Cincinnati Equipment Co. v. Big Muddy River Consol. Coal Co.

Decision Date27 March 1914
Citation164 S.W. 794,158 Ky. 247
PartiesCINCINNATI EQUIPMENT CO. v. BIG MUDDY RIVER CONSOL. COAL CO.
CourtKentucky Court of Appeals

Appeal from Circuit Court, Jefferson County, Chancery Branch, Second Division.

Action by the Cincinnati Equipment Company against the Big Muddy River Consolidated Coal Company. From a judgment dismissing the petition, plaintiff appeals. Affirmed.

Harmon Colston, Goldsmith & Hoadley, of Cininnati, Ohio, and Trabue Doolan & Cox, of Louisville, for appellant.

Wehle &amp Wehle, of Louisville, for appellee.

SETTLE J.

This action, as originally framed, sought the reformation of an alleged written contract claimed to have been between appellant and appellee October 12, 1907, for the sale to the former by the latter of 100 secondhand coal cars at $700 per car, 25 per cent. of the aggregate price to be paid in cash, the remainder in 12 equal monthly installments, beginning after January 1, 1908; it being alleged in the petition that the contract, as agreed on, provided that the cars were to be delivered December 1, 1907, and that the first deferred monthly payment should be made February 1, 1908, but that by mistake of the parties these two provisions were omitted from the contract. In addition to seeking the reformation of the instrument, the petition prayed for its specific performance. Later, however, appellant, by an amended petition, withdrew the demand for specific performance and in lieu thereof set up claim to $20,000, damages for an alleged breach of the contract by appellee. The writing in question is as follows: "Louisville, Ky. Oct. 12, 1907. The Cincinnati Equipment Company, Cincinnati, O.--Gentlemen: Reducing to writing the result of the several conferences between Mr. Warren, representing your company, and myself, representing the Big Muddy River Consolidated Coal Company, I beg to say that we have now come to the following agreement: That we are to take from you one hundred (100) cars out of the Puritan Coal Company, or the Morrisdale Company, which cars were inspected by our Mr. Rhoads. They are to be painted and put in such condition as to pass M. C. B. inspection. We are to pay you for said cars the sum of seven hundred ($700.00) dollars each; delivered at Altoona, or approximately Altoona, and we are to pay you 25 per cent. cash, and the balance in twelve monthly installments, beginning after the 1st of January, 1908. This agreement is merely tentative, and the cars are to be placed with us upon a trust, the ownership to remain in the trustees until final payment is made. These papers are to be in the usual and ordinary form, a copy of which will be submitted to the Big Muddy River Consolidated Coal Company later on. We will want delivery of these cars about the 1st of December, 1907, a few days later will cut no figure whether one way or the other, and contract will be averaged when the cars shall begin to be delivered. It is understood that in making the obligation the obligation shall be for the entire cost price of the hundred cars, the time of delivery will be averaged. It is of course understood that these cars shall be subject to our inspection at the time of delivery. Shipping instructions to be given at the proper time. Yours truly, Big Muddy River Con. Coal Co., by Bennett H. Young, Pt. Accepted: The Cinti. Equipment Co., P. B. Warner, Secy. & Tr."

The answers to the original and amended petitions resisted the relief asked by appellant upon the grounds: First. That neither by the above writing nor otherwise was there a contract entered into by the parties. Second. That the writing referred to was but a tentative agreement for the sale of certain cars, in which certain features of the contract therein contemplated were left open for subsequent agreement by the parties, but were never agreed on because appellant, by another draught of a contract submitted to appellee, changed the person of the vendor, the means of securing the deferred payments, and would have deprived the vendee of the right of choice between cars of similar kind proposed to be purchased, and that the changed or substituted draught of the contract thus submitted to appellee was never accepted by it. Third. That there was no breach of contract. Fourth. That appellant was not damaged by a breach of the alleged contract in the sum of $20,000 or any other sum. The affirmative matter of the answers was traversed by reply. Subsequently appellant filed a second amended petition, claimed to be necessary to make the pleadings conform to the proof, wherein it was in substance alleged that appellee failed and refused to execute the draught of a car trust agreement, prepared by appellant and submitted to it, in compliance with the terms of the written agreement of October 12, 1907, for the insufficient reason that, on account of the stringency of the money market and circumstances of its own making, it found it inconvenient and undesirable to perform the contract. The averments of this amended petition were controverted of record, thereby completing the issue.

