Griffin Mfg. Co. v. Boom Boiler & Welding Co., 7182.

• Decision Date: 14 May 1937
• Docket Number: No. 7182.,7182.
• Citation: 90 F.2d 209
• Parties: GRIFFIN MFG. CO. v. BOOM BOILER & WELDING CO.
• Court: U.S. Court of Appeals — Sixth Circuit

90 F.2d 209 (1937)

GRIFFIN MFG. CO. v. BOOM BOILER & WELDING CO.

No. 7182.

Circuit Court of Appeals, Sixth Circuit.

May 14, 1937.

Harold K. Bell, of Cleveland, Ohio (Cannon, Spieth, Taggart, Spring & Annat, of Cleveland, Ohio, English, Quinn, Leemhuis & Tayntor, of Erie, Pa., Paul H. Keough, of Cleveland, Ohio, and Francis B. Quinn, of Erie, Pa., on the brief), for appellant.

A. E. Petersilge, of Cleveland, Ohio (Duncan, Leckie, McCreary, Schlitz & Hinslea, Frederick L. Leckie, and J. Harold Traverse, all of Cleveland, Ohio, on the brief), for appellee.

Before HICKS, SIMONS, and ALLEN, Circuit Judges.

ALLEN, Circuit Judge.

Appeal from a judgment in an action on a contract, brought by appellee as the assignee of the seller (hereinafter called the Dailey Company) to recover the balance of the purchase price of certain equipment furnished for a steel strip pickling plant. The principal legal questions relate to the construction of the contract.

Appellant is engaged in making finished steel products in the manufacture of which it uses hot rolled steel. As the hot steel comes into contact with the air, scales of iron oxide are formed, which are removed by "pickling" through immersion in a sulphuric acid bath. Formerly appellant used a hand pickling process, but later it installed a mechanical pickling plant, out of which installation this controversy arose.

The plant was designed to secure a process of continuous pickling in which strips of rolled steel clamped together are pulled through a tank of acid. As the strips come to the plant in coils, the first step in the process is to unwind the coil. The outside end of each strip is fed through metal rolls which take out the bend in the coil. The strips are then joined by a metal clip inserted in holes made by a punch press. Between the acid tank and the punch press a pit is located in which surplus strips of steel are accumulated to allow the operator time to fasten the strips together and at the same time to permit the steel to pass through the acid tank at a uniform speed. The strips are then rinsed and run through a neutralizing solution after which they are unfastened and recoiled.

On August 7, 1929, the Dailey Company agreed with appellant "to furnish equipment for a 2, 4 Strand Pickling Plant for pickling four steel strips up to 12½" wide or two strips 24" wide and up to ¼" to 5/16" in thickness . . ." Each item of equipment was to be paid for in thirty days after shipment, and unit prices were stated.

The contract concluded: "It is agreed that the Dailey Machine Construction Co. . . . will spend sufficient time at your plant to advise in the matter of erection work and putting the entire Pickling Plant in satisfactory working operation."

Appellant repeatedly claimed that the plant did not operate satisfactorily. A number of personal inspections were made by the president of the Dailey Company, and several test runs were made. Finally, in December, 1931, a new contract was entered into by the parties, the pertinent parts of which are as follows:

"WHEREAS, up to the present time the Dailey Company has not been able to furnish said pickling plant in accordance with said agreement, . . . it is agreed . . .

"That the Dailey Company shall have until the close of business, February 21, 1932, within which to complete said pickling plant in accordance with the terms and conditions of said agreement of August 7, 1929 . . ." and

"That, if at the end of said period, to-wit, February 21, 1932, at the close of business, said pickling plant has been placed in satisfactory working operation by the Dailey Company as provided in said agreement of August 7, 1929, then the same shall be paid for by the Griffin Company . . ."

This contract was followed by a letter in which appellee wrote "it is our understanding, that the interpretation of, satisfactory working operation, is that, the pickling plant must be capable of producing a speed of sixty-six and two-thirds feet per minute, with a fifteen per cent loss in a ten hour run. The machine must hold up for more than two or three days run."

Appellant agreed to this definition of satisfactory operation, but said that the machine must "perform steadily for a period of not less than two weeks."

Further efforts were made by the Dailey Company and new tests were taken, but the plant did not operate to appellant's satisfaction. The equipment was not paid for, and this lawsuit followed.

It is appellant's principal claim that the first contract was a "satisfaction" contract under which the Dailey Company guaranteed that it would put the pickling plant in satisfactory working condition, that is to say, in condition to the satisfaction of appellant; that the agreement was not carried out, and that appellant therefore is not liable. Appellee contends that the first contract was an agreement to furnish equipment and to give advice as to satisfactory operation, which was given, and that the contract therefore was fully performed. In the alternative, appellee contends that the inefficient operation of the plant was due to appellant's lack of cooperation.

The gist of the controversy is presented in the charge of the court,¹ which in substance stated that while the original contract was an agreement to sell equipment and to give advice, the Dailey Company later obligated itself to put the plant in reasonably satisfactory working condition. The court also stated in effect that the ultimate question was whether the equipment furnished was reasonably fit for the purpose intended and in condition to operate at a speed of sixty-six and two-thirds feet per minute for two or three days or longer.

Appellant claims that the court's construction of the contract was incorrect, that the conduct of both parties, the second contract and its express terms made the agreement a satisfaction contract, and that the court therefore erred in not so charging the jury, and erred in submitting the issue of lack of co-operation to the jury.

We think the court correctly construed the contract. The first agreement does not provide for the sale of a pickling plant. It lists certain equipment to be sold as units, and charges unit prices, to be paid for in...