Opinion
November 17, 1931.
1. CONTRACT: Suit on Notes: Failure of Consideration: Warranties: Joint and Independent Obligations of Plaintiff and Third Party. Although the contract between plaintiff and defendant, and the contract between a third party and defendant, were complementary and designed to produce a cooling of the atmosphere in the auditorium of defendant's theatre, and although certain provisions of the contract between plaintiff and defendant were incorporated by reference into the contract between defendant and the third party, yet if the contracts disclose no joint undertaking to do anything, and nowhere in either contract is there an assumption by the contractor of responsibility for the other's performance of his contract, but the two contracts are clearly separate and independent obligations, though designed to accomplish the same objective, the defendant cannot escape liability on notes given by him to plaintiff for the performance of plaintiff's contract with him, on the ground of total failure of consideration, where plaintiff's warranties were conditional and made dependent on the performance by the third party of his contract with defendant, and the sole cause of the failure to produce the stipulated and guaranteed result was the failure of the third party to furnish a specified equipment.
2. ____: Refrigeration: Tests: Naming Arbiter: Other Witnesses. Where the contract prescribed the tests for determining the efficiency of the cooling system to be installed in the defendant's theatre and the exact manner in which the test was to be made, and named the person who should make the finding as to whether the operation of the system met the test, and provided that his finding should be final and conclusive, the testimony of other witnesses that the temperature of the theatre was not reduced by the system is incompetent, has a tendency to mislead and confuse the jury, and its admission is error.
Appeal from Circuit Court of City of St. Louis. — Hon. Granville Hogan, Judge.
REVERSED AND REMANDED.
Jourdan English for appellant.
(1) The court erred in not entering judgment in favor of plaintiff. The verdict and judgment are against the evidence, and the court erred in giving instructions 1 and 2 to the jury, thereby permitting a judgment in favor of the buyer and against the seller, defeating the entire recovery of the purchase price of goods sold and delivered, and thereby permitting the buyer to recover damages from the seller, all for the breach of an express warranty, when in law a buyer cannot defeat recovery of the purchase price nor recover damages from the seller for the breach of an express warranty connected with the sale except by pleading and proving that all conditions precedent of the covenant of warranty have been fulfilled. Tower v. Pauley, 76 Mo. App. 287; Nichols-Shepard Co. v. Rhoadman, 112 Mo. App. 299; Chapman v. Ferguson, 152 Mo. App. 84; Monks v. Mueller, 13 Mo. App. 363; Josse's Admr. v. Newman, 38 Mo. 43; Machine Co. v. Wells, 182 Mo. App. 50. (2) Where there is no substantial evidence to support the verdict, the verdict should be set aside. Archambault v. Blanchard, 198 Mo. 428; Ettlinger v. Kahn, 134 Mo. 497. (3) The court erred in refusing to give plaintiff's instructions I and J, such refusal amounting to a ruling by the court that defendant could defeat recovery by the plaintiff of the purchase price of goods sold and delivered under an express warranty conditioned upon the performance by a third person of a separate contract executed independently of plaintiff's contract, and it is error to allow the buyer to defeat recovery of the purchase price for breach of an express warranty conditioned upon performance by a third party where the proof shows that the third party has not performed the condition. Authorities, supra; 2 Williston on Contracts. secs. 664, 666A, 674. (4) A verdict should have been directed for plaintiff and a judgment should have been entered for plaintiff; the verdict and judgment are against the evidence and for the wrong party, and the court erred in giving defendant's instructions 1 and 2 for the reason that the verdict and judgment rendered and permitted under said instructions allowed a purchaser to defeat the entire claim for the purchase price of a chattel sold by the plaintiff to such purchaser when the law does not, on account of a breach of an express warranty, allow the purchaser to defeat the entire claim unless the purchaser not only alleges and proves that the chattel did not answer the demands of the warranty, but also alleges and proves that the purchaser returned or offered to return the chattel and that it was entirely worthless for any purpose whatever, and the court must predicate the instructions of entire failure of consideration upon the hypothesis that the chattel was entirely worthless for any purpose whatever. Archambault v. Blanchard, 198 Mo. 428; Ettlinger v. Kahn, 134 Mo. 497; City Trust Co. v. Crockett, 309 Mo. 716; Birch