Majority
p. 126THE DELAWARE, LACKAWANNA AND WESTERN RAILROAD COMPANY, Plaintiffs and Respondents, v. HENRY C. BOWNS et al., Defendants and Appellants.
Headnote
L Contract.—Strikes by Workmen.1. Exemption clause against liability for non-fulfilment of contract, caused by strikes of workmen, what is not covered by.
1. A strike caused by a contractor’s reducing the wages of his workmen is not.
1. Unless, perhaps, a strike so caused is specially provided against.
3. Effect of stipulation to me every effort to fulfil the contract on such exemption clause.
1. It prevents the exemption clause operating either where the contractor’s own act causes the strike, or where he encourages it, or where he could have prevented it and did not.
p. 127Before Barbour, Ch. J., Freedman and Sedgwick, JJ. Decided May 31, 1873.
II. Construction.
1. Particularr and general words.
Particular words are not enlarged or varied by being conjoined to general words; on the contrary, general words are limited by particular ones used with them.
1. Example.—When a clause in a contract provides that “if at any time the business of a company is so interrupted by storms, floods, breaks, accidents, combinations, turnouts, strikes among miners, or other employes, or by any occurrence whatever, as to materially decrease the quantity of coal which the company would otherwise have been able to obtain and deliver, the company will not hold itself liable for or pay any damages,” etc.
The words, “ by any occurrence whatever,” are to be construed in connection with the other words in the same sentence, and to mean “ any unavoidable occurrence."
III. Berwick v. Swindell (3 A. & E. 868, 5 N. & M. 381) does not conflict with above doctrines.
TV. Pleading.—Exemption clause.
1. Where a cause of action, defence, or counter-claim is founded on a liability which would exist in the law unless it falls within the scope of some exemption clause in the contract between the parties, it is not necessary for the pleader to show that the exemption clause does not apply. It is for the person claiming the benefit of such clause to place his reliance on it, and if he does, then it is time enough for the party insisting on the liability to show that the clause has not relieved against it.
Appeal from judgment.
The main point in this case refers to the counter-claim made hy defendant. The referee has decided that the facts put in evidence do not sustain the counter-claim.
The plaintiffs had contracted" to deliver a certain quantity of coal to the defendants, but delivered only a part of that quantity. The counter-claim demands damages for this failure to deliver. The plaintiffs denied their obligation to deliver because the contract specially stipulated as follows: “Every effort will be made by the “ company for the fulfilment of its contract for the de
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“livery of coal, but if at any time the business of the “company is so interrupted by storms, floods, breaks, “accidents, combinations, turnouts, strikes among min- “ ers or other employes, or by any occurrence whatever, as to materially decrease the quantity of coal ‘c which the company would otherwise have been able “to obtain and deliver at Elizabethport, during the “month in which the coal now sold is deliverable, the “ company will not hold itself liable for or pay any “damages sustained by reason of the non-delivery of the “ coal now sold or of any portion thereof,” etc. The plaintiff further claiming that a strike among miners had diminshed the production of coal to such an extent that the quantity of coal which the company would otherwise have had was materially decreased, etc.
The plaintiffs had in their business two sources of supply of coal. These were its own mines, from which it procured coal by its own miners and laborers, and mines owned by others from whom it made purchases of coal.
The contract was made November 30th, 1870. On the 39th of that month the plaintiffs posted through their own collieries a notice that “ on and after the first of “December proximo, the prices paid to miners, labor-11 ers, and others, employed by this department, will be “the same as those paid in April, 1869.” This would have reduced wages from $1.30 a car to 86 cents a car.
As to the effect of this notice, the referee finds “ that “in December, 1870, a strike was caused among the “ miners in plaintiff’s employ, and plaintiff’s reduction of “ the wages of such miners immediately preceded and “ was the proximate cause of said strike,” and “that the “ business of the plaintiff was thereby so interrupted “ as to materially decrease the quantity of coal which “ they would otherwise have been able to obtain and de- “ liver; ” “ that during the continuance of said combina- “ tion and strike, the production of coal by the plaintiff
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1 ‘ was wholly suspended: ” “ that the coal which during “that time they were able to obtain and deliver at “ Elizabethport and Hoboken amounted in all to but a “few hundred tons, and that their usual and ordinary “receipts at said points, prior to said strike and in the ‘ ‘ ordinary course of their business, amounted to about “ 9,000 tons daily.”
The referee did not find specifically, although the testimony shows that the reduction of wages was not proposed with the purpose of causing a strike or in bad faith to the defendants, but was made in the belief that the reduction would be proper, and would not be objected to by the miners and laborers.
