#### The Domhoff & Joyce Co. *v.*The Hamilton Furnace Co.

*Contracts—Sale of coice—Government price to govern during federal control—Failure to agree upon price thereafter—Seller entitled to reasonable price—Section 8389, General Code.*

(No. 17667

Decided May 22, 1923.)

Error to the Court of Appeals of Butler county.

On February 25, 1920, plaintiff, the Domhoff & Joyce Company, entered into a written contract with the defendant, the Hamilton Furnace Company, for sale and delivery to the latter of 120,000 tons of coke at the price of $8.89 per ton, f. o. b. ovens, shipment to be made monthly of approximately 6,000 tons of furnace coke and 6,000 tons of egg-size coke. Monthly deliveries were to continue from March 1, 1920, to December 31, 1920,. inclusive. Payments were to be made according to the terms of a rider attached to the contract. The rider provided that- the price named in the contract was *26not in excess of that fixed by the United States government, and contained the further provision that—

“Should the United States government cease to regulate prices during the life of this contract, then the price of coke covered by this contract, but not then delivered, shall be subject to a revision to a figure to be mutually agreed upon by purchaser and seller.”

Plaintiff shipped the March deliveries at the price of $8.89 per ton, which were paid for by the defendant. On March 31, 1920, the United States government ceased to regulate the price of coke. Promptly after April 1st the plaintiff took up the question of mutual agreement upon a new price. A great many conferences were had between the parties during the months of April and May, relative to the price to be fixed for the deliveries during those months, but there was an utter failure to agree thereon. In the meantime plaintiff continued to ship coke until about May 20 of that year.

It appears from the record that in April Mr. Savage, the vice president of the furnace company, suggested the continuance of shipment until an understanding could be reached between the parties as to what the price should be. It appears further that prior to May 3 plaintiff had suggested the price of $12.50 per ton for furnace coke and $11.50 for egg-size coke, f. o. b. ovens, to cover the period of delivery under the contract. On that date, May 3, the furnace company wrote that these prices would be “satisfactory for the months of April and May,” but that it could not accept them for a longer period. This proposition was not acceded to, except with a modification as shown by the correspondence between the parties.

*27It is apparent from the record that at no time were the parties able to mutually agree upon a price for the coke after the cessation of government control, either for the amount remaining to be shipped under the contract or for the deliveries made during the months of April and May. There is testimony tending to show that some time in May the plaintiff was offered the sum of $13 per ton for the coke, and also that at times during these months the defendant furnace company had been able to obtain a price lower than $11.50 per ton for furnace coke.

The Domhoff & Joyce Company brought an action on account for coke delivered during the months of April and May. The defendant answered thereto by way of cross-petition, claiming damages because of the alleged breach of the contract by plaintiff, under which it claimed the right of shipment and delivery under the contract at the price of $8.89 named therein. On the trial the common pleas court found in favor of the plaintiff on its petition in the sum of $111,880.22, being the price for delivered coke at the sum of $8.89, and also found in favor of the defendant on its counterclaim. It found that the defendant’s damages exceeded plaintiff’s by reason of an alleged breach of the contract on the part of the plaintiff, but found the amount due the defendant in a sum exactly offsetting the amount due the plaintiff, and entered judgment accordingly. On error this judgment was affirmed by the Court of Appeals, whereupon error was prosecuted to this court.

Mr. *Frank Brandon; Mr. E. A. Belden,*and *MrA Murray Seasongood,*for plaintiff in error.

*28*Messrs. Shotts & Millihm,*and *Messrs. Ernst, Cassatt S Cottle,*for defendant in error.

By the Court.

The facts are substantially conceded, and in our view the application of the law becomes quite simple. The contract contemplated a sale and delivery of coke until December 31, 1920. The price agreed upon was $8.89 per ton, but it was expressly stipulated that upon the cessation of government control the price of coke covered by the contract, but then undelivered, should be subject to a revision to a figure to be mutually agreed upon. The lower courts held that under the terms of the contract the original contract price continued in force until a new price should be mutually agreed upon, and that, since no agreement was reached, the price of $8.89 per ton controlled the deliveries made in April and May. This was not the language of the contract contained in the rider attached. The parties there agreed that after control by the United States government ceased they should revise the price by mutual agreement. This was not only the contract between them, but it was so interpreted by the parties, as appears from the numerous confer-, enees and correspondence between them.

It is evident from the record that the plaintiff promptly upon termination of government control endeavored to have a new price fixed and agreed upon. It further appears that no agreement was effected. The position of the defendant therefore seems to be that it could keep aloof from mutual agreement while the deliveries continued, and thus avail itself of the price named in the original contract. The record is replete with testimony diados*29ing the fact that during the continuance of shipments after March 31st the parties to the contract expected to agree upon a new price for the coke, and we find no contradiction of the testimony that Mr. Savage, the vice president of the defendant, suggested that the shipment of coke be continued until the parties reached an understanding. In support of the judgment on the cross-petition the lower court held that the plaintiff breached the contract by refusing to further ship coke at the old price, of $8.89 per ton. This is fallacious, for at no time did plaintiff agree to furnish coke at $8.89 beyond the period of government control.

In view of the situation, what became the legal obligations of the parties? By the rider it was their duty to mutually agree upon a new price after March 31,1920, and if such price could not be agreed upon, and shipments continued, the seller and buyer were under' obligations, respectively, the seller to ship the coke, and the buyer to pay a reasonable price therefor. Section 8389, General Code, controlled the case in its present aspect. That section provides that the price may be fixed by the contract or left to be fixed in such manner as may be agreed upon, and—

“(4) "When the price is not determined in accordance with the foregoing provisions the buyer must pay. a reasonable price. "What is a reasonable price is a question of fact dependent on the circumstances of each particular case.”

On the showing that the parties were unable to agree upon a new price during the deliveries in April and May it became the duty of the court to *30ascertain what the reasonable market price was and render judgment accordingly.

The judgments of the common pleas court and Court of Appeals are therefore reversed, and the cause remanded to the former for a new trial, or for further proceedings according to law.

*Judgment reversed.*

Marshall, C. J., Wanamaker, Robinson, Jones, Matthias, Day and Allen, JJ., concur.