Lukens Iron & Steel Co. v. Hartmann-Greiling Co.

Kerwin, J. It is established by the evidence and the verdict that the defendant in May, 1915, entered into a contract with the United States government to build a dredge, and afterwards negotiated with A. M. Castle & Company for the purchase of material for the steam boiler in said dredge. The negotiations with A. M. Castle & Company resulted in an order addressed to the plaintiff for such material at an agreed price to be charged to the defendant. No time was fixed for delivery. A. M. Castle & Company knew that the contract contained penalties in case of failure to complete within the time specified in the contract of defendant with the United States government. Although defendant, after the order of August 17th was placed, repeatedly insisted upon quick delivery, no shipment was made until December 9, 1915. The defendant accepted the material but did not pay for it. Because of the delay in shipping defendant was obliged to construct the boiler at extra expense and was unable to complete the dredge according to the terms of its contract with the government, and sustained damages on account of interest on money withheld by the government, expense of’ insurance and inspection during the period of delay. Several contentions are made by appellant for reversal, which we shall treat in their order. 1. It is contended that A. M. Castle & Company were not the agents of the plaintiff in making the sale to defendant. A. M. Castle & Company advertised on their letter-heads and correspondence that they were the “Western Sales Agents Lukens Iron & Steel Company,” and the correspondence generally, which was quite extensive, tends to show that A. M. Castle & Company was the agent for plaintiff in selling the material in question. They placed the order with plaint — 353 — iff and corresponded with it with reference thereto. It is true that the negotiations which resulted in placing the order for the steel were carried on between defendant and A. M. Castlé & Company, but the evidence tends to show .that they were acting 'for plaintiff. Moreover, the plaintiff adopted the contract made through A. M. Castle & Company as its contract, -made it its own, and sued upon it. The letter relating to waiver and insisting that plaintiff would not ship unless penalty was waived also tends to show that A. M. Castle & Company were agents of plaintiff in the deal. The appellant insists that A. M. Castle & Company were brokers, not agents of plaintiff. It is not very material whether they be styled brokers or agents. The question is, Did they act for plaintiff in making the contract in question, and did plaintiff adopt the contract, act upon it, and deliver the steel under it? The knowledge of a broker is generally imputed to the principal. 9 Corp. Jur. 673. The evidence also tends to show that plaintiff affirmed the contract made for it by A. M. Castle & Company. We are satisfied the evidence shows that A. M. Castle & Company were agents of plaintiff, and that plaintiff was bound by their acts and knowledge. A. M. Castle & Company knew the terms of the government contract at least as early as the date of completion of the contract, August 17, 1915, and knew that it was a penalty contract. Their knowledge was the knowledge of the plaintiff, hence plaintiff was chargeable with such damages as might fairly and reasonably be considered as either arising naturally — that is, according to the usual course of things — from such breach, or such as may reasonably be supposed to have been in contemplation by both parties at the time they made the contract as the result of a breach thereof. Hadley v. Baxendale, 9 Exch. 341; Kellogg v. Malick, 125 Wis. 239, 103 N. W. 1116; Gross v. Heckert, 120 Wis. 314, 97 N. W. 952; Guetzkow Bros. Co. v. A. H. Andrews & Co. 92 Wis. 214, 66 N. W. 119. The question of agency on the evidence produced was for — 354 — the jury. Garlick v. Morley, 147 Wis. 397, 132 N. W. 601; Taylor v. Seil, 120 Wis. 32, 34, 97 N. W. 498. It is argued that plaintiff did not know that the defendant’s contract with the government imposed penalties. But A. M. Castle & Company, agents of plaintiff, knew it, and its knowledge was attributable to plaintiff. Ross v. Northrup, King & Co. 156 Wis. 327, 144 N. W. 1124; Owen v. Roberts, 36 Wis. 258; Geel v. Goulden, 168 Mich. 413, 134 N. W. 484; Ney v. Eastern I. T. Co. 162 Iowa, 525, 144 N. W. 383; Brown v. People’s Nat. Bank, 170 Mich. 416, 136 N. W. 506. 