Case Name: International Clay Machinery Company v. Oliver Machinery Company
Court: Montgomery County Court of Common Pleas
Jurisdiction: Ohio
Decision Date: 1918-12-26
Citations: 21 Ohio N.P. (n.s.) 425
Docket Number: 
Parties: International Clay Machinery Company v. Oliver Machinery Company.
Judges: 
Reporter: Ohio nisi prius and general term reports (new series)
Volume: 21
Pages: 425–436

Head Matter:
WARRANTY EXPRESS AND IMPLIED UNDER WRITTEN CONTRACTS OF SALE.
Common Pleas Court for Montgomery County.
International Clay Machinery Company v. Oliver Machinery Company.
Decided, December 26, 1918.
Sales — Written Representations of Fitness for a Particular Use Made by Seller Previous to Signing Written Contract — Not a Basis for Claiming Express Warranty When Not Reiterated in the Written Contract — Express and Implied Warranty Under the Ohio Code and Common Law.
1. When machinery is sold by written contract without express warranty as to fitness for a particular and special purpose being incorporated therein, such express warranty can not be established by proof of the representations of a letter sent by the seller to thé buyer prior to the execution of such written contract.
2. When opportunity is given for the examination of such machinery and it is inspected before purchase by the buyer or his agent and upon such inspection changes and improvements are suggested by the inspector and made by the seller, the purchaser is not entitled to the.benefit of implied warranty of fitness for use for the purpose intended.

Opinion:
Snediker, J.
This case is before the court on the merits. The plaintiff, a corporation located in this city, complains in its petition that on or about the 21st day of December, 1915, it entered into a written contract with the defendant whereby the plaintiff agreed to purchase and the defendant agreed to sell to the plaintiff thirteen turret lathes, at the price of nine hundred and fifty dollars for each lathe, delivered by the defendant f. o. b. cars at the city of Grand Rapids, Michigan.
The plaintiff contends that this contract was based upon and embraced as part of the terms and provisions thereof certain written and printed plans and specifications prepared by the said defendant of the said lathes, together with statements and representations made by the defendant in its written correspondence with the plaintiff, and also in certain oral communications by agents of the defendants with agents of the plaintiff. The deliveries, the plaintiff says were to have been made by the defendant, one lathe within two weeks from the date of the contract, six within six weeks from the date of the contract and the remainder within seven weeks from the date of the contract.' Plaintiff's contention is that it specifically advised the defendant that it desired to purchase lathes which would turn three-inch Russian shrapnel or shells as it had immediate prospect of a large and favorable order for the making of such shrapnel and shells on a highly renumerative basis; that in compliance with the specifications prepared by the defendant and upon which the contract was based, the lathes were represented as being designed and suitable for turning three-inch Russian shells, and that representations were made by the defendant in its correspondence that it, the defendant, contemplated the making 'of shells from forges itself, and that the style, type and kind of turret lathe contracted for by the plaintiff had been especially designed for its own use in turning three-inch Russian shrapnel.
The plaintiff says that the entire purpose and object of its contract with the defendant, so far as this plaintiff is concerned, was to enable it to procure turret lathes which would be proper and suitable for the turning of said shells; that this the defendant knew and understood throughout all the negotiations leading up to and forming a part of said contract. Certain changes were, as plaintiff states, made in the spindles of the lathes for the purpose of making them fully conform to and answer the objects and purposes of the plaintiff. The plaintiff then complains of certain delays in deliveries; that upon installation of the lathes at its plant they failed and refused to do and perform the work for which they were designed and which they were represented by the defendant as being capable of, that is, the turning ou,t of three-inch Russian shrapnel.
The plaintiff complains that the lathes so constructed and shipped by the defendant were defective in design and mechanism in that the turret holes were out of line, turret stops which were inserted in the turret posts did not fit therein suitably, causing) considerable play between them and corresponding vibration, and head g'ears were improperly constructed, and that there were other objectionable conditions; all of which necessitated changes and improvements which this plaintiff was compelled to make, and plaintiff sets forth an itemized statement thereof which, in all, total $1,419.66.
The plaintiff paid for eleven of the lathes which have been shipped to it and placed in its factory. The other two lathes were sent by the defendant, but have been subjected to an attachment by the plaintiff.
