MAXWELL v. ZENITH LIMESTONE CO.

MAXWELL v. ZENITH LIMESTONE CO.
1930 OK 161
286 P. 879
142 Okla. 286
Case Number: 19237
Decided: 04/08/1930
Supreme Court of Oklahoma

MAXWELL et al.
v.
ZENITH LIMESTONE CO.

Syllabus

¶0 1. Sales--Action for Damages for Nondelivery of Goods--Affirmative Defense Established by Plaintiff's Evidence.
In an action for damages for the breach of a contract of purchase, the affirmative defense set up in the answer of the defendant, to the effect that he was unable to deliver the goods contracted for because of certain contingencies in the manufacture thereof, as provided in the contract, need not be proven by witnesses introduced by the defendant, if the reason for nondelivery of the goods contracted for is shown by uncontradicted evidence of plaintiff.
2. Same--Demurrer to Plaintiffs' Evidence Properly Sustained.
In an action to recover damages for failure to deliver goods contracted for, it is not error for the trial court to sustain a demurrer to plaintiffs' evidence, although said testimony shows that the goods were not delivered as provided in the contract, where it further appears that the reason for the nondelivery was a broken shaft in defendant's factory, which fact was known to the plaintiffs, and under the contract defendant was excused from delivering the goods contracted for by reason thereof.
3. Sales--Two Contracts of Same Date for Two Different Building Materials for Use on Road, Project not Construed as One Contract.
Where two written contracts are entered into on the same date, between the same parties, one for the delivery of rock and the other for the delivery of sand, to be used in the construction of a paved road, the same will not be construed as one contract, where it appears from the circumstances surrounding the case and the language used therein that the parties did not so intend.

Commissioners' Opinion, Division No. 1.

Error from Court of Common Pleas, Tulsa County; S. M. Rutherford, Judge.

Action by J. H. Maxwell and E. W. Mead against the Zenith Limestone Company. Defendant filed a cross-petition asking damages against the plaintiffs. Judgment for defendant, and plaintiffs appeal. Affirmed.

Frank Hickman, for plaintiffs in error.
West, Gibson, Sherman, Davidson & Hull, for defendant in error.

FOSTER, C.

¶1 J. H. Maxwell and E. W. Mead brought this action in the court of common pleas of Tulsa county against the defendant, Zenith Limestone Company, to recover the sum of $ 442.98. Plaintiffs' petition alleges that on the 21st day of July, 1926, the parties entered into two written contracts, copies of which are attached to plaintiffs' petition. In the first contract the defendant agreed to sell plaintiffs crushed stone at a price of $ 1.40 per ton, f.o.b. Verdigris, Okla.; and in the second contract agreed to sell and deliver plaintiffs sand at a price of 90 cents per ton, f.o.b. Verdigris, Okla. Except as to material and price, as above set out, the other provisions of the two contracts were identical and were executed upon the same day, and both show upon their face that the crushed stone and sand were to be used by the plaintiffs in the construction of a concrete road known as Federal Project No. 183-B. The sand and rock were to be delivered between the date of the contract and the 31st day of December, 1926, and were to be shipped as nearly as possible to meet the necessities of the work, except that the defendant was not obliged to ship more than eight cars of crushed stone in one day.

¶2 The petition further alleges that the defendant breached the contract, and that it was necessary for plaintiffs to go into the open market and buy stone, and that pursuant thereto it made a contract with the Hughes Stone Company at a price of 25 cents per ton more than it agreed to pay the plaintiffs, thereby sustaining a damage of $ 2,268.58; that the defendant was entitled to a credit against this amount in the sum of $ 1,825.60 for stone and sand which it furnished prior to the breach of the contract, leaving a balance of $ 442.98.

¶3 The petition further alleges that it was impossible for plaintiffs to secure crushed stone without at the same time contracting with the same company for the sand necessary to complete the job.

¶4 To this petition the defendant filed its answer, admitting the execution of the contracts, alleging that they were distinct and independent, denied a breach thereof, but alleged that on or about the 15th of August, 1926, it was unable for a short time to furnish crushed rock because of a broken shaft in the crushing machine of the defendant, but that the same was repaired within about 30 days, and tender of the remaining part, as provided by the contract, was made. By way of cross-petition the defendant alleged that it was at all times willing, able, and ready to deliver the sand as provided for in the second contract, and that the plaintiffs refused to accept the sand and the defendant was damaged in the sum of $ 650. This, together with the amount set out in plaintiffs' petition, which was due for sand and rock delivered, to wit, $ 1,825, made a total of $ 2,475, for which defendant prayed judgment.

