Sheffield Furnace Co. v. Hull Coal & Coke Co.

McCLELLAN, J. On August 30, 1887, the Hull Coal & Coke Company and the Sheffield Furnace Company executed the following writing: ‘ ‘ Hull Coal & Coke Company sell to Sheffield Furnace Company, and Sheffield Furnace Company buy from Hull Coal & Coke Company 3,900 cars Flat Top Coke at $5.10 per net ton (2,000 lbs.) f. o. b. cars Sheffield, Ala., provided Hull Coal & Coke Co. are able to induce the operators to build ovens, and make coke for 3,700 cars of the above amount. Sellers agree to furnish 200 cars of the above amount between September 20th and November 1st, 1887. On October 1st sellers are to advise buyers how much of the 350 cars they can furnish during the month of November, 1887. On November 1st sellers are to advise buyers how much of the 350 cars they can furnish in the month of December, 1887. December 1st 1887 sellers are to advise buyers how much they can furnish of the 750 cars during the first three months of 1888. February 1st sellers are to advise buyers how much they can furnish of the 750 cars the second three months of 1888. May 1st sellers are to advise buyers how much they can furnish of the 750 cars during the third three months of 1888. August 1st sellers are to advise buyers how much they can furnish of the 750 cars for the last three months of 1888. Deliveries to be made as near as possible proportionately during each period. “These conditions of sale, binding the buyers to take — 466 — the coke as specified above from September 20th, 1887, to December 31st, 1888, giving sellers option of furnishing for said time, are entered into for the purpose of enabling sellers to induce the operators to put up more ovens by promising them a certain sale .of the product of these ovens at a fixed price. “The sellers undertake in good faith to use their best endeavors in inducing manufacturers of coke to provide ovens for the purpose of filling this contract. Norfolk & Western Railroad weights at usual point of weighing for these mines to govern. Buyers to remit on or before the 10th day of each month for all shipments made during the preceding month. In case of strikes, accidents, deficient transportation, or other cause unavoidably causing stoppage or partial stoppage of the works of the manufacturer of this coke or of its shipment, or in case of strikes, accidents, or other cause unavoidably causing stoppage or partial stoppage of the works of the buyer, deliveries herein contracted for may be suspended, or partially suspended, as the case may be, or at the option of the party not in default may be immediately cancelled during the continuance of such interruption by immediate notice to that effect given to the other party. Such interruption or cancellation, however, shall not invalidate the remainder of this contract, but on removal of the cause of interruption deliveries shall be continued at the specified rate, and if the delayed deliveries shall not have been cancelled they shall be made thereafter at the regular rate commencing when the contract would otherwise have ended. It is understood that Hull Coal & Coke Company have freight rates to Sheffield, Ala., on which the above price is based, but if during the time this contract is in force this rate should be advanced, then buyers have the option of taking any undelivered portion due on this contract, at the advance, or of cancelling it, provided sellers do not elect to stand said advance. ’ ’ A few days after this instrument was executed, Hull Coal & Coke Company used its “best endeavors in inducing manufacturers of coke to provide ovens for the purpose of filling this contract;” and succeeded. Said company was “able to induce” and did in fact induce operators — manufacturers of coke — to build ovens for the manufacture of 3,700 cars of coke of the kind specified — 467 — in the writing, and this coke was to be manufactured for the company at a price agreed on between it and the producers for the purpose on its part of filling its contract with the defendant corporation. All this was accomplished, the operators induced to build ovens, the ovens built in sufficient numbers and with adequate capacity and sufficient coke actually produced to comply with the terms of the contract in respect of the initial deliveries, before the time at which deliveries were to commence had arrived. Not only so, but Hull Coal & Coke Company, prior to said time, with a view to this contract had engaged and bound itself to take from the said operators, at a price agreed upon, the gross quantity of coke necessary to fill its contract with the Sheffield Furnace Company, and duly notified the latter company of the success of its efforts to induce operators to build sufficient additional ovens to produce the requisite quantity of coke. And on September 30th, 1887, the Hull Coal & Coke Company advised the furnace company in respect of the number of cars of coke it could furnish during the.month of November following, to the effect that owing to temporary scarcity of water in the coke fields it would probably be impracticable to deliver 350 cars during November, but this deficiency the coke company proposed to, or suggested it would, anticipate and discount by delivering more than the 200 cars required by the contract in October, asserting its belief that in this way 550 cars — the gross number stipulated for during the period — could be in any event delivered between October 1st and December 1st. At the instance of the furnace company, deliveries were partially suspended after about October 8th and throughout the months of November, December and January, so that up to January 30th, 1888, only sixty-six cars had been delivered. On that day, the following instrument was executed by Hull Coal & Coke Co. and the Sheffield Furnace Company : ‘ ‘This memorandum of an agreement made this 30th of January in the year 1888 by and between the Hull Coal & Coke Company of the first part, and the Sheffield Furnace Company, of the second part, witnesseth : That, whereas, there is a contract now in existence between the parties hereto of date August 30th, 1887, whereby the party of the first part is to deliver to the party of the second part, and the party of — 468 — the second part is to take from the party of the first part 3,834 cars of Flat Top Coke (66 cars'having already been delivered out of the 3,^00 cars secured to the party of the second part under said contract), which contract is hereby referred to as a part hereof. And whereas