Republic Coal Co. v. W.G. Block Co.

• Decision Date: 14 November 1922
• Docket Number: 34883
• Citation: Republic Coal Co. v. W.G. Block Co., 195 Iowa 321, 190 N.W. 530 (Iowa 1922)
• Parties: REPUBLIC COAL COMPANY, Appellee, v. W. G. BLOCK COMPANY, Appellant
• Court: Iowa Supreme Court

190 N.W. 530

195 Iowa 321

REPUBLIC COAL COMPANY, Appellee, v. W. G. BLOCK COMPANY, Appellant

No. 34883

Supreme Court of Iowa, Des Moines

November 14, 1922

REHEARING DENIED FEBRUARY 17, 1923.

Appeal from Muscatine District Court.--A. J. HOUSE, Judge.

ACTION on a contract, to recover the purchase price of coal. Defendant counterclaimed for damages for failure to deliver the full amount provided for in the contract. The court directed a verdict for plaintiff for the amount claimed to be due, and dismissed defendant's counterclaim. Defendant appeals.

Affirmed.

Jayne & Westrate and E. M. Warner, for appellant.

Alvin E. Stein and Thompson & Thompson, for appellee.

FAVILLE J. STEVENS, C. J., EVANS and ARTHUR, JJ., concur.

OPINION

FAVILLE, J.

The pleadings in this case consist of the plaintiff's petition and an amendment to the petition; an answer and counterclaim in two counts; the plaintiff's answer to defendant's counterclaim; a reply to plaintiff's answer to defendant's counterclaim; an amendment to plaintiff's answer to defendant's counterclaim; a second amendment to plaintiff's answer to defendant's counterclaim; a third amendment to plaintiff's answer to defendant's counterclaim; an amendment to defendant's reply to plaintiff's answer to defendant's counterclaim; a fourth amendment to plaintiff's answer to defendant's counterclaim; an amendment to the amendment to plaintiff's answer to defendant's counterclaim.

These somewhat extensive and voluminous pleadings present the issues of a claim by the plaintiff to recover the balance of the purchase price of certain coal claimed to have been sold and delivered to the defendant by the plaintiff, under a written contract between the parties. The defendant, by counterclaim, seeks to recover damages for the failure of the plaintiff to deliver the full amount of the coal specified in the contract, at the contract price.

Plaintiff is a company engaged in the mining of coal at Jeffrey, Illinois. Defendant is a dealer in coal, having offices at several cities in Iowa. On the 15th day of March, 1919, the plaintiff, as seller, and the defendant, as buyer, entered into a written contract for the purchase and sale of certain coal. The contract provided that the coal was to be furnished during the period from April 1, 1919, to March 31, 1920, and contained the following provisions regarding the quantity, price, and delivery of the coal:

"25,000 tons Black Jeff 6" chunks, 3-6" furnace and 1 1/2x3" small egg at price of $ 2.75 F.O.B. mines, less 15 cents per ton commission, and 25,000 tons of 1 1/2" screenings at price of $ 2.05 F.O.B. mines, less 15 cents per ton commission. It is understood and agreed that this coal should be taken practically in equal monthly allotments, and so far as the prepared sizes, namely, chunks, furnace, and small egg are concerned, these shall be taken in about equal proportions as to their production at the Jeffrey mine, namely, 15 per cent chunks, 20 per cent furnace, and 20 per cent small egg. * * * The buyer agrees to remit in full on or before the 20th day of each month for all coal shipped during the preceding month. * * * Should production of available tonnage of coal herein contracted for, due to the above causes, prevent the seller from meeting all of its obligations, the buyer agrees to accept, as complying with agreement during such period, such proportion of the available coal as buyer's orders under contract herein bear to such total obligations of the seller. The above conditions not to be applicable to, nor to entitle buyer to countermand or cancel shipments after the same have left mine. Noncompliance of buyer with any of the terms of this contract will entitle seller at its option at any time to cancel this contract, irrespective of failure to cancel for prior noncompliance."

Other provisions in the contract are not material to the questions involved in this appeal.

After the parties entered into said contract, various shipments were made by the plaintiff to the defendant, from time to time, and various payments were made by defendant. There is no dispute between the parties in regard to these items, and it is admitted that there was due an owing for coal so shipped, the amount claimed in plaintiff's petition. The burden, therefore, rested upon defendant, to establish the allegations of its counterclaim.

