Rose-Derry Corp.. v. Proctor & Schwartz, Inc.

• Citation: 288 Mass. 332,193 N.E. 50
• Court: United States State Supreme Judicial Court of Massachusetts
• Decision Date: 01 December 1934
• Parties: ROSE-DERRY CORPORATION v. PROCTOR & SCHWARTZ, Inc. PROCTOR & SCHWARTZ, Inc., v. ROSEDERRY CORPORATION.

288 Mass. 332

193 N.E. 50

ROSE-DERRY CORPORATION

v.PROCTOR & SCHWARTZ, Inc.

PROCTOR & SCHWARTZ, Inc.,

v.ROSEDERRY CORPORATION.

Supreme Judicial Court of Massachusetts, Suffolk.

Dec. 1, 1934.

Exceptions from Superior Court, Suffolk County; Morton, Judge.

Cross-actions of contract by the Rose-Derry Corporation against Proctor & Schwartz, Inc., and by Proctor & Schwartz, Inc., against the Rose-Derry Corporation, tried together. Verdict for the Rose-Derry Corporation for $1, and verdict for Proctor & Schwartz, Inc., for $14,865.50, and both parties bring exceptions.

Exceptions of the Rose-Derry Corporation and of Proctor & Schwartz, Inc., overruled, in the case in which Proctor & Schwartz, Inc., was the defendant, and exceptions of the Rose-Derry Corporation overruled in the case in which the Rose-Derry Corporation was defendant, and judgment ordered for Proctor & Schwartz, Inc., on the verdict.

C. F. Rowley and D. R. Pokross, both of Boston, for Proctor & schwartz, inc.

W. B. Keenan, of Boston, for Rose-Derry Corporation.

DONAHUE, Justice.

These are actions of contract in the first of which Rose-Derry Corporation as plaintiff has sued Proctor & Schwartz, Inc., on two written agreements. The second action is brought by Proctor & Schwartz, Inc., against Rose-Derry Corporation. The declaration contains counts on notes given by the latter as payment under the written agreements and a count for goods sold and delivered to the Rose-Derry Corporation. The cases were tried together in the Superior Court before a jury. In reply to the question submitted: ‘Did Proctor & Schwartz, Inc., fail to make the change-over of the four Derry machines of Rose-Derry Corporation into the double doffer type in a good and workmanlike manner or fail to use materials of suitable quality according to the specifications of the contracts' the jury answered ‘Yes.’ After the jury returned this answer and the answer ‘No’ to the question whether there had been an accord and satisfaction, the judge ruled: ‘There is a provision in the contract to the effect that damages are limited * * * to the cost of making good the defective machinery and limited to that only,’ and, there being no evidence as to such damage, directed the jury to return a verdict for the plaintiff for $1 in the case in which the Rose-Derry Corporation was plaintiff.

1. The Rose-Derry Corporation, hereinafter referred to as the Rose-Derry company, was in 1929, and for many years had been, engaged in the manufacture of cotton felt and felt mattesses and in dealing in cotton waste. It had in its factory at Derry, New Hampshire, four so called ‘garnett’ machines which were used to card and process cotton waste and turn it into felt. It had two such machines at its factory in Mechanicsville, New York. In July of that year after oral negotiations between the parties, Proctor & Schwartz, Inc., hereinafter referred to as the Proctor company, made a proposal on a printed form with typewritten insertions to furnish the parts and appliances to convert two of the machines at the Derry factory into the ‘new design Proctor double doffer delivery machines.’ This proposal was accepted in writing by the Rose-Derry company. In September of the same year the Proctor company made a substantially similar proposal which was also accepted in writing by the Rose-Derry company with reference to two other machines at the Derry factory and two which were at the Mechanicsville factory. No question is here raised as to the two machines last mentioned. The four Derry manchines were taken apart, shipped to the Philadelphia plant of the Proctor company, there remodelled, shipped back to Derry, and erected under the supervision of an employee of the Proctor company. The work of erection was completed in January, 1930, and the machines were put in use. Complaints were made by the Rose-Derry company as to the quality of felt that the remodelled machines produced and various adjustments of the machines were made from time to time by the Proctor company in the effort to improve that quality. In the autumn of 1930 at the suggestion of an employee or agent of the Proctor company the four machines were shipped to its Boston factory, their cylinders recovered with heat treated wire without cost to the Rose-Derry company, and they were shipped back to Derry and put in operation. There was no contention that thereafterwards the quality of felt that the machines produced was improper or that the machines did not operate properly.

The jury, by its answer to the question submitted, found that the Proctor company failed to perform its contracts in a good and workmanlike manner or to use materials of suitable quality. Performance in that manner of workmanship and with that quality of material was in terms required by the contracts. The judge in effect ruled that the contracts were to be interpreted as limiting the amount of recoverable damages for such failure in performance to the cost of making good the defective machinery. There was at the trial no evidence from which such cost could be determined. It is the contention of the plaintiff that such an interpretation of the contracts was not warranted and that it was entitled to recover damages for what is described in its declaration as ‘losses of time, sales, profits, production overhead, and other expenses, and raw and manufactured goods and materials.’ which losses it is alleged resulted from the failure of the Proctor company to perform its contracts.

In form, the written contracts are substantially the same. Each begins with the statement of a proposal by the Proctor company to furnish the parts to convert the machines of the Rose-Derry company into machines of another type and to furnish other specified parts and appliances. Then follow clauses with reference to the erection of the machines at the Derry plant upon their completion, to the matter of the time of shipment from Philadelphia, to parts or appliances to be furnished by the Rose-Derry company in connection with the erection, to the amount and method of payment, to the quality of materials and the character of the workmanship and the manner and time of completion of the work and other clauses. The controversy of the parties with regard to the interpretation of the contracts centers in the following clause: ‘It is understood that all machinery, materials and supplies herein specified shall be of good and suitable quality, and that all work specified shall be performed in a good and workmanlike manner and shall be completed in the manner and at the time specified, subject to the reservation hereinafter contained as to delays caused by causes not within the Company's control. This shall be the limit of the [Proctor] Company's liability under this contract.’

The first sentence in this paragraph considered for the moment apart from the following sentence was manifestly intended as a statement of the quality of performance required to the Proctor company with regard to materials, workmanship and manner and time of completion. In a contract of this sort some specification of the required character of performance in these respects would naturally be expected. The sentence deals with the manner of performance by the Proctor company up to the time of completion of the work undertaken. Elsewhere in the contracts there are references to the operative qualities of the machines after completion. In one of the two contracts it is stated: ‘It is understood that the productive capacity of each’ of the machines shall be a stated quantity of material per hour, and both contracts recite that the capacity and mechanical operation of...