Shaw v. Water Supply & Storage Co.

• Citation: 23 Colo.App. 110,128 P. 480
• Court: Colorado Court of Appeals
• Decision Date: 11 November 1912
• Parties: SHAW et al. v. WATER SUPPLY & STORAGE CO. [d]

128 P. 480

23 Colo.App. 110

SHAW et al. v. WATER SUPPLY & STORAGE CO. ^[d]

Court of Appeals of Colorado

November 11, 1912

Appeal from District Court, Larimer County; Harry P. Gamble, Judge.

Action between S.G. Shaw and another, copartners, and the Water Supply & Storage Company. From a judgment for the latter, the former appeal. Conditionally affirmed.

Rogers, Ellis & Johnson, of Denver, for appellants.

Leftwich. Clammer & Temple, of Ft. Collins, for appellee.

HURLBUT J.

This case is appealed from the district court of Larimer county and is founded upon an alleged breach of warranty with respect to the sale and purchase of a steam shovel.

All the issues of fact were sharply contested at the trial, and the testimony was decidedly conflicting concerning the same. The jury having found in favor of plaintiff, and there appearing to be sufficient evidence to sustain the verdict, we are concluded thereby, under the well-settled rule in this jurisdiction, that when there is sufficient evidence to sustain a verdict founded upon conflicting testimony the same will not be disturbed. We have carefully considered the instructions of the court given and refused, and are satisfied that, taking them as a whole, the action of the court in giving or refusing the same is free from reversible error, with the exception of instructions No. 8 given by the court and No. 17 refused. Therefore, as we view the record assignments of error numbered 26 and 32 present the decisive matters for consideration on this appeal.

A written contract of warranty upon which the action is based consists of two documents, one executed August 28, 1906, the other September 3, 1906. The first reads as follows "The Water Storage & Supply Co., Fort Collins, Colo.--Gentlemen: We offer you a 45-ton secondhand Bucyrus shovel, 1 1/2 yard dipper standard-gauge trucks in good working condition, for the sum of $5,200.00, fifty-two hundred dollars, f.o.b., Tacoma, Wash., less 2 per cent. discount for cash. (This offer is subject to prior sale.) We also will supply you with competent man to put same in operation and educate your employés in operation thereof. Yours respectfully, S.G. Shaw & Co., per A.R. Foxley, 1721 Arapahoe street, Denver"--the second as follows: "Sept. 3-06. The Water Supply & Storage Co., Fort Collins, Colo.--Gentlemen: Referring to Bucyrus Steam Shovel No. 102, for which you have placed your order with us, we would say that we hereby guarantee the same to be in good working condition. The boiler having been tested to 100 pounds working pressure, and all the machinery inspected and in good repair and in as good condition as possible for a secondhand shovel, and in event of not proving so will refund all money paid by you on demand. S.G. Shaw & Co., per A.R. Foxley, Representative." The court instructed the jury that these two instruments constituted the written contract of sale between the parties, and we think properly. Appellants insist that a letter written by them September 7, 1906, and directed to the appellee company, which contained certain specifications concerning the shovel, should also be considered as part of the contract. We do not agree with appellants in this contention. The letter and specifications referred to were written and mailed to appellee four days after the contract had been consummated. There is no showing in the record that this was to be considered by the parties as part of the contract.

As will be noticed, the contract price of the shovel was $5,200 f.o.b. Tacoma, Wash., $4,000 of which was paid by appellee on September 6, 1906. The important and decisive question before the court is as to the proper construction to be given the contract, and particularly the clause found in the letter of September 3d, viz.: "And in the event of not proving so will refund all money paid by you on demand."

It seems to be the universal rule that, in construing a written contract, the courts will endeavor to arrive at the intentions of the parties as manifested by the language used, if such intentions can be discovered therefrom. The word "refund," as here used, is defined by Bouvier's Law Dictionary, vol. 2, p. 859, as follows: "To pay back by the party who has received it, to the party who has paid it, money which ought not to have been paid." Webster's Universal Dictionary, published in 1912, gives several definitions, viz.: (a) "To pour back (obs.);" (b) "to repay;" (c) "to return in payment or compensation for what has been taken; to restore;" (d) "to reimburse (obs.)."

In attempting to arrive at what was in the minds of the contracting parties at the time of the execution of the contract, it might be well to briefly state the situation. Appellee was a domestic corporation operating in Larimer county. It was engaged in constructing reservoirs, building ditches, and supplying water to consumers. At the time this contract was made, it was either building, or about to build, an irrigating ditch in the neighborhood of Ft. Collins, and it seems had been contemplating the purchase of a steam shovel to be used in excavating the ditch. Appellants, learning of this, submitted to them the offer of August 28th, therein proposing to sell to them the shovel upon the terms and conditions therein expressed. Afterwards it appears that appellee considered this offer favorably, and some time between that date and September 3d decided to purchase the shovel in pursuance of the offer. On the last-mentioned day the contract was consummated and the guaranty made concerning the condition of the shovel, etc. It was well known to both parties that the shovel was in the state of Washington, and it can be fairly presumed from the record that all parties knew the shovel was to be brought to Ft. Collins and used on a ditch in that vicinity. Appellants vigorously contend that the contract clearly shows on its face that, in case of a breach of warranty as to the condition of the shovel, their liability was terminated by repayment to appellee of the $4,000 paid on the purchase price, with interest, while appellee claims that the phrase "will refund all money paid by you on demand" clearly meant all moneys paid out by it, either on the purchase price or for freight, installation, or other expenses that occurred in attempting to demonstrate its efficiency for the work required under the warranty. Inasmuch as the sellers of this shovel were not manufacturers or dealers in such implements as a regular business, but were merely arise in a resale of the same, such facts being known to appellee, and inasmuch as neither party had ever seen the shovel and had no personal knowledge of its conditions, appellants relying entirely upon statements from the railroad company and some individual in Washington as to the same, we cannot believe it was in the minds, or in contemplation, of the parties that, if the shovel failed to conform to the terms of warranty, appellants were liable for any amount beyond the money paid on the purchase price, nor does it appear to be a reasonable presumption that appellants intended in this transaction to assume a liability so great as that entailed upon them by this verdict. It appears rather from its reading that in making this contract appellants intended to limit their liability to a refund of the purchase price in case the shovel did not prove as represented, and had no intention of assuming the liability that would result from an action upon breach of a general warranty.

There is another matter appearing of record which is rather significant upon the question of the intentions of the parties who made this contract and how they understood it and that is the letter written by appellee to appellants under date of December 14, 1906, which was after the shovel had been in operation on the ditch for several weeks. This letter appears to be the first positive complaint of appellee concerning the shovel. It definitely repudiates the sale, pronounces the shovel worthless, as in no way conforming to the terms of the warranty, refuses to accept the same, notifies them that the shovel is at their disposal and subject to their order, and closes with the following sentence: "We also beg to notify you that this company, pursuant to the terms of your guarantee, hereby demands that you immediately refund to this company the amount paid to you on account, to wit, the sum of four thousand dollars ($4,000.00), and we shall be pleased to receive your remittance therefor at once." It is a fair interpretation of this letter that appellee at that late date considered the liability of appellants to be only the $4,000 demanded. It seems that, if it had placed the construction upon the contract that it did in its subsequent suit and at the trial, it would have at least intimated in this letter that it had additional claims for damages against appellants. It is not altogether clear from the evidence but that the expenditure of $100 in repairs would have placed the shovel in good, serviceable, working order to do efficient work within its capacity. However, the jury thought otherwise, as their verdict indicates. The warranty did not go to the amount of work the...