Tree Bank v. Dowler, 163 Mo. App. 65; Webster College v. Tyler, 35 Mo. 268. (5) There were two agreements between the plaintiff and the defendant, one dated June 3, 1924, the other dated November 20, 1924. The consideration moving from the defendant for the contract of November, 1924, was the giving of the notes in suit and this was the only consideration moving from the defendant in the contract of June, 1924. The court excluded testimony of the witness Crawford to the effect that a test under the contract of June, 1924, showed full compliance of the warranties therein, and the court refused plaintiff's Instruction E, telling the jury that if the apparatus mentioned in the contract of June, 1924, met the required warranties the verdict should be in favor of the plaintiff on the counterclaim, and in so doing the court committed error, because, upon the full performance of a contract of sale of personal property with warranties by the seller, there is no consideration for a contract to give additional warranties upon the same chattels where the only consideration for the first warranty was the agreement of the purchaser to pay a specified amount, and the contract giving the additional warranties imposed no further obligation upon the purchaser than the making of the payments required by the original contract. Moomaw v. Emerson, 80 Mo. App. 318; Renner v. Luchow, 280 S.W. 77. (6) Conclusions of witnesses not qualified to make such conclusions are not admissible in evidence and should be stricken out on motion, especially where they invade the province of the jury and, therefore, the court erred in permitting defendant and defendant's unskilled witnesses to testify to conclusions which invaded the province of the jury, and to conclusions which the parties had agreed should be made by a skilled expert. Southern Iron Equip. Co. v. Smith, 257 Mo. 226; Smith Const. Co. v. Mullins, 201 S.W. 602; Indiahoma Refining Co. v. Fire Ins. Co., 242 S.W. 712.
Leahy, Saunders Walther and Lyon Anderson for respondent.
(1) The court did not err in refusing to render judgment for plaintiff, notwithstanding the verdict. (a) Said motion was not timely filed. Meffert v. Lawson, 315 Mo. 1091. (b) Defendant's answer stated a defense. (2) The court did not err in failing to direct a verdict for plaintiff on the evidence. (a) Plaintiff failed to request a directed verdict in its favor and failed to present to the court an instruction in the nature of a demurrer to the evidence. Kenefick-Hammond v. Ins. Co., 205 Mo. 300. (b) The temperature guarantees were not based upon "one hundred twenty-five tons of refrigeration effect per twenty-four hours, measured at thirty atmospheres, suction pressure, delivered to the cooling coils," but merely upon the factors contained in the specifications annexed to the contract of June 3, 1924, and the undisputed evidence shows that those factors were present. (c) The proof shows that the installation of this plant was a joint undertaking by plaintiff and the American Carbonic Machinery Company, and that defendant was under no duty to supply any specified refrigeration as a condition precedent to the operation of the guarantees. (d) The notes were delivered as per the terms of the contract. (3) There is no merit to the contention of plaintiff that defendant failed in its defense and counterclaim because he failed to arrange an official test. (a) Said provision of said contract was fully complied with, the record showing that from June 28th to November 20th there were several tests made at which defendant was present. (b) Defendant was never notified by plaintiff of the completion of the installation of the cooling system. (c) Plaintiff never tendered to defendant a complete plant. (d) Said clause in the contract of June 3, 1924, relied upon by appellant, was superseded by the provision in the supplemental contract of November 20, 1924, providing that the acceptance test should be conducted by the Terrell Croft Engineering Co. (4) Defendant's instructions number one and two were not erroneous. (a) Plaintiff failed to request more specific instructions. (b) The proof covered only the specific matters complained of in the answer and counterclaim, so that the jury could not have been misled by its general terms. (c) Since the contract provided that if the apparatus failed to meet the guarantees plaintiff would refund all moneys paid to it on account, and since the proof showed a failure of the guarantees, defendant was under no duty to pay the notes before bringing suit on the warranty. (d) The specified refrigeration effect contained in the November 20th contract was not a condition precedent to the temperature guarantees contained in the contract of June 3, 1924, but was a duty imposed upon plaintiff and the American Carbonic Machinery Co., who had jointly obligated themselves to install this plant. (5) There was ample evidence to support the verdict on the counterclaim. (6) The court did not err in refusing to