Houston-Starr Company v. Berea Brick & Tile Company

• Decision Date: 23 June 1961
• Docket Number: No. 35865.,35865.
• Citation: 197 F. Supp. 492
• Parties: HOUSTON-STARR COMPANY, Plaintiff, v. BEREA BRICK & TILE COMPANY, Defendant.
• Court: U.S. District Court — Northern District of Ohio

197 F. Supp. 492

HOUSTON-STARR COMPANY, Plaintiff, v. BEREA BRICK & TILE COMPANY, Defendant.

No. 35865.

United States District Court N. D. Ohio, E. D.

June 23, 1961.

George I. Meisel, Squire, Sanders & Dempsey, Cleveland, Ohio, Philip Huss, Jr., Lewis & Drew, Pittsburgh, Pa., for plaintiff.

David L. Daley, Stith, Daley & Butler, Elyria, Ohio, for defendant.

McNAMEE, District Judge.

This is a diversity action, the plaintiff being a corporate citizen of Pennsylvania and the defendant a corporate citizen of Ohio. Plaintiff is now and for 55 years has been engaged in the sale of builders' supplies including bricks. Twice during its business life plaintiff has been a manufacturer of bricks. Defendant is and has been a manufacturer of bricks for about 5 years. Plaintiff claims that commencing in June, 1958 and continuing through the fall of that year it placed orders with defendant for brick to be used by building contractors in the Pittsburgh, Pa., area in the exterior construction of homes. Plaintiff alleges that said orders were placed in reliance upon defendant's express warranty that the bricks would "withstand the weather." Plaintiff claims also that defendant knew the purpose for which such bricks were to be used and that plaintiff relied upon defendant's skill and judgment to furnish bricks reasonably fit for such purpose. Plaintiff alleges further that after the bricks were incorporated into the exterior walls of completed homes they crumbled, spawled and deteriorated generally so as to require replacement; that plaintiff was obligated to and did bear the expense of removing and replacing deteriorated brick in approximately 25 completed dwellings and that plaintiff is obligated to assume the additional expense of further replacements to be made in the future, all to its damage in the sum of $40,000. Defendant denies that it expressly warranted that bricks purchased by plaintiff would withstand the weather and denies that plaintiff relied upon defendant's skill or judgment to furnish brick fit for the purpose for which plaintiff intended to use them. Defendant avers that plaintiff purchased bricks known in the trade as "culls" and that said cull bricks were of known inferior quality and sold to plaintiff at a substantially reduced price. Defendant denies that plaintiff was damaged as alleged. Defendant also asserts a counterclaim in the sum of $1,056 for the unpaid purchase price of Grade A-1 bricks ordered and received by plaintiff in April 1959. The issues are: (a) Did defendant expressly warrant that cull bricks sold to plaintiff would withstand weather; (b) Under the facts of this case, was there an implied warranty that cull bricks were reasonably fit for the purpose for which plaintiff intended to use them; (c) Is defendant entitled to recover on its counterclaim.

Facts

In the late spring of 1958 Donald Mackall, who prior to that time had been associated with other manufacturers of bricks, was hired by defendant as superintendent of its plant at Berea, Ohio. On May 14, 1958 Mackall wrote plaintiff, who had been a customer of his during the time he represented a manufacturer of bricks with a plant located at Darlington, Pa. In that letter Mackall alluded to his satisfactory dealings with plaintiff in former years and forwarded samples of brick to plaintiff. The concluding sentence of the letter reads: "How about helping out a new man at a new job, by sending in some orders." The letter was signed "Berea Brick Co., D. A. Mackall, Supt." Shortly after the receipt of the above letter representatives of plaintiff visited the plant of defendant at Berea, Ohio and inspected bricks manufactured by the latter. At that time and at intervals thereafter in conformity with its wishes samples of brick were delivered to plaintiff. On June 5, 1958 plaintiff wrote defendant "Attention Mr. `Red' Mackall." The second paragraph of that letter read:

"When I spoke to you on the phone you said you had some $20.00 brick which were, I believe, seconds. Some of the builders are using a very cheap brick here, but of course they would have to be burned hard enough to stand up. Would it be possible for you to send us one box of the $20.00 brick, which I imagine would come in a mingled shade?"

On June 13, 1958 Mackall wrote plaintiff on stationery bearing the following letterhead:

The Berea Brick & Tile Company 9485 Eastland Road Berea, Ohio

The letter contained the following statement:

"We have 50000 hard cull brick here in the yard, I will personally guarantee them to withstand the weather, you can have them for $20.00 per M. Things are certainly dead around here, and I would certainly appreciate any business you can throw my way. (Emphasis supplied.)

