McGarry v. Superior Portland Cement Co.

• Decision Date: 26 March 1917
• Docket Number: 13745.
• Citation: 95 Wash. 412,163 P. 928
• Court: Washington Supreme Court
• Parties: McGARRY v. SUPERIOR PORTLAND CEMENT CO. et al.

163 P. 928

95 Wash. 412

McGARRY v. SUPERIOR PORTLAND CEMENT CO. et al.

No. 13745.

Supreme Court of Washington

March 26, 1917

Department 1. Appeal from Superior Court, King County; Walter M. French Judge.

Action by Dan McGarry against the Superior Portland Cement Company and others. From the judgment, the named defendant appeals. Affirmed.

Bronson Robinson & Jones, of Seattle, for appellant.

J. L Corrigan, of Seattle, for respondent.

CHADWICK J.

Respondent McGarry is a contractor. On the 24th day of May, 1915, he entered into a contract for the improvement of permanent highway No. 10 in King county. The United States Fidelity &amp Guaranty Company is surety upon his bond. Several claims were filed against the bond. This action was instituted by McGarry to have adjudicated the extent and validity of the several claims.

Appellant, the Superior Portland Cement Company, filed a claim of $1,911.50. Respondent alleges that there is no more than $667.70 due on this claim. The position of the appellant and the contention of the respondent are fairly stated by their respective counsel:

'Mr. Jones: Now, I think there is no dispute, your honor please, between plaintiff and ourselves except on this one point: We claim that we made a contract with him to supply him with cement at $1.90 a barrel, and that he was to have a rebate or reduction if the market price fell below that. He claims he was to have a rebate or reduction if any sales were made or any prices quoted to any one whomsoever corresponding to the amount of the reduction. That is correct, isn't it, Mr. Corrigan?

'Mr. Corrigan: This is substantially correct. * * * My idea of this contract is simply this: The plaintiff alleges he made this contract with the defendant Superior Portland Cement Company to take this cement at $1.90 a barrel, with this stipulation added, that in case they quoted a less price to any other contractor or concern, or agreed to furnish cement at a less price to any other contractor or concern, or agreed to furnish cement at a less price, that the plaintiff would have a rebate of a corresponding amount, provided this reduction was made during the time deliveries were being made on this work.'

The contract between respondent and appellant was oral. It will be seen that the parties now disagree, the one saying that if the market price of cement fell below the quoted price, and the other saying if a lesser price was quoted, appellant was to have a rebate. After the contract had been entered into, appellant issued a letter addressed to the commissioners of King county:

'Confirming advice given you by our Mr. Sutherland on the terms of sale of cement to the county, to be used for county roads and bridges, the $1.75 net delivered price will apply only to points on the Great Northern and Northern Pacific to which the 5-cent rate applies from Concrete and Bellingham.

'There will be no objection to shipping cement to the contractor whenever your honorable board direct us to, but it must be understood that the cement will be invoiced to the county, and must be paid for by the county.'

Thereupon the board of county commissioners issued a notice to contractors:

'Notice to Contractors Regarding Cement.

'King county will furnish cement to successful bidder at the rate of one dollar and seventy-five cents ($1.75) per barrel, delivered in carload lots of not less than one hundred and thirty-two (132) barrels. * * *

'Shipments from the factory will in all cases be not less than minimum carload lots. Smaller shipments may be had from the Seattle warehouses at regular prices.

'King county purchases cement at the above-named prices under contract, for its own use, and any cement sold to its contractors is to be used on King county work only. Failure on the part of the contractor to conform to the above conditions will be considered grounds for the county to refuse to furnish the contractor with any more cement and the county will so do and compel the contractor to buy the balance of the cement needed to complete the contract in the open market.'

The court held this to be a quotation of a lower price, and that respondent was entitled to a rebate. We think the decision of the court is clearly right. While much of the oral argument was taken up by a discussion of the meaning of market price, the theory of appellant may be adopted, and we may still hold that the offer of appellant was, in effect, a cut in the market price. The words 'market price' have no hard and fast meaning. There is no magic in the term. When it becomes a subject of legal controversy, it will be given that meaning which will best serve the purpose and intent of those who use it in their contracts.

The contract was made with reference to road work in King county, and it is evident that the parties had in mind that respondent should have protection against the quotation of any lesser price to those engaged in work of a like kind or character. The intent of the contract was to put respondent on the same footing as other like contractors.

Appellant quoted a lower price to the county for the advantage of contractors generally. This was a reduction of the market price in so far as such price was quoted to, or for the benefit of, those engaged in the same kind of work. It may be seriously questioned whether appellant made proof of a market price above $1.75 per barrel. Sales managers or officers of three firms or companies were called to testify that the price quoted, and at which sales were made at the...