and another v. OLIVER and another.
June Term, 1886.)
(Circuit Court, N. D. Ohio, W. D.
A contract must be construed as a whole. Words are to be given their usual and common signification, and the language used must be read in the light of surrounding circumstances, the situation of the parties, and the object of the contract, and that construction given which most nearly conforms to the intention of the parties. . Expert evidence depends for its value upon tne knowledge of the witness, and his experience and capacity, as well as upon the reasons he gives for his opinions.
Where milling machinery is warranted to make flour "to satisfy the trade" of the party to whom it is sold, the "trade" meant is the "trade" in and around the place where the mill is situated. .
DAMAGES-MEASURE OF-BREACH OF CONTRACT.
Where plaintiff had bought and manufactured machinery for defendant, who subsequently rescinded the contract, the plaintiff's measure of damages was held to be the loss in the value of the machinery actually manufactured below the contract price, the loss of the profit on the sale of machinery purchased by him for the purpose of filling the contract, and the profits to be realized from the work to be performed in setting up the machinery.
The plaintiffs were manufacturers of mill machinery, and also en. gaged in furnishing other machinery than their manufacture, and putting up mills, located at Fort Wayne, Indiana. The defendants, living in Van Wert county, Ohio, being desirous to erect and put into 'operation a mill at Venedotia, in that county, entered into a written contract by which the plaintiffs sold to, and the defendants agreed to purchase, certain mill machinery described in the contract, and which tbe plaintiffs agreed to put up in a mill·bouse to be erected by the defendants; and fully complete and put in operation a complete mill, by a time named, and for tbe price stated in the contract of $6,000, to be paid as therein stipulated. The w.ritten contract contained the following clause:
"This mill, when completed and ready for operation, is guarantied by the party of the first part [the plaintiffs] to have a capacity of from ten to twelve bushels of wheat per hour, and make a grade of !lour equal to the straight flour made at the Delphos mills, and satisfy the trade of the second party, rthe defendants.]"
Under the contract the plaintiffs proceeded to manufacture the machinery they were to make, and made contracts to purchase the part thereof they did not manufacture; and by the sixteenth of May, 1884, had, as they claimed, all the machinery ready to deliver according to the contract, and were ready to put the same in the mill-house, as reqnired by the contract. The defendants went on and erected the mill building required to hold the machinery, but, before the machinery was delivered, they notified the plaintiffs that they would not receive tbe machinery, or allow them to completo
the mill; claiming that they had ascertained that the machinery so purchased would not comply with the guaranty contained in the contract as to the character of flour to be produced thereby, and refused to comply with said agreement. This suit is brought for a breach of this contract, and the plaintiffs allege that they had and were ready to comply in all respects with their agreement, and a'sked judgment for their damages for such breach. The defendants deny such compliance with the agreement, and allege that the machinery was not such as was provided for in the said guaranty; and also claim damages, occasioned by plaintiffs' breach of contract in not furnishing them such machinery, by the erection of their mill.house, and by procuring ground upon which 'to '.ocate, claiming great losses upon the value thereof. J. K. Hamilton and Harvey Scribner, for plaintiffs. R. H. Cochran and C. T. Watt, for defendants. WELKER, J., (orally, charging jury.) Three things are provided for in this guarapty: (1) The capacity of the mill to be 10 to 12 bush· els per hour; (2) that the mill would make a grade of flour equal to the straight flour made at the Delphos mills; (3) that the flour it would make would satisfy the trade of the defendants. There is no contention as to the first, but the controversy is as to the last two items of the guaranty. The defendants might refuse to take the machinery before its de· livery, and before it was placed in the mill building, if the machinery was not such as was provided for in the contract and guaranty. They were not required to allow the machinery to be put up in the mill, and rely on the guaranty afterwards, if it did not comply with the guar'anty. The plaintiffs must show that they have complied with theil' contract, or that they were ready and willing to do so, and were prevented by t 11e defendants, to entitle them to recover forthe breach of the contract, as claimed in this case. Your finding in this case will necessarily depend upon the construe'· tion given to the words used, "Delphos Mills," being the standard df the grade of flour it was to make. This is important, for the reason that there were two mills at Delphos at the time, and it is claimed that one made a better grade of flour than the other. A contract must be construed as a whole; and to ascertain, as far as possible, the intent and understanding of the parties to it, at the time it was made. Words are to be given their usual and common signification,the sense in which they are commonly used. The language used must be understood in its plain and ordinary sense, as read in the light of the surrounding circumstances, the situation of the parties, and the objects of the contract or guaranty, and that construction given which most nearly conforms to the intentions of the parties. In the light of these rules of construction, you will carefully examine all the evidence, and ascertain what was intended by the parties
