MT. VERNON REFRIGERATING CO. v. FRED W. WOLF CO., 188 F. 164

McCALK, District Judge (after stating the facts as above). This case is before the court on an appeal by the defendant from a decree against it of the United States Circuit Court for the Southern District of Ohio. It is a case in equity, and all the evidence was presented in the form of depositions and exhibits. The first question to which the attention of the court is challenged relates to the extent that an appellate court will review the evidence in passing upon the findings of fact by the trial court.

The rule obtaining on writs of error that, when there is any material evidence tending to support the verdict of a jury,'the appellate court will not review the evidence, does not obtain in equity cases which come up on a broad appeal. Especially is this so when it appears that all the evidence introduced before the trial court was in the shape of depositions, and not given before the court orally. Ridings v. Johnson, 128 U. S. 218, 9 Sup. Ct. 72, 32 L. Ed. 401; Johnson v. Harmon, 94 U. S. 371, 24 L. Ed. 271; Garsed v. Beall et al., 92 U. S. 684, 23 L. Ed. 686; The Santa Rita, 176 Fed. 890, 100 C. C.

A. 360, 30 L. R. A. (N. S.) 1210; Waterloo Min. Co. v. Doe, 82 Fed. 51, 27 C. C. A. 50. There is practically no controversy as to the material facts in the case. The Wolf Company guaranteed the machinery sold by it to produce 50 tons of merchantable ice daily, when the plant was installed and operated under its direction and management, according to the terms of the contract. The plant was installed under its supervision, and not only failed to produce the guaranteed daily output, but it failed to produce a pound of ice.

The nub of the controversy is whether this failure is attributable to the fault of the appellant or the appellee. Was the contract breached by the one or the other of the parties to it ? A correct answer to this question depends upon a proper construction of the contract. As has been stated, the contract entered into was upon a regular printed form of proposal, prepared and generally used by the Wolf Company in the sale of its ice manufacturing machinery, and, if there is doubt as to the true meaning of the contract, it should be construed most strongly against the Wolf Company. In Christian v. First Nat.

Bank (8th Circuit) 155 Fed. 709, 84 C. C. A. 57, Judge Van Devanter, speaking for the court, said: “The language of the agreement is that of the plaintiff and his codeposi-tors, and, if there be any doubt as to its true meaning, it is both just and reasonable that it should be construed most strongly against them. Noonan v. Bradley, 9 Wall. 394, 407, 19 L. Ed. 757; Texas & Pacific Ry. Co. v. Reiss, 183 U. S. 621, 626, 22 Sup. Ct. 253, 46 L. Ed. 358; Osborne v. Stringham, 4 S. D. 593, 57 N.

W. 776. “Of course, effect must be given to the intention of the parties, and, if that is made-plain and certain by the agreement, every part of it being duly considered, the considerations and rules of

interpretation to which we have referred are without application.’’ Not only so, but in construing a contract that is ambiguous its various provisions are to be considered together, and in the light of the situation of the parties, keeping in mind the object that is sought to be attained. McKell v. C. & O. Ry. Co., 175 Fed. 321, 99 C. C. A. 109; Hull Coal Co. v. Empire Coal Co., 113 Fed. 256, 51 C. C. A. 213.

Turning now to the contract, we find the facts to be that the Ice Company had purchased two 100 horse power gas engines for the purpose of using them to furnish the power for operating an ice plant which it proposed to establish. The Wolf Company manufactured and sold ice manufacturing machinery, and it submitted a proposition to the Ice Company to sell to and install for it ice manufacturing machinery, which, when connected with the gas engines according to the terms of the proposition, and onerated by it, was guaranteed to produce 50 tons of ice daily.

The purpose of the parties was to install an ice plant of 50 tons daily capacity. Gas engines were to be used as the motive power, and this was known to the Wolf Company as is evidenced by the terms of the contract, as follows: Cl) “For di-ivins? the two compressors * * * we propose to furnish Renold silent chain drive * * * to connect to the gas engines furnished by purchaser.” 2. The Wolf Company recognized the reservation of the title of the Elyria Gas Engine Company to the two gas engines as per its contract with the Ice Company, dated December 22, 1905.

That the AVolf Company had this information before making the contract is also clearly established by the evidence in the case. In the light of all the evidence, we think the proper construction of the contract is that the Wolf Company agreed to furnish the Ice Company machinery to manufacture ice to be driven with the power produced by the two gas engines that the Ice Company had purchased, when connected therewith by means of the Renold silent chain drive, and that the Wolf Company contracted to make this connection.

