Cleveland Rolling-Mill Company v. Rhodes/Opinion of the Court

by Horace Gray

United States Supreme Court

121 U.S. 255

Cleveland Rolling-Mill Company  v.  Rhodes

The original defendant duly pleaded, and has earnestly argued, that the plaintiffs did not perform their contract, in respect either to the nature of the thing furnished, or to its quantity, or to the time of delivery. The principal objections, each of which would require consideration if the decision of the case depended upon it, are as follows: As to the nature of the thing: That the amounts of ore from each of the four mines named, delivered at the furnance and there manufactured into pig-iron, differed from the amounts contracted for, the ores from three of the mines being respectively 20 tons, 595 tons, and 22 tons less, and the ore from the fourth mine 805 tons more. As to the quantity: That the plaintiffs tendered to the defendant the product of 14,168 tons of ore, when the contract was for the product of 14,000 tons only. As to the time of performance: That the pig-iron was not made and shipped 'as rapidly as possible;' and especially that so much of it as had not been made and shipped before the close of navigation, in 1880, was not shipped 'on the opening of navigation of 1881, or as near the opening as possible.'

We have not found it necessary to consider the objections as to the kind of iron, or how far any such objections were waived by the defendant, or the effect of tendering too much, or yet the objections to the competency of evidence admitted at the trial, or the variance suggested between the declaration and the proof, because we are of opinion that the delay which took place in the making and shipment of so much of the pig-iron as had not been made and shipped before the close of navigation in 1880 is fatal to the plaintiffs' right to maintain this action. In a case decided upon much consideration at the last term, the general rule was stated as follows: 'In the contracts of merchants, time is of the essence. The time of shipment is the usual and convenient means of fixing the probable time of arrival, with a view of providing funds to pay for the goods, or of fulfilling contracts with third persons. A statement descriptive of the subject-matter, or of some material incident, such as the time or place of shipment, is ordinarily to be regarded as a warranty, in the sense in which that term is used in insurance and maritime law; that is to say, a condition precedent, upon the failure or non-performance of which the party aggrieved may repudiate the whole contract.' Norrington v. Wright, 115 U.S. 188, 203, 6 Sup. Ct. Rep. 12. See, also, Filley v. Pope, 115 U.S. 213, 6 Sup. Ct. Rep. 19; Pope v. Porter, 102 N. Y. 366, 7 N. E. Rep. 304; Rommel v. Wingate, 103 Mass. 327.

When a merchant agrees to sell, and to ship to the rolling-mill of the buyer, a certain number of tons of pig-iron at a certain time, both the amount of iron and the time of shipment are essential terms of the agreement. The seller does not perform his agreement by shipping part of that amount at the time appointed, and the rest from time to time afterwards; and the buyer is not bound to accept any part of the iron so shipped.

In the case at bar, the plaintiffs were merchants at Chicago, and the defendant was the owner of a rolling-mill at Cleveland. By the agreement between them, made in February, 1880, the plaintiffs sell to the defendant 'the entire product of fourteen thousand tons iron ore, to be manufactured into pig-iron with charcoal,' at a certain furnace, 'and to be shiped in vessel cargoes as rapidly as possible' to the defendant at Cleveland, 'during the season of navigation of 1880,' and 'such portion of the product of said ores, as is made after the close of navigation of 1880, is to be shipped by vessel to Cleveland on the opening of navigation of 1881, or as near the opening as possible.' The plaintiffs thus agree that all of the pig-iron contracted for, that is not made and shipped before the close of navigation in 1880, shall be shipped as early in 1881 as navigation shall be open, and vessels can be obtained. This implies that the whole of the ore shall be made into pig-iron, and ready for shipment as soon as navigation opens, in 1881. The implication is confirmed by the further stipulation that the defendant shall have the privilege, upon paying the additional expense of transportation by land, 'of ordering the iron, which may be made too late for shipment by lake during the season of 1880, through by rail to Cleveland, during the winter of 1880 and 1881.' In short, all the pig-iron not shipped before the close of navigation in 1880 is to be made before the opening of navigation in 1881, and to be then shipped as soon as vessels can be obtained, n less the defendant elects to have it previously forwarded by land.

