Case Name: Dayton v. Hooglund
Court: Supreme Court of Ohio
Jurisdiction: Ohio
Decision Date: 1884-01
Citations: 39 Ohio St. 671
Docket Number: 
Parties: Dayton v. Hooglund.
Judges: 
Reporter: Ohio State Reports, New Service
Volume: 39
Pages: 671–682

Head Matter:
Dayton v. Hooglund.
■1. Whether in a contract of sale made solely by correspondence, there is a warranty as to quality, is a question for the court; and, although parol evidence is not admissible to contradict the agreement, the court may look, not only to the language of the correspondence, hut the subject matter of the agreement and surrounding circumstances-so as to be able to see the transaction as the parties themselves saw it.
2. Authority without restriction to an agent to sell, carries with it author, ity to warrant.
3. A foreign manufacturer of a superior brand of iron, having sold a por_ tion of it to a customer in this country, advised another customer^ known to him to be a manufacturer of bolts and nuts, to buy of the first customer “a ton or so for sample, should you wish to test the quality with a view to import this year; ” and such second customer, informing the manufacturer that he had acted on his advice, and finding the iron satisfactory for his purpose, ordered twenty tons of the brand; Held, that this amounted to a warranty that the twenty tons which, were to be manufactured by the plaintiff for the defendant for such use in his business, should be equal in quality to such sample.
4. In a suit for the price of a lot of iron manufactured by the plaintiff for the defendant, the defendant, in case there is a breach of warranty as to the quality of the iron, may recoup for such damages as he has sustained, although he has used the iron without offering to return it.
Error to the District Court of Hamilton county.
Frederika W. Hooglund and Carl Andres Lindroth, doing business as N M. Hooglund, manufacturers and shippers of iron at Stockholm, Sweden, brought suit September 29, 1874, in the Superior Court of Cincinnati, against Lewis M. Dayton, of Cincinnati, engaged in the business of manufacturing nuts and bolts in that city, under the name of American Bolt and Nut Works. The action was to recover the price of twenty tons of Swedish iron, “II. F. S.,” of specified sizes, sold by the plaintiffs (through Nils Mitander, their agent, of the city of New York) to the defendant. The contract was made solely by.letters between Mitander, as such agent, and Dayton.
The answer to the petition sets forth, among other things, by way of counterclaim, that the iron was ordered of the plaintiffs for use by defendant in his business ; that it was sold to him by sample; that the iron furnished was greatly inferior to the sample; that there was much delay in the delivery of the iron ; and that by reason of such inferior quality and such delay, the defendant has been damaged.
In reply the plaintiffs admit “ that said contract was in the form of an order, made by the defendant, and accepted by the plaintiffs, for said quantity of certain description of plaintiffs’ manufacture; ” but they deny the allegations of the answer above mentioned, and say that they “ proceeded to prepare and did furnish said iron as soon after accepting said order as was practicable;” and the allegations of the answer, above mentioned, were denied.
The cause was tried to a jury in February and March, 1878, and a verdict was rendered for the plaintiffs, on which judgment was rendered against Dayton for $2,553.78. The district court affirmed the judgment, and this petition in error is prosecuted by Dayton for the reversal of both judgments.
Probably all the evidence offered on the trial is set forth, substantially in the record; but as the bill of exceptions does not purport to contain all the evidence, the question whether the verdict is opposed to its weight, is not for consideration in this proceeding.
The fair inference from the testimony is that Dayton knew, from the beginning of the correspondence, that Mitander was agent of the plaintiffs, and clothed with authority to do whatever he undertook to do in the transaction ; and that Mitander knew, and it must be assumed the plaintiffs knew, that Dayton was engaged in business in Cincinnati, and wanted the iron, not for the purpose of selling it in the form received, but for the purpose of manufacturing it into bolts and nuts for sale to his customers.
On February 8, 1873, Dayton wrote to Mitander, ordering ten tons of iron (specifying size) of the kind mentioned in Mitander’s circular, which Dayton had received. Mitander replied as follows:
“New York, February 13th, 1873.
