Sterling-Midland Coal Co. v. Great Lakes Coal & Coke Co.

• Decision Date: 16 April 1929
• Docket Number: No. 19262.,19262.
• Citation: 334 Ill. 281,165 N.E. 793
• Court: Illinois Supreme Court
• Parties: STERLING-MIDLAND COAL CO. v. GREAT LAKES COAL & COKE CO.

334 Ill. 281

165 N.E. 793

STERLING-MIDLAND COAL CO.

v.GREAT LAKES COAL & COKE CO.

No. 19262.

Supreme Court of Illinois.

Feb. 20, 1929.

Rehearing Denied April 16, 1929.

Error to First Branch Appellate Court, First District, on Appeal from Municipal Court of Chicago; Daniel P. Trude, Judge.

Action by the Sterling-Midland Coal Company against the Great Lakes Coal & Coke Company. Judgment for plaintiff was affirmed by the Appellate Court, and defendant brings certiorari.

Reversed and remanded.Winston, Strawn & Shaw, of Chicago (Silas H. Strawn, J. Sidney Condit, Grier D. Patterson, Charles J. Calderini, and M. Ogden West, all of Chicago, of counsel), for plaintiff in error.

John J. Sherlock and Haight, Adcock & Banning, all of Chicago, for defendant in error.

HEARD, J.

Defendant in error, the Sterling-Midland Coal Company (hereinafter called plaintiff), brought suit in assumpsit in the municipal court of Chicago against plaintiff in error, the Great Lakes Coal and Coke Company (hereinafter called defendant), and upon a trial recovered a judgment for $31,047.55, from which judgment an appeal was taken by defendant to the Appellate Court for the First District, which court affirmed the judgment. A writ of certiorari to review the record was allowed by this court at the October, 1928, term.

Plaintiff claimed for money due for various quantities and kinds of coal sold and delivered to defendant pursuant to certain written contracts between them. There is no controversy between the parties as to the amount due from defendant to plaintiff therefor. Defendant pleaded a set-off, alleging the making of two written contracts for the sale of coal by defendant to plaintiff, and that plaintiff failed and refused to accept delivery of approximately 105,640 tons of coal contracted for, and asked for damages based upon the difference between the contract and market prices of this shortage, amounting to $73,948.

The Black Servant Coal Company operated what is known as a ‘strip mine’ in Elkville, Jackson county, Ill. On March 26, 1924, it entered into a written contract with the H. S. Odbert Coal Company for the sale of coal to be shipped from this mine at a price of $1.20 per ton for a period beginning April 1, 1924, and ending March 1, 1925. This contract contained the following provision:

‘ Quality-All coal shall be clean, well prepared and reasonably free from bone, slate, soapstone, shale, fire-clay, sulphur and other non-combustible impurities. Coal is guaranteed to analyze not more than fifteen per cent ash, dry basis, and not less than 11,000 British thermal units, as received.’

On the same date the Odbert Coal Company made a contract in writing whereby it agreed to sell, and the defendant agreed to buy, the same coal. With the exception of the names of the parties and the price, the contracts were identical, and contained identical stipulations as to the quality of the coal to be delivered. An analysis of this coal made on March 27, 1924, disclosed an ash content of 17.24 per cent.

George Skakel, of the defendant company, about this time, on behalf of the defendant, opened negotiations for the sale of coal to plaintiff. On April 4, 1924, as a result of these negotiations, the parties hereto entered into a contract containing, among others, the following provisions:

‘Great Lakes Coal and Coke Co., an Illinois corporation, hereinafter termed the seller, agrees to sell, and the Sterling-Midland Coal Co., an Illinois corporation, hereinafter termed the buyer, agrees to buy, coal of the kind, quality, size and description and at the prices and upon the terms herein below set forth.

‘ Kind-Coal to be shipped from the stripping property of the Black Servant Coal Co., located at or near Elkville, Jackson county, Illinois, on the Illinois Central railroad.

‘ Quantity and Rate of Shipment-Thirty cars per week at a rate of approximately five cars per day.

‘ Size-Screenings which have passed through the perforation of a round-hole screen the diameters of which shall not be less than 1 1/4? nor more than 2?, at the option of the seller. In event that seller is unable to ship screenings at the rate shown herein, he is to make up any deficiency by crushing mine run or other sizes so that the coal, after passing through the crusher, will pass through the perforations of round-hole screens the diameters of which shall not be less than 1 1/4? or more than 2?.

