Big Muddy Coal & Iron Co. v. St. Louis-Carterville Coal Co.

• Decision Date: 05 July 1913
• Citation: 158 S.W. 420
• Parties: BIG MUDDY COAL & IRON CO. v. ST. LOUIS-CARTERVILLE COAL CO.
• Court: Missouri Court of Appeals

158 S.W. 420

BIG MUDDY COAL & IRON CO. v. ST. LOUIS-CARTERVILLE COAL CO.

St. Louis Court of Appeals. Missouri.

July 5, 1913.

1. SALES (§ 81) — CONSTRUCTION OF CONTRACT — DELIVERY UPON ORDER.

A contract for the sale of 300 tons of coal, to be delivered between certain dates, which specified the amount to be delivered in each month, did not in terms require the buyer to give orders for the shipment of coal, but contained no shipping directions. The contract was expressly made to enable the buyer to carry out a contract made by him for the delivery of the coal to another. The seller had no facilities for storing the coal, but must ship it as soon as it was mined, and it furnished to the buyer a blank order book to be used in ordering the coal. For several months the seller shipped only the amounts of coal ordered, although they were less than the amounts called for by the contract during those months. Held, that the contract should be construed as requiring the seller to deliver the coal only when ordered by the buyer, or the one to whom he had sold it.

2. SALES (§ 81) — CONSTRUCTION OF CONTRACT — TIME OF DELIVERY.

In such a contract the time of delivery is of the essence of the contract, and the provisions for delivery of the specified quantities each month will be construed to require delivery of that amount upon orders received during that month, and not to permit the buyer to order a less quantity in the earlier months, when the price is low, and then require delivery of the balance just before the end of the contract term when the price was high, especially where a letter of the buyer, written shortly prior to that time, reduced the quantity previously ordered, on the ground that former orders had exceeded the amount provided for by the contract for that month.

3. CONTRACTS (§ 147) — CONSTRUCTION — INTENTION OF PARTIES.

The intention of the parties to a contract must control in every instance.

4. CONTRACTS (§ 169) — CONSTRUCTION — EXTRINSIC CIRCUMSTANCES.

In arriving at the intention of the parties to a contract, evidence of the circumstances under which it was made is admissible, so that the court can put itself in the place of the parties at that time.

5. CONTRACTS (§ 153) — CONSTRUCTION — REASONABLENESS OF CONSTRUCTION.

Where a written contract is fairly susceptible of two constructions, one of which makes a rational and probable agreement and the other makes an unfair or improbable agreement, the former interpretation is to be preferred.

Appeal from St. Louis Circuit Court; Leo S. Rassieur, Judge.

Action by the Big Muddy Coal & Iron Company against the St. Louis-Carterville Coal Company. Judgment for plaintiff, and defendant appeals. Affirmed.

James R. Van Slyke, of St. Louis, for appellant. E. T. & C. B. Allen, of St. Louis, for respondent.

NORTONI, J.

This is a suit on an account for coal sold and delivered to defendant, amounting to $2,298.42, but the controversy arises on defendant's answer, which sets forth two counterclaims. The answer admitted the indebtedness to plaintiff on account as alleged in the petition, but set up separately two separate contracts for the purchase of other coal, and declared upon their breach. Because of such alleged breach defendant prayed a recovery for several thousand dollars against plaintiff by way of counterclaim. A jury was waived, and the case tried before the court, which found the issue and gave judgment for plaintiff on its cause of action and against defendant on both of the counterclaims asserted in the answer. From this judgment defendant prosecutes the appeal, and urges that the court erred in construing the contracts set forth in the answer and relied upon as a foundation for its counterclaims. It therefore appears that the solution of the controversy depends upon a proper construction of the contracts mentioned, and to this end the facts and circumstances of the case should be fully stated.

Both parties to the suit are incorporated coal companies, and so, too, is the Harman Coal Company, mentioned in connection with the contracts set forth in defendant's counterclaim. It appears that plaintiff is a Missouri corporation, engaged in operating coal mines at Herrin and Clifford in the state of Illinois located on the Chicago, Burlington & Quincy Railroad. Defendant is engaged in both mining and selling coal at Herrin and Clifford, Ill., and had agreed to sell the Harman Coal Company, its customer, a considerable quantity of coal to be delivered in consignments of so many cars per month as stipulated in its contract therewith. The relevant facts touching the controversy here appear in an agreed statement thereof in the record, and the contracts involved are to be interpreted and construed in the light of the facts and circumstances so revealed as attending the situation of the parties and the subject-matter contemplated at the time.

