Am. Player Piano Co. v. Am. Pneumatic Action Co.

• Decision Date: 06 October 1915
• Docket Number: No. 29707.,29707.
• Citation: 154 N.W. 389,172 Iowa 139
• Parties: AMERICAN PLAYER PIANO CO. v. AMERICAN PNEUMATIC ACTION CO. ET AL.
• Court: Iowa Supreme Court

172 Iowa 139

154 N.W. 389

AMERICAN PLAYER PIANO CO.

v.AMERICAN PNEUMATIC ACTION CO. ET AL.

No. 29707.

Supreme Court of Iowa.

Oct. 6, 1915.

Appeal from District Court, Scott County; A. J. House, Judge.

Action to recover liquidated damages for failure to deliver certain pneumatic piano players in accordance with the terms of a certain contract between the parties. The opinion discloses the facts upon which the suit is predicated. Judgment below for the plaintiff. Defendants appeal. Reversed.

Deemer, C. J., and Weaver, J., dissenting.

Bollinger & Block, of Davenport, for appellants.

Cook & Balluff, of Davenport, for appellee.

GAYNOR, J.

This action is based upon the following contract, executed the 8th day of February, 1910. In the contract the defendant is designated as party of the first part, and the plaintiff party of the second part.

“It is hereby mutually agreed by and between the parties as follows, to wit:

That first party shall, for and during the period of one year from and after the 15th day of March, A. D. 1910, sell to second parties, for sale by second parties in the United States of America or anywhere, three hundred and sixty-four pneumatic player actions of the latest and best type, now being manufactured by first party under the inventions of Mr. Eugene T. Turney, of Davenport, Iowa, at the date hereof, which said type shall be designated, ‘type A,’ and shall correspond with a sample to be marked, set apart, and kept by first party as a standard for a comparison in the future, in the manner and upon the terms hereinafter specified, and shall sell no other player actions save as hereinafter provided.

That all such player actions shall be delivered by first party to second parties at first party's factory in Davenport, Iowa, at the rate of seven each week for each calendar week during such year, and shall, if second parties so elect, be properly installed in pianos furnished by second parties, and shall be expressly warranted by first party to be of first-class material and workmanship, free from flaws or defects and in good working order at the time of delivery.

That if second parties elect to have such actions installed in pianos by first party, they shall deliver to first party at first party's factory in the city of Davenport, Iowa, a sufficient number of pianos at times sufficiently early to fairly enable first party to make the installation agreed upon, and shall each week remove from first party's factory at least seven of such actions either installed in pianos furnished by second parties, or uninstalled, as second parties may have previously elected.

That second parties shall pay to first party the sum of eighty dollars for each player action so furnished and delivered within thirty days after such delivery.

That the pianos so to be furnished by second parties to have actions installed therein shall be upright of good make, and in sound condition, having cases not less than four feet six inches high, ‘stickers' or ‘risers' at least six inches long, and a clear interior space at least five inches wide between the inside of the upper panel and the front ends of the tuning pins.

Second parties shall receive and take from first party's factory each week the same number of actions which first party has agreed, pursuant to this contract, or any extension or modification thereof hereinabove provided for, to install or deliver each week to second parties, and shall pay for each such action at the price agreed upon, within thirty days from and after such receipt of the same by second parties.

In the event that second parties shall fail to receive and take away the actions hereinabove agreed to be received by them each week, or shall fail to pay for any such actions within thirty days after second parties' receipt of the same, then first party shall have the option and election either to terminate this contract, or to sell the player actions, which second parties so failed to take, in any territory, to any person, firm, or corporation, at the best price offered therefor, and collect the difference, if any, between such selling price and the price provided by this contract from second parties as agreed and liquidated damage for the breach of this contract caused by each such failure of second parties; but before second parties shall be deemed to have so failed to receive or pay for any such player actions, first party shall notify second parties in writing that it intends to claim a breach of this contract, and stating its election on account of such breach, giving the number of pianos which second parties have failed to take or pay for, as the case may be, and the several dates of such failures, and thereupon second parties may avoid the forfeiture and damages herein provided for by taking possession of such pianos, or making payment, as the case may be, within five days after the receipt of such written notice.