L. M. Dayton, Esq., American Bolt and Nut Works,
184 West Second street, Oi/ncinnati, Ohio:
Dear Sir: In reply to your favor of the 8th instant, just at hand, would say that the bolt rods in question are sold, and I have at present no bolt rods on hand. Messrs. Steever & Potts of Philadelphia, I know, have some H. F. S. bolt rods -| and T\ inch square, from whom you may get a ton or so for sample, should you wish to test the quality with view to import this year. For importation I quote, viz:
H. F. 8. from to -J- inch square $115.
“ « “ “ “ “ round 117.50
A. H. “ “ “ “ “ square 115.
“ “ “ “ “ “ round 117.50
O. B. “ “ “ “ “ square 115.
“ “ “ “ “ “ round 117.50
all gold per ton, at dock at Boston, New Yorkor Philadelphia, without duty, landing and custom-house charges, thirty days. The duty is 1J cents per pound,' less ten per cent, payable by the buyer upon arrival of iron. Above quotations are subject to confirmation from my house at Stockholm by cable. Your obedient servant,
Nils Mitander.”
On the trial Mitander testified: “ Bands around the iron have H. F. S. stamped on them. Our house has made a great deal of it. Plaintiffs are shipping merchants and shareholders in various iron works. Swedish iron varies from £10 to £21 per ton. One brand brings £25. The H. F. S. brand is one of the best I sell.. . H. F. S. brand is a word or stamp by which the iron is known. — Is only one quality of that grade of iron. Certain ores go into the making of this brand. . . . There has never been more than 5 per cent, waste in H. F. S. iron. . . . The Steever & Potts iron was ordered from me, but shipped from Sweden direct to Philadelphia. . . . II. F. S. brand is adapted for anything requiring strength. The brand bends well.”
Dayton replied to the letter of February 13th, as follows :
“ Cincinnati, March 24, 1873.
Mr. Nils Mitander,
69 William street, New York:
Dear Sir: After your favor of 13th pit. I ordered the bolt rods from Messrs. Steever & Potts, Philadelphia, and finding the quality to be what I want, can now make you an order for importation. Please order for me Norway bolt rods, II. F. S. brand, New York entry, as per price named by you, 1 ton yV round, 4 tons round, 2 tons f round, 3 tons f round, 4 tons -5*5- round, 3 tons round, 3 tons T\ round. If you have any of the above in store in New York, you can forward at once, if you prefer to do so. Please advise me of receipt of order and oblige, Truly yours,
L. M. Dayton.”
On the trial Dayton testified : “ The iron received from Steever & Potts was a little short of three tons. I gave this iron particular attention. D think it was equal in quality to any I ever used. Its qualities were tensile strength, tenacity, and so soft as to be bent and twisted in various ways without breaking — to be heated, swedged, and have a thread cut on it. Heating did not damage it.” Other witnesses testified to the same facts.
After further correspondence, in which there was slight modification as to size and shape of rods and price, Mitander wrote as follows:
“New York, April 1,1873.
American Bolt and Nut Works,
184 West Second street, Cincinnati, 0.:
Dear Sirs: Your esteemed favor of 29th ultimo duly received, conveying offer for 20 tons H. F. S. square bolt rods, as per specification, at $121 gold per ton, 2240 pounds, at dock, New York, 30 days; the duties and custom-house charges payable by the purchasers; which offer will be sent by first mail to my house for confirmation, and I shall have the pleasure, in due course of time, to inform you of its acceptance. I have taken due notice of your request regarding the shipment. The price above' given is both for rounds and squares, I presume they have got some way of facilitating the making of round rods, as the squares and rounds are at present quoted at the same price. I am, Your obedient servant,
Nils Mitander.”
After further correspondence, in which there was a further slight modification as to size of rods, the agreement, on May 24,1873, received the assent of both parties. Subsequently the mill in Sweden, in which the iron was being manufactured, was in part destroyed, and a lengthy, angry correspondence ensued between Dayton and Mitander, containing complaints by Dayton of delay in filling the order, and explanations by Mitander as to the causes of such delay. The twentieth letter was as follows:
“New York, December 26, 1873.
“ American Bolt and Nut Works,
“ 170 and 184 Second street, Cincinnati, Ohio:
“ Dear Sirs: I beg leave to inform you of thé shipmen t from London to this port, per S. S. ‘ Harold Haarfager,’ on the 1st of this month, your order for H.F.S. bolt rods complete, in 452 bundles, weighing tons 20 3.0.4. As per your former instructions, the shipping documents will be handed over to Merchants’ Dispatch Transportation Co. for shipment in bond to your place. In case of loss at sea you will effect insurance on the profit you anticipate on this importation; my insurance will only cover the value of the goods. The steamer ‘Harold Haarfager’ is expected here in the beginning of next month. I am, dear sirs,
“ Your obedient servant,
“Nils Mitander.”
