Feuchtwanger v. Manitowoc Malting Co.

• Decision Date: 11 April 1911
• Docket Number: 1,684.
• Parties: FEUCHTWANGER et al. v. MANITOWOC MALTING CO.
• Court: U.S. Court of Appeals — Seventh Circuit

187 F. 713

FEUCHTWANGER et al. v. MANITOWOC MALTING CO.

No. 1,684.

United States Court of Appeals, Seventh Circuit.

April 11, 1911

For a number of years prior to 1907, plaintiffs in error, sellers of malt, had employed defendant in error to convert their barley into malt. To cover the season from October 1, 1907 to October 1, 1908, they entered into the following contract:

'This agreement made this 12th day of September, 1907, between the Manitowoc Malting Co., a corporation created under the state laws of Wisconsin, party of the first part, and Feuchtwanger Bros., of Pittsburgh, Pa., parties of the second part.

'The party of the first part agrees to malt in first class manner for the parties of the second part from 400,000 bu. to 500,000 bu. of barley, and further agrees to deliver the said malt made from this barley free on board cars at their plant with the understanding that the party of the first part will deliver this contract in regular monthly shipments dividing the total amount of malt by 12 which will constitute regular monthly delivery. Party of the first part agrees to deliver to the party of the second part all the skimmings, screenings and sprouts from said barley and malt, and will sell same for their account giving them proper credit. In consideration of the fulfillment of this contract the party of the second part agrees to pay the sum of 13 1/2 cents per bushel for each bushel of barley actually steeped. In this charge there is included the free storage of all barley and malt delivered and to be delivered. This contract covers the season of 1907 and 1908. It is further agreed that the parties of the second part will pay to the party of the first part a certain sum of money as agreed upon between them for wear and tear, and loss on the bags furnished the party of the second part, and, also, to pay all freight on the return of empty bags. The party of the second part agrees to pay to the party of the first part their malting commission monthly.'

Disagreements arose, and by February, 1908, the contract was admittedly breached; each party claiming that the other was at fault. In March, 1908, defendant in error began this action to recover the profit it would have made if plaintiffs in error had fully performed. It laid its damages at $10,000. Plaintiffs in error, as defenses, charged that defendant in error had committed the first breach, and that plaintiffs in error had justifiably rescinded the contract on March 1st.

On the basis that the contract required plaintiffs in error to furnish during the year a minimum of 400,000 bushels, there was a failure to furnish 322,581 bushels. If the contract had been performed, defendant in error would have received 322,581 times 13 1/2 cents, or $43,748.43; and its gain would have been the difference between that sum and the cost of malting. In proof of cost, defendant in error introduced a tabulation made by an expert accountant and his testimony in connection therewith. The tabulation purports to show the cost of converting one bushel of barley into malt at defendant in error's plant for the year ending September 30, 1908. The action was begun in March, 1908, but was not tried until in 1909. The calculation was based on an 'actual steep of 1,121,275 bushels.' 'Direct expense' was given as 'labor, $19,838.70, and coal $16,336.94.' 'Indirect expense' covered items of salaries, general expense, taxes, insurance, depreciation, and 5 per cent. interest on investment, aggregating '$51,372.59.' For 1,121,275 bushels the direct expense was therefore $.032226 and the indirect $.04582 per bushel. The expert's tabulation then proceeded to give the cost 'based on capacity of plant, 1,500,000 bushels. ' The indirect expense was thereby reduced to $.03425 and the total cost to $.06651 per bushel. On the basis that, if the contract had not been broken, the actual steep would have been 1,121,275 plus 322,581 bushels, the jury, from the expert's tables, figured that the cost per bushel would have been $.06784, and that defendant in error was therefore entitled to 'damages on 322,581 bushels at $.06716, $21,664.54. ' There were repeated objections, in effect, that the whole matter, so far as the expert was concerned, was hearsay, and that defendant in error had not by other evidence laid the proper foundations for bringing the expert's tabulations and his testimony in explanation thereof within the exceptions to the hearsay rule.

Certain sections of the Wisconsin Revised Statutes of 1898, adopted by rules of the court below, read as follows:

'Sec. 4186. Whenever a party in any cause or proceeding shall produce at the trial his account books and swear that the same are his account books, kept for that purpose; that they contain the original entries of charges for goods or other articles delivered, or work and labor or other services performed or materials found, and that such entries are just, to the best of his knowledge and belief; that said entries are in his own handwriting and that they were made at or about the time said goods or other articles were delivered, said work and labor or other services were performed or said materials were found, the party offering such book or books as evidence, being subject to all the rules of cross-examination by the adverse party that would be applicable by the rules to any other witness giving testimony relating to said book or books, if it shall appear upon the examination of said party that all of the interrogatories in this section contained are satisfactorily established in the affirmative, then the said book or books shall be received as presumptive evidence in proof of the charges therein contained.

'Sec. 4187. Whenever the original entries mentioned in the preceding section are in the handwriting of an agent, servant or clerk of the party the oath of such agent, servant or clerk may in like manner be admitted to verify the same, and said books shall be testimony in the same manner as the books mentioned in the preceding section; provided, that such books mentioned in this and the preceding section shall not be admitted as testimony of any item of money delivered at one time exceeding five dollars, or of money paid to third persons, or of charges for rent.'

'Sec. 4189. Any entries made in a book by a person authorized to make the same, he being dead, may be received as evidence in a case proper for the admission of such books as evidence. Entries in a book or other permanent form, other than those mentioned in sections 4186 and 4189b, in the usual course of business, contemporaneous with the transactions to which they relate and as part of or connected with such transactions, made by persons authorized to make the same, may be received in evidence when shown to have been so made upon the testimony either of the person who made the same, or if he be beyond the reach of a subpoena of the trial court or insane, of any person having custody of the entries and testifying that the same were made by a person or persons authorized to make them in whose handwriting they are, and that they are true and correct to the best of his knowledge and belief. In case such entries are, in the usual course of the business, also made in other books or papers as a part of the system of keeping a record of such transactions, it shall not be necessary to produce as witnesses all of the persons subject to subpoena who were engaged in the making of such entries; but before such entries are admitted the courts shall be satisfied that they are genuine and in other respects within the provisions of this section.'

Section 4189b has reference to the books of banks.

The process of melting takes from 8 to 12 days.

After a motion for a new trial was overruled, the court permitted defendant in error to amend its demand for damages to correspond with the verdict, and judgment was then entered.

The further facts necessary to be noted are stated in the opinion.

A. L. Hougen, C. E. Brady, John J. Healy, and Walter M. Joyce, for plaintiffs in error.

L. J. Nash and W. M. Spooner, for defendant in error.

Before GROSSCUP, BAKER, and SEAMAN, Circuit Judges.

BAKER Circuit Judge (after stating the facts as above).

A contention is presented that the contract is unilateral unenforceable for want of mutuality, in this: That, while defendant in error covenanted to malt grain for plaintiffs in error, the latter did not agree to deliver grain to be malted. True, they did not so bind themselves in express words; but, taking their express promise to pay monthly for the service and the impossibility of defendant in error's making the agreed monthly deliveries of malt unless the grain was first supplied, undoubtedly the necessary implication respecting the parties' intention is that plaintiffs in error undertook to furnish during the season a minimum of 400,000 bushels of barley to be malted by defendant in error. Compare Hudson Canal Co. v. Penn. Coal Co., 8 Wall. 276, 19...