Slike stranica

at all times and under all like conditions. brake test; that in February, 1904, the third Neither of the turbines, nor any part of unit had not yet been installed, and was them, were ever tested at the Holyoke test- lying upon the ground at Twin Branch, the ing flumes, either before or after their in- fourth unit was not maufactured, and that stallation, nor were they ever tested by any the same was not delivered until June, 1905, mechanical or brake test at the Twin Branch thereafter; that thereafter appellants prodam, after being put in commission, or else- posed and offered to compensate and reward where; and such water wheels or turbines, appellee if it would concede the making of an either in whole or in part, were never tested electrical test, and agree to be bound by the by any kind or character of tests under the same, but that appellee refused such offers, exact physical condition set forth in the con- and insisted that they would stand upon the tract; nor were they ever tested under an contract; that the appellants thereafter proexact 15-foot or 18-foot head by any kind posed and offered to make a mechanical test; of test, by the appellants or by any other that this offer of appellants was coupled with person for them. There never was any meas- the condition by which in substance and urement made by the appellants, or any oth effect appellants required of appellee that it er persons for them, through weir, or any agree to the finding of some third person in other approved form of device, or the vol- the capacity and character of an arbitrator, ume of water available at the dam, or the and further required of the appellee that it water used by any of said lines of turbines. agree to be bound by the finding of such If a wheel of a given type and size is tested arbitrator; that appellee made no objection in testing flume, and the quantity of water to the character of such test, but notified discharged by it is ascertained, it would be appellants that it refused to modify the concome the basis of a water meter, and the tract, or to accept such third person as volume of water passing through it, or arbitrator and to agree to be bound by his through any wheel made on the same form, finding; that thereupon the appellants reat any given head could be computed. The fused to make any further tests whatever, or power of the turbines was never read or as- to pay any further sums due under said concertained by or through any mechanical or tract whatsoever until appellee would agree brake test, either at Twin Branch or else to abide by the result of any further test where and the only reading or statements of made. During the last half of the year 1906, the power given by said wheels at any time and up to September, 1907, the date of the since they were made were taken from elec- commencement of this action, and while the trical instruments, after the power had been plant and turbines were in the control and developed electrically through generators, possession of the St. Joseph & Elkhart Powand transmitted to the switchboard, and then er Company, that company informed the read in kilowatts, and then reduced to horse parties that it could not at such time permit power.

the use of said plant or wheels, by either apPrior to June 13, 1902, the parties through pellee or appellants, on account of load contheir representatives met at Springfield, Ohio, ditions; and that in May, 1907, said operat-, and the appellee then and there informed ap- ing company informed the appellee that they pellants that it would not sell any of its could probably have the use of a line of wheels or water turbines with any guaranty said turbines within a year for the purpose to depend upon any electrical test, or test of making a test. made by any electrical device; that after In what is known as an electrical test of the execution of the contract or proposition water turbines, the power and the efficiency of July 19, 1902, nothing was said or written of the water turbines is necessarily measured by either party with reference to any test by the power and efficiency of the electrical clauses in the contract until March 9, 1904; generator or generators, and depends on the that from the fore part of July, 1904, at which accuracy of such electrical devices. The intime the appellants first informed appellee struments used for the measurement of elecof the result of switchboard readings of the trical currents, during the electrical test conJune, 1904, electrical test, appellee within a ducted at the Twin Branch dam, in June, reasonable time declared and maintained 1904, were not calibrated at the United that the provisions of the contract concern- States Bureau of Standards, in Washington, ing tests meant a Holyoke or mechanical D. C., before such test. The electrical genbrake test, and that appellee during all of erators in the Twin Branch dam were gensaid time maintained and declared the same erators manufactured by the Westinghouse position with reference to the test clauses Electric Manufacturing Company, of a voltin said contract, and maintained and insist- age of 13,500 volts; and said instruments ed that the wheels furnished gave all the were not returned to said Westinghouse power, speed, and efficiency guaranteed, and Electric Manufacturing Company to prove were furnished in full performance of their back their accuracy or variation at any time contract; that the appellants in all of their after such test. At the time of said eleccorrespondence and conversations with ap-trical test conducted at the Twin Branch pellee, during all of said time following, nev- dam in June, 1904, the power of said gener disputed the construction of said contract erators was reduced through transformers,