give and read to the jury plaintiff's requested instructions I and J. (a) The temperature guarantees were not dependent upon any specified refrigeration effect, but only upon the factors contained in the specifications annexed to the contract of June 3, 1924, which the undisputed evidence shows were present. (b) The defendant was under no duty to furnish the refrigeration effect for the operation of this plant. This obligation was that of plaintiff and the American Carbonic Machinery Company. (7) It was not necessary for defendant to plead and prove that he returned or offered to return plaintiff's equipment, or that it was entirely worthless, for the reason that the contract provided that the right of possession and title to the apparatus covered by the contract should remain in plaintiff until the full purchase price was paid, and that said apparatus should not be considered as a part of the building or real estate. The contract also reserved to plaintiff the right to enter the premises, and, without notice, remove the property in the event of default in payment, and further that in the event the operating guarantees were not fulfilled plaintiff would refund all money paid and remove the apparatus and material from the premises. There was, therefore, no duty under the contract on defendant to return or offer to return the property, 35 Cyc. 439; Warder v. Meyers, 70 Neb. 15, 96 N.W. 992. (8) There was sufficient consideration for the modification of the contract of June 3, 1924, since the time for performance by plaintiff was extended, and defendant gave up his right to have the question of the fulfillment of the guarantees determined by an impartial arbitrator and agreed to be bound by the finding of Terrell Croft, plaintiff's employee. Consideration for a modification of a contract may rest in the mutual assent of the parties. Carman v. Harrah, 182 Mo. App. 365; Smith v. Crane, 169 Mo. App. 695; Welch v. Mischke, 154 Mo. App. 728; Cannon v. Boswell, 117 Mo. App. 473. (9) The court did not err in refusing to strike out the testimony of Fred Cornwell, and in admitting the testimony of witnesses Weil and Werner. (a) Having failed to object to previous testimony of the same tenor, appellant is now estopped to urge that the court's ruling constitutes reversible error. (b) Appellant had full opportunity to cross-examine the witness as to all the facts upon which the alleged conclusions were based, and the error, if any, was harm- less.
The petition in this case seeks in six counts to recover on as many promissory notes, each for the sum of $1041.66, with six per cent per annum interest from December 1, 1924. The answer alleges that each of said notes was given in part payment for a certain air-cooling apparatus to be installed by plaintiff in a motion-picture theatre operated by defendant, with respect to the efficiency of which when installed plaintiff made certain warranties, and that by reason of plaintiff's breach of said warranties the said notes and each of them were without consideration. Under a counterclaim filed in connection with the answer defendant seeks to recover from plaintiff for the alleged breach of warranty the sum of $6249.96. In the trial court the jury found for defendant on plaintiff's cause of action and also on defendant's counterclaim. Judgment was entered accordingly, and plaintiff appealed.
The facts giving rise to this controversy will be briefly outlined. In the early summer of 1924, defendant as lessee was operating the Delmonte Theatre in the city of St. Louis. In view of the approaching heated season he set about to have installed in the theatre building an efficient cooling system, whereby the air therein would be materially reduced in temperature and then satisfactorily distributed to the various parts of the auditorium. To that end he entered into negotiations with the American Carbonic Machinery Company, a Wisconsin corporation, engaged in the business of manufacturing and installing refrigeration plants, and plaintiff corporation, the business of which was the manufacture and installation of devices for conditioning and distributing the air when cooled by means of a refrigeration plant. The representatives of the two corporations together made a survey of the building and collaborated in drawing plans and specifications for a proposed cooling system as a unit. But defendant entered into a separate contract with each. Under the contract entered into with the American Carbonic Machinery Company it was "to furnish and install a complete carbonic safety system of refrigeration for the purpose of cooling water and air for the air conditioning system to be installed by the W.L. Fleisher Co., Inc." That with plaintiff required it to furnish and install an apparatus that would efficiently distribute the air when cooled to various parts of the theatre building. Both contracts were presented to defendant for signature at the same time and both became effective on or about June 3, 1924.
