Crook, Horner & Co. v. Baltimore & Ohio Railroad

Page, J., delivered the opinion of the Court. This appeal is from an order of the Court below, sustaining the exceptions of the appellees to the allowance by the Auditor of the claim of the appellants. On the fifteenth day of May, 1890, Charles Webb, the Receiver of the Bay Ridge Company, through his agent, Hugh L. Bond, Jr., contracted with a certain William H. Pitcher for the purchase of an ice machine, to be furnished within thirty days, with capacity for making one and one-half tons of ice per day, and for cooling to a temperature of thirty-two degrees Fahrenheit, in all weathers, certain specified spaces in the restaurant building at Bay Ridge. By the agreement Pitcher guaranteed the capacity and character of the machine, and agreed to .run the same for ten days after completion to demonstrate its efficiency; the Receiver to supply the water and steam required. The price of the machine was to be $4,500, to be paid in instalments at different periods, with interest thereon from the date of acceptance, to be secured by notes endorsed by the B. & O. Railroad Co., or some individual endorser satisfactory to said Pitcher. It was also agreed that the • property in the machine should remain in Pitcher until the delivery of the notes, endorsed as stated; and these were not to be given until the machine was complete and working to the satisfaction of Mr. Bond. Pitcher put up the machine during the summer of 1890. On the thirtieth day of October, of the same year, the Receiver reported to the Court, that “ while the machine was partially operated the season of 1890, it — 343 — was not completed and working as required until after the close of the season, and your Receiver did not escape all expense on account of ice, as he had hoped. Your Receiver has therefore agreed with said Pitcher, subject to the approval of this Honorable Court, to accept the said machine and apparatus; provided, the said Pitcher shall obtain the contract and agreement of Messrs. Crook, Horner & Co., a responsible firm of the city of Baltimore, to put the same in good working order at the beginning of the season of 1891, and to guarantee the same, shall in all respects comply with the requirements of the said contract between the said Receiver and said Pitcher, as well when operated during the summer months as at other times, and to pay for the same the sum of $2,000, on or before the 10th of July, 1891, and $2,000 on or before Sept. 1st, 1891, the balance in cash.” By an order passed on the 31st of October, the Court approved of the proposed contract and authorized him to issue his certificates of indebtedness bearing six per cent, interest per annum, to meet the deferred payments. On the 10th day of November ensuing, the Receiver entered into the following contract: “ Whereas, one William H. Pitcher did contract and agree with the said Receiver, by written agreement dated the 15 th of May, 1890, to construct and supply ice making and refrigerating plant at Bay Ridge, Anne Arundel County, Maryland, of the description mentioned in said contract, a copy of which is hereto annexed, referred to and made part of this agreement; and whereas, the said machinery and plant were not completed within the time mentioned in said contract, and could not be tested at the time therein provided; and whereas, the said Pitcher and the said Crook, Horner & Co., as his assignees, are desirous of obtaining a settlement from the said Receiver, and the Circuit Court for Anne Arundel County has authorized said Receiver to issue Receiver’s certificates to the amount of $4,000; to pay for said plant; provided, said firm of Crook, Horner & Co. will contract and agree to put the said machinery and plant — 344 — in good working order at the beginning of the season of 1891, and guarantee that the same shall, in all respects,, come up to the requirements of the said contract between said Receiver and Pitcher, as well when operated during the summer months as at other times. Now, * * * in consideration of the delivery by the said Receiver of four. Receiver’s certificates, each for the sum of $1,000, bearing, &c., &c., and the payment of $293.15-100 in cash, in full settlement and payment for said ice machine and refrigerating plant, under said contract between the Receiver and the said' Pitcher, the said Crook, Horner & Co. do hereby promise, &c., that they will put said machine and apparatus in complete working order at the beginning of the season of 1891, by the fifteenth day of May, and will cause the same to comply with and come up to, in all respects, the requirements of said contract hereto attached, as well when operated during the summer months as at any time.” The amount provided to be paid under this agreement, that is, $4,293.15, was in full settlement for the machine and refrigerating plant, but it also comprehended payment for balance due for a pump located on the steamboat wharf. In pursuance of this contract, the cash provided for therein was paid, and certificates were issued payable to Pitcher, and upon being endorsed by him were delivered to the appellants. Two of these have been paid and the amounts due on the other two now constitute the appellee’s claim. It also appears, that prior to Nov., 1890, Pitcher had become largely indebted to Crook, Horner & Co., partly on account of money advanced to carry out his contract with the Receiver. To secure this, Pitcher