LANG & GROS MFG. CO. v. FT. WAYNE CORRUGATED PAPER CO., 278 F. 483

ALSCHUEER, Circuit Judge (after stating the facts as above). To entitle the Paper Company to recover damages for breach to contract, it must appear that there was a contract to deliver 5 million yards of the tape basis one inch in weekly shipments of substantially 50,-000 yards 2". It is insisted for plaintiff in error:

(1) That it never accepted defendant’s final order to deliver 50,000 yards weekly beginning October 1; (2) that it was under no obligation to deliver the tape, if the price of raw materials changed, or if it was unable to purchase raw materials when the orders were given, and that war conditions relieved it from responsibility to deliver; (3) that if there was a contract it expired by its own terms October 3, 1917, and in any event on March 3, 1918, and that no deliveries thereafter could have been, required; (4) that defendant in error breached any contract there was by failing to make its specifications prior to September 17, 1917; (5) that there was error in the exclusion and admission of evidence, and in the court’s direction of verdict.

The proposal which it is claimed was not accepted is that contained in Paper Company’s specification of September 10 for shipment of 50,000 yards 2" tape beginning October 1, followed by the letter of September 17 stating that this was intended to be a weekly shipping order, and again specifjdng 50,000 yards 2" tape per week. This last letter followed the Manufacturing Company’s inquiry of September 14, which referred to the order, calling attention to the fact that it is not there stated how often shipments are to be made, and requesting prompt action.

While the record shows no reply to the letter of September 17, it does show that in pursuance of it the Manufacturing Company at once began shipment of approximately 50,000 yards 2" tape, and continued practically weekly thereafter for a number of months. This order referred to contract order No. 6299, which specified 5 million yards. There is nothing in the evidence to suggest any quantity other than 5 million yards as the subject-matter of these parties’ dealings. It was either 5 million yards or no fixed quantity at all.

One cannot read the record of the transaction between the parties without concluding that, as the deliveries were being made and accepted and paid for, it was under the full assumption and belief on the part of both that there existed between them a valid and binding contract for the sale of 5 million yards of the tape at the stipulated price to be delivered and accepted at the rate of 50,000 yards 2" each week until the entire quantity was delivered. If in any manner the minds of the parties met on this proposition, it is sufficient manifestation of a binding contract, even though formal acceptance is wanting.

The contract of a party in making performance in pursuance of a definite proposition is an acceptance of the proposition. Page on Contracts (2d Ed.) § 156; Parsons Contracts (9th Ed.) § 476; Miller v. McManis, 57 Ill. 126; Plumb v. Campbell, 129 Ill. 101, 18 N. E. 790; Monarch Cement Co. v. Creedon, 94 Neb. 185, 142 N. W. 906; Woodbury v. Jones, 44 N. H. 206; N. Y. & N. H. R. R. v. Pixley, 19 Barb. (N. Y.) 428. As to rise in market prices and inability to purchase materials, we find in Manufacturing Company’s letter (

b) quoting figures, the words, “Subject to market conditions remaining unchanged and our being able to purchase the material as you specify.” If it be assumed that these conditions ultimately remained as part of the contract, we are of opinion that the expression “subject to market conditions remaining unchanged” would have reference to the time the contract was entered into, so that if, at some time after the proposition was made and before acceptance, prices had materially advanced, the Manufacturing Company would not be hound by the subsequent acceptance of the Paper Company, but might then have objected that the price had advanced; but if, without such objection, it accepted the order as finally given, it would be bound by it, even though after ultimate acceptance the price did advance.

As to inability to purchase material, it may be said that the record discloses no evidence, nor was any offered, that at the time the specification was made there was inability to purchase the material.

As early as in the letter of May 3, Manufacturing Company stated that it wished to be promptly informed of the specifications, so that it might protect, itself for the correct amount of raw material, and when in September, after the specification had been ■ definitely made at 50,000 yards per week, and it manifested, as indicated, its willingness to accept the contract and specifications, it might then, as before, have protected itself by arranging for raw material, or, if unable then to do so, promptly have made known the circumstances and claimed then the advantage it now seeks, because of suggested inability to procure the raw material, and declined to accept the specification and begin shipments; As to the suggestion that war conditions prevented compliance, the war was on during practically all the time covered by the correspondence and the negotiations, and there was nothing in the correspondence or otherwise in the record to indicate any intention that the contract should be affected by the exigencies of existing war.

After having supplied about half of the total contract requirement for this tape the Manufacturing Compañy said in the letter of April 16 that they would not at present accept any further orders for such tape, but suggested that they were putting out another tape, which was being used by other manufacturers, and which they claimed eliminated some of the objectionable features of the contract tape.

But in this letter they did not suggest the substitution of this tape for the other to fill the contract, but advised the giving of a trial order, and that, if satisfactory, they would be “very pleased to quote on your requirements as soon as we know the grade you have selected.” This amounted to a declination to be governed by the contract, and an invitation to enter into a new contract for the new material at some new price to be agreed upon.

