Case Name: Canonsburg Iron Co. v. McKeever et al.
Court: Supreme Court of Pennsylvania
Jurisdiction: Pennsylvania
Decision Date: 1888-10-15
Citations: 1 Monag. 744
Docket Number: No. 86
Parties: Canonsburg Iron Co. v. McKeever et al.
Judges: 
Reporter: Cases in the Supreme Court of Pennsylvania; being those cases not designated to be reported
Volume: 1
Pages: 744–747

Head Matter:
Canonsburg Iron Co. v. McKeever et al.
In an action on the case for damages for breach of written contract, the evidence was to the following effect: A coal company offered in writing to
furnish an iron company with what coal they would require for their works for three years, at prices named. It was stipulated that the coal company should not be held in damages for miner’s strikes, and the iron company was not to be required to receive coal when their works were out of operation. The offer was accepted. Subsequently the iron company introduced natural gas into their works and almost entirely discontinued the use of coal. Held, that there could be no recovery of damages for failure to take coal, in place of natural gas, for the operations of the works.
Query whether, in such case, the defendant would be allowed to give parol evidence that a prior offer was made, on the same day, requiring the iron company to take sufficient coal to operate Iheir mill, that this was rejected for the reason that they did not intend to bind’ themselves to take any quantity of coal but only what they would need, of which they were to be the judges; that the agreement in suit was then drawn up with the intention of expressing this understanding, and was executed; and that, if it had not been for the modification, it would not have been executed by the iron company.
Oct. 15, 1888.
Error, No. 86, Oct. T. 1888, to O. P. Washington Co’., to review judgment on verdict for plaintiff in an action of case by McKeever, Oook & Go. against H. S. Duncan et al., doing business as the Canonsburg Iron Go., Limited, at Feb. T. 1886, No. 257. Williams, J., absent.
The written contract, for the breach of which suit was brought, is stated in the opinion of the supreme court. An acceptance by the iron company was endorsed upon the written offer.
At the trial, when H. S. Duncan was on the stand, the defendants offered to prove by him that, on the day the contract in suit was written, a-prior offer was made by McKeever, Oook & Go., which, in its terms, required the iron mill company to take sufficient coal to operate their mill, from McKeever, Oook & Co.; that this was objected to by Mr. Duncan for the reason that they did not intend to bind themselves to take any quantity of coal, but only what they would need, of which they were to be the judges; that the agreement now in evidence was then drawn up for the purpose and with the intention of expressing this understanding; and was then executed by Mr. Duncan ; and that, if it had’not been for the modification so made, the agreement would not have been executed by the iron mill company.
Objected to as incompetent and irrelevant, being an attempt to modify a written agreement by parol evidence, without alleging fraud, accident or mistake; and inadmissible because no notice thereof was given in the bill of particulars of the defendant. Objection sustained, and exception. [5]
Hon. Jonathan Allison on the stand: The witness having testified that he had been operating a coal mine within two-and-a-half miles from the mine of said Cook for twenty-five years, the defendants offer to ask the witness the following question: “ From your knowledge of Mr. Cook’s mine, its location, the necessary expense he should be at in the running of the mine, and in the delivering of the coal, state whether, in your judgment as an expert, a profit could have been made on the delivery of that coal at the rate of $1,500 an acre ?”
For the purpose of showing the improbability of Mr. Cook’s estimate of the profits, and the unfairness of it.
Objected to as incompetent and irrelevant. Objection sustained, and exception. [6]
The plaintiffs gave evidence to show that the defendants introduced natural gas into their mill, after which they took from the plaintiffs only a very small quantity of coal.
The court charged, inter alia, as follows:
[“ Under this contract, Mr. Cook claims that the iron company was bound to take from him all the coal that was required and necessary to run the mill during tbe three years that' the contract was in force. It being in evidence that, at the time the contract was made by the parties, coal was the only fuel being used or that was then accessible and suitable to be used in this mill, we instruct you as a matter of law, that this is a proper interpretation and construction of the terms of this contract.”] [4]
The defendants presented these points:
“ 1. The acceptance by the defendants of the offer made by the plaintiff, to supply the iron company with what coal it would require for the mill for three years from November 1, 1882, at the prices named, did not bind the defendant company to use coal during the said term, exclusive of any other fuel. Ans. Refused.”
“ 2. The acceptance by the defendants of the offer made by the plaintiff to supply the iron company with what coal it would require for its mill for three years from November 1, 1882, did not bind the defendant company to take coal in sufficient quantity to •operate its said mill for three years from November 1, 1882, exclusive of any other fuel. Ans. Refused.”
