Columbian Iron Works & Dry Dock Co. v. Douglas

33 L.R.A. 103, 34 A. 1118, 84 Md. 44, 1896 Md. LEXIS 85

• Court: Court of Appeals of Maryland
• Decided: June 18, 1896
• Status: Published

Opinion

McSherry, C. J.,

delivered the opinion of the Court.

This suit was brought to recover damages for an alleged breach of contract. The declaration'contains two counts; one upon the contract and one for money received by the defendant for the use of the plaintiff. The first count alleges in substance, that the plaintiff purchased from the defendant “ all the steel scrap in the ship yard of the defendant * * consisting of clippings and punchings from the steel plates and angles and beams used in the construction of the United .States cruisers built by said defendant;” and that the defendant was to load the said scrap at the plaintiff’s expense upon railroad cars on scows at its works. That the defendant agreed to furnish clean steel scrap consisting only of clippings and punchings from the steel plates, angles and beams of the United States cruisers built by it, but that, though warned by the plaintiff not to deliver or to mix with said steel, any iron, copper or other scrap, yet the defendant, without the plaintiff’s knowledge, in violation of its agreement, did deliver such iron, copper and scrap mixed with the steel scrap, whereby the steel scrap was rendered unmerchantable. That relying on the contract and on the good faith of the defendant to deliver the material purchased, the plaintiff upon presentation of an invoice from the defendant for three hundred and fifty-seven thousand and seven hundred pounds of steel scrap, paid the defendant the sum of two thousand six hundred and seventy-four dollars and seventy-five cents ; and that the plaintiff immediately upon discovering, after the delivery of the material, that the defendant had wrongfully mixed iron, copper and other scrap with the cruiser steel scrap purchased, demanded a return of the money paid, and asked that directions be given with reference to the disposition to be made of the scrap, but that the defendant refused to return the money or to assume any responsibility as to the goods, whereby the plaintiff sustained great loss. The defendant pleaded the general issue. The verdict and judgment were for the plaintiff and the defendant has appealed. There is but one exception in the record and that brings up for review the rulings of the Court of Common Pleas upon the prayers for instructions to the jury.

The contract sued on is, according the contention of the appellant, wholly in writing, whilst according to the contention of the appellee it is partly in writing and partly in parol. Whether it be the one or the other is of practically little consequence. If wholly in writing, it is evidenced by numerous letters and telegrams ; and if partly in writing and partly in parol, it is evidenced by the same letters and telegrams, and by interviews between the agent of the plaintiff and some of the officers and employees of the defendant. The negotiations opened July the nineteenth, eighteen hundred and ninety-two, with a written inquiry from the plaintiff to the defendant, as to whether the latter had on hand and for sale any steel scrap, angle or plate croppings or punchings. To this the defendant, which is a ship building company, replied the following day that it had a large quantity of steel scrap left from the Government cruisers that it had constructed; arid that this scrap was first-class material. Considerable correspondence then followed .until August the third. This correspondence related to the price, quality and quantity of the material, and included an offer at a named sum which was rejected; but subsequently a price was agreed on. Throughout the correspondence and the interviews the material negotiated for was described and understood by both parties to be scrap from cruiser steel. Two of the United States cruisers, the Detroit and the Montgomery, had been built for the Federal Government by the defendant at its yard in Baltimore. The steel of which the hulls of these vessels were made was required to be of a high grade and quality. The shearings, clippings and punchings from the plates, beams and angles used in the construction of the cruisers were the steel scrap which the plaintiff agreed to purchase and the defendant agreed to sell. Not only was no other material contemplated, but all other and different material was, in express terms, excluded. On August the second the plaintiff wrote as follows :

“I now confirm having made the purchase from you of from 125 to 175 tons steel scrap, consisting of clippings and punchings from the steel plates and angles used in the construction of the United States cruisers built by you, at $ 16.50 .per gross ton f. o. b. cars your works, and will wait your confirmation of the sale. Terms of payment as usual in such cases, net cash, 30 days. We will send you instructions in regard to shipment within a few days, and would be glad to know when it will suit your convenience to load up the scrap.”

