and tested if it did not perform the warran-17. SALES (8 439*)—WARRANTY-BREACH-DUties as to amount of power developed and effi- TY OF BUYER. ciency of units, the fact that the contract Where a contract for the sale of maprovided that the buyers at their discretion chinery provided for installation by the buyer were entitled to have the machines tested aft- and reserved to him the right to make a test er being put into commission to determine the of the strength, efficiency, etc., to determine fulfillment of the guaranty as to strength of whether the machinery furnished complied with parts, amount of power developed, and ef- a warranty, the burden was on the buyer ficiency of units before final settlement, did claiming a breach of such warranty to show not make the performance of the seller's war- not only a proper installation but that an ranties as to efficiency, etc., conditions pre-efficient and accurate test had been made withcedent so as to require the seller to show in a reasonable time under actual working performance before it could recover a balance conditions which demonstrated that the warof the price.

ranty had been broken. [Ed. Note. For other cases, see Sales, Cent. [Ed. Note. For other cases, see Sales, Cent. Dig. 8 709; Dec. Dig. $ 250.*]

Dig. $$ 1258-1260; Dec. Dig. $ 439.*] 3. SALES (

8250*)—DELIVERY-ACCEPTANCE 8. TRIAL (8 356*)-FINDINGS-FAILURE TO OF PART-CONDITION PRECEDENT—WARRAN- FIND. TY.

A failure to find the existence of essenWhere defendants had received and ac- tial facts necessary to establish a breach of cepted a substantial part of water power ma- warranty of goods sold is equivalent to a findchinery, delivered under a contract of sale, ing against the buyer having the burden of without any objection, a provision of the con- proof on such issue. tract that the machinery when completed would [Ed. Note. For other cases, see Trial, Cent. develop a specified amount of power, though Dig. $$ 849-854; Dec. Dig. $ 356.*] regarded as a condition precedent to recovery 9. SALES (§ 441*)—WARRANTY-BREACH-TEST of the price, became a warranty or an inde

OF MACHINERY-FINDINGS-EVIDENCE. pendent agreement which afforded the buyers no defense to an action for such balance, but water power machinery to comply with a war

On an issue as to the efficiency of certain merely gave a right to recover damages by way of counterclaim for insufficient perform- ranty, in a contract of sale, evidence held in

sufficient to warrant a finding that the buyer ance.

had made a proper or accurate test so as to [Ed. Note. For other cases, see Sales, Cent. show that the machinery did not develop the Dig. § 709; Dec. Dig. $ 250.*]

power contracted for. 4. SALES (8 121*)-MACHINERY-INSTALLA- [Ed. Note. For other cases, see Sales, Cent. TION-ACCEPTANCE.

Dig. $$ 1277–1283; Dec. Dig. § 441.*] Plaintiffs, having contracted with defendant for water power machinery to be install- 10. SALES ($ 442*)—BREACH OF WARRANTY

MEASURE OF DAMAGES-ASCERTAINMENT. ed in the plant of a corporation under a guar

On a counterclaim for breach of warranty anty that the machinery would develop a spec. of the efficiency on a sale of water power maified horse power, received the two units first chinery, the measure of damages was the difdelivered and installed them and, after finding ference between the value of the machinery them deficient in power, also received and indelivered and its value had it complied with stalled the third and fourth units. After this the warranty; the contract price being prima the machinery was mortgaged and transferred facie" the latter value and such damage could as an integral part of the plant to others, and not be properly ascertained by determining the remained in constant use for several years percentage of deficiency in power and deductwithout any offer to return the same. Held that there was an acceptance of the machines ing such percentage of the contract price, cost

of which precluded plaintiffs from rescinding and relying on exact performance as a condition

[Ed. Note. For other cases, see Sales, Cent. precedent to liability to pay the purchase Dig. && 1284–1301; Dec. Dig.'& 442.*] price. [Ed. Note. For other cases, see Sales, Cent.