“ 3. By the true construction of the writing dated November 8, 1882, the defendant company was not bound to take coal in sufficient quantity to operate its mill, from the plaintiff, but was •only bound to take what coal it saw fit to use in its mill at the prices named. Ans. Refused.”
Verdict and judgment for plaintiffs for $1,767.
The assignments of error specified, 1-3, the refusal of defendants’ points, quoting them; 4, the portion of the charge above, quoting it; and, 5, 6, the rulings on the evidence, quoting the bills of exceptions.
J. D. Braden, J. W. & A. Donnan, for plaintiffs in error.
The construction placed upon a contract must be reasonable. Chit. Cont. 79. Suppose it is discovered that iron can be made without coal, must the company still take coal ? They were tó be the judge under the contract, of the quantity of coal they would receive for their mill.
It was gross error to exclude the testimony of Jonathan Allison. Pittsburgh v. O’Neill, 1 Pa. 342; Detweiler v. Groff, 10 Pa. 376; Mish v. Wood, 34 Pa. 451.
By the evidence referred to in the fifth assignment, it was intended to show what was the understanding of the parties at the time of the signing of the written agreement. Such evidence is admissible. Spencer v. Colt, 89 Pa. 314; Selden v. Williams, 9 Watts, 9; Wallace v. Baker, 1 Binn. 610; Grier v. Huston, 8 S. & R. 402; Echel v. Jones, 8 Pa. 501; Caley v. R. R., 80 Pa. 363.
John L. Gow, R. W. Irwin, R. R. Crumrine and Boyd Crumrine for defendant in error.
Every contract is to be construed with reference to the situation and circumstances of the parties and the subject matter of the contract. Williamson v. McClure, 37 Pa. 402; Howland v. Leach, 11 Pick. 151.
When the plaintiff offered to furnish the coal with an express limitation as to when the defendants would be relieved from taking it, and they accepted the offer, they must be held to have accepted that as the only limitation of them liability for not taking the coal. 2 Whart. Cont. § 674; Aspdin v. Austin, 5 Q. B. 683.
It was not error to exclude the testimony of Allison. Jefferson Ins. Co. v. Cotheal, 7 Wend. 72; Mish v. Wood, 34 Pa. 454; 1 Greenl. Ev. 440; Dewitt v. Barly, 17 N. Y. 340; Krum v. Mersher, 116 Pa. 17; 2 Whart. Ev. 513, note.
The court committed no error in rejecting the testimony of Duncan. The effort was to show what Duncan understood the contract to be. It is not claimed that any declarations were made which induced the signing. Spencer v. Colt, 89 Pa. 314, is squarely against the plaintiffs in error.
The evidence was intended to vary the written contract and was properly excluded. Martin v. Berens, 67 Pa. 459; Rowand v. Finney, 96 Pa. 192; North & West Br. R. R. v. Swank, 105 Pa. 555; Phillips v. Meily, 106 Pa. 536; Irwin v. Shoemaker, 8 W. & S. 76.
Oct. 15, 1888.

Opinion:
Gordon, C. J.,
This case is all wrong, and must be reversed. The following seems to be the contract under which the parties contestant operated:
" Canonsburg, Pa., November 8, 1882.
"Canonsburg Iron Co., Limited, Canonsburg, Pa.: We will agree to supply you with what coal you require for your mill for three years from November 1, 1882, at the following prices, delivered at your works; you to build the necessary bridge, make and keep the road in good condition during this contract: Forked coal, $4.10 per 100 bushels; run of mines, $3.30 per 100 bushels ; slack, $1.50 per 100 bushels. Payment to be made, in cash, on or before the fifth of each month's delivery. This price is based on the three and a half cent mining rate, and, should the same be advanced at any time durihg this contract, the price of coal will be correspondingly advanced ; that is to say, if the mining in the Pittsburg district should advance half a cent, our price to you will then be as follows: Forked coal, $4.85 per hundred bushels; run of mines, $3.95 per hundred bushels; slack, $2.00. We will use our best efforts to give you your full requirement daily, but not to be held in damages for miner's strikes, or causes beyond our control; neither will we require you to receive coal should your works be out of operation at any time. Should coal not prove satisfactory after thirty days' trial, this contract to be null and void."
From this it is obvious that no limit was, by the contract, put upon the discretion of the defendants as to the amount of coal they were to use in the mill. It might be much, little, or none at all. What coal was necessary for consumption in their works they must take from the plaintiffs. This is all they were bound to do, and all the plaintiffs were bound to furnish them, and it was of no consequence whether the falling off in that consumption was occasioned by the contraction of their business, or- by the introduction of gas. In either case, less coal was necessary for the defendant's manufactory, and they were not obliged to pay for what they did not require.
The judgment is reversed.