readings obtained, in order to measure the the same, without any such test; that unit full capacity of said generators, had to be - 4 was not shipped to appellants until June, multiplied by 2,000. Prior to June, 1904, at 1905, but was thereafter received by appelleast two of the generators broke down, and lants and installed. On March 9, 1905, appelit was necessary to rewind the same, which lee had information that the operating comwas done at the power plant at Twin Branch, pany had not accepted units 1, 2 and 3. prior to June 1, 1904. At the electrical test The court further found the total amount made in June, 1904, there were only three of the agreed purchase price of the four generators on the ground; and during the generator lines and two exciter lines to be test one generator was run as a motor, and $32,420, with payments as follows: June 3, another as a generator. After the two elec- 1903, $8,000; August 27, 1903, $3,000; Septric generators were rewound as aforesaid tember 23, 1903, $2,261.70; January 4, 1904, they were never tested as to their efficiency. $4,448.30; March 15, 1905, $1,838.75; May The only basis of all statements as to the 27, 1905, $3,000, making a total of $22,548.75, power of the turbines are the results of pow- and leaving a balance unpaid of $9,871.25. er generated through those Westinghouse

The finding further shows that the four electric generators.

units were installed in accordance with the The court further found that the log sheets terms of the contract and as shown by bluein evidence indicating the power and efficien- print drawings accompanying it, and that cy of the turbines are the records of the op- the reasonable cost and expense incurred by erating company, and were not made by, or on appellants in making the installation was behalf of, or under the supervision of the ap- $11,580 ; that the four generator lines of turpellants; that the records or log sheets were bine wheels delivered to appellee were not made from electrical or switchboard readings, after the power of the water wheels horse power per line of five wheels, under a

so constructed that they would develop 1,750 had been transformed into electrical energy working head of 18 feet, and make 120 revothrough the Westinghouse generators; and lutions per minute, and were not so conthat the operating company, in making said structed that they would develop 1,200 horse readings from such electrical meters measuring devices, did not check or correct power per line of five wheels, under a worksaid meters by the use of any calibrated in- ing head of 15 feet, and make 120 revolutions struments, either immediately before or im- per minute; that each of the four generator mediately after the readings; that all of lines had the capacity to develop 1,523 horse such measurements and readings were made power, and no more, under a working head and recorded by operators in the employ of of 18 feet and make 120 revolutions per minthe operating company; that the log sheets ute; and each of them had the capacity to in themselves do not show at what gate develop 1,044 horse power, and no more, unopenings the wheels were operated during der a working head of 15 feet, and make 120 any of the readings recorded therein.

revolutions per minute; that the four generWithin a reasonable time after delivery ator lines were not so constructed that they appellants notified appellee that trials of the would develop an efficiency of not less than turbines indicated that they were not in 75 per cent. under actual working conditions, accordance with the contract, and on Decem- at a constant speed of 120 revolutions per, ber 31, 1903, they notified appellee that they minute, under an effective head of 18 feet, would withhold acceptance of units 1 and 2 with three-fourths gate opening; that if until a test could be made, and that in case each of the four generator lines had developof any shortage or deficiency, appellants ed the power and shown the efficiency which would look to appellee to correct it at appel- appellee by its contract with appellants lee's expense, regardless of payments made agreed and represented that they would deto it.

velop and show, the value of the four lines Immediately after the installation of units installed in the power house, in working 1 and 2 and before the installation of unit condition, with an electric generator attach3, and while unit 3 was lying upon the grounded to the shaft of each of the four lines of at Twin Branch dam, and before any work wheels of sufficient capacity to generate and was done thereon preparatory for its instal- transmit all of the power from them, the lation, appellee advised appellants by letter four generator lines, in such working condiof March 9, 1904, which letter was received tion, together with the generators attached by appellants, that if they were not satisfied thereto, would have been of the fair and reaas to power to ship unit 3, or one of the sonable value of $132,000; and said four wheels thereof, to the testing flume at Hol- generator lines of turbine wheels, together yoke, Mass., to be there tested in regard to with the generators attached to the lines as power, as they had that privilege under the aforesaid, after being installed in the power contract, before any further units were in-house, and in good working condition, were stalled at Twin Branch dam; but that ap- of the fair and reasonable value of $114,840, pellants wholly failed and neglected to send and no more; that if the four generator lines either said unit 3 or unit 4, or any parts had been so constructed as to develop the thereof, to the testing flume at Holyoke, but horse power and show the efficiency specified proceeded to install the same, and did install and agreed to be developed and shown under the contract between the parties, their value to evade this rule by the claim that the proinstalled in the power house, in working vision contained in that part of the concondition, exclusive of the generators attach-tract involved in the specifications presented ed to the shafts of the lines, would have by appellants, which reserved to them the been $44,000; that the four generator lines, right “to have, at their discretion, any or as delivered and installed in the power house, all of the turbines tested after being put inin working condition, exclusive of the gener- to commission to determine the fulfillment of ators, are of the value of not to exceed $38,- guaranty as to strength of parts, amount of 280.