Indeed, the large quantity of other tapes which Paper Company was compelled to buy, and did buy of Manufacturing Company, was charged at the greatly increased market prices, without regard to the contract. Respecting the contention that the'contract expired by limitation on October 3, 1917, and that in no event did the contract require specifications to be filled after March 31, 1918, it appears that, after the first order was forwarded, the Manufacturing Company on May 1 stated it could not accept it because not in compliance with its offer, though not stating wherein it did not comply.

Attention is called in that letter to the fact that the original offer failed to specify a six-months period for tire quality 16 tape, and that it was willing to enter the contract for supplying the tape, to be taken in approximately equal monthly shipments during a period of six months. It also called attention to the fact that the offer on Hercules tape was for immediate shipment, and that the price of that had advanced since the offer, quoting new price of $3.95. The Paper Company responded by a telegram wherein it said “immediate shipment of Hercules cloth would be satisfactory.

Wire acceptance to-day of contract prices and specifications will go forward.” This of itself did not signify a willingness to accept the six-months period'as part of the contract; indeed, the only proposition contained in the Manufacturing Company's last named letter, which the Paper Company’s'telegram and letter of May 3 accepted, was with reference to the immediate shipment of Hercules cloth.

This is further manifested by the Paper Company’s letter of the same day wherein they acknowledged receipt o.f the Manufacturing Company’s telegram accepting the contract prices as requested, and stating their understanding that the contract was for 5 million yards of the one inch ungummed tape at $3.30 per M. and one million of the Hercules at $3.60 per M., which was the price named in the Manufacturing Company’s original proposal for the Hercules tape, and the Paper Company’s order therefor, and not the advanced price stated in the Manufacturing Company’s letter of May 1.

That the May 3d letter of the Paper Company was satisfactory to the Manufacturing Company is manifested by its reply to it of May 8.

That there was no six months limit, as 'was proposed in the Manufacturing Company’s letter of May 1, is evident further from what is said in the Paper Company’s May 3d letter, wherein it asks that the time for shipment of the tape in question do not begin until October 1, and postponing the statement of requirements until the Manufacturing Company replied to this request, which the latter did through its letter of May 22, in further reply to that of May 3, stating that it would try to waive matter of shipments until October.

The matter of deliveries appeared to have remained in suspense for nearly four months, until, under date of September 10, the Paper Company sent its order to apply on its previous contract order, for shipment beginning October 1 of 50,000 yards 2" tape, followed by that of September 14th fixing weekly intervals for shipments, as pointed out. Assuming, as we do, that the contract quantity of this tape was 5 million yards 1", it is very plain that if the deliveries were made weekly of 50,000 yards 2", it would require 50 weeks to complete delivery.

Given the total yardage and the quantity to be delivered weekly, it would be quite superfluous to insert in the contract the time within which delivery was to be completed. It is there as definitely as if it had been specified. That practically such a time was under consideration, though not in words carried into the contract, would be indicated by the Paper Company’s very first request for submission of prices, wherein it asked it on basis of six months and one year, respectively. Six months was evidently dropped out, and a period of nearly one year by necessary inference inserted.

The contention that defendant in error breached the contract by failing to make its specifications earlier than September 17 is negatived by what has been said respecting the specification, for deliveries, and acceptance by the Manufacturing Company.

As to the alleged errors in rejecting evidence for plaintiff in-error, the first is the offer to prove a trade custom that the expression “subject to market prices remaining unchanged and our being able to purchase the material as you specify” means that the contract was to be subject to the seller’s ability to purchase the material when the specifications were furnished by buyer and subject to conditions remaining unchanged at time of receipt of buyer’s shipping orders.

While we have heretofore stated our view of what the expression means, uninfluenced by any trade usage, yet, admitting in general the propriety of evidence as indicated by the offer, there is nothing in the offer which makes it material.

The offer refers to the time the specifications were furnished, which was on September 17, and no claim was then made by the seller that there had been any change in market price of the tape, or that there was then inability to purchase the material ; but, as has been pointed out, the specifications were accepted,. and the contract, as it then was, both parties proceeded to execute, and they actually and strictly operated under it for a considerable time. Under these circumstances the offered evidence was properly excluded.

Second, certain letters and telegrams between the parties were offered for the purpose of showing conditions which rendered impossible the delivery of the tape in question, and that defendant in error voluntarily abandoned the contract and purchased a large amount of other material in place of this tape. We have commented on this situation, and we find nothing in the rejected correspondence which would in our judgment relieve plaintiff in error from the consequence of its failing to fulfill its contract. We find nothing in the offered evidence that tends to show abandonment of the contract by defendant in error.

It purchased a large quantity of tape in the open market, most, if not all, from plaintiff in error. It paid the very much greatly increased market price for this substitute material. Plaintiff in error did not contend that it was thereby complying with the contract; indeed, it contends that in 1919, after prices for the contract tape had very materially declined, it offered the Paper Company to deliver the balance due on the contract. We find no error in the rejection of the correspondence.

As to the contention that the court erred in admitting the testimony of witness Stalhut as an expert on market values of such tape, it is sufficient to point out that the record shows no objection to his evidence or to his qualification as an expert. We find no error in the record, and the judgment is affirmed.