163 Ky. 306 | Ky. Ct. App. | 1915
Opinion op the Court by
Affirming.
The Elkhorn Consolidated Coal & Coke Company is a corporation operating a coal mine and coke oven in Pike County. Eaton, Ehodes & Company is a firm of Cincinnati brokers, engaged in the business of handling pig iron, coal, coke, etc., on commission. The product of coke ovens, coal mines and blast furnaces is largely sold through brokers and sales agents. Prior to the completion of its ovens in July, 1911, a representative of Eaton, Ehodes & Company visited the coal company for the purpose of obtaining the privilege of selling its coke output. The negotiations led up to a contract by which the coal company’s entire output of coke was placed in the hands of Eaton, Ehodes, & Company for the purpose of sale. The contract was concluded by correspondence, and its terms are fully set forth in the following letters:
“Pikeville, Ky., May 25th, 1911.
“Messrs. Eaton, Ehodes & Co., Cincinnati.
“Gentlemen: — Tour Mr. Layne was in Pikeville last week to see us about the selling of the output of The Elkhorn Cons. Coal & Coke Co.’s make of coke.
“I suggested to him that we might place the sale of our coke in your hands so long as your services were satisfactory to us, and you were getting the right prices for our coke. In other words, we desire to test your ability to handle our coke. He expressed himself as greatly pleased to take the sale of our coke upon that*308 basis. I bave advices from Mr. Gorley, of tbe Marrow-bone Coal & Coke Co., and have considered tbe matter with my brother, who is viee-pres. of onr company. We have decided to place the coke in your hands for sale accordingly. You will please write us a letter stating commissions charged and time of remittance and arrange orders for us. We will be shipping about the first of July. Yery truly yours,
Fon Rogers.”
Eaton, Rhodes & Company, in response to the above letter, wrote:
“Cincinnati, May 31st, 1911.
“The Elkhorn Consolidated Coal & Coke Co.,
Pikeville, Ky.
“ Gentlemen: — It is our understanding that you are to place in our hands the exclusive sale of your entire output of coke, and that you will not permit any one else to quote on this product, so long- as we are able to demonstrate our ability to handle this matter for you.
“In consideration of our disposing of this product we are to receive the following commissions:
“On furnace coke at less than $3.00 per ton f. o. b. cars ovens, 10c per ton.
“On furnace coke at $3.00 per ton and over 5%'com-mission.
“On foundry coke, a straight commission of 15c per ton.
“We to bill and collect, remitting to you on the 20th of each month following shipment.
“If this is in accordance with your understanding, and as a matter of future reference, please sign and return to us for our files a copy of this letter.
Yours truly,
“Eaton, Rhodes & Company,
“J. C. Layne, Jr.”
This letter was accepted, endorsed and returned, accompanied by another letter, as follows:
“June 3rd, 1011.
“Eaton, Rhodes & Co., Cincinnati.
“Gentlemen: — We have your letter of the 31st May, relative to sale contract covering the production of our coke plant. We are signing your letter referred to, but*309 in doing so we understand yon will keep us supplied with orders at good prices, and understanding this way, we accept your terms. We further understand that you guarantee to us all accounts; that is, when we sell coke on your order the matter of collecting is entirely with you, our net amount being guaranteed by you.
“As to price, we feel we should, have a good price for our foundry, say $2.50, and $1.75 for our furnace coke. We would like to have orders for about 150 tons of coal daily, to net us 90c or over. We will be running the first of July, and by the fifth of the month will be making good coke.
Very truly yours,
“Elkhorn Cons. Coal and Coke Co.,
By Fon Rogers, President.”
The terms • of the above letter were accepted by the following letter:
“June 5th, 1911'.
“Mr. Fon Rogers, President,
“The Elkhorn Cons. Coal & Coke Co.,
“Pikeville, Ky.
“Dear Sir: — We beg to acknowledge receipt of your favor of the 3rd with acceptance of our letter of the 31st ult.
“We believe your position in regard to our guaranteeing the net amount is well taken, and we hereby agree to this arrangement — settlements to be made between the 20th and 25th of the month following shipment.
“We are inclined to think that we can secure the prices you mention for Foundry and Furnace Coke; these figures, of course,, are subject to our commission'; that is, $2.35 net for Foundry and $1.65 net for Furnace. We have in sight some business now which we will probably be able to close up in the course of a week or ten days, which will take care of about 50 tons daily of Furnace Coke for the last half of the year; when we say 50 tons per day, we mean 350 tons per week, and not 300 tons. Of course, you would have to ship a little over 50 tons daily to make up for the non-shipment Sundays.
“Regarding coal, we also have in sight some business which will probably take care of 400 to 600 tons per week of crushed coal, but we do not believe, in view of the general situation, that we can secure your price of*310 90c net. We think it likely, however, that we can get 80c net and an outside possibility of 85c. We understand very thoroughly that you will not be in shape to ship any coke before the first of July. If you can furnish any crushed coal for June shipment at 80c net, please advise immediately.
“In any event, we will ask you to reply to this letter by return mail, and in the future will be greatly obliged if you will state clearly in your letters and telegrams if the prices which you mention are net or subject to commission. It would probably be well to have a general understanding on this subject, so that there will be no chance for mistake. Yours truly,
“Eaton, Rhodes & Co.”
Soon thereafter Eaton, Rhodes & Company began to advertise the coke to be manufactured by. the coal company, and to take steps to establish a market therefor. On July 3, 1911, the firm made a contract for the delivery to the Ashland Iron & Mining Company of 1,500 tons of coke a month from July 15th to December 31, 1911, at $1.85 a ton. In October, 1911, the firm contracted with the Ashland Iron & Mining Company for the delivery, during the year 1912, of approximately 450 tons a week at $1.85 a ton. These contracts netted the coal company $1.75 a ton, after deducting the firm’s commissions. In addition to these sales the firm made sales of furnace coke to other parties, and also of foundry coke, but it was soon demonstrated to the vsatisfaction of both the coal company and the firm that' the coke which was being manufactured was not suitable for foundry purposes, but only for furnace purposes. The firm kept the coal company supplied with orders for all the coke which they could make or did make from the beginning of its operation. When, because of accidents to their furnaces, the Ashland Iron & Mining Company was unable to take the coke contracted for, the firm made sales thereof to other parties. These sales were made for the best prices obtainable in the market. On several occasions during this period the coal company was unable to furnish all the coke required by the orders and contracts made by the firm, and in 1912 did not manufacture or furnish a sufficient amount of coke to fill orders covered by the contracts of the Ashland Iron & Mining Company.
At the close of the year 1912 there was due from Eaton, Rhodes & Company to the coal company the sum of $5,162.41. This sum Eaton, Rhodes & Company declined to pay until the question of damages growing out of the coal company’s alleged breach of its contract with them was adjusted.
This action was brought by the coal company to recover the above sum of $5,762.40. Eaton, Rhodes & Company set up the agency contract and counter-claimed for damages in the sum of $5,200. On the trial before a jury they were allowed damages in the sum of $1,200, and the coal company given judgment for the sum of $4,562.40. The coal company appeals.
Judgment affirmed.