Southern Tallow Co. v. David J. Joseph & Co.

HOLMES, Circuit Judge. This was an action against the seller for failure to deliver melting steel, commonly known as scrap iron. The appellee, David J. Joseph Company, having taken over the assets and assumed the liabilities of the original plaintiff, was substituted as plaintiff below, pursuant to stipulation and order of court. This appeal is- prosecuted from a final judgment against appellant entered upon the directed verdict of a jury assessing damages in the sum of $7,781.25, the difference between the contract price and the market price at the time specified for delivery. The plaintiff below, in five counts, declared upon five contracts of sale, alleging in each instance a breach by failure to deliver the amount of steel called for in the contract. Except as to date; price, amount, time of delivery, and description of steel, the five contracts are identical. The first, dated April 24, 1930, called for 2,000 tons at $10 per ton, delivered in railroad cars, free alongside ship, Port Tampa, Florida. The second called for 1,000 tons at $11; the third for 250 tons at $6.50; the fourth for 750 tons at $10.50; and the fifth for 1,500 tons at $9.50. All contracts provided for terms as usual and for shipment during July and August. The usual terms were alleged to include payment of 90% of the purchase price on delivery of dock receipts and the balance when ship cleared. If the material was not delivered within the time specified, the purchaser bad the privilege of cancelling the contract without notice or of charging the seller’s account with the difference between the contract price and the market price at the expiration of the date of delivery. Demurrers, pleas, amended pleas, and counterclaims at length were filed in conformity with the local practice; but we think it unnecessary to discuss the identical points raised with reference thereto, since the controverted issues were fully presented to the jury, a fair verdict rendered, and a just judgment entered. It is undisputed that the market price had advanced and that the verdict is not for an amount which makes the seller pay more than would have been required if it had delivered the steel and paid the contract prices. The issues upon which the trial was had were whether or not the contracts were made as alleged, and, if so, did appellant prove its performance thereof. The performance contended for by appellant was the delivery of scrap within the time specified in the contracts which appellee allocated to unperformed prior contracts. The evidence sustains the verdict, and the verdict establishes the right of appellee to make the allocations, by which appellant received a higher price than if the deliveries had been accepted under the contracts in suit. It is contended that the proof failed to sustain the allegation that the usual terms, provided for in the contracts, were 90% on delivery of dock receipts and 10% when the ship cleared. As a consequence, it is claimed that appellee had the burden of showing demand and tender of the price. No such contention was made on the trial, and the evidence in the record here shows that no such controversy actually exists. Whatever question may be raised as to the sufficiency of the proof on this point, it can avail the appellant nothing on this appeal, since it does not appear to affect the substantial rights of the parties. Rules of Civil Procedure, Rule 61, 28 U.S.C.A. following section 723c; 28 U.S.C.A. § 391; Moore’s Federal Practice, pp. 3285-9. When introduced in evidence, each of tlic com racts bore a notation on the margin, “Balance cancelled, Houston letter, 9-28.” They were introduced with the explanation that these documents had been used as office records, and that the notation thereon was to avoid confusion in making additional efforts to obtain the material, Upon the further undisputed testimony that it had not been appellee’s intention to relinquish its rights under the contracts, the court permitted lines to be drawn through [864] the notations. This action of the court was objected to, and error is assigned to its ruling. While the contracts gave appellee the option to cancel on non-performance by appellant, no provision was made as to how such cancellation was to be accomplished, except that it might be without notice. Whatever acts are relied upon for cancellation under this option, they would not be effective in the absence of an intention to cancel on the part of some person authorized to make the cancellation. The uncontradicted testimony show's that such intention was wholly lacking. On the trial, appellant raised no issue, either by pleading or proof, as to any exercise of the power of cancellation reserved in the contracts which would relieve it from its obligations thereunder. The real controversy between the parties arose out of the fact that, under previous contracts, appellee had agreed to increase the price and to advance a part thereof before delivery in order to assure performance by appellant. Under the contracts in suit, appellant, having received offers considerably in excess of the contract price, refused to perform unless the price was raised and money advanced. The contention that time was of the essence of the contract appears to be an afterthought on the part of appellant, when the natjire of the business and the prior conduct of the parties are given full consideration. Each side requested a peremptory instruction in its favor, and we think the court committed no reversible error in directing the jury to return a verdict for appellee. The judgment of the district court is affirmed.