To that letter Dayton replied as follows:
“ Cincinnati, December 29,1873.
“ Mr. Nils Mitander,
“ 69 William street, New York :
ll Dear Sir: Your favor 26th inst. duly received. I note particularly your remark in regard to insurance; but let me say that in case of loss at sea I should make no profit; to the contrary, I can buy the iron now for less money than the price of that. In this connection let me say that I am offered Sweden iron at $142.50 per ton, gold, free of duty and custom house • charges — have bought at about that rate. However, by reason of the non-delivery of your iron in the time I had every reason to expect it should be, and depending on it, I was forced to purchase at over $160 per ton, gold, nearly up to the amount I ordered from you. Certainly it was the fault of your house in Stockholm that the order was held eight months — a partial destruction of mill does not furnish sufficient reason. It is not right that I should suffer loss at both ends, and therefore expect you to make allowance to meet the present price. Otherwise I do not want the iron.
“ Yours, with respect,
“ L. M. Dayton.”
Further correspondence ensued, in which Dayton informed Mitander that he had rescinded the agreement. Mitander re plied that he (Mitander) had no power to rescind. The iron arrived at Cincinnati, and Dayton wrote as follows:
“ Cincinnati, January 29,1874.
“ Mr. Nils Mitander,
“ 69 "William street, New York :
“ Sir: Your favor, enclosing me bill for 452 bundles iron, which I had notified you not to forward unless you were willing to make good to me the damage by reason of delay, duly received. The iron also duly arrived, and I concluded to take it out of bond to save it from the cost of extra storage and other expenses which will be incurred pending our arbitration, feeling that you will certainly see the justness of my claim. The iron was received into my possession and duties all arranged only yesterday. The customs and other papers showing the ocean charges and shipping expenses came forward to me and I have paid same, and in presenting my bill in part I put them in. You are fully aware, of course, that I have and do expect you will settle the account on the basis of damages to me, so I need say nothing further. The ocean charges were, currency, $68.56. Shipping expenses, gold, $86.29. Tare allowance by customs, '565 pounds. Difference in value of iron now and when should have been received about $19 gold per ton — damage to me in proportion. If you are disposed to settle on this basis I will remit at any time. “ I am, &c.,
“ L. M. Dayton.”
The following letters closed the correspondence :
“ New York, February 2,1874.
“ American Bolt and Nut Works,
“Cincinnati, Ohio:
“ Dear Sirs : Your favor of the 29th January, announcing the receipt of the 452 bundles iron, has been received and contents noted. The ocean freight, $40.50 gold, has been charged you by oversight on the part of the Transportation Company, has been paid by me to them, and will be refunded you by them. For the invoice, $2,438.37 gold, I shall value on you, and please protect my sight draft on you for that amount on the 9th instant, the date on which it is due. I am, dear sirs,
“Tour obedient servant,
“Nils Mitander.”
“New York, February 6,1874.
“ American Bolt and Nut Works,
Cincinnati, Ohio :
“ Dear Sirs: Referring to mine of 2d instant, I beg to inform you that I have to-day valued on you at sight for $2,438.37 gold, order myself, being amount of invoice on bolt rods ex ‘ H. Haarfager,’ which you will please provide for being protected on presentation. I am,
“Your obedient servant,
“Nils Mitander.”
On the trial, Emig, superintendent of the defendant’s works, testified: “We have a common grade of iron at home as good as this iron. It bears no comparison to the first (Steever and Potts) lot. The bolts came back that we made from it. This iron wouldn’t answer. Wouldn’t stand bending when cold, and when made into bolts would break. It was too brittle — too hard. Besides, there was great diversity in sizes. From this cause there was great loss and inconvenience in making the bolts.” Simpson testified: “Nodifference between Swedish and Norway iron. I have always looked upon them as the same. . . . 'These specimens (from the iron in question) are of very poor quality. They look as if the fibres were gone. . . . This iron is worth nothing for Norway bolts. It might make common bolts if it would head.” There was other testimony to the same effect. Defendant testified: “ Something over ten tons of the iron remains. I saw the specimens tested. The iron is not good. It is not suitable for making Norway bolts........A large portion of the bolts made from it came back. The sizes are irregular, and a great deal is lost in making it up. This iron is deficient. It would not bend. It had not tensile strength, and the sizes were irregular. This twenty ton lot is suitable for making bolts of ordinary strength only — for common carriage bolts — such as are made from ordinary American iron. It might be used to make street railroad spikes. Am familiar with the prices of iron in New York. The Steever & Potts iron was worth in New York in January, 1874, $140 in gold including duty.”