the parties hereto have mutually agreed to postpone the delivery of the said remaining 3,834 cars in such manner that said belivery shall begin about the first day of May, 1888, and shall thence continue at the rate of about ten cars per day until the whole quantity shall have been delivered. Now in consideration of such agreement, and of the sum of one dollar cash in hand paid by the party of the first part to the party of the second part, the receipt whereof is hereby acknowledged, the said delivery is postponed accordingly. ’ ’ After this writing was executed there were some further deliveries of coke, beginning about May 1st and continuing for something over two months, and until five hundred and sixteen cars (including the sixty-six cars delivered prior to the writing of January 30th, 1888, and mentioned therein) of the 3,900 cai*s had been delivered ; but the deliveries after this second agreement were not of the full quantity originally contemplated by the parties and this deviation from the terms of the writings was had at defendant’s instance, who from time to time requested the partial or total suspension of shipments, being unprepared to use or store the full qantity of coke as called for by the writings. Upon these suspensions it became necessary for the plaintiff to make other dispositions of the coke it had contracted to take from the producers for the purpose of filling the contract with the defendant, or to induce the manufacturers to lessen their out-put for the time of such suspension. During the first part of the month of July, ls88, the plaintiff had suspended shipments at defendant’s request and had induced the producers to reduce their out-put so that the quantity manufactured was not more than the plaintiff could dispose of to third persons. To do this the ovens of the manufacturers had to be banked — the fires being put out — and it required several days to re-heat them sufficiently to make a good quality of coke. And as to so much of the out-put intended for this contract, as the plaintiff had diverted to third persons upon the suspension requested by defendant, it required some — 469 — little time to arrange with such persons for a cessation of shipments to them in order that deliveries might he resumed to the defendant. Pending this suspension in July, the plaintiff had made temporary arrangements with othér parties to take a part of the coke intended for the defendant, and as to the residue so intended the production was temporarily stopped, the fires in the ovens being banked or extinguished. The defendant was fully cognizant of all these conditions, and of the arrangements plaintiff had made with third persons and with the manufacturers for the purpose of enabling it to comply with defendant’s request for the suspension" of deliveries then pending. This was the state of affairs when, beginning on July 19, 1888, the following correspondence was had between the parties -: “Montgomery, Ala., July 19, 1888. Hull Coal & Coke Co., Louisville, Ky. Resume shipments of coke immediately. We make nó payment until the 10th of the succeeding month either for freight or coke. Our secretary telegraphs immediate resumption of coke shipments necessary to keep in blast. Answer quick Montgomery and Sheffield when shipments will be resumed. Sheffield Furnace Co., By Alfred H. Moses, Pres.” “July 19, 1888. A.. H. Moses, Montgomery, Ala. Dispatch received. Hull and Lafferty both away. Hull is in New York. Matter will be referred to Lafferty to-mórrow. [Signed] Hull Coal & Coke Co.” “July 20th, 1888. Impossible to resume shipments immediately. It will take from one to two weeks to heat ■ ovens sufficiently to draw good coke. If shipments can be stopped elsewhere that coke might be turned over to you. Will do best we can. Hull Coal & Coke Co.” “Sheffield, Ala. July 21st, 1888, Hull Coal & Coke Co., Louisville, Ky. Have shipments of coke been resumed? [Signed] Sheffield Furnace Co.” “Louisville, Ky., July 21st, 1888.. Sheffield Furnace Co., Sheffield, Ala. Shipments not resumed yet. We wired you, would — 470 — take sometime to heat up ovens which were put out when you ordered shipments discontinued. [Signed] Hull Coal & Coke Co.” “Sheffield, Ala., July 23d, 1888. Hull Coal &.Coke Co.: Have ovens been fired ? When ? What steps taken to expedite resumption shipments ? When will you assure resumption? Coke supply nearly exhausted. Unless assurance speedy resumption will be forced to bank or blowout. Answer. [Signed] Sheffield Fuknace Co.” “Louisville, Ky., July 23, 1888. Sheffield Furnace Co., Sheffield, Ala. Hope to be able to resume shipments to-morrow or next day. [Signed] Hull Coal & Coke Co.” “Louisville, Ky., July 23d, 1888.- Sheffield Furnace Co., Sheffield, Ala. Will suspend shipments to others and instruct shipments resumed at once provided you pay freight as heretofore. Answer. [Signed] Hull Coal & Coke Co.” “Louisville, Ky., July 23d, 1888. Sheffield Furnace Co., Sheffield,. Ala-., Gentlemen : We wired you per the enclosed advising that we hope to be able to resume shipments tomorrow or next day. Since then have sent another dispatch per the enclosed letter,......you, we would suspend shipments to others and instruct shipments resumed to you at once provided you pay freight as heretofore, asking you to wire answer in reply to this. We shall await your reply, and if favorable will instruct shipments resumed immediately. Will arrange with others to wait for their coke until we can get new ovens heated up. You must recognize that it is impossible to hold ten cars of coke per day subject to orders of any one so we can begin shipments of this amount immediately. When customers order shipments stopped we must either place coke elsewhere or put ovens out, and it often takes a week or ten days to get ovens hot enough to make first class coke after it has once been banked. We shall expect to re — 471 — ceive dispatch, from you tomorrow advising that you pay freight on coke as usual. [Signed] Yours truly, Hull Coal & Coke Co. Per H. D. Lafferty G. M.” “Sheffield Ala., July 23d, 1888. Hull Coal & Coke, Co., Louisville, Ky. As you admit ability to ship coke immediately, but refuse unless we pay freight otherwise than is stipulated in the so called contract, you have violated the same and we are released therefrom, and will no longer be bound thereby. [Signed] Sheffield, Furnace Co.” “Sheffield, Ala., July 24, 1888. Hull Coal & Coke C'o., Louisville, Ky. If we withdraw claim of violation by you, will you resume