Appeal from Circuit Court, St. Joseph Dig. $$ 296,301; Dec. Dig. $ 121.*]

County; Walter A. Funk, Judge. 5. INTEREST ($ 15*)-RIGHT TO RECOVER

Action by the Trump Manufacturing ComSALES-UNPAID PORTION OF PRICE.

pany against Edwin N. Sanderson and othUnder Burns' Ann. St. 1908, § 7952, pro-ers. Judgment for plaintiff for less than viding that money due on any instrument in the relief demanded, and defendants appeal, writing shall bear interest at the rate of 6 per cent., a balance due on a written con

and plaintiff prosecutes cross-errors. Af

. tract for the sale of machinery which the buy-firmed on defendants' appeal and reversed er had accepted bore interest at the statu- with instructions on plaintiff's appeal. tory rate from the time the unpaid portion of the price was payable under the contract.

Marshall L. Howell, Demas D. Bates, Gil[Ed. Note.-For_other cases, see Interest, bert A. Elliott, and Vitus G. Jones, all of Cent. Dig. § 28; Dec. Dig. § 15.*]

South Bend, for appellants. A. G. Graham, 6. SALES ($ 82*)-PRICE-TIME OF PAYMENT-G. A. Crane, and F. H. Wurzer, all of South CERTAINTY.

Bend, for appellee. Where a written contract for the sale of machinery provided for payment of half cash on receipt of the goods at destination, one- COX, J. The St. Joseph & Elkhart Power fourth in 90 days from date of shipment, and Company was organized and incorporated in the balance six months after date, the fact this state in 1900 for the purpose of buildthat the specifications reserved to 'the buyer | this state in 1900 for the purpose of buildthe right to test the machinery after being ing and maintaining a dam across the St. put in commission to determine the fulfillment Joseph river east of Mishawaka, at a point of a warranty as to strength, power, and ef-known as Twin Branch, and erecting and ficiency before final settlement did not postpone or make the time of payment uncertain. maintaining in connection therewith a pow

[Ed. Note. For other cases, see Sales, Cent. er house with hydraulic and electrical maDig. $$ 229-233; Dec. Dig. § 82.*]

chinery for the purpose of generating and

•For other cases see same topic and section NUMBER in Dec. Dig. & Am. Dig. Key-No. Series & Rep'r Indexes

selling 'electrical current. Thereafter this sum of $32,420, payable in installments as company let the contract for all the work of in said contract provided ; construction to the Union Construction Com- "And plaintiff further avers that under pany, a Connecticut corporation, which in the terms of said contract, and at the special turn sublet the work to appellants, engineers instance and request of said defendants, it and contractors of New York City, doing furthermore furnished materials and perbusiness in the firm name of Sanderson & formed labor for which said defendants unPorter. Appellants thereupon went into the dertook and agreed to pay this plaintiff the open market to buy materials for building reasonable value thereof; and that the reaand equipping the dam and power house. sonable value of such additional materials They received from appellee, a corporation furnished and labor performed is $318.50 ; of Springfield, Ohio, engaged in the business "That said defendants from time to time of manufacturing water turbines, a written made payments under said contract for said proposal to furnish certain described water turbines and said additional materials furwheels or turbines required in the equip- nished and labor performed amounting in ment of the plant. Appellants met this pro- all to $22,792.77; a bill of particulars of posal by a writing denominated specifica- all of which is filed herewith and made a tions for water turbines. These writings part hereof, and marked 'Exhibit B'; with accompanying blueprints were mutual- "And plaintiff further avers that it did ly accepted and, it is agreed, became the deliver said turbines f. o. b. cars at their contract between the parties on July 19, factory in Springfield, Ohio, to the said de1902. The contract was for two different fendants; and that this plaintiff has fully classes of turbines, known respectively as performed all of the terms and conditions of “Exciter Line Turbines” and “Generator Line said contract by it to be performed, and that Turbines.” This controversy involves only said defendants have received and accepted the latter class. Five of these turbines vere said property, but have failed to pay plainto be set on a horizontal shaft so attach- tiff according to the terms of said contract; ed that they would operate in unison to that there is now due and unpaid the resiturn the shaft which was to be coupled to due of $9,945.73; that of said residue $2,a generator to produce the electric current. 516.25 was due and payable on or before Each set of five turbines so set on a single May 26, 1905, and $7,429.48 was due and shaft was termed a unit. They were to be payable on or before June 26, 1905; that installed in the power house of the power there has accrued on said unpaid balance incompany by appellants. Four of these units terest at 6 per cent. per annum, amounting were ordered by appellants at different times to $1,355.27; and that there is now due and furnished by appellee under the contract plaintiff from said defendants under said and installed by appellants as received in contract, and wholly unpaid, the sum of $11,the power house of the St. Joseph & Elkhart 301. Power Company as the parties contemplated "Wherefore plaintiff sues and demands when the contract for them was made. Pay- judgment for twelve thousand ($12,000) dolments were made by appellants from time to lars, and for its costs herein and for all othtime, when, claiming that the turbines had er proper relief.” failed, in actual work, to produce the power The fourth paragraph is not different in and efficiency guaranteed by appellee, they legal effect from the third. It alleges the refused to make further payments, and this sale and delivery to appellants of two exaction was brought by appellee to recover citer line turbines and two generator line the balance claimed to be due, with interest. turbines under the contract at the contract