The letter was signed:

"D. H. Mackall Berea Brick & Tile Co. "P. S. I mailed you a sample of our cull brick today."

It is plaintiff's claim that the above italicized language constitutes an express warranty of cull brick by defendant. Commencing on June 11, 1958 and continuing at intervals thereafter until October of that year plaintiff placed orders with defendant which, with but few exceptions, were for cull bricks at the cheaper price of $20 per M, which was 33 1/3 % less than the price of A-1 brick. The total quantity of cull bricks purchased by plaintiff from defendant was between 350,000 and 400,000. Defendant's delivery receipts accompanying each shipment described the bricks as "culls." The bricks were delivered to designated customers of plaintiff at the "job sites" by a trucking company selected by plaintiff. Plaintiff also purchased a quantity of cull bricks that had been lying in a pile in defendant's yard since 1956 for $15 per M. These bricks were old and dirty and as a result of long exposure to the weather they were defective in other respects. Plaintiff asserts no warranty as to such bricks. Plaintiff also purchased a relatively small quantity of defendant's Grade A-1 brick but there is no evidence of damage resulting from the use of such brick. A few of the 30 or more orders for $20 cull brick bore various notations of plaintiff such as "new customer fair quality" (Order No. 5733). On Order No. 5833 there appears the following: "Red, would like for brick not to (sic) soft a little mingled in red." Order No. 5824 bore the following typed notation: "Red, please watch these brick as our customer is vary particular." In the handwriting of plaintiff's representative there also appears on Purchase Order No. 5927 the notation: "Must be good not to (sic) soft." Prior to June 1958 plaintiff had purchased cull brick from other sources which it sold to contractors for use in the exterior walls of homes. It was not shown that any warranty was given by the manufacturers of such brick. Among those from whom plaintiff purchased cull brick was The Ohio Lumber & Face Brick Company. The invoices of that company for cull brick sold to plaintiff bore the legend "Not recommended for exterior use." Despite this implicit warning, plaintiff sold and delivered such brick to contractors at the "job sites" for use in the exterior construction of homes. On November 5, 1958 plaintiff wrote The Ohio Lumber & Face Brick Company requesting price lists on that company's various grades of brick manufactured at its plant at Strasburg, Ohio. The letter contained the following:

"If you would like to clean up your culls and B Grade brick I believe we could help you do this provided the price is sufficiently low."

Correspondence in evidence discloses also that in 1958 plaintiff purchased cull brick from Greenfield Industries, Inc., and on one occasion attempted to secure a reduction of $24 on a small order of such brick. In a letter dated August 2, 1958 the Credit Manager of Greenfield Industries disallowed the reduction and, among other things, said:

"* * * Cull brick has no guarantee. When you purchase cull brick that is what you will receive. Brick not usable for any purpose but for back-up etc."

As defined by witnesses of long experience in the brick industry, a cull brick is one that is inferior or defective in one or more of the following respects: Over-burned, underburned, twisted, oversized, badly shaped, cracked, structurally unsound. One witness characterized cull bricks as "the cats and dogs of the brick industry." It was shown that cull bricks are used customarily for "back-up work" or "hidden work"—inside fireplaces, etc. It was established that it is not the custom in the brick industry to warrant cull bricks. Mackall had no express authority to warrant that cull bricks would withstand the weather. The officers of defendant had no knowledge that Mackall had made such a warranty until sometime in 1959 when plaintiff first discussed its claim for damages with Gerald Rushlow, president of defendant, who was "astounded" to learn of Mackall's guarantee. In January 1959 Mackall was discharged from defendant's service for reasons not related to the subject matter of this litigation. Plaintiff submitted proof of substantial damage in bearing the expense of re-bricking the many homes in which cull brick were used and there is evidence tending to show that plaintiff will be required to bear additional expense of like character in the future. Further facts will appear in the discussion of the issues.

Discussion

Did Mackall have implied authority as defendant's agent to expressly warrant cull brick? As indicated above, it was shown that it is not the custom in the brick industry to warrant cull brick. Plaintiff with its long years of experience knew this, as did Mackall, who testified that it was not customary to guarantee cull brick. Defendant conferred no express authority upon Mackall to warrant cull brick and, as shown, was never informed by the latter that he had given such a warranty. The principle that governs in this factual context is stated in 2 Am.Jur., Agency, § 132, p 106, as follows:

"The rule advanced by a majority of the decisions as well as by the American

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