It was assumed that workmen stopping their work in consequence of the plaintiffs giving the notice specified, was a strike.
The referee, as a conclusion of law, found that the plaintiff was not bound to deliver to the defendants, under the contract, the coal which was not delivered.
H. W. Johnston, attorney, and F. C. Cantine, of counsel for appellants, urged:
1st. The referee erred in his interpretation of the terms of sale, the essential part of which is contained in the tenth article. It is important to observe that this article begins with a stipulation that the plaintiffs will make “ every effort for the fulfillment of its contracts for the delivery of coal,” etc.
This stipulation is of the essence of the contract, and, as we shall show, performs a very important office as a guide to the true construction of the whole article.
' If the plaintiffs had performed this stipulation, even in its spirit, they would not have committed the act which produced the “strike” pleaded by them as a discharge from the contract.
2d. It is not denied that such a “strike ” as the parties contemplated at the time the contract was made,
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would have absolved the plaintiffs from all obligation to deliver the coal in question; but it is insisted that such a “strike” never occurred.
The “ strike ” which the parties had in mind, was one which should be occasioned without the fault or agency of the plaintiffs ; one which they could not prevent or control; one which should arise in spite of “every effort” which they might make, “for the fulfillment of its contract.” Plaintiffs had reason to.believe that defendants so understood the contract, and if so, the court will construe it accordingly (2 Story on Contracts, § 635).
_ 3d. This clause of the article in question must be so interpreted as to give it significance and effect. The construction contended for by the plaintiffs deprives the clause of all meaning.
Validity and force must be given to every part of the contract, so as to make the obligations mutual (Barton v. McLean, 5 Hill, 256 ; 2 Story on Contracts, §§ 657, 658 ; 2 Parsons on Contracts, pages 16, 17).
Construed on this principle, the article would read as follows: “Every effort will be made by the Company for the fulfilment of its contracts for the delivery of coal; but if, notwithstanding such efforts, at any time,” etc.
4th. If it is repugnant to, or inconsistent with, the remainder of the article, it must prevail over the other stipulations, for the reason that it is the earlier stipulation (2 Parsons Contr. p. 26, and notes; Newdecker v. Kohlberg, 3 Daly, 407 ).
But there is no repugnancy or inconsistency between the several clauses of the article. They are entirely harmonious.
5th. The construction put upon this article by the referee cannot be sustained, except upon the theory that the defendants entered into the contract with the intention of leaving it to the option of the plaintiffs to perform
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or not, as their pleasure or interest might dictate ; for, upon this construction, they could, if so disposed, discharge themselves by provoking a strike among their miners.
Such a construction is irreconcilable with the presumption that contracting parties intend, in the absence of plain expressions to the contrary, to bind each other by mutual obligations, and is incompatible with the rule of construction that the court will, if possible, so interpret contracts as to make them mutual. It makes the contract in question essentially unilateral.
6th. If the plaintiffs had intended to make the performance of the contract on their part dependent on the existence of any strike, whether caused by their instrumentality or otherwise, they were bound to express that intention clearly. Having failed to do so, the maxim ‘‘contraproferentem’’ applies (2 Story on Contracts, § 662 ; 2 Parsons Contr. 19 ; Edsall v. C. & A. R. R. Co., Church, C. J., Court of Appeals, Albany Law Journal, April 26th, 1873; Alexander v. Green, 7 Hill, 533 ; Wells v. Steam Nav. Co., 8 N. Y. [4 Seld.]S75 ; Stedman v. Western Transp. Co., 48 Barb. 97 ; Guilleaume v. Hamburgh & Amer. Packet Co., 42 N. Y. 212 ; Keeny v. Grand Trunk R. R. Co., 47 N. Y. 525 ; Westcott v. Fargo, 63 Barb. 351 , S. C. 6 Lansing, 319).
7th. The plaintiffs not only did not perform the stipulation to “make every effort,” etc., but committed an act which violated both the letter and spirit thereof.
It imposed upon them the duty, not only of refraining from every act which might lead to a strike, but also to use every endeavor to prevent one which might be threatened, and suppress or conciliate any which might arise without any provocation from them.
The evidence, and the express finding of the referee, on this point, however, is, that the plaintiffs were the aggressors. They provoked the strike by reducing the wages of their miners.
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They would have "been "bound to have acceded to a demand on the part of their miners for increased wages, if thereby they could have"prevented a threatened strike, and been enabled to perform their contract. And if so, they cannot take advantage of their own wrong, by pleading their own act in avoidance of the contract."
