MacAndrews & Forbes Co. v. Mech. Mfg. Co.

• Court: Illinois Supreme Court
• Writing for the Court: STONE
• Citation: MacAndrews & Forbes Co. v. Mech. Mfg. Co., 367 Ill. 288, 11 N.E.2d 382 (Ill. 1937)
• Decision Date: 08 December 1937
• Docket Number: No. 23800.,23800.
• Parties: MacANDREWS & FORBES CO. v. MECHANICAL MFG. CO.

367 Ill. 288

11 N.E.2d 382

MacANDREWS & FORBES CO.

v.MECHANICAL MFG. CO.

No. 23800.

Supreme Court of Illinois.

Oct. 15, 1937.

Rehearing Denied Dec. 8, 1937.

Action by the MacAndrews & Forbes Company against the Mechanical Manufacturing Company. From a judgment of the Appellate Court [285 Ill.App. 81, 1 N.E.2d 895], affirming a judgment for plaintiff, defendant appeals.

Affirmed.Appeal from Third Division, Appellate Court, First District, on Appeal from Circuit Court, Cook County; Joseph Burke, Judge.

Samuel A. & Leonard B. Ettelson, of Chicago (Samuel A. Ettelson, Carl J. Appell, and Erwin M. Treusch, all of Chicago, of counsel), for appellant.

Gann, Secord, Stead & McIntosh, of Chicago (Guy Van Schaick and Loy N. McIntosh, both of Chicago, of counsel), for appellee.

STONE, Justice.

Plaintiff, the MacAndrews & Forbes Company, appellee, filed an action in assumpsit against defendant, the Mechanical Manufacturing Company, of Chicago, appellant, alleging breach of warranties made in connection with a sale to the plaintiff of a certain machine for extracting moisture from licorice solution. The declaration, as amended, consists of four counts, and is based on the claim that the defendant contracted to manufacture for the plaintiff a machine for spray-drying licorice. The declaration charges that the defendant warranted the machine for continuous operation; that there were both express and implied warranties that the machine would be fit for the purpose for which it was intended, and that this machine, known in this record as the Stutzke Patent Spray Dryer, failed to do the work for which it was intended. The declaration alleges the payment of fully three-fourths of the contract price, which was to be the sum of $18,750. Plaintiff's declaration charges that it expended large sums of money in the preparation of its building and in building a foundation for the installation of the machine, which, as shown by the record, is of about the height of a four-story building.

The defendant filed pleas of the general issue, the statute of limitations (Smith-Hurd Ill.Stats. c. 83, § 16), and certain special pleas alleging that the dryer was a trade-name, patented article, and sold as such; that no warranties, either express or implied, were made; and that the machine did the work for which it was built. It is conceded by the plaintiff that the machine will dry licorice, and it is likewise conceded by the defendant that it will not do so continuously, but, after a few hours operation, must be shut down and cleaned out.

The plaintiff is a corporation engaged in the manufacture of licorice paste, having its factory located at Camden, N. J., where it conducts a large plant having a capacity of 100,000 pounds of licorice paste per day, with twenty-four hours' operation. This commodity is sold largely to tobacco manufacturers for the treatment of tobaccos. Licorice root is imported largely from Asia Minor. In the manufacture of licorice paste the root is shredded, steeped in water, and a light licorice solution is drawn from it which is later evaporated into a heavy licorice liquor and then further evaporated to the form of paste. This paste is packed in boxes. The packing of the boxes is a slow process as the paste, on final evaporation, must be run hot into the boxes in successive layers, with intervals of time in the process to allow the licorice to cool and harden. The evidence shows that it takes from 20 to 21 hours to produce licorice paste, and 24 hours more for completing the packing. It also shows that the licorice solution, when first drawn off, will spoil if allowed to stand for two hours, that the heavy liquor will spoil within five hours, and that the paste, if it is not packed immediately, while hot, will harden in the kettles, requiring it to be dug out and reprocessed. Licorice paste is a black solid containing from 17 to 25 per cent. water, according to the nature of the process. Licorice paste is valued by its consumers for the licorice content. The extra weight of moisture and packing cases, the delay in handling, and the cost of transportation, figure largely in the economy of the production of licorice. A process, therefore, which extracts the moisture and reduces licorice to a powder, renders its manufacture much more economical and rapid and its use more convenient, since the licorice paste dissolves slowly while the powder dissolves rapidly.

