Nottingham & Wrenn Co. v. American Coal Exporting Co.

36 F.2d 982, 1929 U.S. Dist. LEXIS 1757
CourtDistrict Court, S.D. New York
DecidedAugust 21, 1929
StatusPublished

This text of 36 F.2d 982 (Nottingham & Wrenn Co. v. American Coal Exporting Co.) is published on Counsel Stack Legal Research, covering District Court, S.D. New York primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Nottingham & Wrenn Co. v. American Coal Exporting Co., 36 F.2d 982, 1929 U.S. Dist. LEXIS 1757 (S.D.N.Y. 1929).

Opinion

THACHER, District Judge

(after stating the facts as above). If the agreement, the validity of which is now conceded, were to be construed in ignorance of the business to which it relates and the situation and necessities of the parties, one would say at once that the obligation expressed was to deliver coal actually produced from Monte Mines No. 1, No. 2, and No. 3. Indeed, the language is so plain that its normal meaning could hardly be made more clear. But words are creatures of their environment. They take color and sense from the transactions in which they are employed, and if truly understood are not always to be construed as the dictionaries define their common usage or the courts declare their legal significance, but rather in the sense in which men situated as the parties were, and concerned in like transactions, would have employed and understood them. And so it is that courts look not only to the face of the agreement but to its subject-matter and the surrounding eireumstanees so that they may understand the language-of the parties and grasp the sense in which their words were used and the application they were intended to have to the business in hand. Nash v. Towne, 5 Wall. 689, 699, 18 L. Ed. 527; Bradley v. Steam-Packet Co., 13 Pet. 89, 99, 10 L. Ed. 72; Chicago, Rock Island & P. Ry. Co. v. Denver & Rio Grande R. Co., 143 U. S. 596, 609, 12 S. Ct. 479, 36 L. Ed. 277. Cardozo, J., writing for a majority of the court in Utica City Nat. Bank v. Gunn, 222 N. Y. 204, 118 N. E. 607, 608, said: “The proper legal meaning, * * * is not always the meaning of the parties. Surrounding circumstances may stamp upon a contract a popular or looser meaning.” This, it seems, is such a ease.

On May 19, 1920, plaintiff agreed with Logan-Poeahontas Fuel Company to purchase the output of three mines at Ottawa, in the state of West Virginia, known as “Monte No. 1,” “Monte No. 2” and “Monte No. 3,” for a stated period and subject to-stated exceptions and conditions. Eight days later the agreement in suit was executed. Express reference was made to plaintiff’s contract for the purchase of the output of these mines, as follows: “* * * The buyer [985]*985hereby purchases and agrees to receive and pay for and the seller hereby sells and agrees to ship from the coal which it may receive from Monte Mine #1, #2 and #3 of BuffaloThaeker Coal Company, located near Ottawa, West Virginia, which coal it has purchased from Logan-Pocahontas Fuel Company under contract dated May 19th, 1929, and expiring March 31, 1921, the quantity and grade of coal hereinafter stated, upon the terms and subject to the conditions stated below. * * * ”

Plaintiff’s contract with Logan-Poeahontas Fuel Company contains the following provision: “Grade: Eagle Run-of-Mine coal to be mined and shipped from Monte Mines No. 1, No. 2 and No. 3, at Ottawa, West Virginia, eligible to pools 5 or 7, under classification B of the Tidewater Coal Exchange. The Seller agrees to give the coal shipped on this contract such standard preparation as will insure its passing the inspection of Newport News Coal Exchange.” It was for the purchase of coal shipped to the piers at Newport News pursuant to the original contract with the mines that the agreement in suit was made. . •

The Monte Mines were located in the Kanawha District, on the Chesapeake & Ohio Railroad. Prior to May 1, 1920, all shipments on the Chesapeake & Ohio Railroad were consigned to the Tidewater Coal Exchange for the account of the transshipper. Coal from the Monte Mines was classified in Pools 5 and' 7 of this exchange. The Tidewater Coal Exchange ceased operations on May 1, 1920, but on that day the Newport News Coal Exchange commenced operations substantially in the same way as the Tidewater Coal Exchange had operated. The new exchange adopted the classifications theretofore in use under the old exchange, and coal from Monte Mines continued to be classified in Pools 5 and 7. The coal was billed from the mine to the particular pool to which such mines were authorized to ship and was consigned to the exchange for account of the transshipper. As soon as the coal was shipped from the mine, the transshipper filed with the exchange a statement showing car numbers, date of shipment, and other details; was thereupon given a credit in the proper pool for the estimated amount of coal loaded in the ears, and was allowed to draw from the pool the amount of coal shown to his credit as soon as a vessel was ready to load, without awaiting arrival of the particular cars shipped from the mines. Under the rules and regulations of the exchange, shipments could only be made upon permits issued upon satisfactory showing that vessels would be available to move the coal promptly. While the new exchange was a voluntary organization formed by the railroad for the benefit of all shippers to avoid congestion and eliminate delay, and membership was not compulsory, the fact is that from May 1, 1920, until the following spring all shippers over the Chesapeake & Ohio Railroad consigned all their coal to the Newport News Coal Exchange for the transshipper’s account in the pool or pools in which it was classified. Prior to May 1, 1920, all such shipments were pooled in the Tidewater Coal Exchange in the same way. It is true that one large shipper whose coal was shipped in private cars was assigned a special pool for his ears only, but all other coal moving over this railroad went into the various pools, and thus lost its identity, to be delivered in kind from the pool in which it was classified. Every coal merchant knew from this uniform trade practice that specific coal shipped from a mine on the Chesapeake & Ohio Railroad would upon arrival at Tidewater lose its identity, and that delivery at the railroad piers would be made in kind. This was the situation with reference to which the parties contracted on May 19, 1920. The evidence shows that the purchaser at that time was only interested in receiving coal classified in Pools 5 and 7, and was entirely indifferent to the mines from which it was shipped. Both parties knew that congestion at the piers was serious. Although it was theoretically possible to ship coal independently of the exchange, it was well understood that any attempt to do so would involve great difficulty and impose upon the defendant much expense in holding vessels on demurrage to await the arrival of particular ears, when by following the uniform practice vessels could be loaded upon arrival from any coal available in Pools 5 or 7.

Under these circumstances the words of the agreement should not be given a legal interpretation which will defeat the purpose of the parties, if by construing them more loosely and in a colloquial sense their purpose can be accomplished. The words, “the buyer hereby purchases and agrees to receive and pay for and the seller hereby agrees to ship from the coal which it may receive from, Monte Mine 1, 2 and 3 * ' * ° which coal it has purchased from Logan-Pocahontas Fuel Company under contract,” etc., are not strained too far when read, in a colloquial business sense with relation to the subject-matter and the situation of the parties, to mean shipment and delivery through the ex[986]*986change. This, I think, is the construction to be adopted, without recourse to the fact that the parties in all their subsequent dealings adopted it. But if there be doubt or ambiguity, such doubt must be resolved consistently with the construction which the parties placed upon their own agreement.

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Cite This Page — Counsel Stack

Bluebook (online)
36 F.2d 982, 1929 U.S. Dist. LEXIS 1757, Counsel Stack Legal Research, https://law.counselstack.com/opinion/nottingham-wrenn-co-v-american-coal-exporting-co-nysd-1929.