shipments coke immediately, and concede our right of freight reduction? Answer quick as supply near exhausted, and we must blow out or bank this evening. [Signed] Sheffield Furnace Co.” “Louisville, Ky., July 24th, 1888. Sheffield Furnace Co., Sheffield, Ala. Kepeated your dispatch to Mr. Hull at U. S. National Bank, New York, asking him to wire direct. [Signed] Hull Coal & Coke Co.” “Sheffield, Ala., July 24th, 1888. Hull Coal & Coke Co., Louisville, Ky. Answer our morning telegram. Highly important as we must notify labor on next turn. Have not heard from Mr. Hull, six fifty-five o’clock. [Signed] Sheffield Furnace Co. ” “New York, July 25th, 1888. Sheffield Furnace Co., Sheffield, Ala.: We have made no failure and violated no contract, but are and have been ready to comply with all its terms. We claim you have refused to carry out terms of contract by stopping shipments of coke, and by refusing to continue payment of freight as heretofore, but to save you from going out of blast or from annoyances, we will consent to pay freight ourselves and continue to deliver the coke, you paying for it five dollars and ten cents per ton, the price stated in the contract, or we will consent — 472 — to modify contract and give you benefit of all tlxe reduction we have talked of, amounting now to eighty-five cents per ton, in consideration and with the understanding that you are to make us daily shipments of iron on sales or for storage of sufficient value to cover our daily shipments of coke and freight. Answer care United States National Bank, New York. [Signed] Hull Coal & Coke Co., By Geo. H. Hull, Pres’t.” “Sheffield, Ala., July 25th, 1888. Hull Coal & Coke Co., Geo. H. Hull, Pres’t, Care U. S. National Bank, New York : Telegram received too late to avoid banking furnace. We deny violation , and insist you violated so-called contract. If we ratify and reinstate it, will' you resume shipments immediately prepaying freight and we paying on 10th of succeeding month whatever the instrument may require under its proper construction. Answer quick, as we must consult absent parties before ratifying or reinstating, and must instruct ore shippers. If reinstated we must stand consequences if courts decide we are not entitled to freight reductions, now ninety cents. [Signed] Sheffield Furnace Co “New York, July 26th, 1888. Sheffield Furnace Co., Sheffield, Ala. Replying to your telegram of yesterday : We stand on our offers of yesterday. Answer whether you accept either of them. [Signed] Hull Coal & Coice Co., By Geo. H. Hull, Pres’t.” “Sheffield, Ala., July 26th, 1888. Geo. H. Hull, P’t. Hull Coal & Coke Co., New York. Answer yesterday’s telegram, oi’e shippers demand instructions from us." We must instruct, or they will sell to others, in which event we can not get ore to go into blast before Jan’y. [Signed] Sheffield Furnace Co . ” “Sheffield, Ala., July 26th, 1888. Dear Sir : — Not hearing from you in reply to our telegram of yesterday, we have just answered you ‘Answer yesterday’s telegram, oi’e shippers demand instructions from us. We must instruct, or’they will sell to others, — 473 — in which event we can not get ore to go into blast before January’. Which we now confirm. Very truly yours, [Signed] Alfjíed H. Moses, Pres’t, For Sheffield Furnace Oo. Geo. H. Hull, Esq., Pres’t Hull Coal & Colee Co., care of U. S. Nat’l Bank, New York.” In the foregoing correspondence are mentioned the two points of difference and contention between the parties, which had arisen between them up to the time at which, it is claimed by each, the other put an end to the contract by violating its terms, or refusing to carry it out according to its tenor and effect. As appears from this and other parts of the voluminous correspondence that passed between the furnace company and the coke company, it was, in the first place, and this as early as the fall of 1887, soon after the commencement of deliveries under the contract, insisted by the furnace company, that by the terms of the contract the coke company was to pay all freight charges on the coke as and when delivered, and such charges were to be refunded to it, as and constituting a part of the gross price per ton which the furnace company was to pay the coke company on the 10th day of the month succeeding that of the deliveries settled for. On the other hand, the coke company contended that the contract, as interpreted in the light of a general usage of the coke trade devolved upon the furnace company the duty of paying the freight charges to the carrier on receipt of the several shipments, and that the amounts so paid during a given month should go as a credit on a settlement for the gross price of the coke made on the 10th of the succeeding month. Upon the furnace company’s contention in this regard being first brought forward on October 12th, 1887, by its bookkeeper, at the suggestion of one Chas. D. Woodson, who was a director of the company, and who, with the company’s general manager, had constituted the committee on the part of that company to make this contract with the coke company, the latter replied that, under the terms of the writing, taken in connection with said custom, it was the duty of the furnace company to pay the freight charges and have the amount thereof credited to it on the succeeding monthly settlement; and to this Woodson responded for the company on October 22; — 474 — “Can’t you stop coke until further orders? We will pay freight.” And after this the furnace company continued to pay such freight charges, without further objection, until June or July, 1888, and did indeed pay such charges on every car of coke it received from the plaintiff. The other matter of dispute indicated in the correspondence copied above, and to which reference is also made in other letters, telegrams and propositions that passed between the parties, grew out of a claim on the part of the furnace company, and its denial and repudiation on the part of the coke company, that by the terms of the contract the furnace company was entitled to the benefit of all reductions in freight on coke delivered at Sheffield occurring subsequent 1o the date of the contract. There were several reductions, aggregating eighty-five cents per ton, and the furnace company insisted that the price of $5.10 per ton, originally agreed on, should be reduced, and was, by a just interpretation of the contract, reduced to $4.25 per ton. The preseut action by Hull Coal & Coke Company against the Sheffield Furnace Company proceeds