‘ Terms of Payment-Cash on or before the 20th of month following shipment. If the credit of the buyer shall at any time, in the judgment of the seller, become impaired, the seller reserves the right to require satisfactory security from the buyer before making further shipments. Time of payment is of the essence of this contract. Failure to pay according to terms hereof shall give the seller unrestricted right, without other demand or notice, to rescind this contract and to proceed to demand and collect all amounts due for coal previously sold and delivered under this contract. No waiver shall be held to arise from failure of the seller to exercise this right.

‘ Weights-Weights obtained by the railroad company at initial weighing station shall govern settlements.

‘ Remarks-Coal is to be consigned to the Western Electric Co., Chicago.

‘ Price-$1.50 per ton f. o. b. car mines, Elkville, Illinois.

‘ Conditions Affecting Contract- * * * It is further understood that during any period of time when seller's receipts of coal of the character specified shall be reduced but not wholly terminated by strikes, lock-outs, delays, shortage of cars, or by failure or other contingencies of transportation, shortageof labor or material caused by war, insurrections or riots, floods, acts of Providence, accidents or other causes beyond its control, the seller shall have the right to furnish to the buyer such proportion, only, of the coal of said character then actually available for delivery by the seller as the maximum daily amount of such coal hereby contracted for bears to the contracts or obligations for such coal held by the seller. * * * There are no understandings or agreements relative to this contract or its subject matter that are not fully expressed herein.

‘This contract shall take effect on the 14th day of April, 1924, and shall continue in force until and including the 31st day of March, 1925.

‘In witness whereof the parties hereto have executed this agreement in duplicate on the 4th day of April, 1924.

‘Great Lakes Coal & Coke Co.,

‘By George Skakel.

‘Sterling-Midland Coal Co.,

‘By W. J. O'Brien.’

On April 23, 1924, a similar contract was entered into for the sale of 18 to 30 cars per week, at the seller's option, at a price of $1.50 per ton. These two contracts were exactly alike, with the exception of the quantity and rate of shipment. Coal was delivered by defendant to plaintiff under these contracts from time to time until about August 25, when plaintiff notified defendant that it would not take any more of the coal. Payment was made by plaintiff to defendant for all coal which was delivered under the contracts. The Western Electric Company was one of the largest customers of plaintiff, and the coal sold to plaintiff was consigned to that company. In July, 1924, the Western Electric Company complained to plaintiff of the quality of the coal delivered, and from that time until the latter part of August numerous complaints were communicated to defendant.

The cause was tried by the court, and findings of fact and propositions of law were submitted. The trial court, over the objection of defendant, permitted the introduction of parol evidence tending to show the purpose for which the coal was bought, that there was an express warranty of the quality and also parol evidence tending to show that the sale was induced by sample. As the coal offered was undoubtedly of the size and from the particular mine described in the contracts, it is apparent that the controlling question in the case is whether the court erred in admitting this parol evidence.

At the request of defendant, the court held that it is the law that, when a written contract of sale upon its face is couched in terms such as import a legal obligation, without any uncertainty as to the object or extent of the engagement, it is conclusively presumed that the whole engagement of the parties and the extent and manner of their undertaking have been reduced to writing. This proposition was marked by the court as ‘held,’ with the statement, however, that it was not applicable. The court held as a matter of law that the contracts between the parties, dated April 4 and April 23, 1924, were, respectively, incomplete, and that parol evidence not inconsistent with the contracts was admissible to show the real intent of the parties thereto. The court also held as a matter of law that parol evidence was admissible to show the quality of the coal purchased by plaintiff on the contracts between the parties dated April 4 and April 23, 1924; also that parol evidence was admissible to show the purpose for which the coal was purchased by plaintiff under these contracts. Upon the facts, the court held that plaintiff made known to defendant the particular purpose for which the coal in question was required, and that plaintiff relied on defendant's skill or judgment, and that various installments of coal furnished by defendant to plaintiff in the months of July and August, 1924, were not suitable for the particular purpose for which the goods were required; further, that plaintiff did not receive the quality of coal bargained for under the contracts between the parties.

[1][2] It is the contention of defendant that, since these contracts were complete, and include, as it asserts, a definite description of the quality of the coal in question, the court erred in admitting parol testimony tending to show that a sample of the coal had been taken prior to the execution of the contract, that defendant had been informed of the purposes...