power developed, and efficiency of units beThe contention of appellant's counsel that fore final settlement is made," when taken the court erred in stating the first and third together with the fact that the turbines were conclusions of law in favor of the right of to become incorporated in a hydro-electric appellee to recover the balance of the pur- power plant, which would make a return of chase price is based upon the assumption them practically impossible after a test, that the burden was upon appellee to aver made the stipulations in the specifications and prove performance of the contract by it as to the quality, capacity and efficiency of by showing not only that it delivered to ap- the turbines dependent conditions or condipellants the turbines and appurtenances con- tions precedent which appellee was bound tracted for, but also that they complied in to show performance of before it could reevery particular with the terms of the con- cover the balance of the purchase price. But

. tract. In other words, as we understand the claim is not permissible. On the concounsel, they claim that the burden was on trary, it seems obvious that the intention of appellee to aver and prove, as a condition the parties was that the title should vest in precedent to a recovery of the balance of appellants on delivery and that these stipulathe purchase price, that the articles con- tions were independent agreements or wartracted for and delivered to appellants ful- ranties. There is nothing to indicate any filled in every respect, including power and possible intention of the parties to rescind efficiency, the stipulations of the contract. the contract and return the turbines after And it is contended that as this burden rest- they had been delivered, placed in position, ed on appellee and the court found that the and tested. But the nature of the articles turbines did not show the power and effi- sold and the disposition of them, together ciency provided for, and failed to find as to with the provision of the contract just above their compliance with the terms of the con-quoted, shows clearly the intention on the tract in other respects, this was a finding part of appellants to rely upon these stipulaagainst appellee on all, and the appellee tions as warranties. was not entitled to recover the balance of the "Where from a consideration of the whole purchase price, and the first and third con- instrument it is clear that the one party relied clusions of law were therefore erroneous. upon his remedy, and not upon the perform

[1] A warranty in a sale of goods is not ance of the condition by the other, such condian essential element of the contract, for a tion is not a condition precedent.” Benj. on sale is complete without it. It is an in- Sales, Bennett's (7th Ed.) § 562. It is said by dependent agreement forming part of the the author that the dependence or independcontract, but collateral thereto; and the rule ence of covenants in a contract of sale is to be is that in an action on a contract of sale to collected from the evident sense and meaning recover the purchase price of goods sold and of the parties and that in applying the rule delivered, the seller is not bound to show of construction quoted, the circumstances unfulfillment of warranties, the burden of der which the contract was made, and the showing the existence of a warranty and the purpose for which it was made, are to be breach of it being on the buyer whether he taken into consideration. Assuming that nothsues for the breach of warranty directly or ing had been paid and this were an action sets it up by way of set-off or counterclaim. for the entire contract price, it could not Neal v. Shewalter (1892) 5 Ind. App. 147, well be believed that appellee could have had 31 N. E. 848; Seiberling v. Rodman (1896) it in mind to sell to appellants the turbines 14 Ind. App. 460, 466, 43 N. E. 38; Plano to be fixedly installed on the condition that Manufacturing Co. v. Root (1893) 3 N. D. he was to exact nothing from appellants if 165, 54 N. W. 924; Reynolds v. Cleveland, there was found a small measure of failure 4 Cow. (N. Y.) 282, 15 Am. Dec. 369; Buck- to comply with the covenants as to quality, staff v. Russell (1894) 151 U. S. 626, 14 Sup. power and efficiency. Ct. 448, 38 L. Ed. 292; Noble v. Fagnant [3] Moreover, if it should be conceded that (1894) 162 Mass. 275, 38 N. E. 507; Burt v. these stipulations are conditions precedent, Garden City Sand Co. (1909) 237 Ill. 473, 86 it would not save counsel's contention that a N. E. 1055; 19 Encyc. of Pl. & Pr; 35 Cyc. failure of appellee to show a perfect performp. 549 et seq; Keystone Mfg. Co. v. Forsyth ance of the conditions must defeat this ac(1903) 123 Mich. 626, 82 N. W. 521; Stillwell tion. A rule well founded in justice is to the Co. v. Beloxi Co. (1901) 78 Miss. 779, 29 contrary: “Although a man may refuse to South. 513.

