Nordyke & Marmon Co. v. Kehlor

• Decision Date: 30 March 1900
• Citation: 56 S.W. 287,155 Mo. 643
• Court: Missouri Supreme Court
• Parties: NORDYKE & MARMON CO. v. KEHLOR.

56 S.W. 287

155 Mo. 643

NORDYKE & MARMON CO. v. KEHLOR.

Supreme Court of Missouri, Division No. 1.

March 30, 1900.

CONTRACT—IMPOSSIBILITY OF PERFORMANCE —MUTUAL MISTAKE.

1. Plaintiff and defendant, understanding that the K. flouring mill produced 55 per cent. patent flour, made a contract by which the plaintiff agreed to erect a mill for defendant, for which he was to receive no compensation if its 60 per cent. product was not equal in quality to the 55 per cent. product of the K. mill. The K. mill did not make a 55 per cent. grade, and refused to change its machinery so as to do so. Held, that the contract was invalid, as the standard to which the mill was to conform had no existence, which made performance impossible.

2. In an action for the breach of a contract, which, by mutual mistake, is based on facts which do not exist, and there is no charge of fraud, it is immaterial which of the parties gave the information, with reference to which the contract was made, that such facts existed.

3. In an action for breach of a contract, which, by mutual mistake, was based on facts which did not exist, the party pleading such facts cannot be rendered liable by reason of his negligence in not determining whether the facts existed.

4. Where a contract shows that it is based on certain facts which are shown to have no existence, a party thereto will not be allowed to show that he had knowledge that such facts did not exist.

5. Where a contract provides that a builder shall receive no compensation for the erection of a mill unless the product equal the best the K. mill produces, as "now constructed and operated," the contract is based upon the present product of such mill, and not on what it is capable of producing.

Appeal from St. Louis circuit court; James E. Withrow, Judge.

Action by the Nordyke & Marmon Company against J. B. M. Kehlor. From a judgment against defendant on a counterclaim, he appeals. Affirmed.

Chester H. Krum, for appellant. Everett W. Pattison, for respondent.

VALLIANT, J.