in the use of the term "Delphos Mills." The plaintiffs claim it meant the old mill. called "Delphos Mills," and the defendants insist it meant all the mills at Delphos, including the one called the "Eagle Mills." Having settled the construction of the guaranty in that respect, you will next find, from the evidence, whether such machinery was being furnished by the plaintiffs as would make the grade of flour provided for in the guaranty. A large part of the evidence upon this question consists of the opinion of experts in the milling and machinery business. This class of evidence is proper to be carefully considered. The value of it greatly depends upon the knowledge of the witness, and his experience and capacity, as well as reasons given for opinions expressed. As to the third item of the guaranty, that the flour should "satisfy the trade of the defendants." This mill was to be erected at the village of Venedotia. The trade in flour there, and the surrounding cQuntry in which it would be sold, would constitute the standard of this part of the guaranty. It would mean that the character of the flour should be such as would, fairly and reasonably, enable the defendants to compete with other mills whose flour might be sold or used in that part of the country. If you find that the plaintiffs complied with their contract, and the machinery was such as would comply with the guaranty, then you will t:eturn a verdict for the plaintiffs, and assess such damages as they may have sustained by reason of defendants' failure to comply with the contract. There are several elements to be considered in this assessment, consisting of loss in the value of the machineryactually manufactured below the contract price, loss of the profit on the sale of machines purchased by them for the purpose of completing the contract, and the profits to be realized from the work to be performed in setting up the machinery. If you find for the defendants, on their counter-claims, you will assess to them such damages as they may have sustained; and the measure of such damages would be the decrease in the value of their mill-bouse, and the lot thereon, by reason of the failure to complete the mill for them as provided for in the contract. Verdict for the plaintiffs.
CARNAHAN '/J. BAILEY.
CARNAHAN and others v. BAILEY.
(Oircuit Court, No D. Ohio, W; D. June Term, 1886.)
SALE-VALIDITY-WHEN THE PROPERTY PASSES,
The title to personal property vests in the vendee when he obtains, with· out fraud, unconditional possession of it.
When personal property is purchased on credit with the intent. then existing, not to pay for it. the title does not pass to the vendee.
S. SAME-INSOLVENCY OF BUYER.
A purchase of goods on credit, by a merchant who knows himself t) be insolvent, but who has reasonable expectations of being able to pay. is not fraudulent. notwithstanding that the fact of the insolvency is not known or disclosed to the vendor. An innocent purchaser for value, of such goods. takes title to them as against the origlllal vendor.
SAME-PURCHASE FROM INSOLVENT BUYER-REPLEVIN.
The plaintiffs were wholesale dealers in boots and shoes in the city of Fort Wayne, Indiana. One Amos Rodgers was a retail dealer in boots and shoes at the town of Paulding, Ohio, and had been, since 1882, purchasing goods from the plaintiffs as he wanted them to sell, and on a credit of four months; and in the month of January, 1884, ordered, through the commercial agent of the plaintiffs, a bill of goods amounting to some $800. At that time Rodgers was indebted to the plaintiffs on such purchase of goods before then sold him. This bill of goods was sold Rodgers on a credit of four months from the first of April then following. The goods were not, immediately after the order, sent by the plaintiffs to Rodgers. Some time after the order was made, Rodgers, by postal-card, directed the plaintiffs to send to him part of the goods ordered,-such as would be salable before the spring season opened. Thereupon the plaintiffs, about the last of January or first of February, sent him the whole amount of goods ordered, and forwarded to him bill of the same. The goods were received, and put up in the store of Rodgers for sale. Rodgers made no representation as to his financial condition, nor did the plaintiffs make any inquiry of him, or anyone else, as to his ability to pay for the goods. About the ninth day of February, Rodgers sold his whole stock of goods, including the goods thus sent him by the plaintiffs, to the defendant, Bailey, for the sum of $1,900, which was paid by him to Rodgers, and the whole stock of goods taken into possession of Bailey, who continued the business in the same store-room; Rodgers, after an absence of some 10 days, going into the store, and helping Bailey to attend to the business there. On the eleventh day of February, 1884, the plaintiffs obtained a writ of replevin against Bailey, and took possession of the goods so sent to Rodgers, claiming them to be their property, in the court of common pleas of Paulding county, and which suit was removed to the circuit court of the United States for this circuit and division. The case was tried to a jury.