Cohen v. Clayton Coal Co.

• Citation: 86 Colo. 270,281 P. 111
• Decision Date: 23 September 1929
• Docket Number: 12134.
• Parties: COHEN et al. v. CLAYTON COAL CO.
• Court: Supreme Court of Colorado

281 P. 111

86 Colo. 270

COHEN et al. v. CLAYTON COAL CO.

No. 12134.

Supreme Court of Colorado

September 23, 1929

In Department.

Error to District Court, City and County of Denver; Julian H Moore, Judge.

Action by the Clayton Coal Company, a corporation, against Morris Cohen and another, copartners doing business as the Central Coal Company. Judgment for plaintiff, and defendants bring error.

Affirmed.

Blount, Silverstein & Rosner, of Denver, for plaintiffs in error.

Ernest Morris, of Denver, for defendant in error.

ALTER J.

This writ is prosecuted by Morris Cohen and Jacob L. Yoches copartners doing business as Central Coal Company, plaintiffs in error, hereinafter referred to as defendants, to review a judgment of the district court in favor of the Clayton Coal Company, a corporation, defendant in error, hereinafter referred to as plaintiff. Upon the trial of the cause, a jury was waived, and the court, at the conclusion of the evidence and arguments, rendered judgment in favor of the plaintiff on its complaint, and in favor of the plaintiff on the cross-complaint of the defendants.

The plaintiff was engaged in the business of mining and selling lignite coal, and its product consisted of both lump and slack; the defendants were engaged in the retail coal business in the city of Denver, and, prior to the time hereinafter mentioned, used in their business some of the plaintiff's product the exact amount of which is not disclosed by the evidence. Prior to August 14, 1926 negotiations were had between the plaintiff and the defendants with reference to a continuation and expansion of their business relations, and on that date the plaintiff wrote the defendants a letter, the pertinent parts of which are as follows:

'This agreement made and entered into this 14th day of August, 1926, whereby the Clayton Coal Company agrees to take care of the Central Coal Company's requirements for one year from date on both lump and slack coal.

'The Clayton Coal Company agree that they will supply lump coal to the Central Coal Company from August 14th to September 30th, inclusive, 1926, at two dollars and fifty cents ($2.50) per ton, net fob mine, but after that the price will be the prevailing market price.

'Slack price to be one dollar ($1.00) per ton, fob mine, for one year from August 14, 1926, to August 14, 1927.'

The defendants' only witness testified that upon the receipt of this letter an exact copy thereof was made on the stationery of the defendants, and formally accepted by writing upon this copy the following words: 'Accepted: Central Coal Co. By Morris Cohen'; that the copied letter with the notation thereon was mailed to the plaintiff; that at the same time the defendants wrote the identical notation upon the plaintiff's original letter and filed the same until the time of the trial, when it was produced, offered, and received in evidence.

It is contended by the defendants that they accepted the proposal of the plaintiff as contained in its letter, and upon doing so it constituted a valid, enforceable, binding, and legal contract to deliver such coal as would be required by them in their business, for the period of a year, at the prices mentioned in the letter. This letter will hereinafter be referred to as the 'contract.'

The plaintiff's only witness testified that no such letter, as defendants claimed to have sent, was ever received.

The evidence discloses that after August 14, 1926, the defendants ordered both lump and slack coal from the plaintiff, and that the orders were filled at the prices mentioned in the 'contract'; that no serious complaint was made by either party until sometime in the month of April, 1927, when the defendants ordered slack coal, and the plaintiff refused to fill the order.

The exhibits offered by the defendants and admitted in evidence--and the facts disclosed by them are not disputed--show that beginning in the month of December, 1926, the plaintiff had failed to furnish the required amount of slakc coal to supply the defendants' 'requirements,' and these exhibits also disclose the fact that as early as December, 1926, slack coal was selling on the open market, at the rate of $1.25 per ton, and before March, 1927, had been purchased by the defendants on the open market at the rate of $2 per ton; notwithstanding this fact, whatever coal was sold to the defendants by the plaintiff was invoiced at the price mentioned in the 'contract.' It is admitted that in April, 1927, the plaintiff sold and delivered, and the defendant purchased and received, coal of the value of $1,911.09, and for this amount suit was brought by the plaintiff.