The complaint was in four paragraphs. price at one time, and two additional genThe first declared on an oral contract. The erator line turbines at a later time by a second sought to recover the value of the later written order referred to as another machinery without reference to a contract. exhibit. Otherwise the allegations and the The second paragraph was taken out of the demand are the same as in the third. case, by a voluntary dismissal by appellee. Appellants answered the complaint in five The first paragraph is not of importance as paragraphs. The first is a general denial it is agreed by the parties, and the court and the second a plea of payment. The found, that the contract was in writing. third paragraph sets up certain guaranties The third paragraph, after allegations of and conditions relating to the power, and the making of the contract and referring to efficiency of the turbines and alleges their it as an exhibit made a part of the com- failure, after installation, to meet these replaint, is as follows:

quirements as to power and efficiency, for “That under the terms of said contract which failure appellee's right to recover the plaintiff sold to the aforesaid defendants anything is denied. This paragraph of antwo exciter line turbines and four generator swer is conceded by appellants' counsel to line turbines, to be made by plaintiff and be merely an argumentative general denial. delivered to the said defendants f. o. b. cars The fourth paragraph of answer is pleadat plaintiff's factory in Springfield in the ed as a counterclaim and in it the execustate of Ohio, for all of which the said de- tion of the contract shown by the exhibits fendants, by the terms of said contract, made a part of the complaint and a part alleged that pursuant to that contract ap- , particulars alleged appellants owed appellee pellee did furnish to appellants, together nothing, but that they had been damaged in with the other turbines and materials not the sum of $12,000, for which sum they askin controversy in this appeal, the four units ed judgment. of "Generator Line Turbines" in question; The fifth paragraph is also pleaded as a that by the terms of the contract appellee counterclaim and its allegations are the warranted that each of these units could same as the fourth paragraph, except it is and would, under ordinary conditions, gen- alleged that appellants paid appellee $22,erate 1,750 horse power under a working 792.77 on the contract price in the belief that head of 18 feet and under such conditions appellee had furnished them turbines of the would make 120 revolutions per minute; kind, quality, and capacity agreed upon; that appellee further warranted that each but that by reason of their incapacity to of these units would furnish 1,200 horse perform the

the work warranted they were. power under a working head of 15 feet and worth $12,000 less than the contract price, under such conditions maintain a speed of which sum they asked to be recouped against 120 revolutions per minute; that all of these any sum found due appellee. turbines were furnished by appellee and

Appellee demurred to each of the third, received by appellants under an express fourth, and fifth paragraphs of the answer. warranty in the particulars named. It is

These demurrers were overruled and appelthen alleged that these units will not fur lee excepted. The issues were closed by a nish 1,750 horse power each under a working head of 18 feet and make 120 revolutions reply of general denial addressed to the per minute as warranted, but, on the con- second, third, fourth, and fifth paragraphs

of answer. trary, will not furnish over 1,200 horse pow.court, and, upon the request of both parties,