And thereupon the defendant’s attorneys asked,, the witness the following questions:—
“ What was the iron sent to you by the plaintiffs worth in the New York market in December, 1873, and in January, 1874?
“ How did the iron sent to you by the plaintiffs compare in value in New York at that time with the value of iron such as was sent to you by Steever & Potts ?
‘ How much was the iron sent to you by the plaintiffs worth in January, 1874, in New York, for any purposes for which it could be used ? ”
To each of which questions the plaintiffs objected, and the court sustained the objection, and refused to permit either of the questions to ho asked, to which overruling of the questions the defendant excepted. And thereupon the defendant offered to prove that the iron furnished by the plaintiffs, on the order given by the defendant, was not worth at the time of delivery, either in the New York or Cincinnati market, more than $70 per ton, in currency, and that it was not worth more than that sum in either of those markets for any use to which it was fitted — which testimony was objected to by plaintiff’s attorneys, and the objection sustained, to which the defendant excepted.
J. W. Herron for plaintiff in error.
In addition to authorities referred to in the opinion, counsel cited and relied on the following : Brown v. Edgington, 2 M. & G. 290; Benj. on Sales, §§ 567, 894, 900, 901; Howard v. Hoey, 23 Wend. 351; Gautier v. Douglass, etc., Co. 13, Hun. 514; Bigge v. Parkinson, 7 H. & N. 954; Long on Sales, 128*; Beresford v. McCune, 1 C. Sup. Ct. 51; Dorr v. Fisher, 1 Cush. 271; Bryant v. Isburgh, 13 Gray, 607; Hyatt v. Boyle, 5 G. & J. 121.
Huston & Holmes for defendants in error.
In addition to authorities referred to in the opinion and argument for plaintiff in error, counsel cited and relied on the following: Baine v. Burnside, 5 N. Y. 95; Waring v. Mason 18 Wend. 25; Loomis v. Cromwell, 8 L. Rep. 546; 13enj. on Sales, §§ 649, 657, 661, 895, 896; Hargous v. Stone, 5 N. Y. 73; Gardner v. Gray, 4 Campb. 144; Bartlett v. Hoppock 34 N Y. 118; Railroad Co. v. Jessup, 44 How. 447; Jone's v. Bright, 5 Bing. 540; v. Randall, 29 N. Y. 358; Chanter v. Hopkins, 4 M. & W. 399; Greenthal v. Schneider, 52 How. Pr. 133; Stafford v. Pooler, 67 Barb. 143; Gibson v. Bingham, 43 Vt. 410; Allison v. Vaughn, 40 Iowa, 421; Kellog v. Denslow 14 Conn. 411; Percival v. Blake, 2 C. & P. 514; Cost v. Giles, 3 C. & P. 407.

Opinion:
Okey, J.
The agreement in this case was made solely by correspondence between Mitander and Dayton, and is, therefore, an agreement in writing. Its construction is for the court. Parol evidence is not admissible to vary its terms (Thurston v. Ludwig, 6 Ohio St. 1; Jones v. Brown, 11 Ohio St. 601, 606; Neil v. Trustees, 31 Ohio St. 15, 19); nevertheless, the court may look, not only to the language employed in the letters, but to the subject matter of the agreement and the surrounding circumstances, so as to be able to see the transaction as the parties themselves saw it. Merrian v. United States, 107 U. S. 437.
Authority, without restriction, to such an agent to sell such property, to be manufactured for such a purchaser, carries with it authority to warrant that it shall be equal, when manufactured, to a sample produced by the agent when he made the sale. Schuchart v. Allens, 1 Wall, U. S. 359; Ewell's Evans on Agency, 158 ; cf. Benjamin on Sales, § 945. The rule stated in Herring v. Skaggs, 62 Ala. 180, even if •sound, is inapplicable to this case.