8th. The plaintiffs were guilty of bad faith. The defendants entered into the contract, with reference to the state of things then existing; but plaintiffs had already, before the date of the contract, taken steps towards reducing their miners’ wages, and suppressed the fact, although their experience had taught them that any dispute with their miners respecting wages was likely to result in a strike.
And this has been the experience of the entire community for years.
■ The subject of laborers’ wages is always an exceedingly delicate one, and its agitation invariably leads to insubordination.
In the light of this experience, plaintiffs’ act was without excuse—it was culpable. Indeed, their own evidence shows that they regarded a strike as possible, in consequence of the. proposed reduction, for they consulted Storrs, their superintendent, on the subject..And although he advised them that “in his judgment' there was no possibility of a strike,” yet it is evident that in so advising he disregarded the teaching of his-experience.
Besides, plaintiffs had no right to urge the advice of Storrs in justification of their course. He was their own agent, and an officer of the company. It is analogous to the case of a party setting up his own opinion and judgment in extenuation of his wrongful act.
Again, it is absurd for plaintiffs to argue their good faith from the fact that the strike resulted in a loss to-them.
They certainly expected to derive a benefit from the
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proposed reduction of wages ; no other motive for it can be assigned. If they had anticipated that injurious results would flow from their reduction, that circumstance would be rather an evidence of their folly than of their good faith in making’ it.
9th. If, therefore, the strike was the natural and probable consequence of the plaintiffs’ act in reducing the wages of their miners, they will be presumed to have intended that result.
10th. Again, when the plaintiffs discovered them mistake, they were bound by their stipulation to retrace their steps, and use “every effort” to conciliate their miners.
It involved no element of impossibility, or even of ■difficulty, but merely a question of dollars and cents.
Edwards & Odell, attorneys, Hamilton Odell and Jacob Vanelte, of counsel for respondents, urged:
The defendants insist that the strike ■ furnishes no excuse to the plaintiffs for non-delivery, because, they say, it was caused by the plaintiffs’ reduction of the miners’ wages. They say that the law presumes that the plaintiffs intended the results of their own act.
1. We deny the application of this principle here, but if applicable, it is true only as to the “necessary” results (Van Pelt v. McGrraw, 4 N. Y. 110 ); the “ natural ” results (Hain v. Wilson, 9 Barn and Cress. 643);—the ‘ ‘ natural and probable results’ ’ (1 Green on Ev. p. 18, § 24). The evidence of Mr. Storrs shows that .the plaintiffs had no good reason to expect or fear that a strike would be the “necessary,” or the “natural,” or the “ probable,” result of the reduction.
The law also presumes that- men act according to their own interests (1 Phil. on Ev. 608). It is in evidence that former strikes had resulted injuriously to the plaintiffs “in a stoppage of their business, decreasing
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their revenues, without any proportionate decrease of expenditures.”
It is too clear to need argument, that nothing "but absolute necessity would lead the plaintiffs to pursue any course of action which would or might provoke a strike on the part of their employés.
2. The language of section 10 of the terms of sale is of the broadest character ; ‘ ‘ storms, floods, breaks, accidents, combinations, turn-outs, strikes among miners or other employés, or any other occurrence whatsoever.” The thing guarded against was “a strike”— not a strike from one cause or another, but any strike from any cause, “or any other occurrence whatsoever,” whereby their supply of coal would be materially diminished.
3. The proof shows that,' prior to December, 1870, during the whole period of their existence, the company had, from time to time, altered the rate of miners’ wages. It- was a circumstance occurring in and forming a part of the ordinary administration of the company’s business. The defendants dealt with them knowing, or bound to know, that circumstances might require or justify a change in the price of labor. It is absurd to insist that there was an implied agreement on the part of the plaintiffs to make no reduction in wages, or other change in the system of conducting their business, which might be distasteful to, or not meet the approval of, the miners, and so possibly lead to a suspension of work.
Any change by the plaintiffs in the mode of managing or operating their mines—e. g., in the. mode of mining coal, in hours of labor, in the amount of the daily production, a new system of ventilation, a new regulation designed to' prevent accidents to laborers or to-preserve the company’s property from injury or destruction, the introduction of mechanical aid by which the miners’ labor would be lightened and the force of
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laborers be reduced, might be unsatisfactory to the employes, and lead directly to a strike.
But will it be seriously insisted that a strike for such a cause would not be a strike within the meaning of section 10 of the terms of sale ?
Is section 10 to be construed as relating only to strikes which the company should not be able to prevent? That would require an accession by the plaintiffs to whatever demands the miners might advance.
