Stephenson v. Atlantic Terra Cotta Co.

Decision Date04 November 1915
Docket Number1343.
Citation230 F. 14
PartiesSTEPHENSON v. ATLANTIC TERRA COTTA CO.
CourtU.S. Court of Appeals — Fourth Circuit

T. S Clark, of Charleston, W. Va., for plaintiff in error.

Buckner Clay, of Charleston, W. Va., for defendant in error.

Before PRITCHARD, KNAPP, and WOODS, Circuit Judges.

PRITCHARD Circuit Judge.

This is an action of assumpsit, brought by the Atlantic Terra Cotta Company, a corporation of New York, against Samuel Stephenson, to recover the sum of $5,000 with interest alleged to be due upon a contract. There was a trial before a jury, which resulted in a verdict and judgment in favor of the defendant in error for the sum of $5,000, with interest from October 24, 1910, and costs. The case comes before us on a writ of error. The plaintiff in error will hereinafter be referred to as defendant, and the defendant in error as plaintiff; such being the respective positions occupied by the parties in the court below.

Many of the facts in this case are undisputed. In 1909 the defendant Stephenson, and C. M. Alderson entered into a contract with the Moore Construction Company for the construction of a large office building in the city of Charleston. On November 22d of the same year the plaintiff, the Atlantic Terra Cotta Company, a corporation engaged in the manufacture and sale of terra cotta, having its principal office in the city of New York, entered into a contract with the Moore Construction Company for the manufacture and delivery of terra cotta for the building, according to the plans and specifications prepared by the architects. The contract provided for the delivery of the terra cotta f.o.b. plant, with freight allowed to Charleston. The contract price was $18,190, which was to be paid on or before the 20th of each and every month for material shipped during the preceding month to the amount of 85 per cent. of the value of the work; the final payment to be made within 30 days after the final shipment of the material. There were three other contracts for small amounts of additional material. These supplemental contracts brought the total price for all work and material up to $19,584.

The plaintiff began the manufacture of material immediately, and completed a considerable portion of it in the early spring; but shipment was delayed because the Moore Construction Company was not ready to receive it. Beginning with June 17, 1910, shipments were made from time to time by the plaintiff as the same were required. On October 17, 1910, the date of the agreement which forms the basis of this suit, there had been shipped material of the value of $14,530, being all the material but four carloads, of the value of $5,054. There had become due under the contract from month to month the sum of $9,418, and there would have been due on October 20th, three days later, the sum of $2,932.50. Up to this time the Construction Company had only paid $2,500, which was paid on September 8th, and had been allowed freight charges to the amount of $693.65.

There was considerable correspondence between the parties, and it developed from this correspondence that the failure of the Moore Construction Company to make the payments as they became due was due to the fact that the owners, Alderson and Stephenson, had defaulted in their payments to the Construction Company. Under date of September 19, 1910, C. M. Alderson wrote a letter to the plaintiff explaining the delay, and in this letter he says:

'Being one of the parties interested in the construction of the Alderson-Stephenson Building in this city, by the Moore Construction Company, I am advised that you have been urging the Moore Construction Company for remittances, and as a matter of fairness to that company I beg to say that the owners of the building have been delayed in making some of their payments to the Construction Company, and this delay has prevented the company from making prompt remittances to you.' The Moore Construction Company failed to make further payments, and on October 13th plaintiff sent the following night letter:
'In view of delay of owners in making payments to you, situation if your account is extremely unsatisfactory. Under present conditions we should have ordered payments and some detailed statement as to state of operation and assurance for future. Please reply by same.'

Later a meeting was arranged between the plaintiff and the Moore Construction Company for October 17th, at Charleston, and W. H. Powell, president of the Terra Cotta Company, came to Charleston on that day and met W. E. Moore, president of the Construction Company, and the two together went to see the defendant, Stephenson. With reference to this meeting, Mr. Powell says:

'I met Mr. Moore, and went to lunch with him, and I told him we were very much dissatisfied with the condition of the account; that we did not propose to go ahead and send them any more terra cotta until we were paid for the terra cotta that had been delivered, payments for which were long overdue, and until we had satisfactory assurance as to payment for the terra cotta that was still to be delivered.'