¶5 At a trial before a jury, the testimony on behalf of the plaintiffs disclosed that they had begun the construction of the road on or about the 15th or 16th of August, 1926; that after the delivery of about 15 cars of rock, the defendant refused to deliver any additional rock, although plaintiffs requested it many times to do so. One of the plaintiffs testified that he went to the office almost every day for ten days or two weeks, and that the defendant continually promised him that he would send additional rock on tomorrow or the next day. However, the plaintiffs admit that defendant told them the reason for nondelivery was because a shaft in their crushing machine was broken and that as soon as it was repaired delivery would be made, which, as defendant stated, would perhaps be on the next day.

¶6 It is apparent from the record, however, that no crushed stone of any kind was delivered from about the 15th of August, 1926, until about the 20th of September, and on or about September 1st the plaintiffs made a contract with the Hughes Stone Company for the delivery of all the crushed rock and sand that was necessary for the completion of the federal project. On or about the 20th of September, the defendant offered to continue the shipping of rock and did ship some eight cars, which was refused. About the 1st of September, plaintiffs notified the defendant not to ship any more sand until further orders, and the record is clear that defendant was never afterwards ordered to ship any. The amount paid by the plaintiffs to the Hughes Stone Company exceeded the amount of the contract between plaintiffs and defendants in the sum as alleged in the petition. The plaintiffs offered to prove that it was impossible for them to buy rock either from the Hughes Stone Company, or from the defendant without also contracting to buy the necessary sand, which testimony was refused by the court.

¶7 At the close of plaintiffs' evidence, the court sustained a demurrer thereto. It was then agreed that defendant had shipped crushed rock and sand in the sum of $ 1,825, which had not been paid for. The court then permitted defendant to introduce testimony on its cross-petition. The defendant' evidence showed that it was in the commission business of selling sand and rock; that it entered into the contract as above, set out for the sale of sand, and that approximately 6,000 tons of sand were necessary for the completion of the road which the plaintiffs were building, and for which the sand was to be used; that the defendant furnished some 2,800 tons, leaving approximately 4,000 tons which were not purchased from the defendant, but were purchased by the plaintiffs elsewhere; that defendant's commission on the sand was $ 3.50 per carload of 50 tons each. To this testimony there was no material contradiction, and thereupon, at the close of all the testimony, the court instructed a verdict in favor of the defendant for the sum of $ 2,103.57, and from this judgment plaintiffs appeal.

¶8 Several assignments of error are made, but the two questions presented by this appeal are, in substance, as follows:

First. Whether or not the court was justified in concluding that the plaintiffs had not established their cause of action, or the right to recover damages from the defendant.

Second. Whether or not under the record the defendant was entitled to a judgment for damages on his cross-petition for breach of the contract.

¶9 It is first contended by the plaintiffs that the burden is upon the defendant to prove its affirmative defense, and by sustaining the demurrer to plaintiffs' testimony, the court held, in substance, that it was the duty of the plaintiffs to show that the contract was not performed by reason of the broken shaft. Plaintiffs contend that the record is silent as to any affirmative defense, since the defendant introduced no testimony.

¶10 The contract for the delivery of the crushed stone provided that "all orders and contracts are accepted subject to contingencies of, manufacture and shipping, and other causes beyond seller's control." It is defendant's contention that this provision in the contract was sufficient to relieve the defendant from delivery of rock, where it is shown that the reason for the nondelivery was a broken shaft in the crushing machine. With this contention we agree. We think that the broken shaft in the crushing machine would be such a contingency as was intended by the contract. Certainly, it would be an event which would come without design, forethought, or expectation on behalf of the defendant.

¶11 The evidence on behalf of the plaintiffs shows that the agent to the defendant told them that the shaft was broken, and that that was the reason for the nondelivery. One of the plaintiffs so testified, and further stated that he had no reason to doubt the statement of the defendant's agent. Mr. Chandler, a witness for the plaintiffs, testified he knew that the shaft of the defendant's crushing machine was broken. We think it is clear from the evidence of the plaintiffs that the failure to ship the cars of rock was due to the fact that the shaft of the stone crusher belonging to the defendant was broken. Under this state of the record, the rule relied upon by the plaintiffs has no application.

¶12 The case of Detroit Edison Co. v. Main Island Creek Coal Co., 295 F. 781, relied upon by the plaintiffs as being directly in point, is not controlling. In that case there was no showing by plaintiffs' testimony what was the reason for defendant's failure to deliver the goods as provided in the contract, and the court there properly held that it was defendant's duty and the burden rested upon it to show that the failure to deliver came within the provisions of the contract similar to the one in this contract. But, in the case at bar, where the plaintiffs' testimony so shows, we think it unnecessary for the defendant to introduce any testimony. The other cases relied upon by the plaintiffs only go to support the general rule that, in all cases where a contract is admitted and the defendant seeks to defend against its enforcement by alleging a breach of warranty, or where any other affirmative defense is set up, the burden is upon the defendant to prove it. But such cases are not in point, and the rule contended for by plaintiffs is fully met, where the plaintiffs' testimony discloses the affirmative defense alleged in defendant's answer.