And the next day the defendant replied :

“Yours of 2nd to hand, and contents noted. In reply we respectfully call your attention to ours of 2nd, wherein we say the price of the material for which you are in negotiation with us is $16.50 per ton net. Of course this does not mean that we shall load it on the cars, which we do not propose to do, neither will we accept other than prompt cash payments, as the cars leave here loaded, or short time paper, with interest added at the rate of six per cent, per annum, endorsed to our satisfaction. These are the terms. We thought you understood this portion of the inquiries, as they have always been named. These two points accepted by you and the material is yours.”

Upon the receipt of this letter, instead of replying in writing, the plaintiff, who is an iron merchant, doing business in New York, sent his brother, John B. B. Douglas, to Baltimore to settle the matter and to conclude the negotiations. When Mr. Douglas reached Baltimore he called on Mr. Malster, the president of the defendant company, and they discussed the proposed terms of purchase and the cost of moving the material from the company’s yard to the wharf for loading. Mr. Malster had described the steel scrap as “a nice, clean lot.” Upon examining the pile Mr. Douglas noticed that there was a considerable amount of iron pipe and galvanized iron and pieces of wrought iron lying on the pile, and to this he took exception. Mr. Malster’s office assistant stated in reply that there was but a small quantity of this iron in the pile and that it was so entirely different in appearance from the steel that it could easily be kept out when loading. Upon the return of Mr. John Douglas to New York, the plaintiff, on August the sixth, wrote in part as follows: “ Confirming conversation with your Mr. Malster, yesterday, relative to your favor of third instant, I will take the lot of punchings and clippings from plates and angles of cruiser steel, at $16.50, per gross ton where they lie, terms cash on presentation of bill with railroad shipping receipt attached. We will pay you 15c. per ton for loading on cars, and if we ship by lighter or railroad float will pay ioc. per ton more (25c. per ton in all), to cover cost of cartage in your yard, and loading on lighter or in cars on float * * * In loading the scrap, please keep out all the light scrap, such as sheet or galvanized iron, and steel or pipe, and the other materials, such as turnings and borings. I wish the stock loaded free from all such materials and dirt and earth, as my customer is particular in regard to this.” To this letter the defendant, on August the eighth, replied as follows : " In reply to yours of sixth instant referring to purchase of material will say: We accept your proposition to sell to you what punchings, clippings or shearings from plates, angles, beams, etc., we have from cruisers, for $16.50 per gross ton, as they now lie in our yard, and you to pay 15 c. per ton additional to the above-mentioned figure, for loading cars in our-yard, when they are loaded upon our track. Thus far your proposal is accepted:’ ’ Then followed some observations as to the cost of loading and the letter concluded in these words : “ Furthermore, we desire you to send some one familiar with the quality of such material, as referred to in our several letters, so as to pass upon it as to quality, for we wish you to take notice, and be guided accordingly, that there shall not be any rebate on the said material, on account, of light weight, dirt or quality of material, or for any other cause after having left our yard.” On the ninth Douglas replied. Part of his letter reads as follows:

“ Regarding my-sending some one to inspect the loading of the scrap, it is not very convenient for me to do so at present, and I do not think it is necessary unless you choose to take up so arbitrary a position as to compel me to do so. I would be satisfied to- accept the material as represented by you, that it is the ‘ punchings, clippings and shearings from plates, angles, beams, etc., from cruisers,’ with your assurance that you would exercise every care that no other material is shipped. Light sheet iron, borings, turnings, etc., do not come under your description, nor would such real estate as might be shovelled into the cars with the steel. We are paying you a high enough price to warrant your taking some little extra care in this respect, and will be satisfied with your assurance in regard to it. It would be impossible for any one to accept a lot of scrap as being of the quality represented. We know what the requirements of cruiser steel are, and presume what has been delivered to you has pássed the Government inspection. The only point we could decide would be whether what you loaded on the car was covered by the terms ‘ punchings, clippings and shearings from plates, angles, beams, etc.,’ and in my opinion it should be unnecessary for us to send any one to decide such a matter.”

Getting no reply he again wrote on the sixteenth, and amongst other things stated:

“ In regard to sending some one to inspect the loading of the scrap, as already explained, it is hardly convenient to do so, and I would prefer to leave it to yourselves to load only a nice lot, which would come entirely within the description, and so be a means of leading to further business. However, if you could arrange a day for loading, say Tuesday or Wednesday of next week, when we could have a float in, I would try to have some one on hand to inspect the scrap. If these, or any other day would suit you, please advise and I will endeavor to arrange it.”