As a second cause of action the plaintiff claims delay in the manufacture of the three-inch Russian shrapnel, on account of the defect claimed in its first cause of action, and that as a result thereof it was unable to fill its contract which it had made with other party and which provided for the manufacture by the plaintiff of one hundred thousand Russian shrapnel at a net profit of twenty cents on each shell; that because of these conditions and circumstances it lost the contract, and its total loss and damage on account thereof was twenty thousand dollars, and plaintiff asks recovery in the sum of $21,419.66.
By -way of answer, the defendant says that it did contract in writing with the plaintiff to manufacture and sell plaintiff thirteen 47-T turret lathes according to description set out in the contract and bulletin of specifications attached thereto; that this contract bearing date of December 20, 1915, and this bulletin of specifications embraced all the terms, conditions and understandings of every kind between the plaintiff and the defendant; that delays in delivery were caused by the- action of the plaintiff; that-the lathes made and delivered by it to the plaintiff were in all respects according to contract and specifications, and were of the best material and workmanship, and were properly constructed and built in all details and parts; that the plaintiff's claim on account of expenses in changing the lathes and adding parts is not proper against it, the defendant, as they are for parts that were not set forth in the contract and specifications, but are separate and apart therefrom and therefore can-not be charged to it; that defendant has fulfilled its contract with the plaintiff in every way except the deliveries which were delayed by the plaintiff's action as aforesaid, and the defendant denies each and every allegation in the plaintiff's two causes of action not expressly herein admitted to be true.
Plaintiff's reply is a denial of all defendant's allegations which are not consistent with its petition.
From the evidence it appeared that this plaintiff, contemplating the construction of three-inch Russian shrapnel, communicated with the defendant company as to the bind and character of the lathes made by it by letter of December 3, 1915, as follows:
"Oliver Machinery Co.,
Grand Rapids, Mich.
Gentlemen:
We are in the market for five to ten lathes for turning three-inch Russian shrapnel. Have you anything to offer for quick delivery 1
Very truly yours,
Chas W. Raymond,
Purchasing Agent. ' '
In response to that communication, under date of December 4, 1915, the defendant wrote to the plaintiff the following:
"December 4, 1915.
"International Clay Machinery Company,
Dayton, Ohio.
Gentlemen:
We are in receipt of your favor of December 3d, stating that you are in the market for five or ten lathes for turning three-inch Russian shrapnel, and we are enclosing herewith photograph and circular of our 16-inch very heavy duty engine and turret lathe. Our turret lathe is especially' designed for turning three-inch Russian shrapnel, although the engine lathe is a general purpose machine and may be used on all classes of 'work.
(Signed) Oliver Machinery Company."
An illustration and circular of No. 16 heavy duty engine and turret lathe is found in plaintiff's Exhibit 3 and as part of that circular certain specifications are found relating to the construction, material and efficiency of the lathe.
Thereafter, on December the 17th, 1915, the following telegram passed tp the defendant company from the plaintiff company:
"Oliver Machinery Company, Grand Rapids.
Do you guarantee material workmanship suitable for three-inch shrapnel inside turning? If so, will have a man to inspect them Monday. Answer."
And to this telegram, on the same date, a reply came from the defendant company to the plaintiff company:
"International Clay Machinery Company, Dayton, Ohio.
We guarantee material and workmanship first class. We consider the machine suited to your work, but you must be the judge of suitability.
Oliver Machinery Company. ' '
Thereafter, on December 20, 1915, the lathes were inspected by a representative of the plaintiff company for the purpose of determining whether or not they were of a kind and character which would turn three-inch Russian shrapnel. Upon his inspection this agent of the plaintiff company suggested certain changes in the lathe- with the object of making it stronger and more fit for use in the heavy work to which it was intended to be subjected in turning the shrapnel, and advised defendant that plaintiff would take thirteen, and under date of December 20, 1915, this plaintiff and this defendant entered into a contract in writing in the following language:
"December 20th, 1915.
Contract for Turret Lathes.
