Yellow Jacket Mining Co. v. Tegarden

• Decision Date: 15 July 1912
• Citation: 149 S.W. 518,104 Ark. 573
• Parties: YELLOW JACKET MINING COMPANY v. TEGARDEN
• Court: Arkansas Supreme Court

149 S.W. 518

104 Ark. 573

YELLOW JACKET MINING COMPANY v. TEGARDEN

Supreme Court of Arkansas

July 15, 1912

[Copyrighted Material Omitted]

Appeal from Marion Chancery Court; T. H. Humphreys, Chancellor affirmed.

STATEMENT BY THE COURT

This is an action instituted by Tegarden Brothers to recover a balance of $ 4,000 alleged to be due for the purchase money of a concentrating plant constructed on certain land in Marion County, and to enforce a mechanics' lien thereon. No question is raised as to the right to enforce the lien. The defendant admitted the purchase of the property and that a balance of the purchase money was due thereon, but resisted recovery of the full amount sued for. It pleaded as a set-off a note for $ 445.66, and also a counterclaim for damages which it alleged it sustained by reason of the breach by plaintiffs of certain warranties contained in the contract of sale of the property. It alleged that these damages, together with said set-off, amounted to $ 3,635.13, leaving a balance of $ 364.87, for which it offered to confess judgment.

The plaintiffs owned and were operating a concentrating mill located on land known as White Eagle Mine, in Marion County and all parts of the mill were second-hand, having been operated for some years. On October 1, 1910, they sold the mill to the defendant, and agreed to move same to its property, known as Philadelphia mine, located in the same county, for the sum of $ 7,000, to be paid in installments. The sale was evidenced by a written contract. By the terms of said contract, it was provided that "said mill herein conveyed is to be a first-class one of 100 tons daily capacity, and is understood to include all buildings boilers, engines, pumps, crushers, conveyors, breakers and all other machinery, appurtenances, appliances and tools belonging to and used in connection with the said mill without regard to number, value or amount." The plaintiffs also agreed therein to move the mill and buildings to defendant's property, and there erect and construct same "in a good and workmanlike manner upon the plan of its construction at the White Eagle Mine." They also agreed to furnish certain parts of machinery not included in the secondhand plant, amongst which was a self-feeding hopper.

The contract further provided: "Party of the second part (plaintiffs) further agrees, in order to test the construction of said mill and buildings and as further guaranty of its good condition, to operate the same after it is erected at their own expense until they have manufactured or milled one carload of concentrates ready for shipment. * * * "The party of the first part (defendant) agrees to accept said mill and pay therefor the sum of seven thousand dollars, as follows: $ 1,000 on the execution of this contract; $ 2,000 when said mill has been removed and rebuilt on the property of the party of the first part as herein provided, and after it has been operated for such a length of time as to mill a carload of concentrates; $ 4,000 thirty days after the date of said payment of $ 2,000, provided at the time said payment of $ 4,000 is due the mill shall prove satisfactory and free from defects. And, in the event that there should be any defects in the erection of said mill occasioned by the negligence or lack of skill on the part of the parties of the second part, that the parties of the first part shall have the right to remedy such defects, and deduct the cost of the same out of the payment of $ 4,000."

The defendant is a corporation having its principal office at Helena, and, before entering into the above contract, sent a committee, consisting of five persons, to examine the property. This they did, and, after agreeing on the terms of the purchase, defendant had the contract drafted at Helena and forwarded to plaintiffs for their execution, which was done. Thereupon, the plaintiffs moved the mill to the Philadelphia mine, and proceeded to operate the mill in order to manufacture the one carload of concentrates in compliance with the terms of the contract. This they did, substantially, by February 4, 1911. During all the time that the mill was being moved and set up, defendant had a representative named McCarty present, who notified it just prior to February 4 that plaintiffs had about milled the carload of concentrates. Thereupon the defendant sent a committee of three persons to examine and take over the property. At that time the plaintiffs had not milled an entire carload of concentrates, but substantially so, and the committee agreed to accept the amount so milled as the required amount, and thereupon made the second payment of $ 2,000. The plant was then turned over to the defendant, and said McCarty became its superintendent.