Again on August the 17th, Mr. Douglas wrote as follows :

“Confirming my respects of yesterday, we can arrange to take delivery of the scrap alongside lighter your wharf, and will pay you ten cents per gross ton for trucking in addition to fifteen cents for loading, making price in all twenty-five cents per ton for delivering scrap from where it lies to alongside float or lighter. If this is satisfactory to you, on receipt of your confirmation I will order float to be sent in on any day suitable for you, say Monday, Tuesday or Wednesday of next week, and will have some one on hand to inspect loadmg, so as to start first thing in the morning, and have it go right along without further delay.”

And on the following day the defendant replied to the letter of the sixteenth :

“In reply to yours of August 16th to hand, wherein you state, if we will load the material (steel scrap) and cart it to the side of a lighter, which you will have placed at our wharf,' you will pay to us 25c. per gross ton for so doing; as we understand 'it, we have nothing whatever to do with loading the scow or flat. We load the carts with the scrap and haul it to the scow or flat, where we unload it alongside, or as near as we can get to the flat. For this you will pay us 25 c. per gross ton. This we accept, although at a loss to us beyond what we previously agreed to. But it must be understood that the above figure does not include the loading the flat, or doing anything other than above stated, and the flat to be placed as we may direct. If the above is your offer, you can commence to move the stock at any time, with the understanding, however, that the part of our letter dated August 8th, referring to payments for the said stock is in full force, and the acceptance of this part of your, proposal shall in nowise vitiate or annul that part of the contract.”

On August the twenty-third John B. B. Douglas arrived at the defendant’s ship yard at about eight A. M. The witness was turned over to Mr. Malster’s assistant, and the assistant turned him over to the yard foreman. The work of carting the scrap to the wharf then began. The witness noticed the galvanized iron and other objectionable material on the pile hauled to the wharf, pointed it out and it was removed and placed in a separate heap. On the following-day the hauling to the wharf and the loading aboard the cars on the scow continued, explicit instructions having been given by John Douglas that the objectionable scrap should not be loaded. Being calléd away, Mr. Douglas notified the yard foreman that he would leave for Philadelphia, and there being no objection to his going he went, relying upon the good faith of the defendant not to load the material that had been rejected and depending on the understanding that only cruiser steel would be put on the cars. The loading from the wharf to the cars was done by the Baltimore Storage and Lighterage Company. The barge with the loaded cars left the defendant’s wharf on August the thirty-first. The defendant wrote, enclosing invoice and receipt of the Lighterage Company for 357,700 pounds of “steel scrap,” and the next day the plaintiff forwarded his check for the amount claimed to be due. On the second of September the defendant returned a receipted bill for the same number of pounds of “ steel scrap.” The plaintiff sold the scrap to the Latrobe Steel Works of Pennsylvania. When it reached Latrobe in the cars loaded at the defendant’s yard it was found that of the total one hundred and fifty-nine tons shipped eighty-nine .tons were cruiser steel and seventy tons were not. By reason of this default the plaintiff was obliged to sell the seventy tons at a much less sum than he had paid for it, in consequence of which he incurred considerable loss. On October the thirteenth the plaintiff communicated this result to the defendant and the defendant in reply merely referred to the antecedent correspondence. To recover for the loss thus sustained the pending suit was subsequently brought.

