Superior Combustion Industries v. Schollman Bros. Co.

• Decision Date: 18 November 1959
• Docket Number: No. 16190.,16190.
• Parties: SUPERIOR COMBUSTION INDUSTRIES, INC., a corporation, Appellant, v. SCHOLLMAN BROS. CO., a corporation, Appellee.
• Court: U.S. Court of Appeals — Eighth Circuit

271 F.2d 357 (1959)

SUPERIOR COMBUSTION INDUSTRIES, INC., a corporation, Appellant, v. SCHOLLMAN BROS. CO., a corporation, Appellee.

No. 16190.

United States Court of Appeals Eighth Circuit.

November 2, 1959.

Rehearing Denied November 18, 1959.

Leo E. Sherman, New York City, and Tyler B. Gaines, Omaha, Neb. (Gaines, Spittler, Neely, Otis & Moore, Omaha, Neb., were with them on the brief), for appellant.

Robert W. Green and Marvin G. Schmid, Omaha, Neb., for appellee.

Before SANBORN, VAN OOSTERHOUT, and MATTHES, Circuit Judges.

VAN OOSTERHOUT, Circuit Judge.

This is an appeal by defendant from final judgment entered against it upon a jury verdict for damages sustained by plaintiff as a result of an explosion of a boiler unit sold to plaintiff by defendant.

Plaintiff, a Nebraska corporation engaged in the plumbing and heating business, does a considerable amount of commercial and industrial contracting. Defendant is a foreign corporation which manufactures boilers. Jurisdiction upon the basis of diversity of citizenship is established.

Plaintiff had a contract with the United States Air Force to furnish and install in a building at Offutt Air Force Base a steam generating unit which was to be a multiple drum water-tube package steel boiler with integrally mounted burner, fans, combustion, and controls, so as to make a complete self-contained unit designed to fire on gas and fuel oil. Defendant through Horton, acting as manufacturer's representative, solicited and obtained from the plaintiff its order for the boiler here involved. Horton and the defendant were familiar with the applicable Air Force specifications. Plaintiff on August 31, 1955, issued to defendant its signed order reading:

"1. Superior DS-6-29 Water Tube Package Boiler with Steam atomizing burner and accessories as per your quotation dated 8-31-55 and subject to the approval of the Offutt Field Base Contractor with Start-Up Service and 1-Year warranty on items furnished

F.O.B. Cars Offutt

Field ..........$23,070.00"

This order was promptly accepted by the defendant. In accordance with Air Force requirements, defendant, through plaintiff, furnished the Air Force the detailed specifications of the boiler being furnished, which specifications were approved by the Air Force.

A boiler of the model and type ordered was shipped to the plaintiff by rail on March 23, 1956, and was paid for in full by the plaintiff on April 24, 1956. Thereafter, plaintiff moved the boiler from the railroad yards to the place of installation, mounted the boiler on a base it had prepared, connected the steam, gas, oil, water, and electrical lines, and put in place the breeching between the boiler and the smokestack. After the boiler was so installed, defendant, in response to plaintiff's request to provide "start-up service" contracted for, sent out its employee Sandor to provide such service. Sandor, after several days of checking and adjusting, started and ran the boiler satisfactorily on gas for about three hours on October 17, 1956. On October 18 he again ran the boiler on gas from 8:00 o'clock A. M. to 11:00 o'clock A. M. At 11 o'clock A. M. he began his attempts to fire the boiler on oil. At about 12:00 o'clock noon an explosion occurred in the combustion chamber of the boiler unit, causing considerable damage to the unit and the building. At plaintiff's request defendant furnished repair parts and service on the boiler unit. Defendant then again furnished "start-up service" and made the tests and demonstrations required by the Air Force. The boiler unit was accepted by the Air Force, and plaintiff was paid the full contract price. Additional facts will be set out hereinafter.

