Lindsay v. Carbon Steel Co.

Opinion by Mr. Justice Fell, The plaintiff sued to recover commissions for the sale of 6,000 tons of steel plates. The plaintiff was the agent for the Carbon Steel Company, and through his instrumentality a proposal made by it to the Penooyd Iron Works was accepted by the following letter addressed to him: “We have now to accept the offer of the Carbon Steel Company to furnish us with about [123] 6.000 tons of universal plates for the Blackwell’s Island Bridge 1.38 c. per pound f. o. b. cars, Pencoyd.’ We expect deliveries to commence about July 1, 1895, and to extend to March, 1896. It is understood however, that should we for any cause, legal or otherwise, be stopped from going ahead with our contract for the superstructure of this bridge, we are to be liable only for such tonnage of plates as have been rolled or shipped.” The New York and Long Island Construction Company proposed to build a bridge at Blackwell’s Island, but was unwilling to enter into final contracts for materials and labor until .some questions relating to its right to build had been determined. It had advertised for and received bids, among others that of the Pencoyd Iron Works, for a part of the superstructure. It arranged with the iron works to accept its bid if the construction was proceeded with, and the iron works agreed to be bound by its offer, with the right, however, to withdraw it if after three months’ notice the construction company failed to enter into a final and binding contract. This arrangement was made in January, 1895, and was pending and undetermined when the letter of April 4 was written ; and it was because of it that the provision relieving the iron works from liability for plates not rolled or shipped by the defendant was inserted in the letter of acceptance. On July 2, 1895, the iron works, in the exercise of the right reserved by its agreement with the construction company, notified it that the formal contract must be entered into within three months. It was not entered into, and the whole transaction between these companies ended on Octoer 2. Specifications for 100 tons of plates were sent by the iron works to the defendant on July 12. The order was not filled. On July 15, the defendant wrote to the iron works: “We consider that you have not complied with the terms of your contract with us, and hence we cannot furnish you with the 100 tons of plates requested by you.” No plates were furnished at any time. At the trial there was no dispute as to the material facts. The plaintiff claimed to recover commissions for the sale of 6.000 tons of plates ; the defendant denied his right to recover anything; the view of the learned trial judge was that the plaintiff was entitled to commissions for the amount of deliveries to which the iron works was entitled under the contract [124] before October 2, the date on which it terminated the contract with the construction company, and he so instructed the jury. To this instruction both parties to the action excepted, and they are here with cross-appeals. The ground of the refusal of the defendant to deliver plates was that specifications had not been sent in time. The letter of acceptance of April 4 was preceded by a lengthy correspondence, in which the terms of sale were discussed. There does not seem to have been a definite agreement as to the exact time for delivery. On March 1, the' defendant wrote, naming a price, “ with the understanding that they will specify for this material so that we can begin delivery the 1st of July, this year, and deliver at the rate of about .800 tons a month until the order is completed, the entire amount to be taken out not later than March, 1896.” Before the acceptance of this offer a number of letters relating -to the price passed between the parties, and following its acceptance there were a number in relation to the understanding as to the terms of payment, but none of them contained any reference to the time of delivery. In the letter of acceptance it is stated: “We expect deliveries to commence about July 1, 1896, and to extend to March, 1896.” The subject having been left in this indefinite shape, and no request having been made by the defendant for specifications which would have enabled it to have commenced to deliver by July 1, there was not such a failure on the part of the iron works as to justify the defendant after the receipt of the order of July 12. in refusing to carry out its contract. It was shown by the testimony that this order was sent in good faith, and with the intention to follow it by orders making the full amount of 800 tons per month. The plaintiff was therefore entitled to commissions on the price of plates which the defendant had the opportunity, except for its own improper act, to deliver during July, August and September. Whether the plaintiff was entitled to commissions on the whole 6,000 tons is a question less free from difficulty. The iron works had the right to withdraw its proposal to the construction company, unless a contract was executed within three months after notice was given. It was not bound to the defendant for the price of plates not rolled in the event that it should “ from any cause, legal or otherwise, be stopped from [125] going on with its contract,” with its construction company. Was the refusal of the construction company to enter into a contract, a stoppage within the meaning of the contract with the defendant? The thing against which the iron works guarded in its contract with the defendant was the failure of the construction company to enter into and carry out a contract, the terms of which had been agreed upon, but which was then without binding force. A failure might be caused by the inability of the construction company to build the bridge by its refusal to contract if its right to build was established, or by its failure to carry out a valid contract into which it had entered. Any one of these would have been a cause which would have relieved the iron company from liability for the price of plates not delivered. That its own act in giving notice brought its arrangement with the construction company to an end, did not, we think, affect its rights under its contract with the defendant. It had waited three months before sending notice, and it waited three months after, -while under an obligation to receive and pay for 800 tons of plates a month. There was a time limit fixed at March 1, 1896, within which all the plates were to be delivered. The iron works was not bound to wait indefinitely, and the failure of the construction company to act after notice was, we think, a cause fairly within the meaning of the contract, which prevented its execution; and the instruction of the learned judge to that effect was correct. The judgment appealed from by the plaintiff is affirmed, and the defendant’s cross-appeal is dismissed.