Under all these circumstances there ought to be, and we think there is, no serious difficulty as to the law which should govern this case. Without going into a specific criticism of each prayer and each instruction contained in the single exception which the record brings up, a general statement or summary of the law upon the subject involved will be sufficient, we apprehend, to show that there is no error suggested of which the appellant has the slightest reason to complain. It is a mistake to assume that the doctrines applicable to warranties have any reference to or can be invoked in this controversy. The contract, whether treated as evidenced alone by the writings referred to, or as consisting of both the writings and the parol interviews, is obviously not an agreement warranting the steel scrap to be of a designated or prescribed quality; but in whichever light the contract may be viewed it is impossible to escape the conclusion that it was an agreement for the purchase by the appellee and for the sale by the appellant of a specific, designated thing; and that thing was, not steel of a described grade free from a named percentage of sulphur and phosphorus, but steel scrap from, the plates, beams and angles of United States cruisers built by the appellant. This was the named and designated—the specific and identical—thing contracted for ; and the substitution of any other or different material, no matter what its quality or chemical test might be, was a clear breach of the undertaking entered into by the parties. When a person buys a particular thing he cannot be compelled to take some other thing, even if like the thing he bought. He has a right to insist on the terms of his contract. If he has unwittingly received that which he has not bought he has the right to return it, or, keeping it, to recoup when sued for the stipulated price, the damages which a failure to comply with the contract has caused him; or, finally, if he has paid the purchase price he has the legal right to sue for and to recover back the difference in value between the price which he paid for an article he did not get, and the market price of the substituted article delivered to and retained by him. He cannot, if he has purchased a cargo of peas be required to take a cargo of beans. Lord Abinger in Chanter v. Hopkins, 4 M. & W. 399; 2 Benj. on Sales, 768. Before a defendant can be compelled to take anything in fulfillment of a contract of sale it must be shown not merely that it is equally as good as the article that was sold, but that it is the same article he has bargained for and none other. Lord Blackburn, in Bowes v. Shand, 2 App. Cas. 455; 2 Benj. on Sales, 768. In other words, if the sale is of a described article, the tender of an article answering the description is a condition precedent to the purchaser’s liability, and if this condition be not performed the purchaser is entitled to reject the article, or, if he has paid the purchase price, he is entitled to recover back the price as money had and received for his use. 2 Benj. on Sales, sec. 918. This doctrine cannot be better stated than it was put by Lord Abinger in Chanter v. Hopkins, supra. “ A good deal of confusion has arisen in many of the cases upon this subject, from the unfortunate use made of the word warranty. Two things have been confounded together. A warranty is an express, or an implied statement of something which a party undertakes shall be part of a contract, and though part of the contract, collateral to the express object of it. But in many of the cases, the circumstance of a party selling a particular thing by its proper description has been called a warranty, and the breach of such a contract a breach of warranty ; but it would be better to distinguish such cases as a non-compliance with a contract which a party has engaged to fulfill; as if a man offers to buy peas of another and he sends him beans, he does not perform his contract; but that is not a-warranty; there is no warranty that he should sell him peas, the contract is to sell peas and if he sell him anything else in their stead, it is a non-performance of it.” Precisely this principle is recognized in The Warren Glass Works Co. v. The Keystone Coal Co., 65 Md. 547. It can make no possible difference whether the failure of the plaintiff to receive what he contracted to get, grew out of the fraud of the defendant,or out of an accident unmixed with bad faith.

If the contention of the appellant that the contract was wholly in writing be conceded, then there was obviously a sale of goods by description, and as the question of warranty was not involved at all, it would have been palpable error to have denied the plaintiff a recovery on the ground that there was not a warranty, though the condition precedent that the goods sold should be what they were alleged to be was wholly unfulfilled. There can, therefore, be no error predicated of the refusal on the part of the Court below to grant the appellant’s first prayer.

If the theory of the appellant be accepte d that there was no condition precedent as to the character of the goods involved in their description, and that the sale was made subject to inspection; then, assuming the contract to have been evidenced solely by writing, there was no term in it which subordinated the description to the inspection ; because it is perfectly apparent the minds of the two contracting parties never concurred in substituting an inspection by the purchaser for the description furnished by the vendor. This is made clear by the correspondence heretofore transcribed. But if on the other hand the contract was both in writing and in parol, then the question as to inspection was a question as to the construction of the contract and was for the jury, and the Court so considering it left it to them.

(Decided June 18, 1896).

These views dispose of the whole case. If the contract be treated as one wholly in writing the appellant wrongly construes it. If it be considered as partly in writing and partly in parol, the appellant’s prayers were wrong in assuming that it was wholly in writing. The instruction given by the lower Court cannot be objected to because it was in fact more favorable to the appellant than the appellant was, in strictness, entitled to receive.

As we find no errors we shall affirm the judgment.

Judgment affirmed with costs above and belozv.