The International Clay Machinery Company of Dayton, Ohio, hereby agrees to purchase and the Oliver Machinery Company of Grand Rapids agrees to sell thirteen (13) No. 47-T turret lathes as follows:
Specifications for turret lathe as per Bulletin No. 47-T, dated 12-13-'15, copy of which is attached hereto. Machine is to have spindle four (4) inches diameter with 2 %-inch hole and with two hardened steel thrust collars. Price of each f. o. b. cars Grand Rapids, Mich., nine hundred and fifty dollars ($950).
Terms — sight draft attached to bill of lading, subject to the clause at the bottom of our letter-head sheet, delivery as follows:
One (1) as near to two (2) weeks from date as seller's works will permit.
Six (6) in six (6) weeks and
Six (6) in seven (7) weeks.
All thirteen (13) to be delivered f. o. b. cars Grand Rapids seven (7) weeks from date of receipt of order.
Earlier shipment acceptable to purchaser. (Signed)
Oliver Machinery Company,
by J. W. Oliver, President.
International Clay Machinery Company,
by J. C. Brannock."
And thereupon the defendant entered upon the performance of its contract in the construction of the lathes.
It appears that after the delivery of the lathes, in its attempt to make the Russian shrapnel, this plaintiff had difficulty in the use of the lathe, which resulted in the delay, in failure of production, and eventually in the loss of contract to construct shells. There passed between the parties numerous communications— complaints on the part'of the plaintiff and explanations on the part of the defendant; changes were made in the machines, both with and without the, advice of the defendant; delays were occasioned in deliveries with respect to which each party claims the other was at fault.
At no time did the plaintiff company in its communications to the defendant, after certain of the lathes had been received by it in its factory and put in operation, absolutely reject the lathes, refuse to accept them, or offer to return them to the defendant. The whole scope of its correspondence with respect to defects was that it was dissatisfied in certain particulars; that it claimed that certain changes were necessary, stating the kind and character of such changes and expense incident thereto; and that it asked the advice and help of this defendant in such alterations. The plaintiff did write under date of February 2, 1916, to the effect that, on account of the turret holes being 1-16 out of line and on account of the necessity of its reboring the holes, it expected to charge back the expense to' the defendant. And in that letter it says:
"Now, we also wish, to impress on your mind the necessity oi! giving this particular point attention on the lathes that you are still to construct. To be candid with you, should we receive twelve additional lathes from you and find the turret holes 1-16 out of line, we would be very much inclined to reject them altogether. ' '
In other words, there was not up to March 22, 1916, the date of the bringing of this action, and there is'not claimed in this case any rescinder by the plaintiff of its contract with the defendant. The contract is recognized, and on account of their differences this action was brought by the plaintiff to recover under what it regards as the warranties, express and implied, of the defendant as to the fitness for use of the lathes in the construction of Russian shrapnel and further, on account of the implied warranty which attaches, of the fitness of the lathes with respect to material and workmanship. It is not necessary, therefore, for us to consider and apply to the evidence before us the rules of law relating to a refusal to accept or to a rescinder.
The contention of the plaintiff is, as we have said, that not only the written contract of December 20, 1915, shall be looked to in determining as to the duty of the defendant company, but also in connection therewith all conversations and written communications made by the defendant company to plaintiff or its representatives; and in so doing it claims that it is entitled to the benefit of an express warranty as recited in the letter of December 4, 1915:'"Our turret lathe is especially designed for turning three-inch Russian shrapnel." If the contract as between the plaintiff and defendant had been made solely by correspondence and the letter of December 4th was a part thereof, even though it antedated the final order for the lathe, then, under the rule laid down in the 39 Ohio State, p. 671, this plaintiff would be entitled to the benefit of what is contained in that letter. But after that letter was written and after certain other oral and written representations were made by the defendant company, the contract of December 20, 1915, was entered into, and nowhere in that contract is found any express warranty with respect to the fitness of the lathes there bought and sold for the turning of three-inch Russian shrapnel.
In the ease of Curran & Wolf v. Houser, Kramer & Company, 6 Ohio Nisi Prius Reports, the Superior Court of Cincinnati, ex-President Taft deciding the case, says:
'1 It has sometimes been held that as the warranty is a collateral undertaking for the main contract, parol .evidence is admissible to establish warranty, though the terms of the sale are in writing, but by the great weight of authority the rule is that, where parties reduce their contract to writing, no additional warranty can be engrafted on it by parol or the other writings not a part of the former contract.