The agreement under consideration was, in effect, this: Plaintiffs, manufacturers of a superior quality of Swedish iron, known as H. E. S. brand, at Stockholm, knowing that defendant was engaged in manufacturing bolts and nuts at Cincinnati, and wanted iron superior to American iron, not for the purpose of re-selling it in the form received, but for the purpose of manufacturing the same into bolts and nuts, and then selling them to his customers for purposes requiring superior iron, informed the defendant that they had sold to Steever & Potts, Philadelphia, a lot of H. E. S. brand, and advised him to buy of that lot " a ton or so for sample, should you wish to test the quality with a view to import this year." The defendant having purchased of Steever & Potts, three tons, part of the lot, and finding the quality to be excellent, informed the plaintiffs of the fact, and ordered of them twenty tons of that brand. The question is whether this was a warranty by the plaintiffs to the defendant that the twenty tons should be in quality substantially as good as the iron purchased from Steever & Potts. We hold there was such warranty. True, it was not strictly a sale by sample, for the twenty tons had not been manufactured. It was more than a sale by sample. Something better than American iron was needed by defendant for use in his business. It could only be procured by importation, at a price in advance of American iron. He applied to the plaintiffs, manufacturers of the II. E. S. brand, who, knowing his wants, suggested that he buy, for the purpose of testing its quality, a ton out of a lot of that brand which they had sold to Steever & Potts. The defendant was not engaged in buying iron to sell it without changing its form. The name of the brand, to him and his customers, was nothing; the quality of the iron everything. No case has been cited, nor have we found one, opposed to the view that here was a warranty, only to be satisfied by iron equal in quality with that which the defendant had purchased from Steever & Potts. The Pennsylvania cases relied on by plaintiffs (Boyd v. Wilson, 83 Pa. St. 819, and cases there cited), though thought to be opposed to the current of authority (Benjamin on Sales, 4th Am. ed. by Corbin, § 369, note 26), are in no way in conflict with our view of this case. Moreover, if there had not been such warranty that the quality should equal the Steever & Potts iron, the plaintiffs, knowing the object which the defendant had in view in obtaining iron from the manufacturers in Sweden, would have impliedly warranted that the iron furnished by them was suitable for the purpose for which it was obtained, and free from latent defects. Rodgers v. Niles, 11 Ohio St. 48; Byers v. Chatpin., 28 Ohio St. 300; Randall v. Newsom, 2 Q. B. D. 102; Kellogg Bridge v. Hamilton (S. C. U. S.) 18 Cen. L. Jour. 150 ; Benjamin on Sales (4th Am; ed. by Corbin), § 988, note 35.
The defendant retains the property, and does not now seek to disaffirm the contract, but to enforce it by claiming damages, by way of recoupment, for the non-performance of the contract with respect to quality (as to which see par. 3 above) and as to delay (as to which see Ogle v. Vane, L. R. 3 Q. B. 272; Hickman v. Haynes, L. R. 10 C. P. 598; Tyers v. Rosedale Iron Co., L. R. 10 Ex. 195; cf. Plevins v. Downing, 1 C. P. D. 220). In view of the nature of the warranty, the defendant may use the iron in his business, and in this action for the price, recoup to the extent he has been injured by a breach of the plaintiffs' warranty. Miller v. Eno, 14 N. Y. 597; Day v. Pool, 52 N. Y. 416; Gurney v. Railroad Co., 58 N. Y. 358; Pomeroy's Rem. (2d ed.) §779. And see Timmons v. Dunn, 4 Ohio St. 680. Dounce v. Dow, 64 N. Y. 411, cited by plaintiffs' counsel, is not in conflict with these cases.
In view of the warranty, the evidence as to the quality of the iron, and the evidence as to delay, there was error in rejecting evidence as to the value of the iron, with a view to recoupment. Whether there was such defect, and if so, what damage resulted from it, and whether there was injury from delay, and if so whether it had been waived, are questions for the jury. Besides, parts of the elaborate charge of the judge of the superior court who presided at the trial, are in conflict with the construction we place on the contract; and this also calls for a reversal.
Judgment reversed and cause remanded for a new trial.