on the theory that the writings set out above, taken in connection with the facts we have stated, constituted a binding contract of sale by the plaintiff to the defendant of 3,900 car loads of coke, that the defendant wrongfully refused to accept and receive the coke it had contracted to receive, and thus violated its contract, and that this breach damnified the plaintiff in the sum of $100,000, which is the amount claimed in the complaint. There was verdict and judgment for plaintiff for $35,000. The main defenses relied on at the trial were three. First, it is insisted that the writings executed by the parties impose no contractual obligations upon the defendant because of a want of mutuality, there being, it is said, the assumption of no enforceable obligation on the part of Hull Coal & Coke Co., and hence, it is argued, the formal assumption of obligation on the part of the furnace company is formal only, and without efficacy. Again, it is contended that the duty to pay freight was upon the coke company, and that its failure and refusal so to do was a breach of its contract which authorized the furnace company to wholly repudiate it: And it is further insisted, that the contract secured to the defendant the benefit, in the way of credit on the agreed price — 475 — per ton of the coke, of all reductions in freight rates for the carriage of the coke from the place of manufacture to Sheffield, that there were material reductions in these rates and that the coke company refused to allow the defendant the benefit thereof, thereby committing a breach of the contract, which released the defendant from all further obligation under it. These defenses will be considered in the order stated; and afterwards we will briefly advert to some minor points presented by the record. Was the agreement evidenced by the writings unilateral, involving a mere option on the part of the coke company to deliver the specified quantity of coke to the furnace company, and for this reason, as is argued, not binding on either party? The contention that the agreement is of this class has for its basis certain provisions in the first four clauses of the writing executed August 30, 18s7. Thus, in the first clause, the instrument evidences a sale by the coke company to the furnace company of 3,900 cars of coke provided the seller is able to induce operators to build ovens and make coke for 3,700 of said cars. Following this are stipulations which require the seller to advise the buyer at various dates mentioned how much coke can be supplied during certain subsequent periods, as, for instance, on "December 1st, 1887, the sellers are to advise buyers how much they can furnish of the 750 cars during the first three months of 1888. ’ ’ The third clause of the writing is as follows : ‘ ‘These conditions [those referred to above] of sale binding the buyers to take the coke as specified above from September 20th, 1887, to December 31st, 1888, [and?] giving sellers option of furnishing for said time, are entered into for the purpose of enabling the sellers to induce the operators to put up more ovens by promising them a certain sale of the product of these ovens at a fixed price." And it is further stipulated, that "the sellers undertake in good faith to use their best endeavors in inducing manufacturers of coke to provide ovens for the purpose of filling this contract." Considering the agreement of August 30, 1887, apart from the writing of January 30, 1888, and taking hold of it immediately upon its execution, that is, before the coke company induced the erection of additional ovens sufficient in number to manufacture the requisite quantity of coke to fill the contract, it may be conceded that — 476 — the instrument was unilateral, imported, no enforceable obligation on the part of the coke company, and hence was not binding on the furnace company. But that, the original status of the parties was entirely changed by what they, and especially the coke company, did under and in performance of the agreement. We understand the writing itself to mean simply this, that upon the success of the coke company’s promised endeavors to induce operators to build additional ovens, and make 3,700 cars of coke for said company during the time covered by the agreement, that company became absolutely bound to supply the furnace company 3,900 cars of coke between September 20, 1887, and December 31, 1888. There is no other condition to an absolute sale mentioned anywhere in the writing. This condition and no other is stipulated in its first clause, where the sale is made contingent alone on the coke, company’s ability to induce operators to make the necessary coke. The second clause, which requires the coke company to advise the furnace company from time to time specified how much coke could be supplied during specified subsequent periods, is, in our Opinion, only a resultant of the uncertainty as to how much could be delivered at all, and this uncertainty was referable solely to the condition in the first clause, and was removed as soon as that condition was complied with. And the necessity for the condition, the purpose for which it was incorporated and its meanihg and intent are clearly shown in the third clause. The necessity for it arose from the fact that the output of the stipulated brand of coke at the date of the agreement was not sufficient to fill its terms. The coke company did not know that the operators could be induced to sufficiently increase the out-put to enable it to supply 3,900 cars to the furnace company. It was unwilling to bind itself in that regard until it had satisfactory assurances in the building of additional ovens, and in the undertaking of the operators that the available supply would be adequate. On the other hand, the obligation of the furnace company to take this quantity of coke was naturally an important factor of the inducements held out to the operators. And hence, as appears from the third clause of this writing, the sole purpose of the option to the coke company was to enable it “to induce the opera- — 477 — tors to put up more ovens by promising them a certain sale of the product of these ovens at a fixed price/' and when this purpose was subserved the option ceased, and the agreement of the coke company was converted from a conditional and optional one, to supply the coke if the building of sufficient ovens could be induced, into an unconditional and absolute contract to supply the coke, the building of sufficient ovens, which was