The result of the conference between the parties was that Mr. Moore gave Mr. Powell the check of his company for $5,000, dated October 22d; Messrs. Stephenson and Moore gave to Mr. Powell one of the series of notes owned by Stephenson, executed by the Carroll Hardwood Lumber Company, which was to be credited on account at its discount value, $4,833.34; and the defendant, Stephenson, agreed to have a check for $5,000 in the plaintiff's office the following Monday, being October 24th. It is contended by the plaintiff that, when all these payments were made, his company was to deliver to the Moore Construction Company the remaining four carloads of material.

The check of the Moore Construction Company was not paid when presented, but was protested and returned, and later, on October 27th, the bank at Charleston notified the plaintiff by wire that the check would be paid. It was paid about November 5th. The check of Stephenson was not sent when promised, so that on October 25th, the day after it was to be in New York, the plaintiff company wired Mr. Stephenson as follows:

'Check for five thousand not here as promised. Answer by wire.'

The same day Mr. Stephenson wired:

'Mail check this evening; was a little disappointed.'

This check was never sent, and it is upon Stephenson's agreement to pay this $5,000 and his failure to do so that this action was instituted.

After the plaintiff had been notified by the bank that on October 27th the check of the Moore Construction Company would be paid, if again presented, this company, by wire on October 26th, authorized the delivery by the railroad of the two carloads of material next in order, and these carloads were thereupon delivered to the Construction Company. It is also contended by the plaintiff that the remaining carloads were never delivered because of the failure of Stephenson to make payment of the $5,000 as promised, and the failure of the Construction Company to make any further payments on account. These cars were held pending negotiations between the parties until November 17th, when they were finally unloaded and stored; Stephenson and the Moore Construction Company having failed to pay the $5,000 promised by Stephenson, and the plaintiff being unwilling to make delivery until such payment was made. This material was eventually sold, and brought $150, and out of this storage charges of $75 were paid. The material having been manufactured especially for the Alderson-Stephenson building, it was of little value for anything else.

There remained due on the account of the Moore Construction Company a balance of $5,995.19. This amount was never collected. The Moore Construction Company became badly involved and on the 18th day of April, 1914, it was adjudged a bankrupt. After Stephenson's telegram of October 25th, that he would mail check that evening, the plaintiff did not hear from him again until November 10, 1910, when he wrote as follows:

'Atlantic Terra Cotta Company, 1170 Broadway, New York-- Gentlemen: In re Terra Cotta for Alderson-Stephenson Building, Charleston. The Moore Construction Company advise me that you are withholding terra cotta needed for the completion of this building because I did not advance you $5,000 on the Moore Construction Company contract with you. In this connection I beg to say that when your Mr. Powell was here several weeks ago he stated to me that the terra cotta had all been shipped before he left New York and that it would be here in a day or so. Assuming that Mr. Powell's statement was correct, I was willing to advance $5,000, even though the Moore Construction Company did not then owe you such sum and Mr. Moore, president of the Construction Company, stated in the presence of your Mr. Powell and myself that such sum was not then due. Subsequently I learned that the terra cotta had not been shipped as represented, and I did not therefore send check mentioned in my wire. I shall allow the matter to take its course upon the contract between you and the Moore Construction Company.
'Very truly yours,

Samuel Stephenson.'

The plaintiff company replied by night letter on November 14th, emphatically denying this statement. On November 15th Mr. Stephenson wrote again. Among other things he said:

'In reply beg to confirm my statement that Mr. Powell, when here, stated to me that the terra cotta had all been shipped-- not that one or two cars of it had been shipped, and that the balance would be shipped at a subsequent time. Your Mr. Powell also carefully concealed the important fact that the terra cotta which had been shipped was consigned to your order, and not to the order of the Moore
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3 cases
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    ...will not be disturbed for want of a proper instruction, unless it was requested and refused ...." See also Stephenson v. Atlantic Terra Cotta Co., 230 F. 14 (4th Cir.1915); Jaeger v. City Railway Co., 72 W.Va. 307, 78 S.E. 59 (1913). Rule 51 of the West Virginia Rules of Civil Procedure pro......
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