On July 28, 1924, each of the companies notified defendant that its part of the work had been completed according to its contract. Thereafter various tests were made from time to time as to the efficiency of the cooling system as a whole, none of which showed that it met the requirements of the contracts. Fnally, on November 20, 1924, plaintiff and defendant entered into a written contract which supplemented and in some respects modified the original contract between them of June 3, 1924. The provisions of the final contract having a direct bearing on the questions calling for decision are as follows:
"Guaranties:
"With the operating conditions herein specified fulfilled and while the system is supplied continuously with water and electric current and refrigeration effect as furnished by the American Carbonic Machinery Company, we will guarantee the following:
"1. That the temperature at the exhaust grilles will not be over 80 degrees F. when the outside dry bulb temperature is 90 degrees F.
"2. That the temperature at the exhaust grilles will not be over 73 degrees F. when the outside dry bulb temperature is 80 degrees F.
"3. That the relative humidity will not be over sixty per cent at 80 degrees or sixty-five per cent at 73 degrees under the conditions specified above. It is understood that the conditions in the theatre will be better than those given above, as the exhaust air carries all the heat and moisture given up by the people, but in so specifying, we are aiming to guarantee something which can be easily determined. . . .
"Additional Guarantees: In addition to the temperature and humidity guarantees given in our main contract of June 3, 1924, we will guarantee that the extreme dry-bulb temperatures on the main orchestra floor from the inside of the parapet wall to the front of the stage will not at the same time have a greater difference than 3½ degrees F. from the mean temperature on the main orchestra floor as above specified. This extreme variation will be smaller in average summer weather.
"Temperatures will be taken four feet above the main auditorium floor and among the seats. The temperatures so taken will not in any case be greater than the temperature guaranteed in our contract of June 3, 1924, which specifies that such temperatures shall be taken at the exhaust grilles.
"It is understood that `the outside dry bulb temperature' which is referred to in clauses 1 and 2 of the `Guarantees' of the June 3 contract shall mean a temperature to be taken over and four feet above the sidewalk at the Delmar Boulevard curb line at a point fifty feet west of the Clara Avenue west curb; at least one hour after sundown, by a certified thermometer which is completely protected from direct radiation from objects outside of the thermometer enclosure.
"The test and guarantees herein shall be effective only when the system is operated according to our instructions and with one hundred twenty-five tons of refrigeration effect per twenty-four hours, measured at thirty atmospheres, suction pressure, delivered to the cooling coils.'
"It is agreed that the acceptance test will be conducted by the Terrell Croft Engineering Company of University City, Missouri, or in the event that the Terrell Croft Company is in any way incapacitated to act, then in that event by such other engineer as both parties to this contract may agree upon and that the finding of such engineer shall be binding upon all parties hereto. . . .
"In the event that this equipment on the official test does not fulfill such operating guarantees as are herein give, then we shall be given a reasonable opportunity to make such changes as we may deem necessary. If after reasonable time has been given not exceeding one year from date of completion of erection, to make such alterations, the system continues to fail to fulfill these operating guarantees on official test, then we will refund all moneys paid to us on account of the installation and will remove the apparatus and material furnished by us from your premises, thereby terminating this contract and all responsibility of either party for damages for any causes whatsoever. . . .
"It is further agreed that upon the execution of this contract by all parties hereto that the said F.L. Cornwell will issue to the W.L. Fleisher Company, Inc., twelve promissory notes payable monthly, the first note to be dated December 1, 1924, payable one month after date and each succeeding note one month later, so that the entire contract shall be paid in full by January 1, 1926. All of said notes shall bear interest at the rate of six per cent per annum."
The American Carbonie Machinery Company's contract with plaintiff provided:
"The refrigerating plant to be of a capacity of 125 tons rated at twenty-five degrees above zero (Fahrenheif) gas and shall deliver refrigerating energy equivalent to this capacity to the cooling coils of the air washers, as further outlined in this specification."
Following the signing of the supplemental agreement of November 20, 1924, in June, 1925, plaintiff, under the direction and supervision of Mr. Terrell Croft of the Terrell Croft Engineering Company, set about to make its air cooling and distributing apparatus fulfill the guarantees of the contract. Changes, modifications and additions, in connection with the tests, were made from time to time during the summer of 1925. None of these tests showed that the system as a unit complied with the contracts. The test which showed the nearest approach to a fulfillment of the required conditions, and which seems to have been the last one, was made August 6, 1925. With respect to that test Mr. Croft, who at the time of the trial was in Yucatan, testified by deposition as follows:
"The conditions — or guarantees — called for in the American Carbonic Machinery contract were not satisfied because the guaranteed refrigeration was not produced at the guaranteed electric power consumption and suction pressure. The conditions — or guarantees — called for in the W.L. Fleisher contract were not satisfied because the average temperature in the theatre auditorium was not quite as low as the guaranteed average temperature. The average temperature was, in the August 6, 1925, test, for example, almost as low as the guarantee, but not quite. In the August 6 test it lacked but six-tenths of a degree of satisfying the guarantee. There may be other minor particulars in which the guaranteed performances were not satisfied."