The defendant operated the mill from that date until March 24, 1911. It is claimed by defendant that during that time its superintendent discovered a number of defects in various parts of the machinery, and notified it thereof. Thereupon it sent a special representative to examine the property, who did so on March 24, 1911. There is a conflict in the testimony as to whether or not plaintiffs were notified of the alleged defects prior to that date. However, on that day defendant's said representative stated to plaintiffs that there were a number of defects in the machinery, and in the erection of the mill, and specified same. The defendant then refused to pay the last installment of $ 4,000, but it continued to operate the mill until the latter part of June, 1911. In the meanwhile, plaintiffs instituted this suit on April 7, 1911.

In August, 1911, the defendant had extensive repairs made in the plant, and in doing so purchased various parts of new machinery. The defendant alleged that it paid for work and labor and material for making repairs and for the new parts of machinery the total sum of $ 2,203.13, and that all of these were necessary to place the plant in a first-class condition and to obtain 100 tons daily capacity.

It also alleged that, during the thirty days that it tested the mill to ascertain the condition of the machinery, it operated it for fifteen days before making discovery of its failure to come up to the required capacity, and on that account it was forced to and did operate it for said fifteen days at a loss of $ 50 per day, which it asked to recoup as damages. It also claimed that during the time that plaintiffs operated the mill after its removal, in order to manufacture the one carload of concentrates, they used a number of cords of wood belonging to defendant, of the value of $ 220, for which they asked recovery.

The plaintiffs admitted that defendant was entitled to credit for said note, but denied all items of the counterclaim.

The testimony of a number of witnesses was introduced by both parties relative to the condition of the various parts of the mill and as to the capacity thereof. This testimony was conflicting. Upon the part of the defendant it tended to prove that certain parts of the machinery, especially the rougher and cleaner jigs, were decayed in parts and leaked; that plaintiffs had endeavored to repair them at the time they moved the mill, but that the repairs were not effective, and that these defects reduced the mill's capacity. This testimony also tended to prove that there were defects in the elevators, pulleys, hopper and other parts of the machinery, as well as in the foundation, and the manner in which the mill was erected; that the mill, by reason of these defects, did not have a capacity of exceeding one-half the required 100 tons daily capacity, and, in order to remedy the defects and obtain said capacity, it was necessary to make the repairs and purchase the new parts of the machinery. It introduced in evidence an itemized statement of the amounts paid by it for work and material and parts of machinery, which amounted to said sum of $ 2,203.13.

The testimony on the part of the plaintiffs, however, tended to prove that the mill, when turned over to plaintiffs on February 4, had a capacity of 100 tons daily, and that, if it did not come up to that capacity when operated by defendant, this was due to the inefficiency of its superintendent. This testimony also tended to prove that, while parts of the jig were decayed, plaintiffs had repaired same so that they were in good condition; that, except in a few minor parts, all of the machinery was in first-class condition as second-hand machinery; that the defects if any, were slight, which could be remedied at a small expense. There was also a great conflict in the testimony as to the amount necessary to pay for each of the parts of the plant which were claimed as defective.

Upon the final hearing of the case, the chancellor held that by the terms of the contract the plaintiffs sold the mill to the defendant, with the warranty "that they would remove and reconstruct it in a workmanlike manner, so that when erected it would be a first-class second-hand mill, complete in every detail and free from defects meaning of course material defects, and of 100 tons daily capacity;" and that the defendant was entitled to recover damages for "all material defects in the entire mill and in the erection thereof." He found that when the mill was turned over to defendant it was not constructed so that, it had a capacity of 100 tons daily, and that this was due to material defects in the machinery and the erection thereof. He further found that defendant proceeded to operate the mill for a period of four months after the termination of the thirty days given to it by the contract in which to determine whether the mill was free from defects, before it repaired and reconstructed the plant; that "the use and operation of the mill in its defective condition for so long a time would...