Davison Chemical Co. of Baltimore County v. Baugh Chemical Co. of Baltimore County
| Decision Date | 20 June 1918 |
| Docket Number | 35. |
| Citation | 104 A. 404,133 Md. 203 |
| Parties | DAVISON CHEMICAL CO. OF BALTIMORE COUNTY v. BAUGH CHEMICAL CO. OF BALTIMORE COUNTY. |
| Court | Maryland Court of Appeals |
Motions for Rehearing and Modification of Opinion and Mandate Denied July 30, 1918.
Appeal from Circuit Court No. 2 of Baltimore City; Henry Duffy Judge.
Suit by the Baugh Chemical Company of Baltimore County against the Davison Chemical Company of Baltimore County, From a decree for plaintiff, defendant appeals. Reversed, and bill dismissed.
Argued before BOYD, C.J., and BRISCOE, THOMAS, PATTISON, URNER, and STOCKBRIDGE, JJ.
Harry N. Baetjer and Charles McH. Howard, both of Baltimore (Venable, Baetjer & Howard, of Baltimore, on the brief), for appellant.
Frank R. Savidge, of Philadelphia, Pa., and W. Irvine Cross, of Baltimore (Lee S. Meyer, of Baltimore, on the brief), for appellee. THOMAS, J.
The appellee, the Baugh Chemical Company of Baltimore County plaintiff below, is a corporation engaged in the manufacture of acid phosphate, and its plant is located in Baltimore county, Md., and the appellant, the Davison Chemical Company of Baltimore County, is a corporation engaged in the manufacture of sulphuric acid, and its plant is also located in Baltimore county. The chief materials used in the manufacture of acid phosphate, the product of plaintiff's plant, are sulphuric acid and phosphate rock, and for a number of years prior to the year 1913, the plaintiff had purchased the sulphuric acid required in the manufacture of its acid phosphate from the defendant. Sulphuric acid is made from sulphur, and originally, or in the early days, the raw material employed in the manufacture of that acid was native sulphur or brimstone. After the discovery of the sulphur bearing ore called pyrites, containing about 50 per cent. of sulphur, it became the raw material generally used in the manufacture of sulphuric acid, particularly the low grade of acid used in the making of acid phosphate. Just when this change from brimstone to pyrites took place is not definitely fixed by the evidence in the case, but the lower court in its opinion stated that it was between 1880 and 1890. The chief supply of pyrites was imported from Spain, the supply from the Canadian mines and mines in this country being very small, and those mines were generally owned or controlled and their product consumed by companies engaged in the manufacture of acid or acid phosphate.
In the early part of 1913, the plaintiff and defendant began negotiations for the purchase and sale of sulphuric acid which resulted in a contract executed by them the 28th day of April, 1913, by which the plaintiff purchased from the defendant from 30,000 to 50,000 tons, of 2,000 pounds each of sulphuric acid per year, of the quality designated "chamber acid ranging from 50 degrees to 54 degrees Beaume," to be delivered at the plaintiff's works at Canton, or to Baugh & Sons Company, Norfolk, Va., for a period of five years beginning January 1, 1913, and ending December 31, 1917, for the sum of $5.75 per ton. The contract provided that the plaintiff should declare on the 2d of January of each year what amount in excess of the minimum amount of 30,000 tons it would take that year, and that the deliveries of sulphuric acid should be made as nearly as possible in equal weekly installments, and also contained the following provisions:
"Fire, accident or strike, in the work of any of the parties herein mentioned; obstruction to navigation, accident to acid, barges, war, insurrections or other uncontrollable causes rendering buyers unable to receive or seller unable to deliver, shall be good and sufficient reasons to make this contract inoperative during the period of necessary repairs, reconstructions, or continuance of the difficulties."
Immediately following the execution of the contract, the price fixed thereby was by agreement reduced to $5 per ton. In pursuance of the provisions of the contract, the plaintiff elected to take 50 tons of acid per year, and it appears that the deliveries of the acid were accordingly and regularly made by the defendant during the years 1913 and 1914 and until some time early in the year 1915. During the year 1915, the defendant failed to make full deliveries to the plaintiff, and in February, 1916, the plaintiff filed a bill in equity to compel the defendant to perform its contract. The defense in that suit was that by reason of a breakdown in its plant, and other causes, the defendant had not been able to make full deliveries to the plaintiff and other parties to whom it had sold sulphuric acid, and that it was therefore compelled to make a proportionate distribution of the product of its factory among them. In disposing of the case on May 18, 1916, Judge Bond said that the evidence produced showed that there had been much interruption in the defendant's factory, due to accidents and breakdowns in its plant during the year 1915, "and up to this time," which cut down its capacity to an "extraordinary extent"; that as the defendant's contracts would have necessitated a full normal working of its plant, it was incapable by reason of such interruption of filling all of them; that the principle of "prorating" should govern and determine the rights of the parties when the output is involuntarily reduced was in that case conceded; that the suspected improper preference of later buyers over the plaintiff had not been established by the evidence, and that he would sign an order dismissing the petition for a preliminary injunction. The case was never pressed to a final hearing, and the bill was later dismissed by the plaintiff, and on the 10th of November, 1916, the plaintiff brought suit at law against the defendant to recover damages for the nondelivery of acid in accordance with its contract up to and including June, 1916.
Interference with the importation of pyrites caused by the war, and which had disminished the normal supply during the year 1915, had largely abated during the fall of 1916 and the early part of 1917, and by reason thereof, and the extra efforts made by the defendant in anticipation of difficulty in obtaining the ore, it had, in March, 1917, accumulated at its plant about forty-eight thousand tons. About that time, however, just preceding the entrance of this country into the war, the interference with navigation occasioned by the German U-boat campaign became very serious. The companies with which the defendant had contracted for delivery of the ore, and whose contracts contained a clause similar to the clause in the contract between the plaintiff and the defendant which we have quoted, notified the defendant that they would be compelled to suspend deliveries. After receiving this notice, and after making efforts to secure further deliveries of ore from the parties with whom it had contracted and from other sources, the defendant notified the plaintiff and all others with whom it had contracts for delivery of sulphuric acid that after the exhaustion of its accumulated stock of pyrites it would not be able to make deliveries of the acid contracted for, and would have to take advantage of the clause in its contract with the plaintiff authorizing a suspension of deliveries. At the same time the defendant stated that it would continue its efforts to secure pyrites, and continue to deliver to them their proportion of acid from any pyrites that it might be able to obtain, and offered to install in its plant brimstone burners, and to furnish the plaintiff and other parties to whom it had contracted to furnish acid, with brimstone acid, provided they would agree to pay the increased cost of the brimstone acid delivered in lieu of acid made from pyrites. All of the parties with whom the defendant contracted accepted the offer of the defendant and entered into agreements accordingly except the plaintiff, and on the 25th of September, 1917, the plaintiff filed in the court below a bill of complaint against the defendant, in which it prayed:
On the same day the court passed an order, directing a preliminary injunction to be issued, requiring the defendant to "proceed forthwith to fulfill the contract between the complainant and the defendant dated the 28th day of April 1913, in...
To continue reading
Request your trial