Pickands, Mather & Co. v. H. A. &. D. W. Kuhn & Co.

8 F.2d 704, 1925 U.S. App. LEXIS 3345
CourtCourt of Appeals for the Sixth Circuit
DecidedNovember 5, 1925
DocketNo. 4397
StatusPublished
Cited by3 cases

This text of 8 F.2d 704 (Pickands, Mather & Co. v. H. A. &. D. W. Kuhn & Co.) is published on Counsel Stack Legal Research, covering Court of Appeals for the Sixth Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Pickands, Mather & Co. v. H. A. &. D. W. Kuhn & Co., 8 F.2d 704, 1925 U.S. App. LEXIS 3345 (6th Cir. 1925).

Opinion

MOORMAN, Circuit Judge.

This is a suit by H. A. & D. W. Kuhn & Co. to recover damages from Pickands, Mather & Co. for the breach of a contract entered into March 30, 1920, by which the latter company agreed to purchase from the former 180,-000 tons of coal, to be delivered during the year beginning April 1, 1920, and ending March 31, 1921, in equal monthly installments of 15,000 tons, the contract price to be $4.25 a ton f. o. b. ears at the seller’s mine, -subject to advances to meet increased production cost. The breach was alleged to have resulted from the refusal of defendant to accept the stipulated monthly deliveries fpr December, 1920, and January, February, and March, 1921.

Upon the hypothesis that it was acting as agent for the United Alloy Steel Corporation and the United Furnace Company in making the contract, defendant set up as a defense the existence of a general custom in the locality of plaintiff’s mine, which it alleged relieved it of liability for refusing to take the coal. It also asserted a counterclaim, alleging that plaintiff failed for the first seven months to furnish the tonnage required by the contract. The trial court held that defendant was acting for itself in entering into the contract, and also ruled that the custom relied on was not a valid defense to plaintiff’s claim. There was a judgment in damages for plaintiff. The errors assigned and argued, except those relating to the questions pertaining to a priority order of the Interstate Commerce Commission and the measure of plaintiff’s damages as set forth in the charge, relate primarily to the trial court’s construction of the contract.

[705]*705On the basic production of 1,100 tons of coal or more a day defendant was entitled under the contract to 15,000 tons a month, or, as both parties seemed to agree, 600 tons a day. This latter quantity is ascertained by dividing the number of days constituting a working month — i. e., 25 — into the agreed monthly tonnage. Defendant contends, however, that plaintiff had no right to apply any part of its production to spot sales until it had first supplied defendant’s quota of 600 tons for the day. It is on this construction that its counterclaim was based. The provision upon which it relies and about which the controversy hinges is:

“Our said Wilson mine is eqnipped now to produce fifteen hundred (1,500) tons of coal a day; it has a car rating of thirteen hundred fifty (1,350) tons a day. Shipments will be made, under this contract, based on production of eleven hundred (1,100) tons run of mine coal per day. Should there be a shortage of labor, shortage of cars, strikes, or accidents of any kind, over which we have no control, during the life of this contract, reduced shipments may be proportioned by the seller on the basis of actual production as compared to eleven hundred (1,100) tons per day.”

The lower court construed this provision, in the light of the evidence, as requiring the seller to furnish to the buyer approximately 600 tons a day for such time as the daily production was 1,100 tons or more, and when because of shortage of labor or cars or as the result of other unavoidable accident the production fell below 1,100 tons a day, to furnish to the purchaser %ioo or six-elevenths of such daily production, with the right to dispose of the remainder as and when it pleased. In our opinion, that is the correct construction. It is consonant with the purpose of self-protection in the event the production fell below the standard fixed — as to the seller against liability for failure to make full deliveries, and the buyer against discrimination in the deliveries. The parties so construed the contract as to November shipments, and other dealings between them indicate a like construction.

But it is contended under that construction that it was competent to prove the existence of a custom to the effect that where the coal was purchased by an industrial plant, and for any reason beyond its control the plant was required to close, for such time as it was closed the purchaser would be relieved from receiving and paying for the stipulated monthly supply. This upon the theory that the Alloy Corporation and the Furnace Company were the real purchasers and their plants were closed for the last four months of the contract. If it be true that defendant was acting as agent for those companies and there was in existence such a custom as alleged, it nevertheless could not be introduced in evidence to contradict the terms of the contract. It has been frequently held by this court that a trade custom, no matter how well established, cannot be permitted to nullify the express terms of a contract. Lillard v. Kentucky Distilleries & Warehouse Co., 134 F. 168, 67 C. C. A. 74; Jenkins S. S. Co. v. Preston, 186 F. 609, 108 C. C. A. 473; American Guaranty Co. v. American Fidelity Co. (C. C. A.) 260 F. 897; Jewett, Bigelow & Brooks v. Detroit Edison Co. (C. C. A.) 274 F. 30. This is in accord with the decisions of the Supreme Court. Bliyen v. New England Screw Co., 23 How. 431, 16 L. Ed. 510; Federal Reserve Bank v. Malloy, 264 U. S. 160; Barnard v. Kellogg, 10 Wall. 383, 19 L. Ed. 987. In the last-mentioned ease it was said, if a custom “be inconsistent with the contract, or expressly or by necessary implication contradicts it, it cannot be received in evidence to affect it.” And, quoting Lord Lyndhurst, it “may be admissible to explain what is doubtful; it is never admissible to contradict what is plain.” The parties here agreed on a scale of delivery, which manifestly cannot be overturned by a custom inconsistent with its terms.

Nor do we think that the contract was made by defendant as agent for the Alloy and Furnace Companies. On its face it purports to be made with the defendant alone. No reference is made in it to the two companies which defendant alleges it was representing. Knowledge on the part of plaintiff that the coal was to he furnished to those companies did not make them parties to the contract. Such knowledge did not thrust upon plaintiff a party with whom it was not dealing and had never consented to deal. The contract, by its terms, bound the defendant and no one else as purchaser. An agent who binds himself will not, as stated in Ford v. Williams, 21 How. 287, 16 L. Ed. 36, “be allowed to contradict the writing by proving that he was contracting only as agent,” although such evidence is admissible “to charge the principal.” However, defendant was permitted to show, if it could, that it acted for the two companies in making the contract. It failed to introduce any substantial evidence in support of that view.

[706]*706Upon the showing that defendant’s quota of production was shipped to it during April, May, June, and July, the court withdrew from the jury consideration of the claim of a breach of the contract by plaintiff for those months, hut submitted the claim of failure to deliver the agreed quota for shipment to Canton during the three succeeding months. As to that part of the claim, plaintiff relied as a defense on a priority order issued by the Interstate Commerce Commission in the latter part of July, 1920, placing a restriction on shipments of coal to places other than lake ports. The defendant claimed that plaintiff used the order as a pretext for refusing to make deliveries for y shipment to the Alloy and Furnace Companies, which companies, because of failure to receive coal, suffered great damage in the operation of their plants.

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Bluebook (online)
8 F.2d 704, 1925 U.S. App. LEXIS 3345, Counsel Stack Legal Research, https://law.counselstack.com/opinion/pickands-mather-co-v-h-a-d-w-kuhn-co-ca6-1925.