Plaintiff is a corporation engaged in manufacturing flouring mills, and defendant is an owner and operator of such mills. Plaintiff sued for the price of certain rolls furnished to defendant for his mills, and defendant answered with a counterclaim. The cause was by consent referred to Arba N. Crane, Esq., to try all the issues. Upon the trial before the referee the plaintiff's cause of action was confessed, but the controversy was over the counterclaim, which controversy is sufficiently stated in the report of the referee, as follows: "Shortly stated, the case is that by its contract plaintiff agreed to furnish a flouring mill, of a specified description, to be paid for when completed and proved capable of producing flour of a certain percentage. Before anything considerable was done towards performing the contract, the plaintiff abandoned it, on the expressed ground that the contract was inoperative, because the basis furnished by it for said percentage test was impossible. Later on the defendant obtained from Allis & Co., of Milwaukee, a flouring mill, located on the same site. The contract in question was entered into and dated May 28, 1892, between the plaintiff, as party of the first part, and the defendant and one E. E. Pierson, parties of the second part. Pierson was a miller residing in Lawrence, Kan., and operating a flouring mill in that state. Before this suit was begun he assigned his interest in the contract to defendant, Kehlor, whom I will hereafter refer to as the contracting party." Then, continuing, the report sets out the contract in hæc verba, which, without here copying, it is sufficient to say it is to the effect that plaintiff agreed to furnish, within a certain period, all materials, machinery, etc., and erect, "in as proper order as is known to science in the art of milling at the present time, and to deliver to them, a flouring mill, with an easy capacity of manufacturing fifteen hundred barrels of flour, of all grades, as specified hereinafter, combined, in every day of twenty-four hours' run," according to specifications, etc. The contract concludes as follows: "The meaning and intent of the above agreement is as follows: The party of the first part have agreed to build a flouring mill according to the specifications," etc., "furnished by them, and which is guarantied by them to be as complete and perfect a flouring mill, as far as construction, durability, and easy working is concerned, as any in the United States, and to make at least the lowest percentage of flour mentioned hereafter as conditions of payment. * * * And, in consideration of the above, party of the second part agrees to pay for the same, when the mill is completed and proved capable of producing not less than sixty per cent. of Kansas hard wheat flour, fully equal in quality to the best fifty-five per cent. that Kelly & Lysle can make in their mill at Leavenworth, Kansas, as now constructed and operated, from the same quality of wheat, and the same yield, which shall not exceed four and one-half bushels to the barrel of flour, the remaining forty per cent. to be fully equal to Kelly & Lysle's remaining forty-five per cent. in proportion according to grades contained in Kelly & Lysle's remaining forty-five per cent., sixty-five thousand dollars, as follows: $15,000 to be advanced when the machinery is ready for shipment; $17,500 to be advanced during the construction of the plant and as it progresses; $32,500 to be paid upon completion of the plant by the first party, as provided above." (Then follow promises to pay $75,000 if the mill produces 75 per cent. equal to Kelly & Lysle's best 55 per cent., and to pay $85,000 if it produces 90 per cent. equal to Kelly & Lysle's best 55 per cent., of flour.) Further the report says: "In his counterclaim the defendant states his view of the terms of the contract, and says that his motive in making it was his obligation to others to build a flouring mill at Shawnee on land acquired for that purpose. He also alleges his own readiness always to perform his part of the contract, and says that on the 5th day of July, 1892, the plaintiff definitely refused to perform, and never has performed, its part of the contract. He alleges that the market value of the mill, constructed and completed as agreed, and conforming to the contract and guaranty, would have been $150,000; that, after the plaintiff had refused to perform its contract, defendant tried to get a mill constructed of the same description, but was unable to do so, because the plaintiff alone was able to construct the mill on the plan called for by the contract. He lays his damages at $85,000. The reply of the plaintiff contains a general denial of all the allegations in the counterclaim, except such as are specially admitted by said reply. * * * In justification of the refusal of plaintiff to perform the contract, it is, in substance, alleged in the reply that the contract was vitiated by a mistake in basing the flour percentage test on a 55 per cent. of Kelly & Lysle's manufacture, the fact being that Kelly & Lysle never made and could not make flour of that percentage without first making changes in their mill, which, when solicited to do by the parties to this contract, they refused; that this test was put in the contract by the defendant, who wanted to make a better flour than Kelly & Lysle; that plaintiff had no knowledge as to the grades of the Kelly & Lysle flour, but was informed by defendant and by Pierson that it was 55 per cent. best grade, and this the plaintiff believed, or it would not have entered into the contract. When the mistake was discovered, and it was found that Kelly & Lysle would not change their mill so as to run a 55 per cent. grade, plaintiff asked the defendant to modify the contract in this particular of the percentage test, which defendant refused; whereupon plaintiff declined to go on with the contract. The reply also states that defendant obtained a mill of the like kind, character, and quality with that which plaintiff contracted to build, and that said mill has been erected and is now in operation on the land mentioned in defendant's answer, and is capable of producing not less than 1,500 barrels of flour in each 24 hours of continuous run. * * * Proceeding now with the inquiry in hand, there is no doubt that an error was made in designating in the contract the Kelly & Lysle product as a 55 per cent. grade of flour, and it is proper to notice how this error happened to occur." Then follows, in the report, a summary of the evidence on that point, and the evidence to show that Kelly & Lysle had not made and declined to make that percentage of flour. Then the referee says: "Under date of July 1, 1892, the plaintiff wrote to the defendant that, inasmuch as Kelly & Lysle made no 55 per cent. flour, the percentage test should be changed, and suggesting a 70 per cent. grade of Kelly & Lysle's manufacture as the standard of comparison. To this proposition defendant replied by letter to plaintiff under date of July 2, 1892, declining to make any change in the percentages. In answer to the latter letter, the plaintiff wrote to the defendant, under date of July 5, 1892, stating its views of the importance of the percentage test, and saying that, `as you have refused to make any changes in this portion of the contract that would place us in as fair a position as we supposed we were when the contract was signed, we are forced to decline to proceed further with the contract.' From the evidence, thus briefly summarized, I find that the selection of a 55 per cent. grade of flour of Kelly & Lysle, as the basis for the test of the mill contracted for, was made on information originating with Pierson, and communicated by him to the plaintiff, and that this standard of comparison was insisted upon by the...