perform his promise till the other party has he has received and accepted a substantial them, and were utterly inconsistent with the part of that which was to be performed in claim that the contract had not been exehis favor, the condition precedent changes cuted by their acceptance. Benj. on Sales its character and becomes a warranty, or in- (5th Eng. Ed.) p. 1013; Benj. on Sales, Bendependent agreement, affording no defense nett's (7th Ed.) 88 703, 901; 2 Mechem on to an action, but giving right to a counter-Sales, $$ 1380, 1387, 1395, and cases there claim) for damages. The reason is, that it cited; Tiffany on Sales, $$ 94, 120, 121; would be unjust under such circumstances Stillwell Co. v. Beloxi Co., supra; C. & C. that a party who has received a part of the Electric Motor Co. v. D. Frisbie & Co. (1895) consideration for which he bargained should 66 Conn. 67, 93, 33 Atl. 604; Fred W. Wolf keep it and pay nothing because he did not v. Monarch Refrigerating Co. (1911) 252 Ill. receive the whole. The law, therefore, oblig- 491, 96 N. E. 1063. es him to perform his part of the agreement, [5] It is also contended that the concluand leaves him to his action of (or counter- sions of law favorable to appellee are erroclaim for) damages against the other side for neous in that they allowed interest of 6 per the imperfect performance of the condition.” cent. on the balance of the purchase price Benj. on Sales, Bennett's (7th Ed.) § 564. from the date when the payments on the

In Beach on Contracts, vol. 1, § 107, it is units in controversy were due under the said: “Conditions precedent must be per- terms of the proposal to the date of the findformed in order to make the conditional ing.

g. The conclusions were not erroneous in promise absolute. But after one party has this respect. Appellants having accepted the performed the contract in a substantial part, delivery of the turbines were bound to perand the other party has accepted and had the form their part of the contract by payment benefit of the part performance, the latter according to its terms. The statute provides may thereby be precluded from relying upon that money due on any instrument in writing the performance of the residue as a condition shall bear interest at the rate of 6 per cent. precedent to his liability; and in such case Burns 1908, § 7952. The general rule in this he must perform the contract on his part, country is that interest as damages for the and must rely upon his claim for damages in breach of a contract to pay money, where the respect of the defective performance." See, amount due and the time of payment are also, Clark on Contracts (2d Ed.) p. 466; certain, is recoverable as a matter of right. Tiedeman on Sales, § 197; Young Bros. Má- 22 Cyc. 1579. See, also, Skehan v. Rummel chine Co. v. Young (1896) 111 Mich. 118, 69 (1890) 124 Ind. 347, 24 N. E. 1089; Killian N. W. 152.

V. Eigenmann (1877) 57 Ind. 480; Burke v. [4] In the case before us delivery and ac- Keystone Mfg. Co. (1898) 19 Ind. App. 556, ceptance were alleged, and the court found | 561, 48 N. E. 382. that the turbine units were completely set up [6] The provision in the specifications rein appellee's factory and inspected by appel- serving to appellants the right to test the lants' engineer and general superintendent of turbines after being put in commission, to construction; that they were

