Kokomo Straw Board Co. v. Inman

The simple question then arises, do the facts in this case bring the plaintiff within the provisions of the above-stated principle ? There is no dispute about the facts that one of the notes of the defendants, the note which became due on the 5th of. July, 1888, was not met at maturity, and was allowed to go to protest. Subsequent notes shared the same fate. It is true that the defendants seek to relieve themselves of the obligation to pay these' notes by the allegation that the plaintiff had not complied with its part of the agreement. That question I will examine under the second legal proposition. Assuming that it had substantially performed its contract, there can be no doubt in my mind that the non-payment of the demands of the plaintiff as they matured under the contract, and the failure of the defendants to give notes for the subsequent shipments made in June, authorized the plaintiff to set aside the contract, and to declare it at an end, and to furnish no other boards. It cannot for a moment be assumed that the plaintiff was bound to go on furnishing its materials under the contract, unless the defendants complied with their portion of the contract, and paid for the materials according to the requirements of the contract. In the correspondence of the defendants at the time when these notes went to protest, and immediately thereafter, there is no pretense of any excuse having been furnished them by the plaintiff for their nonpayment On the contrary, on the day when the note became due, and went to protest, we find Mr. Inman, the defendant, writing to the plaintiff as follows: “ Your telegram in reference to my note ($1,054) was received to-day, too late to be of the slightest service .to me. My payments are very heavy, and I had hoped for some relief from you; therefore, I was obliged to let

the note go back, which I regret very much.” On the 24th of July, after two notes had gone to protest, the defendants wrote to the plaintiffs: “I am very sorry that severe disappointments to me should have inconvenienced you also, but I anticipate no further trouble in the future. Will mail you notes for the unsettled accounts in a day or two." It thus appears that the defendants at that time, instead of finding an excuse for the non-payment of the note in default of the plaintiff, had actually applied to the plaintiff for assistance, and the plaintiff had even been willing to give them assistance, but it had come too late; and after all the transactions had been completed, and all the boards had been delivered except one ton, which was delivered in August to oblige the defendants, the defendants admitted their indebtedness to the plaintiff for the boards which had been delivered, expressing their regrets that the notes given had not been paid, and their determination in a day or two to give notes for the unsettled account. Mr. Inman was asked by his counsel why that note was not paid. His answer was: “ It was not paid for two reasons. One was that I asked them to renew it, and I got no reply from them whether they would or not until after it was protested; and the second reason was because I had paid'out a large amount of money for that same material that was due from them, therefore I was short of funds just at that time; ” and the same reason is given for the non-payment of the notes which became due-July 20th. On the 20th of July, fifteen days thereafter, another note went to protest for the sum of $658.75, and no notes or acceptances were ever given for any shipments after the month of May. In my opinion, therefore, the plaintiff had the undoubted right to send no more boards, and to terminate the contract, unless, as is intimated by a portion of the answer of Mr. Inmari, they were placed in this position by the failure of the plaintiff to furnish the board required; and we are thus brought to the consideration of the second legal proposition, to-wit: Has the plaintiff so violated or departed from its contract as to deprive it of the right of action, or to give the defendants a right of counterclaim for damages against it ? What was the contract between the plaintiff and defendants? It was to furnish during the year 1888,1,200 tons of straw board. Its mill was not completed, and was not to be completed, for some time after the date of the contract, and this was perfectly well known to the defendants when they made their contract. The contract as it is written ought to receive a reasonable interpretation, and such as will be just and equitable to both parties, neither giving the plaintiff the right to send the whole 1,200 tons during the last month of the year, as has been contended for by the plaintiff, nor authorizing the defendants to require 1,200 tons in any one month of the year, or in any two or three months of the year. The natural presumption is that the defendants would require, during the year 1888, 1,200 tons, an average of about 100 tons per month, sometimes a few more, and sometimes a few less, as expressed by Mr. Williams, the witness. An effort has been made on the part of the defendants to show by paroi testimony some other agree

This was an order for 60 tons, and would hardly have been given in the form it was if the defendants knew that there was an outstanding order unfilled for 100 tons given verbally on the 9th of November without any allusion to that order. On the 7th of December, after the above order had been given, the defendants wrote the plaintiff: “ Is there not some way you can let me have a car-load or two right away, even if not quite up to the standard, ard we won’t find any fault As a matter of accommodation I wish you would make the effort. Bush it right along.” No allusion whatever made to the alleged verbal order on the 9th of November. On the 2d of January, 1888, the defendants again wrote: “ Please hurry boards along as fast as possible in accordance with orders sent you.” No allusion whatever to any order given, but to orders sent. On the 12th of January the "defendants wrote: “As to the first lot of board which you sent us, which

