American & British Mfg. Corp. v. New Idria Quicksilver Min. Co., 1590.

• Decision Date: 19 October 1923
• Docket Number: 1590.
• Parties: AMERICAN & BRITISH MFG. CORPORATION et al. v. NEW IDRIA QUICKSILVER MINING CO.
• Court: U.S. Court of Appeals — First Circuit

293 F. 509

AMERICAN & BRITISH MFG. CORPORATION et al. v. NEW IDRIA QUICKSILVER MINING CO.

No. 1590.

United States Court of Appeals, First Circuit.

October 19, 1923

[Copyrighted Material Omitted]

William H. Griffin, of New York City (Ralph M. Greenlaw, of Providence, R.I., on the brief), for plaintiffs in error.

Charles F. Choate, Jr., of Boston, Mass. (Archibald MacLeish, of Boston, Mass., on the brief), for defendant in error.

Before BINGHAM, JOHNSON, and ANDERSON, Circuit Judges.

BINGHAM Circuit Judge.

This is a writ of error to review a judgment of the District Court of Rhode Island in favor of the plaintiff. The action is assumpsit for breach of contract brought by the New Idria Quicksilver Mining Company, a Wyoming corporation, against the American & British Manufacturing Corporation, a New York corporation, having a place of business in Providence, R.E. The writ is dated the 1st day of October, 1920, and the suit was originally brought in the superior court for the county of Providence, and state of Rhode Island, and later removed by the defendant to the District Court.

December 20, 1920, the plaintiff, by a decree of the United States District Court for Massachusetts, was put into the hands of James D. Colt as receiver, who, being authorized to appear and prosecute this cause, on January 21, 1921, entered his appearance and undertook its prosecution. December 5, 1921 George C. Van Tuyl, Jr., having been appointed receiver of the defendant by the United States District Court for the Southern District of New York, was authorized to intervene as defendant in said action and on that date his intervention was allowed.

In its declaration the plaintiff alleges in substance that on the 18th day of January, 1916, it entered into a contract (Exhibit A) in the state of New York with the American &amp British Manufacturing Company, also a New York corporation, wherein the plaintiff sold, and the American & British Manufacturing Company bought, 740 flasks of quicksilver (less a possible deduction of 10 or 20 such flasks already sold or pledged, which deduction was actually 10 flasks) then in transit from California to New York, and all the quicksilver which the plaintiff should produce on any properties owned or controlled by it, from the date thereof, January 19, 1916, until January 1, 1917, at the price of $250 net cash per flask of 75 pounds net weight of quicksilver, upon the terms set forth in the contract (Exhibit A); and that said American & British Manufacturing Company agreed to take and pay for said quicksilver then in transit and to be produced at the price and on the terms aforesaid; that the plaintiff was ready and willing to do and perform all the obligations on its part to be performed, and on the 16th of February, 1916, tendered to the American & British Manufacturing Company in accordance with the terms of such contract 350 flasks of quicksilver, being a part of that hereinbefore referred to as being in transit at the time of the date of said contract, and demanded payment therefor in accordance with the terms of the contract; and at the same time the plaintiff notified the American & British Manufacturing Company in writing that 380 other such flasks of quicksilver, being the balance of the said 740 flasks less 10 flasks deducted to fill orders theretofore pledged, had arrived in New York, and that said plaintiff was prepared to deliver the same to the American & British Manufacturing Company upon payment therefor, and presented an invoice for the same to the American & British Manufacturing Company; but that it did not take and pay for said quicksilver so tendered, or any part thereof, but wholly failed so to do or to do or perform any of its agreements and covenants in the premises; that thereupon the plaintiff, in accordance with the terms of the contract, on February 23, 1916, gave notice in writing to the American & British Manufacturing Company that the plaintiff declared said contract to be of no further force and effect according to the terms of paragraph 7 thereof; that the plaintiff produced from all properties owned and controlled by it between the date of the contract and January 1, 1917, 10,828 flasks of quicksilver; that the plaintiff was obliged to sell and did sell such quicksilver, both that in transit and that thereafter produced, at a less price than that fixed by the contract, to its loss of $1,845,506.05, and also was put to great expense in handling, storing, insuring, and selling the same, and has lost the use of moneys which it was entitled to receive for the same under said contract, and has been otherwise damaged; that subsequently to the giving of notice in writing to the American & British Manufacturing Company in which the plaintiff declared said contract to be of no further force and effect as aforesaid, and before the commencement of this action, the defendant the American & British Manufacturing Corporation acquired all the property and assets of the American & British Manufacturing Company and as a part of the consideration thereof assumed all its obligations; that neither said American & British Manufacturing Company nor said defendant has ever performed any part of said contract or paid the plaintiff any part of its damages as aforesaid, but hitherto have both wholly failed so to do, to the damage of the plaintiff in the sum of $2,500,000.