The contract called for the delivery of 25,000 tons to "Black Jeff" chunk, furnace, and small egg coal, and 25,000 tons of screenings, to be taken practically in equal monthly allotments. The defendant pleaded that the plaintiff had failed to deliver, during the first six months of the contract, 5,241.23 tons of screenings, as required under the contract, and had failed to deliver any screenings during the last six months of the contract, and alleged that, with regard to the other kinds of coal mentioned in the contract, the plaintiff had failed to deliver 6,481.77 tons during the first six months of the contract, and had delivered none during the second half of the contract. The defendant claimed damages for such failure to deliver, in the sum of $ 5,982.52.

In answer to the counterclaim, the plaintiff pleads that, on or about the 22d day of September, 1919, it canceled the contract, for good cause. The plaintiff further alleged, as a defense to the counterclaim, that the defendant had failed, neglected, and refused to take and accept the coal contracted for, and that the plaintiff had delivered all of the coal ordered by the defendant. Defendant pleads that plaintiff waived its right to cancel the contract.

I. The first question for our determination is whether or not the plaintiff had the legal right to cancel the contract on September 22, 1919, under the terms of the contract.

The contract by its terms did not definitely provide the exact method that the parties were to pursue, in operating under the contract. It provided that the coal "should be taken practically in equal monthly allotments," and contained a reference to "buyer's orders, " in the event of a shortage in coal caused by labor troubles, floods, etc., but did not, in terms, state that defendant was to issue orders for the shipments.

The evidence shows, without conflict, that the method adopted by the parties in operating under the contract was that the defendant would order coal shipped to its various yards as it needed it. The amounts so shipped varied. It appears that there were two kinds of orders: one called "standard orders," and the other, orders for a specific number of tons, or cars, called "current orders." In the ordinary course of business, the time between sending the order and the receipt of the coal would be three or four days. Sometimes coal was shipped to the defendant when an order had not first been made. This occurred when plaintiff had coal which it wished to move, and it would request the defendant to receive the coal at that time, which defendant did. Sometimes the orders were given by telegram; but the majority of the time, the standard form of orders was used. Occasionally an order would be canceled and a new order given in its place. The method followed was to use the defendant's standard form of orders; and when coal was ordered by telegram or telephone, it was confirmed with the standard form of order later. The plaintiff shipped the kind and quantity of coal designated in these orders of the defendant, to the various points where the defendant directed the shipments to be made. No shipments were made by the plaintiff after the alleged cancellation of the contract, on September 22, 1919; nor were any orders sent by defendant thereafter.

By the terms of the contract, the defendant agreed to remit in full on or before the 20th day of each month, for all coal shipped during the preceding month. It is conceded by the defendant that it did not make remittances strictly in accordance with the terms of the contract by remitting in full by the 20th of the month for all coal shipped during the preceding month. This failure on the part of the defendant to strictly comply with the contract in the matter of the remittances led to correspondence between the parties.

On May 15, 1919, the plaintiff wrote the defendant as follows:

"We are going to be rather short of funds this month, and if, for any reason, it is not convenient for you to remit us in full by May 20th for April coal, can you not arrange to send us a thirty-day note for any unpaid balance?"

On May 20, 1919, the plaintiff acknowledged receipt of a remittance, and said:

"The 10th and 20th of each month are heavy payment dates for us, and if you can arrange your payments so as to reach us on or before those dates, it will help us very much and we shall be very grateful."

On June 10th, the plaintiff wrote the defendant as follows:

"We are willing to overlook April and May as we appreciate, of course, that you were just getting started on our coal and that it naturally took you some time to get our coal introduced to your trade. Unless, however, we can get full tonnage from you during the months of June, July and August, your contract is not especially desirable as we do not expect to experience much trouble in disposing of our coal at full circular price after September 1st. We must accordingly insist that you give us orders during the next three months to cover full percentages as specified in contract."

On June 13th, the plaintiff wrote the defendant, acknowledging remittance to apply on the May account, and said:

"This leaves a balance of $ 5,297.92 owing on this account. Under the terms of your contract, this will be due on the 20th instant. Having some very heavy obligations to meet on that date, we shall appreciate it very much if you will forward...