we have received, we are very much pleased with it, being the first made by you. If you can steadily improve for three months, you will make the best board in the country.” Ho allusion to the unfilled order of the 9th of Hovember, but another order sent, for ten tons with this request: “ Please make and send to us at once in advance of other orders.” And so new orders are given by the defendants to the plaintiff from time to time up to the 28th day of May, 1888, when, as we have seen, the plaintiff was requested by the defendants to cancel all orders previously given. Even after the note had gone to protest on the 5th of July, 1888, the defendants, so far' from making any allusion to unfilled orders,, or any claim for damages against the plaintiff, write: “I was-obliged to let the note go back, which I regret very much.” The defendant was asked in his examination, “ How many tons were ordered by you under the contract between the 9th of Hovember, 1887, and July 1, 1888 ?” and he answers, “ Five hundred and thirty-three tons.” He is then asked, “Does that include the 100 tons ordered on Hovember 29th?” and he answers, “Yes.” Q. “How many tons did you order in July and August under the contract?” and he answers, “One hundred and forty-three tons.” On the 27th of August the defendants wrote the plaintiff as follows: “How, the situation is this: You have 150 tons of old orders on your books not yet filled.” This, of course, must have included the order for the 143 tons which the defendant has testified that he gave the plaintiff in the months of July and August; for those months only one ton was sent. How, if we deduct 143 tons or 142 tons from the 150 tons which the defendants allege was still due them, it excludes any pretext of the 100 tons alleged to have been ordered in Hovember, and leaves an order for only eight tons unfilled at that time; and the defendants allege further in the same letter that there was due them about 700 tons on their contract with only four months to deliver it in, showing conclusively, according to the construction of the defendants themselves, that the plaintiff had the year within which to complete the entire contract, and, if 700 tons were due them, 500 must have been delivered; and, as there were no deliveries after the 1st of July except 1 ton in August, the plaintiff must necessarily have delivered 500 tons, or about that number, in five months, which would have been a literal compliance with the contract. On the 28th of August, 1888, the defendants wrote the plaintiff ordering 15 tons of board, and that letter says: “We inclose a statement of straw board ordered and received since May 14th, which shows a balance of 133 tons still due us on back orders, not considering the order of to-day.” That order of 15 tons added to the order of 135 tons would, of course, make 150 tons due on the back orders of the defendants on the 28th of August, 1888. The defendant, as we have seen, upon his examination, was asked: “ How many tons did you order from the plaintiff in July and August under the contract,” and he answered,

many the defendants say were ordered during the months of July and August, the conclusion is irresistible that, at the time when the first note was allowed to go to protest, his orders had all been filled, except that the number of tons previously stated by Mr. Williams had not been filled, to wit, about six or seven tons; and it must be remembered that, by the undisputed testimony, from the 29tli of May, inclusive, to the 5th of July, when the note was protested, a period of a little more than one month, orders had been given for 170 tons and during the same period the defendants had received from the plaintiff more than 122 tons, and after these orders had been given and the material received, as late as August 11th, the defendants did not pretend to make any claim for damages, or that the notes were not paid because of any violation of the contract on the part of the plaintiff, but wrote as follows: “I now hand you my check for $558 in payment of the note which I learn has gone back, and will forward check for expenses as soon as informed of the amount. This time the fault should not be charged to me, but I regret the occasion for it. The bank should certainly have notified my office the same day, and, while it would not have altered the result, still you would not have been misinformed.” Having thus come to the conclusion that the plaintiff is entitled to a judgment, the only question remaining to be considered is for what amount that judgment should be rendered.

The plaintiff seeks a judgment for a price far beyond the contract price, upon the ground that the contract having been set aside, he is entitled to the value of the straw board, without reference to the contract; although the contract has been set aside by the plaintiff to enable him to bring the action, it still remains a rule of damage, and the price fixed by the parties themselves at which these boards were to be furnished is the best evidence of value that can possibly be given. Besides, it must be remembered that during the whole correspondence the plaintiff expressed itself as willing and able and even anxious to carry out the contract at the price agreed upon, if that price was only paid, and for much the largest amount in dispute the defendants had given to the plaintiff, and the plaintiff had accepted notes and most of the notes had been paid and the contract to that extent entirely closed. In cases where, notwithstanding the breach of a special contract, the party in fault can still recover upon a quantum meruit, the special contract is sometimes competent evidence upon the question of what the services are reasonably worth. 2 Greenl. Ev., 88, note c. In the case of Clark v. Gilbert, 32 Barb., 582 , in delivering the opinion of the court it is said: “ The contract or agreement of the parties is competent evidence and when the compensation is so fixed and regulated by the contract that it can be apportioned without injustice to either party, the compensation agreed upon may well be taken as that which the party reasonably deserves to receive.” The defendants admit the receipt of 430 tons at thirty-one dollars per ton. This would amount to $13,-330. The plaintiff in his complaint admits the receipt from the defendants of $7,328.40, which would leave a balance due the plaintiff from the defendants of $6,001.60. There is a discrep

ancy between this testimony and the testimony of Mr. Williams-' of only three or four tons. The number of tons shown by the amount of the five unpaid notes to have been received and the amount received in June and August for which no notes were given, confirms, in my judgment, the testimony of Mr. Williams, and I have so found in my report. I have been forced to the foregoing conclusions by the testimony in this cause, notwithstanding the many defenses so ingeniously set up by the counsel for the defendants, and the great ability with which they have been pressed upon me.

Smith & White, for app’lts; Wm. F. Upson, for resp’t.