¶13 Plaintiffs further contend that where the fact is within the peculiar knowledge of one of the parties to an action, the burden rests upon that party to prove it. Several cases are cited in support of this general proposition. We think this rule is well established. However, if the plaintiffs' evidence shows the fact which is within the peculiar knowledge of the defendant, certainly the purpose of the rule has been fully met.

¶14 But if we should assume in this case that the contract had been breached by the defendant without any just cause, still, we think the demurrer to plaintiffs' evidence was properly sustained. It is a well-established rule that damages must be proved as to the time when deliveries were to be made, and it was the duty of plaintiffs to show the market value of the stone at the time it was delivered under the contract. We do not believe the testimony was sufficient to show the market value of the stone. It is true that the plaintiffs purchased other stone from the Hughes Stone Company, and also talked to another stone company about the price of stone. But it is not shown anywhere in the record that the market value of stone was that which was paid by the plaintiffs to the Hughes Stone Company. The price charged by one company, or by two companies, we do not think sufficient to establish the market value thereof. We think it was plainly incumbent upon the plaintiffs to show that the price which they paid the Hughes Stone Company was the market value.

¶15 The next contention of the plaintiffs is that the contract for crushed stone and the contract for sand are to be taken together as one contract. To support this contention the plaintiffs rely, first, upon section 5045, C. O. S. 1921, which is as follows:

"Several contracts relating to the same matters, between the same parties, and made as parts of substantially one transaction, are to be taken together."

¶16 Plaintiffs also rely upon the cases of Miller v. Leo, 55 N.Y.S. 765, and Hart-Parr Co. v. Duncan, 75 Okla. 59, 181 P. 288. However, it will be seen from an examination of these cases that the facts there presented are entirely different. The contract in this case did not relate to the "same matters," as provided in the statutes.

¶17 In the case of Miller v. Leo, supra, there was one contract which provided for all of the cement, rock, and sand necessary for a building, and it was held that a failure to order part of it was a breach of the entire contract, the court holding that, under the circumstances of the case, it was intended by the parties to be one complete contract.

¶18 In the case of Hart-Parr Co. v. Duncan, supra, the contract provided for the purchase of an oil tractor engine and gang plows, which were perfectly suited to the other, and were bought for a specific purpose of plowing ground, and although different orders were made for the tractor and for the plows, still, the contract was considered as one entire contract, and should be so construed.

¶19 In the case at bar, however, two separate and distinct written contracts were entered into. True, they were signed the same date and so far as their form is concerned are practically identical. One, however, provides for the purchase of sand for a particular project, and the other for the purchase of crushed rock at a different price. While they were both to be used in the same project, there is no circumstance tending to show that it was the intention of the parties that it should be one contract. As a matter of fact, the circumstances surrounding the execution of the contract indicate that they were to be different and separate contracts, as both were drawn up and signed on the same day and between the same parties without any reference of one to the other. We think the two contracts are separate and independent, and therefore the court did not err in holding that the plaintiffs were liable for damages for breaching the contract to purchase sand.

¶20 The record further disclosed that certain sand was shipped by the defendant and accepted by the plaintiffs after defendant's refusal to ship the crushed stone. This, in our opinion, shows an intention on the part of the plaintiffs and defendant to consider the two contracts as separate. If we consider the two contracts as separate and independent, it becomes evident that the action of the court in refusing to allow the plaintiffs to prove that they could not buy crushed rock without buying sand from the same company, becomes immaterial. Such testimony would be incompetent, if the two contracts are separate. This appears to be admitted by the brief of plaintiffs.

¶21 However, in any event, the fact that the Hughes Stone Company would not sell crushed rock for a particular project without at the same time selling sand for the same project, or that the defendant would not sell crushed rock without at the same time selling sand, would not be competent under any theory of this case. To prove that these two companies were conducting their business in this manner, would not prove that it was impossible for the plaintiffs to buy sand without at the same time buying rock, Sand and rock are two separate materials, and, while both are used in the construction of the road, which is here under consideration, we do not believe the fact that two companies would not sell one without the other, is any proof that they could not be purchased separately. We think that, in any event, plaintiffs must show that sand and rock could not be purchased separately on the open market.

¶22 From a consideration of the whole record, we think the judgment of the trial court should be, and is hereby, affirmed.