Clark v. Wheeling Steel Works

• Decision Date: 03 January 1893
• Docket Number: 27.
• Citation: 53 F. 494
• Parties: CLARK et al. v. WHEELING STEEL WORKS.
• Court: U.S. Court of Appeals — Third Circuit

53 F. 494

CLARK et al. v. WHEELING STEEL WORKS.

No. 27.

United States Court of Appeals, Third Circuit.

January 3, 1893

Richard C. Dale, (Samuel Dickson, on the brief,) for plaintiffs in error.

John M Gest and Henry M Russel, (John Sparhawk, Jr., on the brief,) for defendants in error.

Before DALLAS, Circuit Judge, and WALES and BUFFINGTON, District judges.

WALES District Judge.

On June 26, 1890, the parties to this action entered into a written contract on the following terms and stipulations: The Wheeling Steel Works sold to Clark & Co. 5,000 tons of soft Bessemer steel billets and slabs; material to be good merchantable steel, suitable for manufacturing purposes, to be delivered at the rate of 1,000 tons per month from August to December, inclusive; price, $30.75 per ton; payment, cash between the 15th and 20th of the month next after delivery steel to be shipped on the orders of Clark & Co. On August 29, 1890, the parties agreed to an extension of the time of deliveries of the steel as follows: 500 tons to be delivered in September, 1,500 tons in October, 1,500 tons in November and 1,500 tons in December. On September 2, 1890, Clark & Co. sold 500 tons of the steel to the Lukens Iron & Steel Company, at $30 per ton; and on October 2, 1890, they sold to the same company 1,500 more tons at $29.50 per ton. The Wheeling Steel Company, on the orders of Clark & Co., accompanied by specifications as to size and weight of billets, shipped to the Lukens Iron & Steel Company about 1,512 tons of steel, as follows: 600 tons in September, 654 tons in October, and the balance in November. On November 12, 1890, by a supplementary contract, the Wheeling Steel Company, in consideration of the payment of them of the sum of $1,500 by Clark & Co., extended the time for the delivery of 3,000 tons of the steel over the first three months of the year, 1891, with an option to Clark & Co. to have a still further extension over the three succeeding months of April, May, and June by the payment of 25 cents per ton. The Wheeling Steel Company could only ship the material on the orders of Clark & Co., giving the directions as to size and weight of billets; but on December 18, 1890, the former company made a formal tender of the balance of the 2,000 tons deliverable in 1890, and again, in January, February, and March, 1891, made a like tender of the quantity due in each of those months, respectively, all of which offers were declined by Clark & Co., whereupon this action was begun to recover damages from Clark & Co. for breach of contract. At the trial the defendants, Clark & Co., justified their refusal to accept further deliveries of the steel on the ground that that which had already been received was not 'good, merchantable steel, suitable for manufacturing purposes. ' This was the main issue of fact before the jury, and was made the turning question of the case. It was admitted that the quality of the steel was right, but that many of the billets were so defective on account of cracks, flaws, or seams on their surface that they could not be rolled into smooth and perfect sheets. In consequence of complaints of this character which had been made to the plaintiff, the Wheeling Steel Works, the latter, early in December, 1890, sent two of its officers or agents to Coatsville, to inspect the steel which had been delivered to the Lukens Iron & Steel Company, who found two or three slabs which were so defective as to be useless for rolling, but that the other slabs complained of could be easily made good by having their surface defects chipped out. It was then understood and agreed that the useless slabs should be replaced or returned, and the slightly defective ones made good, at the cost of the plaintiff. This agreement appears to have been carried into effect, for on the final settlement between the parties to the contract of June 26, 1890, for the steel actually delivered and used, the sum of $45,600 was paid to the plaintiff; that being the contract price for the 1,512 tons delivered, after deducting the price of the steel returned and the cost of chipping. Prior to this settlement, however, the defendant, on January 2, 1891, notified the plaintiff that on account of the defective steel theretofore delivered no further deliveries would be received under the contract, which they declared to be 'canceled.' It was also in evidence that the price of steel, in December, 1890, had fallen to $25.25 per ton. In the course of its charge to the jury the court said:

'The questions of fact are for your determination. The first question for consideration is, was the steel delivered by the plaintiff to the Lukens Iron & Steel Company unmarketable unmerchantable, and unsuitable for manufacturing purposes? In solving this question you should take into consideration all the evidence in the case, in connection with the acts and conduct of the parties. The alleged defects in the steel were structural or mechanical defects in the formation of the billets or slabs, which have been explained to you by the witnesses. What was the extent of these defects? Did they pervade the mass of the slabs to any considerable extent? A few defective slabs occasionally occurring here and there in the mass of steel would not make the steel as a whole unmerchantable if the great mass of slabs and billets were free from defects. What the facts were in regard to these defects it is for you to say upon a consideration of the evidence. * * * But there are other material questions in the case to which I desire to call the attention of the jury, and this, I think, can best be done by here answering the plaintiff's prayers for instructions. I will proceed, then, to answer specifically the plaintiff's points or prayers, so far as the points seem to me to be warranted by...