' ' Then in Randall & Stead v. J. & P. Rhodes, 1 Curtis, C. C. R., 90, the action was on a warranty in the sale of a ship that it was of white oak. It was sought to prove the warranty by the letter from the defendant to the plaintiff containing representation that the ship was of white oak. Subsequent to the letter a written contract of sale was signed, which contained no reference to the wood of which the vessel was made. Mr. Justice Wood held that the statement in the letter must be regarded merely as a representation and not a warranty and gave no right of action for a breach." (Here follow authorities quoted by Judge Taft. He then goes on) :
"In the case of Prideaux v. Bennett, 1 C. B. N. S., 613, a case very like the one at bar in more respects than this, it was held that 'no warranty grew out of a circular sent to the purchaser on which he relied in sending in his order, although it appeared that he had no other knowledge of the article bought. ' It follows, therefore, that no warranty is established either by the parol statement of plaintiff's agent or by the circular handed by him to the defendant."
This language we regard as stating the law, and we may not here find that we are entitled to consider the letter of December 4th and subsequent communications before December 20th as express warranties to which the plaintiff is entitled under its contract.
We now come to the question as to whether or not the plaintiff is entitled to the benefit of the implied warranty of fitness for the use for which the lathes were intended; that is, as stated by the plaintiff in its petition, the turning out of three-inch Russian shrapnel or shell. As before stated, prior to the making of the contract upon which the plaintiff sues, a special representative of the plaintiff went to the factory of the defendant and there inspected the lathe in question, and directed the defendant company to make such changes as in his judgment would better perfect the machine for the purposes of the plaintiff in turning out shells.
The rule under these conditions is laid down by the court in the 71 Maryland, p. 116, in these words:
"The doctrine of implied warranty has not, it seems to us, any application to the facts in this case. Where the buyer has an opportunity of examining the thing sold, there is no implied warranty in the absence of fraud or express warranty, that it shall be fit for the purpose for which it was bought. In such cases the rule of caveat emptor applies, by which is meant that unless the buyer sees fit to require a warranty he takes upon himself the risk as to quality."
In 41 Hun, at page 227, the court say in the opinion:
"In the ease at hand the plaintiff's agent, by it selected for the express purpose of making suitable and proper inspection, examined all the pans and the enameling thereof and approved the'same. If he was incompetent, if he was negligent, if he was inattentive, the responsibility for such neglect, inattention or want of capacity should fall upon plaintiff."
The court refers to the language of Davis, P. J., in McParlan v. Boynton, 8 Hun, 453, where the parties stipulated that articles to be manufactured should be of a particular kind and quality, and at the same time stipulated that they should be tested by a person selected by the purchaser before delivery to ascertain whether they are of the specified kind and quality, and such test is in fact made by him, and the goods are thereupon delivered and accepted:
"The defendant had the privilege of selecting any person he chose. It was both his interest and duty to select a competent and skillful man. If he failed to do that, it was his misfortune or neglect. ' '
In the 4th Fed. eases, at p. 1049, we find the syllabus in Calhoun v. Vechio et al to be:
"Action to recover the stipulated price of a quantity of looking-glass, which the plaintiff advertised as white glass of a superior quality, and which the defendants purchased after having particularly examined the same, signing the agreement stating tiie purchase and price to be paid, on taking the glass away. On the following day one of the defendants returned, examined the glass and said it was an inferior quality, and refused, to comply with the agreement of the preceding day. The glass was in fact of a very inferior quality. The court held that the defendant having examined the glass and given the agreement to purchase it, he could not afterwards claim to be relieved from his bargain by the discovery that the quality of the glass was inferior and that it was not worth the price agreed to be paid for it. ' '
"2. The statement of the quality of the glass in the advertisement did not amount to a warranty inasmuch as the defendants did not rely upon the advertisement, but on their judgment formed after an examination."
See also 10 Wall., 383.