The issues were tried by the er each; that they will not furnish 1,200 the facts were found specially and conclu

1,200 horse power each under a working head of the facts were found specially and conclu

, 15 feet, but, on the contrary, will not fur- sions of law stated thereon. The court statnish over 800 horse power under the worked as its first conclusion of law upon the ing head of 15 feet. It is then alleged that facts found that appellee was entitled to reit was warranted by appellee that each unit cover on its complaint $12,804.45. The secshould be of such dimensions and construc-ond conclusion of law was that appellants tion as to easily and without undue fatigue were entitled to recover upon their counterof any part, develop and deliver the com- | claim $5,720. And the third conclusion of bined power of wheels at full gate, on one law was that appellee was entitled to a end of the shaft when operating under a judgment against appellants for the difmaximum effective head of 22 feet, meas-ference, $7,084.45, with interest from the ured from the surface of the water in the date of the finding at the rate of 6 per cent., tailrace under the turbines to the surface and judgment was rendered accordingly. of the water in the forebay above; that Appellants excepted to each conclusion of the said wheels were not of dimensions and law, and rely for reversal upon the claim construction so as to, without undue fatigue that the first and third conclusions were of any part, develop and deliver the power erroneous. as in said contract set out and specified, but, Appellee assigns cross-errors which call in on the contrary, they have wholly failed question the rulings on appellee's demurrers to furnish the amount of power warranted to the third, fourth, and fifth paragraphs of by the terms of the contract. It is further appellants' answer and the correctness of the alleged that under the specifications which second and third conclusions of law. formed a part of the contract these units

The special finding is very long and conwere furnished for direct coupling to a shaft tains much that is mere evidence. The mafor the generating of an alternating current terial facts found show that under date of of 1,000 kilowatts of electricity and were June 13, 1902, appellee submitted to appelwarranted to run at a constant speed of 120 lants a written proposal to furnish them the revolutions per minute under all variations water turbines in question. The proposal of the load within their capacity, and under is set out in the finding and is identical with all variations of head down to 15 feet, but that attached to the complaint as an exthat they will not perform the work as hibit, as a part of the written contract, and. specified and warranted. It is further al- so far as it is material, is as follows: leged that these turbines were warranted to

“We purpose to furnish five Trump tur. develop an efficiency of not less than 75 per bines on draft-chest. Turbines to have cent. under actual working conditions at a shafts as follows: constant speed of 120 revolutions per minute under an effective head of 18 feet with Beginning with 11 in. in diameter...........1st wheel

Reduced to 10 in, in diameter.. ..2d & 3d wheel a three-fourths gate opening, but that they 8 in. in diameter......

.....4th & 5th wheel will not develop such efficiency under such conditions. It is then alleged that appel

"These turbines to be of our best make lants have at all times been ready and will with forged steel' buckets. The diameter of ing to perform all their part of the con- runner to be such as will give the proper tract, but that appellee failed to do so, and speed under your head. that by reason of appellee's failure in the “Figuring on 15-foot head the wheels to give 1,200 h. p. and make 120 r. p. m. Fig. "Should power exceed that named a prouring on 18-foot head the wheels to give 1,- portionate increase in water consumption 750 h. p. and make 120 r. p. m."

will be allowed." The proposal then continues with a de- These specifications continuing then description of the kind of material, gates, scribe the kinds of materials and construcdraft-chests, stands, exciter wheels, and wa- tion to be used in the appurtenances to the ter cushions all appurtenant to the genera- turbines and then state the following: tor line turbines and then the following:

“The contractor for turbines agrees to re"We guarantee to carry the turbines ab- place, free of all charge, any and all parts solutely in one position without any end- which may prove defective within one year movement of the shaft using this device. from date of starting, providing that such

"We guarantee the generator line to give defects are shown to have existed when 1,750 h. p. under a working head of 18 feet, wheels were started, and that same were and make 120 r. p. m.

caused by poor design, material, or work"We also guarantee 1,200 h. p. at 15-foot manship. head and maintain a speed of 120 r. p. m.