The defendants filed a cross-complaint, alleging that there was a valid 'contract,' under the terms of which the plaintiff agreed to supply them their 'requirements' of lump and slack coal, and failed and refused to do so, in consequence of which the defendants had been compelled to purchase slack coal on the open market at an increased price, and thereby the defendants had been damaged in the sum of $5,000, for which amount they sought judgment. The evidence also discloses that monthly accounts, excepting for the month of April, 1927, had been promptly paid. However, the exhibits show that on April 10, 1927, when the March, 1927, account was paid, there was due the defendants, by reason of plaintiff's breach of contract, the sum of $335.32, notwithstanding which the defendants promptly paid their March, 1927, account without protest or deduction; nor did they claim a breach of the 'contract' by the plaintiff, and seek to set off this amount against the March, 1927, account rendered them.

The court specifically found: (1) That the defendants had not formally or otherwise accepted the proposal of the plaintiff, and there was no contract between them; (2) that part performance did not constitute an acceptance; and (3) that the contract lacked mutuality.

1. There was competent evidence, which, if believed by the trial court, justified it in finding that the 'contract' was not formally accepted, and, under the well-recognized rule in this jurisdiction, we are not at liberty to disturb it. Burnett v. Meyer, 78 Colo. 352-353, 241 P. 726; Johnson v. Elliott, 76 Colo. 358-363, 231 P. 675.

2 and 3. Defendants contend that inasmuch as a written proposal was made, and thereafter the defendants ordered and received coal which was delivered by the plaintiff at the price mentioned in the 'contract,' that it bound both parties to the same extent and with the same force and effect as if formally accepted.

At the trial, the court admitted in evidence several letters written by the defendants to the plaintiff respecting this 'contract,' and all of these letters were dated subsequent to April 22, 1927. There were also exhibits admitted showing the amount of coal which the defendants had purchased elsewhere than of the plaintiff, with the price paid therefor, and extended upon these statements was the amount which the defendants had been obliged to pay in excess of what would have been required if the coal had been furnished by the plaintiff in accordance with the 'contract.' We are justified in assuming that the monthly accounts for all the coal sold the defendants by the plaintiff prior to April, 1927, were promptly paid, and yet an examination of the defendants' exhibits--and about them there is no dispute--shows that beginning with the early part of December, 1926, the plaintiff had failed to furnish the defendants with sufficient slack coal for their 'requirements.' The record discloses that on April 10, 1927, when the March, 1927, account became due, the defendants had purchased slack coal from other dealers at an advanced price, amounting to the sum of $335.32, notwithstanding which the March, 1927, account was paid in full. This evidence offered by the defendants themselves conclusively shows that the defendants were not relying on the 'contract' to furnish their 'requirements.' It is also interesting to note that in the defendants' letters to the plaintiff respecting this 'contract,' and its alleged violation by the plaintiff, at a time when slack coal was selling on the open market at about $2 per ton, they expressed themselves thus: 'We are open to receive as much slack coal as you may desire to send us until the expiration of the contract, at the contract price,' and 'but you can save yourself some damage by sending us as much slack coal as you see fit.' At this time their wants were unlimited and not bound by their business 'requirements.'

In the case of Lovell v. Goss, 45 Colo. 312, 101 P. 72, 73, 22 L.R.A. (N. S.) 1110, 132 Am.St.Rep. 184, we quote with approval the following from the opinion in Manhattan Life Insurance Co. of New York v. Wright (C.C.A.) 126 F. 82, 87: 'The practical interpretation given to their contracts by the parties to them while they are engaged in their performance, and before any controversy has arisen concerning them, is one of the best indications of their true intent, and courts that adopt and enforce such an construction are not likely to commit serious error.' This same language was approved in Baird v. Baird, 48 Colo. 506-518, 111 P. 79, and in later Colorado cases.

Our attention is directed to the case of Robert E. Lee Silver Mining Co. v. Omaha & Grant Smelting & Refining Co., 16 Colo. 118, 26 P. 326, 327, 331, and it is contended that this is decisive of the case under consideration. There were two questions determined in the Lee-Omaha Case, supra with one of which only are we concerned in the present case. On December 1, 1883, the representative of the Omaha Company tendered to the sepresentative of the Lee Company a written proposal, in part, as follows: 'For a period of six months from date w...