Plaintiff brought this action to recover for damages caused by the explosion to the building and the boiler unit in the amount of $18,309.79.¹

Plaintiff's first claim is based on the theory that the explosion was caused by the negligence of defendant's agent Sandor. As an alternate claim plaintiff asserted that the defendant was liable for the damages caused on the basis of breach of contract and breach of warranty, the material part of said claim reading:

"The equipment ordered and furnished was a Package Steam Generator arranged for oil or natural gas firing and defendant agreed, represented and warranted to plaintiff that it would be fully assembled, completed, and tested at the factory, meet the specifications contained in AF Contract No. AF 25(600)-515, dated July 29, 1955 (copy of which is in defendant\'s possession) and be ready for firing and operation when installed and connected, and defendant further agreed that defendant would meet and comply with the requirements of the purchase order for start-up service and also with A.F. contract specifications with respect to operating tests, instruction of Air Force personnel, demonstration of operation to the satisfaction of the government for approval and acceptance, and guarantee. Said equipment was defective, did not meet said specifications, and was not ready for firing and operation after installation and connection, and when defendant, pursuant to its agreement, was endeavoring to fire it with oil, said boiler exploded, damaging the boiler, the breeching between the smoke stack and boiler, and the smoke stack in the approximate sum of $18,698.77 and defendant breached its contract and express warranties with respect to start-up service and meeting and complying with said contract specifications."

Defendant denied that the explosion was caused by the negligence of its agent and in effect denied the material allegations of the alternate claim. Defendant counterclaimed for $3,137.83 which it claimed was the reasonable cost of repairs and services in connection with the repair of the boiler after the explosion.

Defendant at the close of plaintiff's evidence and again at the close of all of the evidence filed a motion for dismissal and for directed verdict as to plaintiff's first claim and alternate claim. In said motion defendant urged that there was no substantial evidence to support a finding that the explosion was proximately caused by the negligence of the defendant or its employee. Defendant's motion directed to the alternate claim urged, among other things, that the warranties pleaded were not proven, and, if proven, no breach thereof was established; and that, if there was any breach of contract or warranty, defendant failed to show that such breach was the cause of the explosion and the damages resulting therefrom. Ruling on the motions was reserved. Similar contentions were made in exceptions to instructions and instructions requested and refused.

The case was submitted to the jury upon the basis of both the negligence claim and the alternate claim, the court, however, stating:

"The Plaintiff\'s claim for negligence and for breach of contract and warranty are alternative claims, and if you should find for Plaintiff on more than one claim, your verdict, nevertheless shall not exceed the sum of $18,309.79, the maximum amount established by the Plaintiff\'s evidence."

The court also instructed that the amount of defendant's counterclaim should be allowed.² The general verdict rendered in favor of the plaintiff was for the difference between its maximum claim and the counterclaim.

After the verdict defendant filed motion for judgment in accordance with its motion for directed verdict and for a new trial, which motion was overruled. Thereupon, timely appeal was taken from the final judgment.

We summarize the principal errors relied upon for reversal:

1. There is no substantial evidence to support plaintiff's claim based upon negligence.

2. There is no substantial evidence to support plaintiff's claim based upon breach of contract.

3. There is no substantial evidence to support a recovery for plaintiff on its breach of warranty claim.

4. Defendant is entitled to a new trial because one or more of the foregoing theories of recovery was erroneously submitted to the jury, and when, as here, a general verdict is returned, it is impossible to determine the theory upon which the jury returned the verdict.

Other errors were asserted, such as, Horton's lack of authority to make the contract and warranty on behalf of the defendant, and alleged erroneous admission and exclusion of evidence, but we do not deem consideration of such issues is necessary for the disposition of this appeal.

In determining the sufficiency of the evidence to support the verdict we must, of course, under the established law prevailing in Nebraska, where this action arose, and in this court view the evidence in the light most favorable to the plaintiff in whose favor the jury, returned this verdict. So viewing the evidence, we are satisfied that the plaintiff made a case for the jury on the negligence issue. It is undisputed that Sandor, the person sent out by the defendant to start the boiler unit, was defendant's authorized agent for such purpose and was acting within the scope of his authority. Sandor had complete charge of the start-up operation.

We do not understand that plaintiff contends that a res ipsa loquitur situation is here presented. The boiler had been out of defendant's control for a number of months. As previously stated, much work had been done by the plaintiff installing and connecting the boiler. The court did not submit the case on res ipsa loquitur. Rather, the court submitted the negligence issue on the basis of specific acts of negligence on the part of Sandor.

We shall briefly explain some features of the boiler operation without attempting to completely describe the operation of this complicated mechanism. When the boiler is fired on oil, the fuel is injected into the burner by an oil gun. The oil line and the steam line are connected to this gun. The principle involved in oil firing is that dry steam under pressure mixes with the oil under pressure, atomizing the oil and causing it to enter the burner in the form of...