2. It is further insisted that the steel was furnished within a reasonable time. It is true no time of delivery was fixed in the order, but the rule of law is well settled that under such circumstances the delivery must be within a reasonable time. Lang v. Menasha P. Co. 119 Wis. 1, 96 N. W. 393. The jury found that plaintiff failed to deliver the steel within the time required by the contract. The question as to what constitutes a reasonable time on the evidence in this case was for the jury. Western L. & C. Co. v. Copper River L. Co. 138 Wis. 404, 120 N. W. 277; Greenwood v. Davis, 106 Mich. 230, 64 N. W. 26. When the order was solicited by A. M. Castle & Company in June, 1915, they stated that the order could be filled in about three weeks. There was a large amount of correspondence between A. M. Castle & Company and plaintiff respecting the details of the material to be furnished and the order was finally placed August 17, 1915. After this the evidence shows that defendant was constantly urging immediate delivery and threatened the enforcement of the penalties and damages in case the order was not promptly filled. In A. M. Castle & Company’s letter dated August 17, 1915, to the plaintiff it is stated, respecting the order for the material, “This is a lot we protected them on at above price,” and it is also stated in this letter that all materials are to be made according to United States government rules and regula — 355 — tions. The order practically described the material to be furnished and the price. While the defendant had a right under the terms of the contract to believe that this material would be furnished within a reasonable time after August 17, 1915, and, as the correspondence shows, was represented could be furnished within three weeks, it was not shipped until the 9th day of December following and was not received by defendant until December 22d. In the instant case time was of the essence of the contract. Henderson v. McFadden, 112 Fed. 389. 3. It is contended by appellant that defendant waived delivery according to the contract, hence was not entitled to damages. This contention is based upon the proposition that since A. M. Castle & Company, acting for plaintiff, offered to ship December 1st provided defendant would waive damages, and that defendant consented to receive the steel on this proposition and afterwards received the material which was shipped December '9th, it thereby waived all damages. The difficulty with this contention is that, even assuming for the purpose of the argument that defendant did consent to waive damages if shipment was made in accordance with the proposition, the plaintiff failed to comply with the proposition so made, because shipment was not made until December 9th. This court has held that waiver is the voluntary relinquishment of a known right, and has also held that the mere acceptance of property under a contract to deliver, after damages have accrued in consequence of nondelivery according to the contract, does not waive or relinquish the right of action for damages which had accrued at the time of the acceptance of the property. Schweickhart v. Stuewe, 71 Wis. 1, 36 N. W. 605. The rule of the foregoing case is particularly applicable in the- instant case. Here the damages had accrued at and prior to the time of the shipment, and to refuse delivery at that time, under the circumstances of this case, would greatly enhance the damages, because the defendant would be unable — 356 — to obtain the material, hence the construction of the dredge would be greatly delayed and the damages thereby greatly enhanced. Where one claiming damages for breach of contract can minimize the damages he is obliged to do so and not unnecessarily increase them; and so the fact that defendant accepted the delivery and thereby minimized damages was not a waiver of damages accrued at the time, unless it appears that the defendant voluntarily waived the damages which had accrued. Sixta v. Ontonagon Valley L. Co. 157 Wis. 293, 306, 147 N. W. 1042. The evidence in the case supports the finding of the jury that the defendant did not waive. In order to constitute a waiver in this case it was necessary for the plaintiff to show that it had strictly complied with its proposition upon which the waiver was based. It did not do so. It made a proposition to ship December 1st.if defendant would waive damages. Defendant replied to this proposition by telegram merely stating, “Ship boiler material first next week follow by tracer O. K.” The proposition and telegram, therefore, did not amount to a waiver, because the- proposition upon which the alleged claim of waiver is based was not complied with. Whether, if the plaintiff had complied with its proposition and had shipped December 1st, the acceptance of the goods under the telegram sent by defendant would have amounted to a waiver of damages which had accrued at that time under the peculiar circumstances of this case, we need not and do not decide. The situation was peculiar. At the time the order was given the steel could have been easily obtained. ' At the time of the alleged waiver and for a long time prior thereto the steel market had tightened and the defendant could not have obtained the steel elsewhere. Therefore the defendant was forced to accept it when it did or greatly enhance damages. 4. Point is made by counsel for appellant that error was committed in the admission and rejection of evidence. We find no prejudicial error under this head. We are convinced — 357 — that the verdict is supported by the evidence and warrants the judgment rendered. By the Court. — The judgment of the court below is affirmed.