the only contingent element in the agreement, having been induced. The evidence is clear and free from conflict to the proof of the efforts of the coke company to induce the building of the additional ovens and the manufacture of the requisite coke by the operators, as was contemplated in the agreement, and of the entire success of these efforts. Thereby the condition to plaintiff's absolute obligation to sell and deliver the coke was met and removed and the unilateral agreement, not binding on either party because in terms not binding on one, was converted into a mutually obligatory contract. — 1 Parsons on Contracts, 477, etseq., and notes; Willets et al. v. Sun Mutual Ins. Co., 45 N. Y. 45; Atlee v. Bartholomew, 5 Am. St. 108, n. 113; Cherry v. Smith, 39 Am. Dec. 150, n. 152; White v. Baxter, 71 N. Y. 254; L’Amoreux v. Gould, 7 N. Y. 349. That the parties themselves understood and treated this agreement, after this condition had been met and filled, as a mutually binding contract is manifested by the supplementary agreement of January 30th, 1888, wherein it is recited and stated, “that there is now a contract in existence between the parties hereto, of date August 30th, 1887, whereby the party of the first part is to deliver to the party of the second part, and the party of the second part is to take of the party of the first part 3,834 cars of Flat Top Coke (66 cars having already been delivered out of the 3,900 cars secured to the party of the second part under said contract), and which contract is hereby referred to as a part hereof/' &c. Here is an express and direct recognition and declaration by the parties of the absolute and unconditional character imparted to the agreement of August 30, 1887, by the performance by the plaintiff of the condition therein stipulated, upon the performance of which the sale and delivery of the coke to the defendant was to cease to be optional with the coke company. And this construction put on the original agreement by the parties themselves — 478 — in express terms is emphasized by the fact that they all along, after condition performed, treated the contract as mutually and absolutely binding; and their declarations and conduct would certainly suffice to remove any doubt there could possibly be as to the absolue contractual duty of the coke company to deliver and of the furnace company to receive the quantity of coke specified in the writings. — Comer v. Bankhead, 70 Ala. 141. But the writing of January 30, 1888, is more than a mere construction of the previous agreement; it is itself an undertaking, absolute in form and substance, on the part of the coke company to sell and deliver, and on tho part of the furnace company to take and pay for, all of the 3,900 cars of coke mentioned in the first paper, except 66 cars which had previously been delivered. It is therein unconditionally stipulated that the deliveries contracted for in the writing of August 30 should be postponed for a certain time, and that said deliveries should again commence about the first day of May, 1888, and thence continue at the rate of about ten cars per day until the whole quantity — 3,900 cars, less the 66 cars previously delivered — should be delivered. We do not hesitate to declare, upon the considerations to which we have adverted, that there was an existing and mutually obligatory contract between the parties at the time of the alleged violation of it by the defendant, in July, 1888, for the sale and delivery of the specified quantity of coke. 2. We are equally free from doubt to the conclusion that there is no question of agency between the coke company and the furnace company in this transaction. It is manifest, we think, as well upon the words of the writings, as from the situation and course of dealings between these companies, that the coke company was in no sense the agent of the furnace company to purchase coke from the operators for the latter, but was itself the séller on its own account of the coke to the furnace company. And we deem it unnecessary to further discuss this feature of the case. 3. As has been indicated, one of the prominent questions on the trial below was as to whether, under the contract, the duty of paying freight on deliveries of coke at Sheffield was upon the furnace company or the coke' company ; the former contending that it was not required to make any payment whatever until the 10th of the — 479 — month, succeeding that in which deliveries were made; and the latter insisting that, by the terms of the contract, as read in the light of a custom of the trade, which the court allowed to be proved against defendant’s objection, the furnace company was required to pay the freight charges on each car as it was received at Sheffield, and was entitled to a credit for the amounts so paid in any month on a settlement on the 10th day of the next month There are only three provisions or expressions in the writings which bear upon this matter. In the out-set the contract provides for a sale and purchase of “Flat Top Coke at $5.10 per net ton (2,000 lbs.) f. o. b. cars, Sheffield, Ala.” It also contains this provision : “Buyers to remit on or before the 10th day of each month for all shipments made during the preceding month.” And this recital: “It is understood that Hull Coal & Coke Co. have freight rates to Sheffield, Ala., on which the above price is based, but, if during the time this contract is in force, this rate should be advanced, then buyers have the option of taking any undelivered portion, due on this contract, at-the advance, or of cancelling it, provided sellers do not elect to stand said advance.” The trial court admitted evidence of a general custom in the coke trade, in line with plaintiff’s contention, to the effect that under contracts like this it was upon the buyer to advance the freight, and take a credit for the aggregate of such bills paid during a month on settlement the 10th day of the succeeding month ; and upon the writings and this extrinsic evidence submitted it to the jury to determine what the contract was in this regard. The action of the court on this subject clearly and confessedly can be sustained only on the assumption that the expressed or implied terms of the contract as reduced to writing were ambiguous in respect to this matter. We think this assumption is not justified by the language the parties have set down in the writings. It was mainly if not entirely rested upon the use of the letters, ”f. o. b.”in the connection shown above : these were supposed to be of such doubtful meaning as to authorize and require a resort to extraneous evidence in their interpretation. We do not so understand the principle on which the court acted. These letters have long been used and have now come into such general use in contracts of sale, where the property sold is to be transported, that their — 480 — significance is a matter of common knowledge, and, lienee, of judicial cognizance. It is commonly known, and therefore courts must be held to know, that these are but the initial letters of three several words, and that these words, in connections like this, are •' ‘free on board.” And even were it conceded that courts do not judicially know what they stood for and mean, and evidence aliunde is resorted to as in this case, such evidence could go no further than to supply the missing letters of the words, of which these letters are by such evidence shown to be the initials. The necessity, in other words, to show by extrinsic evidence what the full words are is met when the completed words are put before the court, and it affords no occasion or justification for giving, by proof of custom or usage, or other extrinsic fact, a different meaning or operation to them than would have attached to them had they been originally inserted in full in the writings. Thus in a case where parol evidence was admitted to show that the letters C. O. I)., (and which are not better understood than the letters f. o. b.), in a receipt given by an express company for a package to be transported by it, were the initials of the words “collect on delivery,” the court held, these words being proved, it was not competent to prove by parol what the full words meant, or to change their natural significance and effect in the case by evidence of custom or usage, or of previous dealings between the parties, so as to relieve the carrier from the duty of collecting the price of the goods from, before delivering them to, the consignee.— American Express Co. v. Lesem et al., 39 Ill. 312. And in another case, where the carrier, the Adams Express Co., was under a contract to carry goods from New York to Boston, the package was marked thus : “A. King, Windsor. N. S., C. O. D. $375, from Turner’s Express, Boston, Mass.,” and in the receipt given for the goods was contained the directions as marked on the package. The package was delivered to Turner’s Express at Boston by the Adams Express Co. without collecting therefor. The consignor sued the latter company alleging a breach of the contract, and on the trial “ the defendant was allowed to prove that the whole direction meant, that Turner’s Express should collect of the consignee; also, what was the custom existing among express companies receiving packages with a C. O. D. from connecting lines.” It was — 481 — held by the Court of Appeals that the admission of this evidence was erroneous ; that while it was competent to give parol evidence to explain the meaning of the letters C. O. D., and thus remove all ambiguity, the contract,being thus made clear, could not be varied; that the additional words, being of familiar and ordinary and not of technical use, and having a well defined meaning, could not be explained or varied, or a different meaning given them, nor was it competent to prove a custom or usage inconsistent therewith.” — Collender v. Dinsmore, 55 N. Y. 200. As has been indicated, our own opinion is, that the meaning of the letters C. O. L. in express carriage contracts, and f. o. b. in contracts like that involved in the case at bar is a matter of judicial knowledge, and that parol evidence is not needed or admissible in their interpretation. — State v. Intoxicating Liquor Co., 73 Me. 278; U. S. Ex. Co. v. Keefer, 59 Ind. 263; Moseley’s Adm’r. v. Mastin, 37 Ala. 216. But whether the words of which the letters are initials are filled in by drawing upon judicial knowledge or by extrinsic evidence, the effect and result are the same : the perfected words, in either case, are inserted in the writing instead of the letters, and the instrument is to be read and construed precisely as if the words had been originally embodied in it. Applying these principles to the present case, the words “free on board” are substituted for the letters f. o. b., and we have a contract by which the coke company agrees to sell to the furnace company 3,900 cars of coke at $5.10 per net ton of 2,000 pounds free on board the cars at- Sheffield, Ala. There can be no doubt as to what these words— free on board — mean in the connection we find them here. Their meaning in contracts of this sort is plain and well understood. They import that the purchaser shall be free from all expense which may have attended the shipment and transportation to the point named. Had the provision related to the initial point of the transportation, the buyer would have been entitled to the shipment at that place free from all expense incident to loading the cars — all expense indeed incurred in the premises- up to and including the loading of the cars. Then it would have been upon the buyer to pay the freight — the cost of transportation — to the final destination of the consignment. The provision here having relation to the point of final delivery, it can mean noth — 482 — ing else than that the seller is to pay all costs and charges up to that point, and that the buyer is entitled to receive the consignment free of all such costs and expenses. And, as we have seen, these plain terms of the contract can not be changed or varied in any way by evidence of a custom existing in the coke trade, according to which the- purchaser is to pay freight charges. There is, therefore, no consideration referable to the use of the letters f. o. b. which inject an element of uncertainty into the contract, or afford any ground for parol evidence in explanation of them or of the words for which they stand. The other terms of the writings bearing on this point are equally free from ambiguity and equally exclusive of the construction sought to be put upon the contract by the evidence of custom which the court allowed to go to the jury. The price tobe paid was $5.10 per -net ton of 2,000 lbs. This was the price of the coke — the amount to be paid for each ton of the commodity — on cars at Sheffield, Ala. There is no more suggestion of freight charges in this provision of the contract, than there would have been had the coke been stored at Sheffield and as stored sold by the coke company to the furnace company at a