Defendant read as a part of the deposition of Croft a letter written by him to plaintiff with reference to the test made August 6, which was in part as follows:
"The average inside auditorium temperature, as shown by the above readings, was 77 degrees, whereas to satisfy the contract, with the outside dry bulb at 85 degrees, this average inside temperature would have to be 76.4. So it is evident that the terms of the contract are not quite satisfied by these readings. That is, we should have an average inside temperature of 76.4 degrees, whereas we actually got an inside temperature of 77 degrees.
"But we have no assurance that the refrigeration equipment was delivering 125 tons when these readings were taken. In fact, there is every reason to believe that it was delivering something less than 125 tons. We did not make a refrigeration-output test. . . .
"It appears quite probable that if 125 tons of refrigeration are delivered with 30 atmospheres back pressure, that the auditorium temperature guarantees can be satisfied. . . .
"I don't see how it will be possible to clean the thing up until the refrigeration outfit actually delivers 125 tons.
"Our recording thermometer is still installed at the Delmonte Theatre and I have loaned a sling psychrometer to Katzung, who is the operating engineer. He promises to take readings every night, so we will have a continuous record of performance. But all of this is worthless and getting us nowhere until we get 125 tons refrigeration."
Defendant testified that following the making of the test last referred to Croft verbally reported to him that the temperature was reduced to within six-tenths of a degree of the prescribed maximum, but under forced conditions; that "the condensers were packed in ice so they could force it to the fullest extent; running the fans around 80,000 feet;" and that as a working proposition it was not satisfactory.
Two witnesses called by the defendant, Wiel and Werner, were permitted to testify over the vigorous objections of plaintiff that they visited the Delmonte Theatre in the summer of 1925 and that during such visits they were unable to distinguish any difference between the temperature outside the theatre and the temperature inside the theatre — that it was not very comfortable inside.
Defendant paid six of the twelve notes he gave plaintiff; these payments constitute the basis of his counterclaim.
The cause was submitted to the jury upon the following instructions given at the request of the defendant:
"1. The court instructs the jury that if they believe and find from the evidence that the notes sued upon were given in consideration of theater-cooling equipment agreed to be furnished and installed by plaintiff; and if the jury further believe from the evidence that the said equipment and Instructions. installation did not conform to the requirements of the contract read in evidence and that the guaranties made in said contracts were not fulfilled, and that the consideration for the said notes failed, then the jury will find for defendant on each of the six counts of plaintiff's petition.
"2. The court instructs the jury that if they believe and find from the evidence that the cooling equipment shown in evidence to have been furnished by plaintiff did not comply with the requirements or fulfill the guaranties made in the contracts of June 3, 1924, and November 20, 1924, read in evidence, and if the jury further believe and find from the evidence that the Terrell Croft Engineering Company did decide and determine that the guaranties and requirements of said contract had not been fulfilled; and if the jury further believe and find from the evidence that defendant fully performed said contracts on his part, then the jury will find in favor of defendant on his counterclaim and will assess his damages at such sum as the jury may believe and find from the evidence defendant paid to plaintiff on account of the contract purchase price of said cooling equipment, not exceeding the sum of $6,249.96 and interest on the amount so found from December 21, 1926, at the rate of six per cent per annum."
All of the instructions requested by plaintiff were refused, and among others the following:
"I. If you find and believe from the evidence that the sole cause of the failure, if any, to produce the temperature guarantees of the contracts was the failure, if any, of a third party to produce the specified refrigeration effect (if you find there was such failure), then defendant cannot recover on the counterclaim.