turned this account against the Receiver over to the appellants. At that time the Receiver’s certificates had not' been issued, new, as appears by the contract of the appellees, as well as by the proof, had the machine been tested. Indeed, as far as the appellants were concerned, it was to enable them to secure the possession of these certificates that the contract of the — 345 — ioth of Nov. was entered into. The Receiver, by that contract, was to issue the certificates and pay the cash named; and Crook, Horner & Co., on their part, agreed to put the machine in complete working order at the beginning of the season of 1891, and in all respects comply with the requirements resting on Pitcher under his contract. The work Crook, Horner & Co. were to do, was the same that Pitcher’s contract required him to do, and the money stipulated to be paid to them under Pitcher’s contract could be due only upon the completion of the machines and after they had been tested and accepted according to the original contract. In other words, the consideration passing to Crook, Horner & Co., was the delivery of the Receiver’s certificates, which Pitcher had agreed to turn over to them, and the duties they had imposed upon them were only to complete Pitcher’s work on the machines. For greater certainty as to the nature of the transaction, the contract explicitly stated that the four Receiver’s certificates, each for $1,000, and the payment of the $292.15 in cash, “were in full settlement and payment for said machine and refrigerating plant under said contract between the Receiver and said Pitcher.” The attitude of the appellants under this contract, therefore was that of a substitute for Pitcher. Having received the promise of the compensation, they assumed his obligations. It does not seem to be seriously contended that the machine was ever brought up to the requirements of the contract. Mr. Crook himself, stated that the machine had never been made to accomplish successfully the test required by the contract, and this is supported by the weight of the testimony. In 1891 work was delayed by the breaking down of the boiler until about the middle of June, and afterwards by the putting in of a larger smoke stack, until the middle of August, so that actual tests were begun about the last of August or the first of September, and were continued (according to Mr. Crook) until the 25 th of September, when they were discontinued by agreement, because of the late — 346 — ness of the season, to be renewed in the spring of 1892. That these tests were unsatisfactory is clearly shown, and Mr. Crook seems to admit this, when he says that in 1892 he came “to see Mr. Bond about starting up the machine, because they refused to pay these other two Receiver’s bonds, and we were anxious, not only to get the bonds paid, but make the machine work and come up to our guarantee.” In 1892 the appellees were informed by Mr. Bond that “he did not have anything to do with Bay Ridge any more, that another company had it * * * * and they would not have any use for the ice machine that summer.” And so no further effort appears to have been made to perfect the machine. On the 27th day of January, 1893, the machine, together with all the real and personal property of the Bay Ridge Company, was sold by Mr. Stockett, trustee under a decree passed in certain foreclosure proceedings by the Circuit Court for Anne Arundel County, sitting in Equity. In view of what has been said, we think this is a case where a machine, having been ordered by the contractor, in an uncompleted condition, a third party, with the concurrence of the original contractor, agrees, in consideration of having received the obligations of the contractee for the whole purchase money, to complete it according to the terms of the original contract. And under these circumstances, the appellants having so agreed, and having taken such obligations, with stipulations so to complete the work, with a full knowledge of all the facts of the case, hold the obligations subject to; such rights in favor of the. Receiver, as would have existed had they remained in the hands of Pitcher, the original contractor. Now, the original contract provides that the machines should have “ capacity for making one and one-half tons of ice per day of twenty-four hours, and of cooling to a temperature of thirty-two degrees Fahrenheit, in all weathers, the following spaces,” &c. And that Pitcher will run the same for ten days after completion, to demonstrate the char — 347 — acter and efficacy thereof. This was a warranty. An acceptance of the machine was no waiver of it, and, if having accepted it, there was a breach, the Receiver could either maintain an action for a breach of the warranty, or recoup the damages sustained in the vendor’s suit. Central Trust Co. v. Arctic Ice M. Co., 77 Md. 238. In this case there was no acceptance of the machine by the vendee. That it was taken possession of by the trustee appointed by the Circuit Court in the foreclosure proceedings, and with other property of the Bay Ridge Co., sold, is true. But this cannot be regarded as an acceptance by the vendee. To entitle the appellants to be paid, they must show performance on their part, or some legal excuse for their failure to perform, according to the terms of their contract, and having failed to show either, their claim should not be allowed. (Decided December 19th, 1894.) Order affirmed and cause remanded.