In the 53 N. Y., at p. 519, the court say:
"But in the absence of fraud or latent defects, an acceptance of the article sold upon an executory contract, after on opportunity to examine it, is a consent and agreement that the quality is satisfactory and as conforming to the contract, and bars all claim for compensation for any defects that may exist in the article. The party can not, under such circumstances, retain the property and afterwards sue or counterclaim for damages under the pretense that it was not of the character and quality or description called for by the agreement. ' '
In 2nd Story on Contracts, Section 1071, et seq., the author lays down the rule that:
"If the work is open to the inspection of the buyer and the opportunities of forming a judgment of its sufficiency are open to the buyer as well as the seller, the rule of caveat envptor applies. ' '
As hearing, upon the question here presented, we may quote Section 8395 of the General Code of Ohio:
"Subject to the provisions of this chapter and of any statute in that behalf, there is no implied warranty or condition as to the quality or fitness for any particular purpose of goods supplied under a contract to sell or a sale, except as follows:
"1. When the buyer expressly or by implication makes known to the seller the particular purpose for which the goods are required and it appears that the buyer relies on the seller's skill or judgment, whether he be the' grower or manufacturer or not, there is an implied warranty that the goods shall be reasonably fit for such purpose.
"3. If the buyer has examined the goods, there is no implied warranty as regards defects which such examination ought to have revealed."
It will be seen from the reading of these portions of this section that the codification of the law of sales in Ohio complies with the common law with respect to implied warranty under the conditions here presented.
Of course, if there had been an express warranty here, the examination of the machine made by plaintiff's agent on its behalf and his suggestion with reference to the changes would not have avoided such express warranty. Under those circumstances plaintiff still would be entitled to claim and rely upon the warranty so expressly made. We find that plaintiff is entitled neither to express nor implied warranty in respect to the fitness of these lathes for the turning out of Russian shrapnel.
There is, as we have said, complaint in the plaintiff's petition of faulty 'Construction in the lathes in that the turret holes were out of line; the turret stops which were inserted in the turret posts did not fit therein suitably, causing a considerable play between them and a corresponding vibration, and head gears were improperly constructed and other objectionable conditions existed. The specifications of the lathe as found in the circular referred to in the contract are sufficient to entitle the plaintiff to complain had it made its claim good with respect to such defects. Under the rule laid down by the Supreme Court in Ohio in the 11 O. S. at p. 48, in the case of James Rogers & Co. v. Niles & Co., there is in a sale of the character here in question an implied stipulation in the contract that the machinery should be free from all defects of material and workmanship, whether latent or otherwise, as would render them unfit for the usual purposes of such a machine.
Of course, as to the allegations of its petition, the burden of' proof is on the plaintiff. In the conflict of testimony which was presented to ns, we can not find that the plaintiff has so far sustained that burden as to entitle it to recover on account of such implied warranty as to defects in workmanship and material. The change in the gears for which the plaintiff makes claim for $830.40 was an after-thought and was designed by the plaintiff for the purpose of giving greater power in operation of the tool, and the expense incident to such change can not be brought within the terms of the contract of December 20, 1915, which we have already found to be the real contract between the parties.
With respect to the reboring and the other changes that were made on the turrets and other parts of the lathe, the evidence indicated, and we think clearly showed, that the reboring was for the purpose of inserting a larger sized tool than that which the lathe, as manufactured, would carry. The interference which resulted by communications of the plaintiff to the defendant and which prevented the manufacture and shipment of the lathes at the time specified in the contract was instrumental in an increased cost of freight and drayage for which this defendant, as we view it, can not be said to be so far solely responsible as to entitle the plaintiff to recover. In regard to shipments, we can not find that, under all the conditions, the defendant violated its contract.
On the whole, therefore, our finding is for the defendant and against the- plaintiff npon the plaintiff's petition.
And coming now to consider the cross-petition of the defendant and having found that the plaintiff is not entitled to recover on the allegations in its petition, and finding that the two 47-T turret lathes heretofore shipped to the plaintiff by the defendant are now in its possession, and that defendant makes claim to the contract price therefor, thus consenting to their retention by the plaintiff and recognizing the plaintiff's property right therein, we further find that the defendant is entitled to recover the agreed price thereof of $950 each, with interest as claimed in its cross-petition.