The first counterclaim set forth in the answer counts upon a contract of date June 14, 1909, whereby plaintiff agreed to ship, and defendant agreed to receive, 300 car loads of Carterville district lump coal screened over a No. 3 screen at mine price of $1.20 per ton, delivered on board Chicago, Burlington & Quincy Railroad cars at Herrin and Clifford, Ill. This contract stipulates a shipment of the coal during the period between the 14th of June, 1909, and January 10, 1910, but provides as well "shipments to be made during the following months: July, 20 cars; August, 40 cars; September, 60 cars; October, 80 cars; November, 40 cars; December, 40 cars; January, 20 cars — total, 300 cars." The second contract, set forth in the answer and declared upon as matter of counterclaim, is of date August 18, 1909, and stipulates that plaintiff agrees to ship, and defendant agrees to receive, 300 car loads of Carterville district lump coal screened over a No. 3 screen at mine price, $1.20 per ton, delivered on board Chicago, Burlington & Quincy Railroad cars at Herrin and Clifford, Ill. This contract provides for the shipment to be made between August 18, 1909, and March 31, 1910, and then stipulates "shipment to be made during the following months: August, 20 cars; September, 60 cars; October, 80 cars; November, 60 cars; December, 60 cars; January, 20 cars — total, 300 cars." It is averred that plaintiff breached each of these contracts in that it omitted and failed to ship to defendant in all under both contracts 284 cars of coal, and for that damages are prayed to compensate the loss entailed upon defendant through its failure to realize profits on a resale of the coal. By its reply plaintiff admits the contracts, and admits, too, that it omitted to ship all of the coal contemplated in the contracts, but avers that it was under no obligation to do so, unless the cars of coal were ordered by defendant during the months as above set forth. Plaintiff avers that it shipped each and every car of coal which defendant ordered, save in a few instances where defendant canceled the order after it made it, and that therefore it fully complied with the obligations imposed upon it by the contracts.

Upon hearing the evidence and considering the agreed statement of facts, the court construed the contracts, in the light of the established course of business between the parties thereunder and all of the circumstances of the case, to impose no obligation upon plaintiff to load and ship the cars of coal except upon orders from defendant to do so, and therefore declared as a conclusion of law that, as plaintiff had shipped all of the coal ordered by defendant during the months specified, no breach appeared, even though 284 cars had not been shipped at all. The conclusion is obviously just in the circumstances of the case, and we believe, too, that it accords with sound law on the subject. From the agreed statement of facts it appears that both of these parties own and operate coal mines, and are engaged in the business of selling and shipping coal to others. Besides operating a coal mine, it appears that defendant is engaged in buying coal as well, and reselling it to customers, as was the course pursued here. Defendant had contracted with the Harman Coal Company to sell and deliver to it a large quantity of coal, and communicated this fact to plaintiff before the contracts set forth in the counterclaim were entered into. The two contracts entered into between plaintiff and defendant, and also the two contracts which defendant entered into with the Harman Coal Company for the sale of coal to it, are set forth in the agreed statement of facts. From these several contracts and other evidence in the record, it is revealed beyond question that the two contracts entered into between plaintiff and defendant were to the end of enabling defendant to fulfill its two contracts with the Harman Coal Company. By the contracts entered into between defendant and the Harman Coal Company defendant agreed to sell and deliver to the latter 600 cars of coal. It is expressly agreed in these contracts that such coal is to be delivered by defendant to the Harman Coal Company in cars on the Chicago, Burlington & Quincy Railroad at the plaintiff's (Big Muddy Coal & Iron Company's) mines in Illinois; moreover, that the deliveries are to be made: 20 cars of three-inch lump during the month of July, 1909; 40 cars in August; 60 in September; 80 in October; 40 in November; 40 in December; 20 in January, 1910. Such is the stipulation of the first contract between defendant and its customer the Harman Coal Company, and the second contract is in no material respect different. Indeed the two contracts seem to be the same. Both of them provide that the Harman Coal Company shall pay defendant $1.25 per ton f. o. b. mine for the coal, all to be shipped from the mines of the Big Muddy Coal & Iron Company — that is, plaintiff's mines — in accordance with the direction of the Harman Coal Company, and bill of lading to be furnished with each car. To enable it to fulfill...