Merchants & Manufacturers National Bank v. Spratt, Johnston & Co.

Mr. Justice Clark delivered the opinion of the court, January 19th, 1885. The defendants in error, Spratt, Johnston & Co., were summoned in an attachment execution, as garnishees of the Siemens Anderson Steel Company. At the trial, they produced a statement of their account, which was admitted to be correct, showing that at the date of the service of the writ, they were indebted to the steel company in the sum of §1,267. The indebtedness exhibited by this account was for plow steel sold and delivered, under a written contract, in the words and form following, viz: July 13th, 1881. Siemens Anderson Steel Co., Pittsburgh, Pa. Gentlemen — We will give you an order for three hundred tons of plow steel, to be taken out on or before March 31st, 1882, at the following prices and conditions, if accepted today: Slab steel, Alabama, Magnolia and Allen sweeps, and all straight cuts, at 3-|-c. per pound. Bull tongues, round point shovels, and all regular turn shovels, at 4c. per pound. Farquar sweeps,-at 4^c. per pound. Pony points, at 4-|-c. per pound. Southern mould boards, at 4¿c. per pound. Scrapers, at 3|c. per pound. Curved turned shovels, at 4|e. per pound. Terms — Four months from date of invoice; except for steel [102] shipped prior to September 1st, 1881, and' paper for all such so shipped, to be given from said date, viz: September 1st, 1881; all shapes not named, in same proportion as above. Spratt, Johnston & Co. Accepted. Siemens Anderson Steel Co. July 13th, 1881. Per B. Catley. At the time of the service of the attachment, on the 11th January, 1882, one hundred and nine tons, only, of the steel mentioned in the contract had been received, and this had been delivered upon demand, and according to specifications furnished to the company by the garnishees. On the 10th January, 1882, the personal property of the steel company was sold upon execution, by the sheriff of Allegheny county; prior to the day of sale, however, the garnishees, had delivered to the steel company an order and specification for 15 or 20 tons of steel, under the contract, which order was never filled; it is admitted that no other or. further demand or specification has, at any time, been made or furnished. The value of steel advanced, and on 31st March, 1882, was considerably higher than the contract price. The garnishees, therefore, claimed to recover or to recoup damages, not only for the non-delivery of the 15 or 20 tons, for which specifications had been delivered, but for the whole amount covered by the contract, and not yet received. The plaintiffs contend, that the garnishees failed to show any damage, other than the difference in price on the 15 or 20 tons. The court below sustained the garnishees’ contention, and directed the jury, to ascertain the loss upon the whole remaining undelivered portion of the steel. It appears from the evidence that slab steel is the material from which the various shapes, recited in the contract, are cut; that an advance upon it necessarily implies a corresponding advance upon the full line of shapes taken from it; slab steel was, therefore, taken as the basis of the assessment, and the measure of damages was held to be the difference between the market price, at the time of default, and the contract price. The'case stands, as between the present parties, precisely as if the Siemens Anderson Steel Company were plaintiffs in this suit, and Spratt, Johnston & Co., defendants. The Merchants and Manufacturers National Bank, under the attachment, stand in the place of the steel company; if Spratt, Johnston & Co. have the right to set off damages for nondelivery of the whole unfinished part of the contract, as against the Siemens Anderson Steel Company, they have the same rights as against the bank. [103] It seems clear from the nature and terms of the contract, that it was necessary for the defendants not only to specify or order from the steel company the particular kinds or amounts of steel required, under the contract,, but to designate the time of the delivery. Spratt, Johnston & Co. were to be the actors, they were to demand and specify the articles they required, and until then the parties to'deliver could be in no default; they had the right to demand fulfilment of the contract on any day within the specified limit. The contract is dated July 13th, 1881, and the three hundred tons of plow steel were to be taken out on or before March 31st, 1882; but the particular time or times for delivery, within the period specified, as well as the selection of the articles named, was at the option of the buyer. If that option was not exercised within the period, the right to exercise it was gone; there was no agreement to deliver the articles afterwards at the price agreed upon. The obligation of the contract being mutual, the steel company might, after the expiration of the time, have been entitled to damages for a loss resulting from •a falling market, but the company was not bound to .tender a performance, in the absence of a demand, excepting, perhaps, for the purpose stated. The contract in suit is, in some respects, similar to that declared upon in Hamilton v. Calhoun, 2 Watts 139. That was an action of covenant, brought by Jane Calhoun against Hugh Hamilton, to recover damages for non-performance of articles of agreement, by which, in- consideration of a release of dower, Hamilton covenanted to pay her “the sum of $33.33 annually, during her natural life; $10 of which is to be paid in cash, the residue or $23.33 to be paid in trade, according to her wants, to wit, grain, meat, hay, &c., at market prices of any and all such articles as she receives each and every year.” Mr. Justice Rogers, delivering the opinion of the court, sajm: “ The contract is for the delivery of the grain, meat, hay, of a stipulated value, as they may be wanted for the support of the widow. She may elect what part she will receive in grain, what in meat, and what in hay, or whether she will receive the whole in the one or the other article, or in any other commodity, the product of the farm. It cannot be the duty of Hamilton to make a tender, for, until she makes a demand, it is impossible 'for him to know what to tender, or in what quantities or at what times.” Applying the rule here stated, it was plainly the buyers’ right to elect what they would receive; a tender in “ Magnolia slabs,” “ Bull Tongues,” or “ Pony Points,” might well be refused upon the ground that these particular shapes had not been designated for delivery. Without such designation, therefore, there could be [104] no delivery of tbe steel, no default on part of 'the compare, "arid therefore no damages sustained b)'’ the garnishees: Wheeler & Wilson Mf'g Co. v. Teetzlaff, 53 Wisc. 211; Wharton Cont. 576; Lobdell v. Hopkins, 5 Cowen 516; Barr v. Myers, 3 W. & S. 299. " It is said, however, that as there was in fact, an order and 'specification delivered for fifteen or twenty tons of steel under •the contract, which the company had failed or refused to fill, the company having subsequently become insolvent, the necessity for further designation was thereby dispensed with. It is admitted that bankruptcy or insolvency alone does not establish such proof of incapacity to perform as would justify the garnishees in treating the contract as broken,'and it is difficult •to determine how the failure to deliver the fifteen' or twenty ‘tons, taken alone or along with insolvency, can be considered 'Rs a refusal to deliver the whole. . No greater significance or ieffect can be given to such partial default than it necessarily ■'implies'. The part demanded may have been of a kind difficult, perhaps impossible a.t the time, to provide, but non constat, «that further orders may be for that kind,'or may not be supplied; fhe default may result from a merely temporary suspension or derangement of business; a further, demand may, ■b'y assignment of the contract of otherwise, be fully provided for, or creditors may intervene through a receiver and provide means of compliance, in order that they ma3r realize the avails "of the contract: Southwick v. Bank, 84 N. Y. 421; Wharton on Cont. 576. • We are of opinion, therefore, that the court erred in refusing the second and third points submitted by the plaintiffs. The judgment is reversed and a venire facias de novo awarded.