of fact Arrington's testimony as to comparative prices could not have been given from Exhibit B, for that shows the average price per ton of coal bought elsewhere, including freight, was $6.35, and not $4.72, as he stated.

THE FOURTH EXCEPTION This exception assigns error in the admission of Exhibits B and 13, and is obnoxious to rule 5, § 6 (90 S.E. vii):

"Each exception must contain a concise statement of one proposition of law or fact which this Court is asked to review."

Aside from this objection, there is no merit in the exception.

Exhibit B is a statement purporting to show in an itemized form purchases of coal by the plaintiff outside of the contract with the defendant. It gives the dates, names of sellers, quantity, price per ton and facts:

2,745.85 tons _________________________________ $17,417.03
From which is deducted ________________________  12,960.41
__________
Which represents what would have been the
price under the contract, a difference of _____ $ 4,456.62

The record does not show that this exhibit was formally offered in evidence, or that the defendant entered objection thereto with the grounds of objection. But, aside from this, the only objection to the exhibit specified in the exception is that it "does not agree with the invoices introduced." This constitutes no objection to the admission of the exhibit. It was evidently not intended to agree with the invoices, as it included freight, while the invoices did not.

The objection specified to the invoices is that they "did not show the price of coal delivered, but the price at which plaintiff procured coal at other places." This objection appears to have been waived by defendant's counsel, who say in their brief, "As these are original bills they are probably admissible for what they show," to which we agree.

THE FIFTH AND SIXTH EXCEPTION As stated by counsel for the appellant:

These "exceptions go to the refusal of the trial Court to instruct the jury that no greater quantity of coal was required under the contract than the actual needs of the plaintiff."

The trial Judge charged the jury in his general charge:

"That remark 'meet actual needs' I construe up to 6,000 tons; if that much was actually needed, and the company advised them that much was needed, then they were obliged to ship that amount."

He also charged:

"The plaintiff would not be required to recover up to the limit if they did not require that amount."

He specifically allowed the defendant that request, which was as follows:

"The Court instructs the jury that the words ``requirements, 6,000 tons, more or less, to April 30, 1920' set forth in the contract, means that the purchaser was not to receive in excess of 6,000 tons of coal, but it does not mean that 6,000 tons were to be delivered by the seller in any event, but only such an amount was to be delivered as was necessary to meet the actual needs of the plaintiff, and of this plaintiff was to advise the seller."

It appears, therefore, that the defendant received the full benefit of the proposition contended for.

THE SEVENTH EXCEPTION The appellant assigns error in the refusal of the following request to charge:

"In no event was the defendant under any obligation to ship coal after the expiration of the contract to make good any such default, if such default existed."

Under ordinary conditions this request states a correct principle of law. It is a corollary of the well-established measure of damages upon the breach of a contract of sale; the difference between the market price at the time and place of delivery and the contract price. To recognize the obligation to deliver after the time limit of the contract would imply a similar right to deliver. In the one case the seller might unjustly be held for an advance in the market price, and in the other allowed credit for a decline. This rule, however, does not apply to a case like the present one, where the seller sets up as an excuse for nondelivery circumstances of strikes, car shortage, and the like. In such cases the obligations to deliver are simply suspended, to be resumed after labor or car service had assumed normal conditions.

In 35 Cyc., 249, the rule announced is as follows:

"Where the contract provided that delivery shall be subject to strikes, the existence of a strike merely suspends deliveries during the strike, and does not terminate the contract, and the seller is therefore bound to resume deliveries after a reasonable time after the strike has ceased."

In Fish v. Hamilton, 112 Fed., 742; 50 C.C.A., 509, the delivery of certain goods under a contract of sale was to be made within a fixed period, subject to this clause: "Barring fires, strikes, or other unavoidable casualties." The seller contended that a strike which lasted for two months avoided the whole contract. The Court held:

"The provision affects the terms of delivery only, and that the seller was bound to deliver within a reasonable time after the termination of the strike."

In Jackson Co. v. Caraleigh Works, 213 Fed., 743; 130 C.C.A., 257, the buyer attempted to hold the seller to strict delivery within the specified time, a car shortage having prevented full delivery. It was held that the proviso as to shipments should be construed as relating to the time of delivery, and not to the life of the contract, and that the seller, after the termination of the car shortage, was entitled to a reasonable time to deliver the goods.

THE EIGHTH EXCEPTION The appellant assigns error in the failure of the trial Judge to charge:

"If no damage was proved by plaintiff, that they should find for defendant the full amount of the Counterclaim."

The request was tendered orally at the conclusion of the Judge's charge. It was not in conformity with rule XI, Circuit Court Rules, and it will be assumed that the failure to respond to it was based upon noncompliance with the rule. Morrison v. Ass'n, 78 S.C. 398. Aside from this technical objection to the consideration of this exception, the idea necessarily ran through the entire charge, and was practically covered in the charge to this effect:

"Take up the question whether the company is entitled to recover for nondelivery, from the preponderance of the evidence; set the amount down and deduct the amount set up in the counterclaim, $2,260.06, if the amount of damages, if you find any, amounts to more; then you say we find for the plaintiff the difference between that and the $2,260.06, the counterclaim."

If there was no subtrahend, there could be no subtraction.

THE NINTH EXCEPTION The appellant's counsel have presented an elaborate and interesting argument to demonstrate that the verdict of $660.09 in favor of the plaintiff is excessive, contrary to the evidence, and without any evidence to sustain it. As expressed in their argument:

"That on no theory of the case was plaintiff entitled under the evidence to the verdict which was given."

This Court is without jurisdiction to review a judgment upon the ground alone that the verdict upon which it is based is excessive or contrary to the evidence. If upon a motion for a new trial it should be made to appear, as a matter of law, an inference from admitted facts, or of facts admitted for the purpose of the motion, that the verdict is excessive, this Court may review a contrary ruling by the trial Court. Here, however, the record does not show that such a motion upon such ground was made in the lower Court. The only reference found in the record to the matter of a motion for a new trial is this statement:

"The defendant appeals * * * from the order overruling the motion for new trial which was based on the above grounds."

If this could be considered as the statement of the fact that such a motion was made, no preceding grounds appear to which reference might be had. And if all these elements appeared, there is no exception to the order refusing the motion.

As to the point that the verdict is without any evidence at all to support it, that matter has been disposed of in the discussion of the exception to the refusal of the trial Judge to direct a verdict in favor of the defendants.

The judgment of this Court is that the judgment of the County Court be affirmed.

MESSRS. JUSTICES GARY, WATTS, FRASER and MARION concur.