"J. You are cautioned that under the contracts introduced in evidence plaintiff was not obligated to install any refrigeration nor to guarantee the effective operation of whatever refrigeration was installed and the guarantees of plaintiff are based upon the refrigeration effect produced or to be produced by the American Carbonic Machinery, a third party."
As heretofore stated the jury found for the defendant on both the cause of action alleged in the petition and the counterclaim.
The refusal of the trial court to give instructions "I" and "J," heretofore set out, is one of the rulings of which appellant complains. The first advised the jury that if the sole cause of the failure to produce the temperature guarantee was the failure of a third party to produce the specified Contracts: refrigeration effect, the defendant could not Complementary recover on the counterclaim. The second and Independent. cautioned the jury that plaintiff was not obligated to install any refrigeration nor to guarantee the effective operation of refrigeration produced or to be produced by the American Carbonic Machinery Company. Appellant bases its contention that the refusal of the instructions was error on the rule of law that the buyer of a chattel cannot defeat recovery of the purchase price, nor recover damages from the seller, on the ground that there has been a breach of an express warranty, unless it be shown that all conditions precedent in the covenant have been fulfilled — the contract in the instant case plainly disclosing that a specified refrigeration effect was such a condition precedent.
It was the theory of respondent, as disclosed by his pleading and the presentation of his defense and counterclaim in the trial below, that his contract with appellant and the one with the American Carbonic Machinery Company in reality constituted but a single contract, that the undertaking of the Machinery Company in the one and that of appellant in the other were the joint undertakings of both. This theory, though stoutly opposed by appellant, was adopted by the trial court. It is true that the two contracts were drawn with reference to each other; each is a complement of the other; the several performances of both, taken together, were designed to produce a single instrumentality, an air conditioning and cooling system. It is also true that certain provisions of the contract between respondent and appellant are incorporated by reference into the contract between respondent and the Machinery Company. But a careful reading of the contracts fails to disclose anywhere, either in express terms or by implication, a joint undertaking to do anything. The part of the cooling system to be furnished and installed by each of the contractors is specifically described and set forth in its contract with appellant, and nowhere in either contract is there any assumption by the contractor of responsibility for the other's performance of his contract. The two contracts are clearly separate and independent obligations, though designed to accomplish a single objective. That appellant did not assume any responsibility for the construction and installation of the refrigeration plant plainly appears from the condition which it expressly annexed to its warranty in the modified or final contract, namely: "The test and guarantees herein shall be effective only when the system is operated according to our instructions and with one hundred twenty-five tons of refrigeration effect per twenty-four hours, measured at thirty atmospheres, suction pressure, delivered to the cooling coils."
Appellant's warranty as to temperatures was not unqualified and absolute: it was conditional. It warranted that its apparatus would produce the specified relative temperatures inside the theatre auditorium, only when the system was operated with one hundred and twenty-five tons of refrigeration effect per twenty-four hours, measured at thirty atmospheres, suction pressure, delivered to the cooling coils. The existence of the specified refrigeration effect was therefore a prerequisite to appellant's liability for breach of the warranty. [Monks v. Miller, 13 Mo. App. 363; Tower v. Pauley, 76 Mo. App. 287; 2 Williston on Contract, secs. 664 and 666a.] In the language of the cases it was a condition precedent the fulfillment of which it was incumbent upon respondent, who averred a breach of the warranty, to allege and prove. [Chapman v. Ferguson, 152 Mo. App. 84, 132 S.W. 284; Nichols-Shepard Co. v. Rhoadman, 112 Mo. App. 299, 87 S.W. 62; 2 Williston on Contracts, sec. 674.] This he did not do. On the contrary the evidence tends to show that the condition as to the refrigeration never at any time existed. Appellant did not ask a directed verdict; it assumed that the issue of whether there was a breach of warranty was for the jury. With respect to such issue it was clearly entitled to have had given its instructions "I" and "J." Their refusal by the court was error.
The contract prescribed the test for determining the efficiency of the cooling system and the exact manner in which it should be made; it also designated the person who should make the finding as to whether the operation of the system met the Incompetent test; and provided that his finding should be final Witness. and conclusive with respect thereto. The testimony of the witnesses Wiel and Werner was therefore incompetent; it had a tendency to mislead and confuse the jury; its admission was error.
The judgment of the circuit court is reversed and the cause remanded. All concur.