"All work is to be furnished under the "We guarantee the exciter line to give inspection and supervision of Sanderson & 200 h. p. and make 230 r. p. m.

Porter (or their duly authorized represen“Price: Exciter line $1,500.00 f. o. b. cars tative), engineers and contractors for above factory.

Generator line, $7,355.00 f. o. b. installation. cars factory.

"All general and detailed drawings are to "Terms: 12 cash on receipt of goods at be furnished to and approved by Sanderson destination. 44 in 90 days from date of & Porter. shipment. Balance in six months from date

"The maker guarantees that all runners of shipment.

will show an efficiency of not less than 80 "We guarantee runners of our turbines per cent. when tested on vertical shaft, under against breakage from actual use for a peri- following conditions: head 15 feet to 16 od of six years and should a runner break feet, speed 113 to 116 r. p. m. within that time, we furnish a new one f. o.

“The right is reserved by Sanderson & b. free of charge."

Porter to have at their discretion any or all The proposal was met by additional speci- of the turbines tested after being put into fications for the turbines and work prepared commission to determine the fulfillment of and submitted by appellants, the material guarantee as to strength of parts, amount of parts of which are as follows:

power developed, and efficiency of units be"Specifications cover turbines for direct fore final settlement is made. The expense coupling to shaft of 1,000 kilowatt alternat- of such test, if made, is to be paid by the ing current generators.

Turbines purchaser. are to be of the horizontal shaft type, set in

“Purchaser is to furnish base plates, Iopen masonry flume.

Each unit of beam husk frames, draft tubes, flume heads five

wheels shall be of such di- complete with babbitted adjustable, self mensions and construction as to easily, and oiling, bearing, and generator coupling with without undue strain or fatigue of any part,

key. develop and deliver the combined power of

"Purchaser is to pay all freights, cartage, wheels at full gate, on one end of the shaft handling and erection expenses, and is to when operating under a maximum effective furnish all common and other labor for erechead of 22 feet (measured from surface of tion. These are a part of a contract between water in tailrace under turbines to surface Trump Mfg. Co. and Sanderson & Porter, of water in forebay above turbines).

* dated June 13, 1902, and accepted July 19, These turbines are to run at a constant speed

1902." of 120 r. p. m. under all variations of load

The proposal of appellee and the specificawithin their capacity, and all variations in tions of appellants were mutually accepted head down to a minimum of 15 feet effective and became the contract between the parties

July 19, 1902. head

On June 6, 1903, appellee “The turbines must develop an efficiency delivered to appellants two units, that is of not less than 75 per cent. under actual two lines of five wheels each, of the generaof not less than 75 per cent. under actual tor line turbines. On January 28, 1904, the working conditions at a constant speed of third unit, and on June 26, 1905, the fourth. 120 r. p. m. under an effective head of 18 The four units of generator line wheels de

. feet, with 34 gate opening. “The following table gives figures for ard Trump turbines, horizontal shaft type

livered to appellants by appellee were standeach of these five wheel units, which the of the size, dimensions and material, conbuilder guarantees wheels to perform at 120 r. p. m. when set as shown on attached shafts and mounted on draft-chests with

structed and arranged, and provided with drawing No. B-154.

journal boxes, and water cushions, as deHead in feet

15 18

scribed in the contract, in so far as size or Horse power developed on shaft will be not less than

1,200 1,750 dimensions were given therein, and were Cubic feet of water used per

delivered to appellants by appellee in and

*

to the shipment of units 1 and 2, they were the closing up of the affairs of the latter, the set up in the factory of the appellee and one various mortgages, and the merger. Lang, hydraulic engineer and general super- Immediately after the installation of each intendent of construction of power plant for of the four units of generator line turbines, appellants, examined and inspected said and as soon as they were ready for operaunits 1 and 2. Units 3 and 4 were dupli- tion, they were put in use and operation by cates in construction, dimensions and materi- the St. Joseph & Elkhart Power Company al and workmanship of units 1 and 2, and for the development of power for commercial all of the units 1, 2, 3, and 4, were identical purposes. The use of units 1 and 2 began and similar in all of their parts.