standard determine the fulfillment of guaranty as to Trump turbines of the type, size, dimensions, strength of parts and power and efficiency of and material, and constructed and arranged units before final settlement, did not, as conwith appurtenances as described in the con- tended by counsel, have the effect of posttract, and that they were delivered to appel- poning and making uncertain the time of lants; that appellants installed them in the payment, and the findings show that the parhydro-electric power plant of a third person ties did not so consider it. The terms of and that person dealt with them as their own payment were fixed by the proposal of apby using them, mortgaging and transferring pellee at one-half cash on receipt of goods them as an integral part of their plant to at destination, one-fourth in 90 days from others and that they were in constant use date of shipment, and the balance in six as a part of the power plant for several years months from the same date. Payment acwith no offer to return them. After the two cording to these terms was an essential conunits first delivered were installed by appel- dition of the contract of sale to be performlants and, as they claimed, found to be lack-ed by appellants. The very terms of the ing in power and efficiency they received and provision of the specifications show that it installed the third and fourth units. The had reference to the collateral agreement of facts so found established substantial per- warranty. formance by appellee and such an acceptance It follows that the court did not commit eras would preclude appellants from rescinding ror against appellants in its conclusions of and returning the articles delivered or from law 1 and 3. relying upon exact performance as a condition The findings and conclusions of law being precedent to their liability to pay the purchase favorable to appellee on the issues presented price, but not from asserting their claim by the third paragraph of answer, appellee's for damages for defective performance. The assignment of cross-error on the action of the acts of appellants and the owners of the trial court in overruling their demurrer to it plant in dealing with the turbines were of does not demand consideration. such a character that they could only be Counsel for appellee, in support of the as. rightfully done if they were the owners of signments of cross-error on the action of the court in overruling their demurrers to 47 Ind. 259; Robinson Machine Works V. the fourth and fifth paragraphs of appellants' Chandler (1877) 56 Ind. 575; Johnston Haranswer which were by way of counterclaim, vester Co. v. Bartley (1882) 81 Ind. 407; Mcurge that these pleadings were clearly defi- Clamrock v. Flint (1885) 101 Ind. 278; Shirk cient in certain essential allegations. As the v. Mitchell (1894) 137 Ind. 185, 36 N. E. 850 ; warranties went to the performance of the Osborne & Co. v. Hanlin (1902) 158 Ind. 325, turbines as to power and efficiency after in- 329, 63 N. E. 572; McKendry v. Sinker, Davis stallation, and as appellee had nothing to do Co. (1891) 1 Ind. App. 263, 27 N. E. 506; with the installation, that duty resting whol. Brower v. Nellis (1893) 6 Ind. App. 323, 331, ly upon appellants, and as the power and ef- 33 N. E. 672; H. B. Smith Co. v. Williams ficiency of the turbines in actual operation (1902) 29 Ind. App. 336, 342, 63 N. E. 318; after being installed depended upon the man- Mack v. Sloteman (1884) 21 Fed. 109; Interner of installation, the character of the national Bow & Stern Dock Co. v. U. S. (O. draft tubes, the volume of water available, O. 1894) 60 Fed. 523; F. D. Cummer & Sons the opening of the gates, the amount of the v. Marine Sugar Co. (1906) 146 Fed. 240, 76 fall, obstructions, and retardations to the C. C. A. 606. flow of the water in the tailrace, and other [8] The finding of facts is either directly things incident to their situation which against appellants or silent on all the various would affect their performance, and as the specifications of warranty except as to the fulfillment of the warranties of the turbines amount of horse power to be developed and under the terms of the contract could only the per cent. of efficiency of the four generabe determined by a test, it was therefore, it tor line units. The rule is too familiar to is claimed by appellee, incumbent upon ap- require the citation of precedents that a failpellants either to allege generally a perform- ure to find the existence of essential facts ance of conditions on their part or to allege is equivalent to a finding against the party facts showing a proper installation and an having the burden of establishing such facts. efficient test. As this was not done it is The conclusion of law that appellants were claimed that the fourth and fifth paragraphs entitled to recover damages for breach of are bad. It is also contended that the war-warranty must therefore rest upon the failranties as averred in these pleadings are not ure of the four generator line units to fulfill in terms coextensive with the written con- the specifications of the warranty that they tract and that the breach of them is not suffi- would develop the power and efficiency reciently negatived. From this claim of the in- quired by the terms of the contract when sufficiency of those paragraphs of counter- properly installed and tested under proper claim on the warranties the further claim of conditions. counsel for appellee arises--that the findings [9] It is, of course, true, as claimed by upon which the conclusions of law that ap- counsel for appellee, that, in determining pellants are entitled to recover damages for whether the facts found justify the concluthe breach of the warranties are outside the sion of law in this respect, only the facts issues and the conclusions erroneous.

found within the issues can be considered. As we have seen, the burden of establishing It is contended by counsel that the findings the warranty and breach of it is on the buy- of the court relating to the installation and er whether presented in an action or coun- test of the turbines by appellants are withterclaim. Involved in this burden is the out the issues and cannot be considered in duty of showing a performance of all materi- support of the conclusions of law favorable al conditions upon which the right to assert to appellants. But assuming that the facts the warranty depends. 35 Cyc. 445, 457. found are within the issues we think that

[7] It was for appellants to show in some they fall short of sustaining the conclusions. adequate way a breach of the warranties in It is true that the finding states that appelthe particulars relied upon. They chose, by lants installed all of the turbines in accordthe terms of that part of the contract pre- arce with the terms of the contract between pared by them, to make the fulfillment of the appellee and appellants, but it is not shown warranties depend upon a test to be made that the structure in which they were installafter the installation by them. Indeed it is ed and of which they became a part and perhaps true that, from their very nature, which had a relation to them was of a charthe power and efficiency of the turbines could acter which would permit the turbines proponly be accurately determined by some defi- erly to demonstrate their power and effinite recognized test. As appellants had re- ciency. served to themselves and assumed the duty There is no express finding that any test of making a test, and as the duty of showing was ever made but it may be gathered from a breach of warranty rested upon them, they various parts of the finding that appellants were therefore bound to show a proper in- made what was claimed to be an electrical stallation and an efficient and accurate test, test in June, 1904. As it also appears from within a reasonable time, under actual work- the finding that the fourth unit was not deing conditions which would have demonstrat- livered and installed until 1905, obviously ed that the warranties had been broken. La- this test was not applied to it, and it no

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