The facts, as found by the court, bearing upon the question of the plaintiffs' performance of their agreement in this particular, are as follows: The whole amount of pig-iron made from the 14,000 tons of ore was 8,000 tons. Of these, 3,421 tons were shipped in 1880, and accepted and paid for by the defendant. At the opening of navigation, early in May, 1881, there were manufactured and on hand, ready for shipment, only 3,506 tons. The remaining 1,073 tons were made afterwards, and the last cargo was not shipped until nearly two months after navigation opened. The general statements in the sixth finding, that the owner of the furnace, after the close of navigation in 1880, 'continued the manufacture of said ore into pig-iron without unreasonable delay,' and on the opening of navigation, in 1881, resumed the shipment of iron to the defendant, 'and continued such manufacture and shipment in cargo lots as rapidly as possible,' are limited and controlled by the more precise statements in the same finding that, if the average daily product of the furnace had been the same from the close of navigation in 1880 to the opening of navigation in 1881, as it had been during the season of 1880, 'all said 14,000 tons of ore would have been made into pig-iron by about May 10, 1881; but in fact the furnace was shut down for a time, and part of the time the blast was checked, for want of a sufficient supply of charcoal, so that about 1,100 tons of said pig-iron were made after May 8, 1881.'

The failure to have on hand a sufficient amount of charcoal to keep the furnace at work is not shown to have been due to 'accidents or strikes,' which were contingencies contemplated by all parties, and provided for in the contract sued on. But it was a state of things of which the plaintiffs assumed the risk by undertaking that the whole of the ore should be made into pig-iron ready to be shipped as soon as possible after the opening of navigation in 1881. After the contract for 8,000 tons of pig-iron had been partly performed on both sides, in 1880, by the plaintiffs' having delivered, and the defendant's having accepted and paid for, 3,421 tons of iron, then the thing which, by the terms of so much of the contract as was yet unperformed, the plaintiffs agreed to deliver, and the defendant agreed to take and pay for, was 4,579 tons of pig-iron, made and ready for shipment upon the opening of navigation in 1881, and then shipped as rapidly as possible; and the rights and duties of the parties as to the performance of this part of the contract were the same as if it had been the whole contract between them.

The true construction of the contract being that that amount of iron shall be ready to be shipped, and be actually shipped, as soon as navigation permits, 'that is part of the description of the subject-matter of what is sold;' and 'the plaintiff, who sues upon that contract, has not launched his case until he has shown that he has tendered the thing which has been contracted for, and, if he is unable to show that, he cannot claim any damages for the nonfulfillment of the contract.' Lord CAIRNS, in Bowes v. Shand, 2 App. Cas. 455, 468; Norrington v. Wright, 115 U.S. 188, 209, 6 Sup. Ct. Rep. 12. The necessary conclusion is that the defendant was justified in refusing to accept any of the iron shipped in 1881; and whether the notice, previously given by the defendant to the plaintiff, that it would not accept under the contract any iron made after December 31, 1880, might have been treated by the plaintiffs as a renunciation and a breach of the contract, need not be considered, because the plaintiffs did not act upon it as such. Dingley v. Oler, 117 U.S. 490, 503, 6 Sup. Ct. Rep. 850.

It conclusively appearing, upon the facts found by the court below, that the original plaintiffs cannot maintain their action, it is ordered, in accordance with the precedents of Fort Scott v Hickman, 112 U.S. 150, 5 Sup. Ct. Rep. 56, and Allen v. St. Louis Bank, 120 U.S. 20, 7 Sup. Ct. Rep. 460, that the judgment be reversed, and the case remanded to the circuit court, with directions to enter judgment for the original defendant.

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