223 Pa. 430 | Pa. | 1909
Opinion by
This was an action brought to recover the amount of an award, and also for damages for the breach of a contract. A jury was waived by agreement of the parties, and the case was heard by the court. It appears .from the evidence, that the contract entered into between the plaintiff, the foundry company, and the defendant, the steel company, was an absolutely safe one in so far as the foundry company was concerned, provided it produced the steel ingots in the quantity and of the quality required. It ran no risk of loss, for it was to receive as compensation a profit of fifteen per cent on the actual cost of the materials, labor, fuel, etc., used in making the steel; and the steel company further guaranteed that the aggregate amount of profit which should thus accrue to the foundry company under the contract during the two years for which it was to run, should not be less than $50,000. Even in the event of cancellation, this much was to be secure; for while there was a provision under which the steel company reserved the right to cancel the agreement, it could only do so by paying to the foundry company such a sum as would, with the profit already made under the contract, on steel then delivered, equal the sum of $25,000, or the estimated cost of its investment in facilities for carrying out the contract; and in addition thereto the further sum of $25,000 as a bonus for the privilege of canceling the agreement. So that if it performed its duty, the foundry company was in any event assured of profits under the contract, amounting, at least, to the sum of $50,000, without the risk of loss. The plaintiff was to work substantially upon a percentage basis. The fact that the steel company was to pay the entire cost of all materials, and the cost of manufacturing them into steel, and a profit on the whole to the foundry company, gave to the defendant a vital interest in the securing of the raw materials as cheaply as possible.
The contract was made on June 30, 1899, and provided that deliveries of steel ingots to the defendant company were to commence about October 1 following. But neither the furnaces of the plaintiff company nor the mill of the defendant
There can be no question under the evidence, but that this raw material was all purchased, not only for the benefit of the defendant company, but with its approval, and nearly all of it upon its express request. And if the contract had been carried out, as was contemplated by both parties when it was made, this material would all have been used in the manufacture of ingots for the defendant company. In order to bear part of the burden of purchasing raw material in advance of its need for actual conversion into ingots, the defendant company advanced to the plaintiff the sum of $40,000. This amount would, in the natural course of the transaction, be used as a credit against the value of the ingots, as manufactured and delivered by the plaintiff; but it could make no great difference in the end, whether the money advanced was appropriated specifically to the cost of material or not. This
The court below found that the plaintiff was entitled to recover for the value of the ingots actually delivered by it, and which were found to be of such a character that they should have been accepted by the defendant. But he refused to allow for the loss on materials purchased by the plaintiff at-the instance and request of the defendant, to be manufactured into ingots for it, and he also refused to allow as damages for the breaking of the contract, the minimum amount stipulated to be paid by the defendant company in case the contract should be canceled by it. The failure to award damages for the
This does not indicate a disposition to waive any of the terms of the contract; on the contrary, it shows readiness on
We are also convinced by a very close examination of the evidence that there is no sound basis for the second, third and eighth conclusion of law in which the trial judge refuses to award to the plaintiff an amount sufficient to make good the loss upon the raw materials purchased for the benefit of the defendant company, and at its suggestion. It may be true that the plaintiff was not, under the strict terms of the contract, bound to purchase materials in advance of actual need for manufacture, and that it was not bound to follow the advice or obey the orders of defendant, as to such purchases. It might have pursued the hand to mouth policy, and saved to itself some risk and much trouble thereby. But beyond all question, its action in the purchase of materials was taken in the supposed' interest of the defendant, and for the most part at its express direction, and the latter cannot now be permitted to disavow responsibility for the result. The purchase of all the materials in question, was made in order that they might be used under the contract for the manufacture of ingots for the defendant, and at its cost. The plaintiff, under the contract, had no concern as to the cost except to protect as best it could the interests of the defendant in the purchase of materials; and it was obviously
Counsel for appellant complain in the sixth assignment that the court below erred in overruling their exception to the ninth conclusion of law, which conclusion was as follows: “The plaintiff's bill of items includes a claim for the cost of the plant and also a claim for the profit guaranteed during the two years .of the existence of the contract. We are quite unable to see how the plaintiff can claim both of these at the same time. It could only successfully claim the former by showing that the contract had been wrongfully brought to an end by the defendant without default on its own part, and a claim for the latter must be founded upon the performance of the contract. As neither 'of these events has happened we are of opinion that it cannot recover either of these items.”
The latter part of this conclusion is not justified by the evidence, nor is it consistent with the construction of the contract by the court in its first conclusion of law, in which it was held that the obligation upon the plaintiff was to furnish only as many ingots as the defendant could use in its twenty-inch mill The evidence shows that the plaintiff never failed to furnish at least that amount, and consequently it was never in default in that respect. The defendant company by its refusal to accept and pay for the ingots delivered to it in accordance with the contract, brought it to an end without fault upon the part of the plaintiff.
The trial judge was, however, entirely right in holding that the plaintiff could not recover both profits and cost of the plant. It was entitled to the profits stipulated for in the contract. But clearly, under the terms of the agreement, the cost of the plant was one of the elements which the profits agreed upon were to cover, and replace. The additional furnaces required
The judgment is set aside, and it is ordered that the record be remitted, that judgment may be entered in favor of the plaintiff in accordance with this opinion.