specified pri.ce per net ton. In each case the cost of transporting the coke from the ovens to Sheffield would be a constituent element or factor to be considered by the seller in fixing a price to be proposed to the would be buyer, just as the price paid by the seller to the operators for the coke at the ovens, and as the value of the seller’s time and services spent and rendered in buying, shipping and delivering the coke would be constituent factors, going along with freight charges and the amount of profit the seller sought to make, in the gross sum of $5.10 per ton; and there is, on the stipulations so far considered, just as much reason and no more for holding that the furnace company was required to pay in advance of the 10th of the succeeding month, or that it was doubtful whether the contract did not require the furnace company to so pay that part of the $5.10, or so much of the $5.10, as was necessary to pay the operators what they were to receive for the coke at the ovens ; and so with the coke company’s profit and the value of its time and services. If this needs further demonstration it is found in the recital of the contract, that “It is understood that Hull Coal & — 483 — Coke Co. have freight rates to Sheffield, Ala., on which the above price is based.” And if it is to be held that the duty of thus paying freight can be imposed upon the furnace company by extrinsic evidence of custom it might with equal propriety be held that such duty in respect of every other item going to make up the aggregate price could in like manner be imposed upon that company to the most flagrant violation and complete emasculation of the provision of the contract — the only stipulation it contains on that subject — requiring payments to be made on the 10th day of each month for all shipments made during the preceding month. The payments thus required are of the price per ton of the coke— the whole price of $5.10, no more and no less ; and there is no warrant in the contract for saying that it requires the payment of this price less in each instance that part of it which is constituted of freight charges, or that it is doubtful and uncertain on the words of the writings whether another amount than this gross price was to then be paid. We are constrained, therefore, to hold that the circuit court erred in the admission of testimony as to the custom proved against defendant’s objection, and in the charges given on this subject. The trial court should itself have construed the contract, and ruled that under it there was no duty resting on the furnace company to'pay freight at all, or to pay any part of the contract price until the 10th day of the month succeeding shipments. 4. Whether the contract was changed in the respect considered above by a subsequent binding agreement between the parties is a different question, which was for the determination of the jury upon the evidence and instructions of the court. There was evidence tending to show that Woodson, subsequent to the making of the contract, agreed to pay freight on shipments as received, that he represented the furnace company in this regard, and that said company thereafter paid freight for a considerable period, several months, and upon all the coke which was delivered to it, amounting to 516 cars, without further objection. But we can not know what conclusion the jury would have reached or did reach on this part of the case, nor indeed that they reached any conclusion in this regard, and hence we, of course, can not say that the errors committed by the court in respect of — 484 — the written contract were without injury to the defendant. One conclusion open to the -jury in this connection was, that the defendant at plaintiff’s instance voluntarily paid the freight on shipments that were received, that is the jury might have reached that conclusion ; and if such payments were made as a matter of voluntary accommodation to the plaintiff, the fact of their being so made for a time did not bind the furnace company to continue payment, nor relieve the coke company from the duty of payment. Charge 1 requested by the defendant should, therefore, have been given. 5. It is next to be considered whether by the terms of the written contract the furnace company was entitled to the benefits of reductions in freight rates occurring after the contract was executed, and while it was being performed. We will repeat here the only provision of the writings which bears upon this point: “It is understood that Hull Coal & Coke Co. have freight rates to Sheffield, Ala., on which the above price is based; but if during the time this contract is in force this rate should be advanced, then buyers have the option of taking any undelivered portion due on this contract at the advance, or of cancelling it, provided sellers do not elect to stand said advance.” Without this provision there was, as we have held, an absolute liability resting on the furnace company to take and pay for 8,900 cars of coke at the rate of $5.10 per net ton. Of course the mere fact here recited that the sellers have freight rates to Sheffield, upon which this price is based, can add nothing to nor take anything from, nor in any manner change, the absolute liability of the furnace company to pay this price. And so far as the fact itself goes, not depending on the recital for its existence, the contract is now the same as if it had not contained the recital at all. But the recital of the fact, aside from its existence, was actuated by a purpose which clearly appears by what follows it. This purpose was to provide what should be the rights of the respective parties in relation to abandoning, or continuing under, the contract in the event and only in the event there should be an advance in the existing freight rates to which the recital referred, the provision being that in such event the furnace company should have the option of taking the then undelivered portion of the coke contracted for by paying — 485 — such advance in addition to the $5.10 per net ton, or of cancelling the contract as to such undelivered part, unless the sellers should elect “to stand said advance.” And it is not conceivable how these stipulations in the writing expressly referring and confined to an advance in the freight rates, and without which obviously the contract required the coke company to deliver and the furnace company to take and pay for 8,900 cars of coke at $5.10 per ton whatever the freight rates were or might afterwards be, whether higher