After the taking of numerous depositions by the parties, the case was submitted, and the circuit court, by the judgment rendered, held that the writing of October 12, 1907, was but a tentative agreement; that it had been abandoned by the appellant itself by a proposition offering another and essentially different contract to that proposed in the tentative written agreement, especially in the matter of substituting another vendor of the coal cars for appellant, named as such therein, which substituted contract was never accepted by appellee; that the contract, not having been completed, was unenforceable; and finally that the petition be dismissed. Appellant's dissatisfaction with that judgment led to this appeal.

The negotiations resulting in the execution of the writing of October 12, 1907, seem to have been conducted by P. B. Warner on behalf of appellant, and Bennett H. Young on behalf of appellee; the former being appellant's secretary and treasurer and the latter appellee's president. These negotiations began with a letter from Gen. Young to Warner of August 8, 1907, looking to the purchase by appellee of appellant of 100 secondhand wooden hopper bottom coal cars of 80,000 pounds capacity each. Coal cars of the character desired were owned, it appears, by three coal companies known to Warner; the Morrisdale Coal Company owning 150 of them, numbered 3,000 and upward, the Puritan Coal Company owning 50, numbered 500 and upward, and the Baker Whitley Company owning 100, numbered 8,000 and upward. The coal companies mentioned were all located in Pennsylvania and on lines of the Pennsylvania Railroad Company.

Shortly before October 12, 1907, one Rhoads, an inspector, by direction of Gen. Young went to Altoona, Pa., and inspected such cars belonging to the three coal companies mentioned as were pointed out to him by an employé of appellant who accompanied him. Among those thus inspected were 17 cars, of numbers between 500 and 550, belonging to the Puritan Coal Company; 29, of numbers between 8,000 and 8,100, belonging to the Baker Whitley Company; and 14 of numbers between 3,000 and 3,150, belonging to the Morrisdale Company. The purpose of the inspection by Rhoads was not to make a selection from among the cars inspected of such as appellee desired to purchase but only to ascertain whether the cars were of the character desired by Gen. Young. Several days after this inspection, namely, on October 12, 1907, Gen. Young and Warner met in the office of the former at Louisville and entered into the writing of that date. There can be no doubt that at that time it was the understanding of Gen. Young and Warner that appellant was to be the vendor of the cars appellee proposed to purchase. The fact that the cars were to be obtained by appellant of the Puritan Coal Company or the Morrisdale Coal Company was also understood, but neither of these companies is mentioned in the writing then executed as the vendor of the cars. The language is: "That we (appellee) are to take from you (appellant) one hundred (100) cars out of the Puritan Coal Company, or the Morrisdale Company, which cars were inspected by our Mr. Rhoads. *** We are to pay you for said cars the sum of seven hundred ($700.00) dollars each; delivered at Altoona, or approximately Altoona, and we are to pay you 25 per cent. cash, and the balance in twelve monthly installments, beginning after the 1st of January, 1908." It is equally evident that, when this writing was signed, Warner exhibited to Young a sample of writing customarily used, as he claimed, in car trust sales which indicated the character of instrument evidencing the trust to be later prepared by appellant and submitted to Young in conformity to the following clause of the paper of October 12, 1907: "This agreement is merely tentative and the cars are to be placed with us (appellee) upon a trust, the ownership to remain in the trustees until final payment is made. These papers are to be in the usual and ordinary form, a copy of which will be submitted to the Big Muddy River Consolidated Coal Company later on."

It is apparent from the evidence that the subsequent writing furnished by appellant's agent, Warner, to appellee's president, Young, for his signature did not contain the contract as tentatively expressed in the previous writing of October 12, 1907, because it did not give the name of appellant as the vendor of the cars therein described, and did not conform to the character of the car trust required by the tentative agreement, but contained the name of the Morrisdale Coal Company as the lessor and ultimate vendor of the cars; and, instead of providing for a sale of the cars to appellee through a trustee who was to hold the title to the...

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