Is it to be construed as relating only to strikes which should not be induced, directly or indirectly, by any act or omission of the plaintiffs ? That would require, practically, submission to the miners. It would prohibit any change of operations to which they did not assent. It would involve the partial surrender by the directors of the company of their right and legal duty to manage the affairs of the company according to their best judgment. It would impose upon the company such an implied agreement as has been above alluded to.
4. In the interpretation of a written contract the court will look to antecedent and surrounding facts and circumstances to ascertain its meaning (Blossom v. Griffin, 13 N. Y. 574 , 576 ; Field v. Woodmancy, 10 Cush. 431 ; Mill Dam Foundry v. Hovey, 21 Pick. 441 ).
Here it appears that the defendant, H. E. Bowns, had for four years prior to the sale of November, 1870, been a regular attendant and purchaser at the plaintiff’s auction sales, during which period'the plaintiffs had, from time to time, changed the wages of their miners, and strikes had resulted.
During all this period, also, the Miners’ Association had been in existence. It was composed of 30,000 members, most of them in the employ of other parties than the plaintiffs. It was thoroughly organized, and acted unitedly. In consequence of it, the plaintiffs had not the free control of their own business. They had
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not the free enjoyment of their own property. Their ability to fulfil contracts for future deliveries of coal was dependent, largely, upon the will of other parties, and therefore they prudently qualified their liability, as expressed in section 10.
5. The defendants will not seriously contend that the plaintiffs would have been bound to comply with any demand of the miners for an increase of wages, large or small. It is submitted that there is no difference in principle between a refusal to increase and a reduction under proper circumstances. The rate of wages in every department of labor must be fluctuating. It is a rule of trade. It is a matter of necessity. -The market value of labor must depend upon the market value' of the tiling which it produces. Wages of miners fixed when coal and cost of living were low, would not be fair wages when coal and cost of living had materially advanced. So wages, fixed when coal and cost of living were high, would be unfair when the price of coal or cost of living had sensibly decreased. A refusal to advance would be as unreasonable in the one case as a refusal to submit-to a reduction would be in the other.
6. The good faith of the plaintiffs in reducing the wages has not been questioned by defendants, and is ■abundantly shown by the testimony of Storrs and Brisbin.
7. There was no agreement by the plaintiffs, express or implied, that they would continue any given rate of wages through the month of December, or for any time (Berwick v. Swindells, 3 Adol. & E. 868 ; Knowlton v. Sewall, 10 All. 34 .) Their contract was conditional, and they were discharged by the happening of the contingency against which they had provided.
The referee’s findings do. not allude (nor did the argument of counsel) to the effect upon the construction of the contract, of the
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fact that plaintiff’s business was that of a purchaser of coal for sale by it, as well as that of mining coal. The proposed reduction of wages led to the miners in other collieries, that usually sold coal to plaintiff, stopping work, as well as to the strike in plaintiff’s own mines. Probably nothing would be gained, for the consideration of the vital question between the parties by pursuing an inquiry suggested by this. When the contract says that every effort will be made by the company to fulfil its contract, but if strikes among miners materially decrease the quantity of coal the company would otherwise have to deliver, the company is not to be liable, it is clear that the contract meant such strikes as might happen against every effort which the company could use to prevent them. If the company could prevent a strike likely to lead to an inability to perform the contract, and did not, or if they, say, encouraged the workmen to such a strike, it would not be true that the company had made every effort to fulfil the contract. We are looking at what is contained in one sentence, and are satisfied that such isx the intended meaning of the phrase, strikes among miners.
This proposition is strengthened from these words, " strikes among miners,” being associated with“ storms, floods, breaks, accidents, and combinations and turnouts.” These latter words have a quality in common, in relation to their leading to a non-fulfilment of the contract. That is, they are in their nature beyond .the plaintiffs’ control. It is to be intended that “strikes among miners,” as used, are such as have the same character of being beyond plaintiffs’ control. This is not weakened by the fact that the words “or any occurrence whatever ” are also used in connection with the words now considered. Particular words are not enlarged or varied by being conjoined to general words. On the contrary, general words are limited by particular ones used with them (Van Hagen v. Van
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Rennsalaer, 18 John. p..428), and by the nature of the contract. These general words must have some limitation. They cannot mean that which is within their verbal significance, viz., that if the production of coal is stopped by the plaintiffs’ direct order, the plaintiffs are not to be liable. The instrument, being a contract, and the nature of “storms, floods, and accidents,” suggest that any occurrence, as specified in the contract, means-any unavoidable occurrence.