or lower than existing rates, could be converted into a provision, or afford ground for argument or inference leading to the conclusion, that in the event of a reduction of such rates — a matter not hinted at in the instrument — the furnace company was to have the benefit of such reduction in the price per ton agreed to be paid by it, which being denied to it, that company had the right to repudiate the contract. In all reason, it would seem most clear that, if the parties had had any such intention, they would most certainly have expressed it in the writings, and that while stipulating for certain exceptional rights in the event of an advance in the rates, they would, had any such purpose been entertained, have also stipulated for the right now asserted by the furnace company in the event of a reduction in the said rates. That they did not so stipulate is conclusive to our minds, on the familiar maxim of expressio unius exclusio alterius, that they never had such a purpose, and that the contract is not open to any construction which admits of the effectuation of the right now insisted on by the defendant. The contract in this particular may have been a most disadvantageous one for the defendant, but it was competent for the parties to so obligate themselves, and it is not for the court to construe their contract by reference to that consideration. The inquiry whether there was a subsequent parol agreement between the parties by the terms of which the defendant was to have the benefit of freight reductions was properly submitted to the jury on the trial. 6. It appears from that part of the correspondence we have copied that on July 23d, 1888, the furnace company notified the coke company that it would no longer be bound by the contract, claiming that the refusal of the latter company to deliver coke, unless the former — 486 — would pay freight at times of delivery, was a violation of the agreement, and released the furnace company from all obligations under it. This position was well taken, unless the evidence satisfied the jury that the original contract, evidenced by the writings, had been efficaciously modified by a subsequent obligatory agreement on the part of the furnace company to thus pay the freight. If the jury found this to be the case, then it is manifest that this renunciation was a breach of the contract, entitling the coke company to an immediate action upon it. That company did not immediately elect to treat’ the renunciation as an actionable breach of the agreement, but on the following day notified the furnace company that it would continue shipments and pay freight itself provided the furnace company would pay the stipulated price, waiving its claim as to freight reductions. This offer was declined. It is now contended that the plaintiff waived defendant’s renunciation, and that, of consequence, whatever conclusion the jury may have arrived at in respect-of the duty to pay freight, defendant’s assertion that it was released from, and notification that it would nolonger be bound by the contract was not a breach of the contract, because not accepted and treated as such by the plaintiff. It is admitted for appellee that the promisee may elect to treat such a breach as inoperative, and that by so doing he keeps the- contract alive for the benefit of the other party as well as his own ; but it is insisted, and we think the proposition is a sound one, “that, if the party renouncing will not and does not accept the offer oí the other party to waive the renunciation, and refuses all such offers and negotiations, the party renouncing can not complain that the other party does finally accept and act upon the original renunciation.” The pretermission of a present acceptance of the renunciation was in effect upon a condition which was not complied with by the defendant: the plaintiff in substance said to the defendant that, if you will continue to pay $5.10 per ton for the coke, I will waive your renunciation and keep the contract alive, but I do this only on the condition named. This condition not having been met, the plaintiff’s intended waiver was as non-existent as if it had never been attempted, and the right to accept the renunciation, and thus put an end to the contract was the same as if an abortive effort to avoid that — 487 — necessity had not been made. We are, therefore, of the opinion that, if the defendant was, by virtue of some agreement subsequent to the written contract, to pay freight charges, its refusal to proceed in the performance of the contract, unless the plaintiff would pay these charges, was a breach of the contract which was not waived by the plaintiff. For this breach the plaintiff would be entitled to recovery, even if it be conceded that defendant was entitled to freight reductions. And on the other hand, if the defendant was not entitled to such reductions, but ivas under no duty to pay freight, its refusal to go on with the contract, the plaintiff paying freight, unless the freight reductions were allowed to it, was in itself an actionable breach as to which there is no pretense of waiver. So that, we concur in the view, given in charge by the trial court, that plaintiff was entitled to recover on either of these breaches, if the jury found either was a breach, and that the defendant could not recover unless it should be found both that it was under no duty to pay freight, and that it was entitled to scale the contract price of $5.10 to the extent of reductions of freight rates subsequent to the execution of the contract. Many exceptions were reserved to the rulings of the circuit court on the admissiou of testimony. These went for the most part to the correspondence between the parties through their respective officers and agents. The only plausible exception taken in this connection had reference to certain communications sent by one Wood-son, on the theory that he was not authorized to speak for the furnace company. We think the evidence as to his relations to the company and to the matters about which he assumed to speak in the company’s behalf, was sufficient to show, prima facie, at least, that he acted with authority, and that the evidence of what he did was properly allowed to go to the jury. The remaining exceptions to the admission of testimony are without merit, except those which are covered by what is said in the foregoing opinion. For the errors adverted to the judgment of the circuit court must be reversed. The cause will be remanded. Reversed and remanded.