In the event that first party shall fail to furnish second parties any player action as agreed upon in this contract, or any modification or extension thereof herein provided for, second parties shall have the option and election to terminate this contract, or to receive from first party, as liquidated damage, the sum of twenty dollars for each player action which first party so fails to furnish.

Second parties agreed to furnish all pianos called for by this contract, at first party's factory at Davenport, Iowa, at their own costs and expense, and to remove all such pianos, when players have been installed, from such factory at their own cost and expense.”

It is claimed that defendant failed, neglected, and refused to furnish 7 player actions each week from and after March 15, 1910; that during the period from March 3, 1910, until August 13, 1910, the defendant furnished and delivered to the plaintiff only 25 player piano actions; that from and after August 13, 1910, defendant failed or refused to furnish any actions whatever to the plaintiff, although plaintiff demanded the same, and was ready and willing to receive actions of the kind provided for in the contract.

To promptly understand the rights of these parties under this contract, and to apply the law to the contract in disposing of these rights, it is necessary that we have at the outset an understanding of what the parties undertook and agreed to do in the contract. To this end it is necessary that we have before us a brief history of the situation as it then existed, and the relationship of the parties to the situation, and to the subject-matter of the contract. The contract sued on was originally entered into between the defendant, the American Pneumatic Action Company, and Paul H. Johnson, C. I. Josephson, and George W. Rundquist. The plaintiff is the successor to all the rights in the contract obtained by Johnson, Josephson, and Rundquist. It is a corporation, organized as such, by Johnson and his associates, to sell these pneumatic player actions, under the Turney patent mentioned in the contract. About the year 1910 Johnson became interested in a proposed pneumatic piano player, the invention of Mr. E. R. Turney, and took part in the formation of a company for the purpose of manufacturing these players under that patent. The company was known as the American Pneumatic Action Company. This company at the time Johnson was connected with it manufactured these pneumatic players, and they were tried out and played. He later severed his connection with that company, and arranged to form a company to sell the actions manufactured by the Pneumatic Action Company, and associated with him the parties named in the contract. The piano player referred to in the contract was the piano player invented by Turney, and then being manufactured. There was only one kind of player action made at the time of the contract; that is, one style, under the Turney patent.

In speaking of the machine to be set apart and marked and labeled the Standard, Johnson said:

“We expected to get the developments of the machine as it was being developed, with these improvements, from time to time, that would make it more and more perfect. We expected a rigid, fixed type of machine when they arrived at a machine that would fill the bill properly.”

Johnson was familiar with the design and plans of the Turney machine. He was at the factory frequently, and was superintendent up to the time the defendant company was reorganized, very close to the time that the contract in question was made, and was in the factory frequently after that time; was in the manufacturing and testing rooms; saw tests being made; made suggestions as to what could be done to overcome defects in design and plan. He was instrumental in forming the plaintiff company, in connection with his associates in the contract. It was he who took up, with defendant company, the negotiations which resulted in the contract in question. The plaintiff company was organized subsequent to the making of the contract in question.

The evidence tends to show that these pneumatic players, when first installed, would play all right, but after they had been sent out and used a while they leaked. That was due to atmospheric conditions that affected the diaphragm used in the wind chest cord. Defendant company attempted to remedy these defects, put in new diaphragms, and tried them over again. There is evidence that these piano players, when sent out, were returned at first, for the reason that they would not stand up, but leaked, due, as the evidence tends to show, to atmospheric conditions. The design, the scheme, the plan was not perfected so as to make them, even when constructed according to the Turney patent, perfect in their operation. There is no question that the machines manufactured and delivered to the plaintiff were made of first-class material and workmanship, free from flaws and defects in this respect, and in good working order at the time, for the type and design after which they were...