The engines, when tested, produced 300 pounds pressure, which was more than sufficient to drive the machinery. But it is urged that the speed of the engines was irregular, and that this produced a whipping of the drive chain. If that be true, then the defect was not in the quantity of power produced by the gas engines, but in its quality. The Wolf Company had been engaged for years in manufacturing ice-making machinery and installing it. This was the first effort that it had made to drive its ice machinery with gas engines. Fred W.

Wolf, president of the Wolf Company, expressed grave doubts if it could be successfully done. Those composing the Ice Company were novices at the business. They had purchased gas engines because natural gas was abundant and cheap in their section, and for that reason they preferred to use it as a fuel. This was explained to Mr. Wolf, when he expressed a doubt as to the sufficiency of the gas engines, and suggested that steam power be substituted.

Nevertheless, the Wolf Company contracted to sell to the Ice Company and install an ice plant to be operated or driven by the Ice Company’s gas engines by means of a chain, and guaranteed that it would produce 50 tons of ice daily. That the experiment was a failure is not more than Mr. Wolf had predicted. The failure was not because the gas engines did not produce sufficient power.' It was because the power was not uniform, and caused the chain drive to whip. This characteristic in the power produced by gas engines w.as known to the Wolf Company, and also, perhaps, to the Ice Company.

The latter company had intended to overcome or neutralize this irregularity by the use of a spring compensating device in connection with the Renold chain. This is what it purchased under the contract. For some reason not very clear, but likely because the Morse chain was cheaper than the Renold chain, the Wolf Company pressed upon the Ice Company the proposition to allow it (the Wolf Company) to substitute the Morse for the Renold chain.

This the Ice Company, after much correspondence, finally consented to, upon condition that the Morse chain was as good as the Renold chain with the spring compensating device, and that the Morse Company would guarantee its chain to run and give perfect satisfaction. The Ice Company had no communication with the Morse Company, but relied upon the Wolf Company to furnish the machinery bought of it, or something guaranteed to be equally as good and to give perfect satisfaction.

The Morse Company made no such guaranty of its chain to Wolf as was required to be done by the Ice Company as a condition to its consent to make the substitution, but the Wolf Company made the substitution notwithstanding. This, we think, it did at its own risk.

The Wolf Company, having made the substitution of the Morse chain, without the spring device, for the Renold chain with it, and that too in the absence of the guarantee required by the Ice Company, without informing the Ice Company, when it developed that the ice plant could not be run because of the whipping of the Morse chain, should, in good conscience and equity, at least, have applied the spring compensating device and further tested it. This it did not do.

Indeed, we think that under the contract and the evidence in this case that before the Wolf Company could be entitled to the relief sought in its bill, if the Morse chain both with and without the spring device had been tried and failed, it should have then furnished the Renold silent chain drive, as originally contracted for.

In view of this record, we are not called upon to determine the question of fact whether a heavier flywheel would have accomplished the required regulation of speed, nor, in case the Renold chain had been tried and found ineffective, what defendant’s duty would have been with respect to trying such heavier flywheel.

It is urged that the Ice Company contracted to furnish the required power to operate the plant, and that, if the power furnished by it was insufficient in quantity, that it was the duty of the Ice Company to furnish a different motive power that was sufficient, or, if it was deficient in quality, it was the Ice Company’s duty to remedy that by furnishing a means of power transmission that would correct the fault.

This insistence is based upon the provision “to furnish the required power” used in the contract, and there would be much force in it if the contract contained only that provision in relation to this subject. This is not the case, however. And that provision must be construed in the light of all the other provisions therein.

The words “required power” are limited and defined by the words, which also appear in the contract, “the gas engines furnished by the purchaser,” tliaí being' the motive power already provided when the contract was ma.de, and it is a most reasonable conclusion that that was the motive power the parties understood was to be used in operating the plant. Meager reference is made in the brief of counsel for appellee to the allowance of its counterclaim.

Counsel for appellant state in their brief that: “The demurrer of appellee was sustained to the cross-bill of appellant and the cross-bill was dismissed. * * * No error is assigned in this court to the action of the trial court in sustaining appellee’s demurrer.” There is nothing in the record that warrants us in expressing an opinion as to the validity of the counterclaim, nor as to the action of the trial court in sustaining a demurrer to a cross-bill, since the record does not show any issue joined on the cross-bill, nor is there any assignment which can properly be construed as relating thereto.

From what has been said, it follows that we are of the opinion that the Wolf Company breached its contract with the Ice Manufacturing Company, and that the Ice Company was justified in refusing the machinery, and the decree of the court below will therefore be reversed and the bill dismissed, with costs.