Davis v. Carnegie Steel Co.

244 F. 931, 157 C.C.A. 281, 1917 U.S. App. LEXIS 2071
Court of Appeals for the Sixth Circuit·Decided October 2, 1917·No. No. 2983·Published·Cited by 4 cases

Opinion

KNAPPEN, Circuit Judge.

Defendant in error (defendant below) had at its McDonald site, near Girard, Ohio, a large dump of furnace slag, amounting to many thousand tons and covering several acres; it had in connection with its Ohio steel plant, near Youngstown (a few [933] miles from the McDonald site), another slag dump, much larger than the one at the latter site. Its daily dump oí slag from the Ohio plant alone was from 1,000 to 1,500 tons. Plaintiffs brought suit to recover damages for the breach of an alleged oral contract, whereby defendant, in consideration of plaintiffs’ agreement to remove from defendant’s premises the two piles of slag, and to keep out of defendant’s way the furnace slag dumped by defendant at both sites, agreed to put in a slag-crushing plant and turn the same over to plaintiffs, to be operated by them; they to have the slag to dispose of as they pleased.

Plaintiffs’ testimony showed that prior to the making of the alleged contract there had been conferences between plaintiffs and defendant’s engineers looking to the installation by plaintiffs on defendant’s premises of a slag-crushing plant, estimated by plaintiffs to cost about $75,-000, for the crushing and removal of the slag dumps. There is no claim that any contract was entered into until plaintiffs’ subsequent interview with defendant’s president in November, 1912, at the close of which interview defendant’s president is alleged to have said: “It would never do to have you put a slag-crushing plant on our ground; * * * you need screens and crushers; there is a steam shovel up there; we will put the plant in there, and you can have the slag so long as you keep it out of our way.” To which plaintiffs replied: “We will keep the slag out of your way. * * * We are satisfied to go ahead and keep the slag out of your way.” Thereupon defendant’s president said: “This is out of tlie wind.” This comprises the express proof of the contract* relied upon. The alleged contract is interpreted by both plaintiffs as requiring the slag (including daily product) to be kept out of defendant’s way; by one as requiring the removal of accumulations at both sites, if defendant so desired; by the the other as permitting it (at plaintiffs’ option), but not requiring it.

The alleged arrangement was entirely oral; it was never subsequently reduced to writing; no payment was ever made to bind the alleged bargain; nothing was ever done under it; no part of the slag was ever delivered to or received by plaintiffs. On the contrary, the defendant built a crushing plant and operated it on its own account; plaintiffs never had any possession of, or anything to do with, defendant’s plant, or with its appurtenances, equipment, or operation.

The defendant, by its answer, denied the alleged contract in tolo, urging also the invalidity of the alleged contract not only for lack of mutuality, but also because it related to an interest in lauds, and because not to be performed within a year from its making, and so void under the statute of frauds (G. C. Ohio, §§■ 8620 and 8621); also, because, con - sidered as a sale, or a contract of sale, of goods of the value of $2,500 and upwards, void under the Ohio Sales Act (G. C. § 8384). Defendant also denies here the authority of its president to make the alleged contract. At the close of the testimony the presiding judge (the present Mr. Justice Clarke) directed verdict for defendant. This writ is to review the judgment entered thereon.

[1] We must assume, on this review, that plaintiffs’ testimony is true, and that they arc thus entitled to the benefit of every fair inference therefrom. Shadoan v. C., N. O. & T. P. Ry. Co. (C. C. A. 6) 220 Fed. [934]*93468, 71, 135 C. C. A. 636. We accept their interpretation that the plant was to be operated by them.

[2,3] The specific ground on which verdict was directed seems to have been lack of proof that plaintiffs were damaged by the breach of the alleged contract. We think the direction sustainable on this ground. There is no claim of damages (except as involved in loss of profits), or of money expended on faith of the contract. The sole basis of plaintiffs’ claimed right of recovery is loss of profits, by being denied the right to perform. While plaintiffs showed the value of the crushed slag, there was no evidence of the cost of crushing and marketing it, and it seems to be assumed that a considerable portion at least required such treatment to make it marketable. The proof of profits lost was speculative and conjectural. Plaintiffs’ testimony, based on inquiries at Detroit, that there was a given profit per ton at that place in the handling and marketing of slag, was properly excluded; for not only was it secondhand information, but there was no showing that the profits derivable from treating and marketing the dumps in question bore sufficient relation to the profits said to be derivable from the uses to which the slag was put in Detroit. Unless, therefore, there was other evidence taking it out of the general rule, the failure to show cost of operation was fatal to recovery. Anvil Mining Co. v. Humble, 153 U. S. 540, 549, 14 Sup. Ct. 876, 38 L. Ed. 814; McCornick v. Mining Co. (C. C. A. 8) 185 Fed. 748, 751, 108 C. C. A. 86; Magnolia Co. v. Gale, 189 Mass. 124, 132-133, 75 N. E. 219; Bristol R. Co. v. Bullock, 101 Va. 652, 44 S. E. 892; Klingman v. Racine Co., 149 Iowa, 634, 128 N. W. 1109; Bartow v. Erie R. R. Co., 73 N. J. Law, 12, 62 Atl. 489.

[4] One of the plaintiffs, however, upon cross-examination apparently designed to bring the case within the Ohio Uniform Sales Act, testified that “the value of that slag that we were to take away and in those piles would exceed the sum of $2,500”; and plaintiffs urge that this testimony is enough to support a verdict for at least $2,500 damages. We are unable to accept this view. It by no means follows that, because the slag was worth $2,500, plaintiffs were damaged in that amount by not getting it; for the contract was an entirety, and plaintiffs could not take away the slag, except by complying with the obligations imposed upon them, namely, the keeping of the slag out of defendant’s way, not only during the demand for uncrushed slag, but during the entire year. In other words, plaintiffs had a duty to perform by way of payment for the slag; and the cost of performing that duty and making such payment does not appear.

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Davis v. Carnegie Steel Co., 244 F. 931, 157 C.C.A. 281, 1917 U.S. App. LEXIS 2071 (6th Cir. 1917).

244 F. 931 (Davis v. Carnegie Steel Co.) — published by Counsel Stack Legal Research, free access to 12M+ legal documents.

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