The defendant pleaded the general issue and filed nine special pleas, in the first six of which it alleged in substance that the plaintiff ought not to maintain its action on the ground that, before the making of said writing or agreement sued on, if any such was made, the plaintiff and others purporting to act for the American & British Manufacturing Company corruptly and wrongfully agreed and conspired to buy up such large quantities of quicksilver as to obtain a monopoly of it for the purpose of selling it at an unreasonable and artificially enhanced price; that in pursuance of the said corrupt and unlawful agreement the plaintiff made and entered into said agreement, if any, with the American & British Manufacturing Company, and that such agreement, if any existed, is void, illegal and unlawful; that it was not only illegal and void at common law, but in violation of chapter 647, Sec. 1, of the Act of the Congress of the United States, dated July 2, 1890 (Comp. St. Sec. 8820), and of the statutes of the state of New York, where it is agreed the contract, if any existed, was made (General Business Law (Consol. Laws, c. 20) Secs. 340, 341, 342; Stock Corporation Law (Consol. Laws, c. 59) Sec. 14; Penal Law (Consol. Laws, c. 40) Sec. 580). In the last three special pleas the defendant alleged that the contract sued upon, if any there was, was executed for the purpose of reselling the aforesaid quicksilver at an unreasonable and artificially enhanced price and speculating in the same and was beyond the corporate powers of the American & British Manufacturing Company and was illegal and void, and that the plaintiff knew or had reasonable grounds to believe, or was possessed of facts sufficient to charge it with notice that the American & British Manufacturing Company entered into the aforesaid agreement, if any there was, for the purpose of reselling the quicksilver and speculating therein, and that said American & British Manufacturing Company was thereby exceeding its corporate powers in so doing.

The plaintiff filed a replication in which it denied the conspiracy; it further denied that in pursuance of the alleged conspiracy it made the agreement of January 18; it further denied that it knew or had reasonable grounds to believe or was possessed of facts sufficient to charge it with notice that the American & British Manufacturing Company executed the agreement of January 18 for the purpose of obtaining a monopoly of quicksilver so as to sell it at an unreasonable and artificially enhanced price. It also denied that the American & British Manufacturing Company was not authorized by law nor permitted by the terms of its charter to buy quicksilver or minerals, ores, or metals of any nature, kind, or description, except in aid of or in connection with the manufacture, purchase, or other acquisition of ordnance, ammunition, armament, guns, weapons, projectiles, etc., and denied that the contract of January 18 was illegal and void.

The defendant also filed a further plea in which it set out that the agreement was void as being in contravention of 'Act 4166 of the General Laws of California, as amended up to the end of the extra session of 1916;' but as it is conceded that the contract was made and to be performed in New York, it is not deemed necessary to state further the matters alleged in this plea.

On December 16, 1921, the jury returned a verdict for the plaintiff in the sum of $1,803,364.05. After the verdict the defendant filed a motion for a new trial, which was denied, and then prosecuted this writ, alleging 316 assignments of error, in which it asserts that the court erred in refusing its motion for a directed verdict; in refusing to give certain requested instructions; in its charge as given; in the reception and rejection of evidence; and in its ruling that the defendant had failed to sustain by its proof the matters alleged in its special pleas.

The principal question presented is whether there was any substantial evidence from which the jury was warranted in finding that the contract was consummated. The plaintiff's evidence tended to prove that, on January 18 1916, duplicate instruments (Exhibit A) embodying the alleged agreement were drafted by plaintiff's attorney in California and there executed by the plaintiff, by its vice president and general manager, W. B. Buckminster; that thereafter these documents were...