It is rather the exception than the rule, to give to a-word in a contract or a statute all the meanings which might be attributed to it, if it were to be defined as a word by itself: It is to be construed according to the
mode of its particular use. The words we examine are in a contract which the parties have made because of its character and force as a contract. Although the parties might have, if they had wished, made a stipulation in it that it should not entail any liability whatever on either one of them, yet until such a purpose is clearly manifested the fact remains that the parties mean that the contract should impose an obligation. That fact is a leading consideration in weighing the particular clauses of the agreement. These should not have given to them a meaning which will destroy the contract, when another meaning, which will uphold it, is at hand, just as fit and true as the former. The contract obligation remains, modified, but not destroyed.
A late case is sufficient illustration of all this. A com-' mon carrier by special contract is exempted from liability for loss by fire. Verbally this means fire of any kind however caused. Yet the common carrier is liable if the fire happens from his own negligence (Lamb v. The Camden and Amboy Railroad Co., 46 N. Y. R. p. 271). It would be no answer to his liability that there was no intention of causing the loss by fire. The contract is not supposed to include a fire as to which he was but only negligent.
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I have come to the conclusion, from these considerations, that the true construction of the phrase “ strikes,” etc., used as it is, is strikes that occur without any agency of plaintiff in inducing or causing them.
On this point, the learned counsel for the plaintiff made the observation that, from the peculiarities of the contract, it must be intended that the parties meant that the plaintiff should conduct its business according to its own customs and requirements, and that this involved the exercise of discretion by plaintiff in fixing its servants’ wages, as it might do if no contract were made. We do not agree to this so as to relieve the plaintiff from any "positive obligation it has made. There was an agreement to deliver. So far as any part of this throws upon the defendant the risk attendant upon a management at discretion by plaintiff of its business, the defendants bear such risks, but no further. The plaintiff has in effect contracted to manage its business so as to be able to deliver, excepting if inability to do this should come from the specified causes which are here examined.
Another view of the matter may be taken. If one contracts unconditionally to do an act, the duty of performance is absolute, and it is his own fault if he do not especially provide against contingencies which prevent performance (Tompkins v. Dudley, 25 N. Y. R. p. 272).
In the contract before us there is an absolute engagement by plaintiff. In the first place, they limited their otherwise absolute agreement to deliver, by providing that if strikes among miners so interrupted their business as to materially decrease the quantity of coal they would otherwise have, then they should not be liable for a non-delivery. But they, as modifying all this, made an express and absolute engagement 1 ‘ that every effort will be made by the company for the fulfilment of its contract.” A breach of this creates a liability for
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damages that follow the breach, as would a breach of any other part of the agreement. This general obligation included the specific obligation to make every effort to prevent strikes. The finding of the referee is, that the company caused the strike by a proposal to reduce wages. The plaintiff places itself upon this strike as absolving them, under the contract, from the obligation to deliver. The evidence is, that the officers and agents consulted as to the probability of a strike following the reduction, and they came to the conclusion that it would not follow. To make every effort to prevent the strike required that they should abstain from acts which involved some probability of causing a strike, even if in the judgment of the officer the probabilities that it would not be so caused were greater or more in number. The proposal to reduce wages had an immediate connection with the means the company were using to fulfil the contract. They used men to get out the coal, and when they proposed to them to reduce their wages, for which they worked, it had a direct bearing upon the production of coal.
It was not necessary that the defendants should put their claim upon the breach of this particular clause. Their cause of action was the non-delivery of the coal. The plaintiffs were as a matter of defence to set up the exemption from liability (Hotham v. The East India Co., 1 T. R. p. 645), and the obligation to use every effort is an answer to that claim of exemption which the defendants were not obliged by our system of pleadings to set up, after the reply was served.
I think, then, that the learned referee erred on two - grounds. First. The strike that occurred was not of the kind specified in the clause of exemption from liability. Second. The strike that diminished the plaintiff’s supply of coal was caused by a breach of the plaintiff’s agreement to use every effort to fulfil the contract.
The case of Berwick v. Swindell (3 A. & E. p. 868, 5 N.
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& M. p. 381), involved a contract which the court thought had expressly stipulated that the obligor might or might not, as he chose, do a certain act, and therefore he might do it although that created a casus omissus, as to which the other parts of the contract made no provision for Ms liability, and therefore he was not liable. The case, however, recognizes the rules of construction upon which we have acted in tMs case.
Judgment reversed, order of reference vacated, and a new trial ordered, with costs to appellant to abide the event.
Barboub, C. J., and Freedman J., concurred.
Cases cited
- Stedman v. Western Transportation Co. 48 Barb. 97 p. 131
- Guillaume v. Hamburgh & American Packet Co. 42 N. Y. 212 p. 131
- Keeney v. Grand Trunk Railroad 47 N. Y. 525 p. 131
- Van Pelt v. McGraw 4 N. Y. 110 p. 133