The plaintiff manufactures licorice for the trade. The evidence shows that it is neither a builder nor a designer of processing machinery. Ronald M. Bickerstaff, Jr., plaintiff's assistant manager, testified, and his testimony appears not to have been contradicted, that though plaintiff had experimented with small spray-drying machines, with the view to purchasing such a machine, they had never attempted to manufacture one, and had never purchased one prior to the transaction with the defendant, for the reason that the economies in its use, by reason of waste, were not such as to attract plaintiff to such purchase. It is apparent that to plaintiff was much interested in securing a machine that was successful as a dryer and, in view of the fact that the processing must be continuous, it is readily seen that such a machine, to be of service to the plaintiff in its business, must be one suited to continuous operation.

The record shows that one Richard W. Stutzke had been experimenting with the manufacture of spray-dryers for organic solutions of different natures, such as yeast, malt, starch, dextrin, blood, and the like, and had taken out patents on the principles involved in his processes, though each machine that had been constructed, as the record shows, was different, because of the difference in the commodity to be spray-dried.

The defendant is a large manufacturer of machinery of various kinds and, in 1923, took over from Stutzke the manufacture and sale of steam spray-dryers and employed him to take charge of the work. In 1924, following an earlier conversation between the engineer of the plaintiff and Stutzke, some correspondence was had between the plaintiff and the defendant pertaining to the building of a machine for the plaintiff sufficiently large to meet its needs. At that time Stutzke had installed in defendant's plant a small dryer which would evaporate about 15 gallons of solution per hour. Certain test runs were made by the defendant during the year 1924 on licorice liquors furnished by the plaintiff, and a good deal of discussion concerning the advantages of defendant's machine was had.

It appears from the record that licorice powder, to be acceptable to the tobacco trade, must be free from a burnt or flat taste. Some of the tests that were made on the defendant's machine resulted in such a taste in the licorice and in some it was free from it. A reading of the correspondence that passed between the parties discloses that it was definitely understood between these parties that plaintiff required a machine that would operate economically and continuously. In fact, throughout this record there is no intimation that the defendant considered that it was to furnish any machine other than one suited for continuous operation. As a result of this correspondence, and the experiments conducted by the defendant in its plant with licorice furnished by the plaintiff, as to which tests much inquiry had been made by the plaintiff concerning defendant's ability to get a successful machine which would process at least 100 gallons of licorice liquor per hour, and of a quality which it could use for its trade, and assurances on the part of the defendant that it had, as a result of such experiments, produced a machine which would meet plaintiff's need, plaintiff, on September 8, wrote the following letter to the defendant:

‘Will you please have made up and mailed to us, three copies of formal contract, one of which is to be returned to you with our signature when accepted, for one Stutzke Spray Dryer for use with licorice extract, capacity of 100 gallons per hour evaporation, using steam at 150 lbs. per square inch pressure, and electricity three phase, 60 cycle, 440 volts.

‘Please state or include--

‘(1) Price, terms and delivery.

‘(2) Guaranteed steam consumption in lbs. per lb. of evaporation.

‘(3) Guaranteed electric consumption in k.w. hours per lb. of evaporation.

‘(4) Provision or certificate from Hartford Steam Boiler Inspection and Insurance Co., approving all parts under boiler steam pressure to 200 lbs. per square inch.

‘(5) Guarantee of overall yield or per cent of weight of dry solids delivered from machine to the weight furnished it.

‘(6) Guaranteed evaporation in lbs. water per hour over 24-hr. period.

‘(7) Statement of maximum density licorice solution that can be dried with your outfit.

‘We will want to inspect your installation in operation that is in our vicinity if it is possible to do so, and we would like to have your contracts at hand by that time.

‘As we have explained to your Mr. Hubbard, the cost of evaporation with your dryer is high, but there are certain factors that may induce us to go ahead with our installation. An inspection of one of your plants in commercial operation will be of great assistance to our executives in making their decision.’

To this letter the defendant, on September 19, replied. Its letter, in so far as is material to the inquiry here, is as follows:

‘Replying further to your letter of the 8th, and following up ours of the 11th, our Engineering Department has now gone over the details of the 100-gallon Stutzke Dryer to operate under 150 pounds steam pressure, to pass Hartford Steam Boiler Inspection and Insurance Company's inspection for 200 lbs. pressure per square inch. We quote you as follows:

‘We propose to furnish one 100 gallons capacity Stutzke Patent Spray Dryer complete with fittings for operating consisting of the following items as shown on Drawing QD 530: * * * Taking up now the seven...