in January, 1904, of unit 3 in June, 1904, Units 1 and 2 were installed by appellants and of unit 4 in December, 1905, and such in flumes at the Twin Branch dam of the use was continued by that company and its St. Joseph & Elkhart Power Company during successors up to the time of bringing this the fall and winter of 1903, and were ready suit and after. for operation in January, 1904. Unit 3 was Appellee knew before and at the time the installed in a fume at the dam after March contract was made that the turbines were to 21, 1904, and was ready for operation June go into a hydro-electric plant which was not 1, 1904. Unit 4 was installed in a flume at the property of appellants, and that the the dam in the summer of 1905 and was plant was in process of construction; and ready for operation in the fall of 1905.

appellee was informed that the owner deAfter the organization of the St. Joseph sired its speedy completion and intended it & Elkhart Power Company, of which one of to go into operation before all the turbines the appellants was an organizer and stock

were furnished and before the last payment holder, it entered into a contract with the

on those furnished would be due under the Union Construction Company, a Connecticut terms of the contract and that the plant was corporation, for the construction of its dam in the hands of the operating company, and

made no objection. At the time of making and power plant with all equipment includ- made no objection. ing the water turbines. Appellants became

the contract appellee knew the conditions subcontractors for construction and equip

construction and equip- and place, purpose and manner in which the ment, including turbines. The St. Joseph & turbines were to be installed and used and

&

was familiar with the conditions under which Elkhart Power Company, March 12, 1903, mortgaged its plant, including real estate, installation and never made any objection

they were required to operate after their rights, and franchises, equipment and machinery of every description, including tur- to their use by the operating company.

The turbines which appellee agreed to furbines, then owned or thereafter to be acquir-nish appellants under the contract were of ed, to a trustee to secure $600,000 of con

a kind and character and of such construcstruction bonds. These bonds were to be de

tion that the amount of power which they livered by the trustee from time to time as would develop and the efficiency which they the work progressed to the Union Construc-would show in working condition could not tion Company. The turbines sold by appellee be known by an inspection of them after to appellants and installed by the latter their manufacture; but that their power and were the only water turbines installed in the efficiency under the terms and conditions of flumes of the power plant from the inception the contract could only be known and deterof the St. Joseph & Elkhart Power Company mined by a practical test or trial in a flume to the time of suit. The affairs of the Un- and operated by water power. By reason of ion Construction Company were wound up the character of the flumes and water power in 1904 or 1905. June 22, 1907, the St. Jos- plant of the St. Joseph & Elkhart Power eph & Elkhart Power Company was merged Company at Twin Branch, where said wheels into the Indiana & Michigan Electric Com- were installed, and by reason of their being pany which became the owner of all the set and placed on horizontal shafts, it was property of the former concern and took pos- physically impossible to test the efficiency session of it and used it in the business of of said wheels on a vertical shaft at the producing and selling power. One of ap- Twin Branch dam; that the efficiency of said pellants was a director of the new company, wheels could be tested when used on vertical and appellants were at all times stockholders shaft at the testing flume of Holyoke, Mass.; of both companies. Prior to July 24, 1907, that said fact was well known both to appelthe mortgage to secure construction bonds lee and appellants; and one of appellants was released and on that date the property had the clause referring to 80 per cent. effiof the Indiana & Michigan Electric Company, ciency on a vertical shaft inserted in the specifically including turbine wheels, was contract so that they would have the right mortgaged for $7,000,000. On July 25, 1907, to make the test at Holyoke. If said wheels another mortgage for $900,000 was given had been tested at the testing flume at Holcovering the same property. Appellants at yoke on vertical shaft, and the result oball times knew all the facts relating to the tained therefrom, that such results or facts incorporation of the St. Joseph & Elkhart could be used as a basis from which to calPower Company, its construction contract culate and ascertain the efficiency as well as with the Union Construction Company and the power of said wheels on a vertical shaft