New York Colorado Mining Syndicate Company v. Fraser

This writ of error is brought to review a judgment entered upon a verdict for $10,500 in favor of the defendants in error. The case originated in five different suits, brought by them against the plaintiff in error in the circuit court of the United States for the District of Colorado,-the first on a promissory note made by it for $1,000, and also for $2,531.78 for the price of goods, wares, and merchandise sold and delivered by them to it. The other four were suits on promissory notes given by the defendant to the plaintiffs for $1,500, $2,000, $1,500, and $4,000, respectively. Afterwards, upon motion of the defendant, these several suits, by order of the court, were consolidated into one. In obedience to this order, the plaintiffs filed a consolidated complaint setting forth these causes of action, the first five being the promissory notes just mentioned, and the sixth being for the goods, wares, and merchandise stated as the second cause of action in the first of the afore-mentioned suits. The defendant, in its answers, original and amended, denied the alleged sale and delivery of the goods as set forth in the sixth cause of action, admitted that it had made the promissory notes sued on, and that they were unpaid, but denied its liability thereon. The other defense consisted in the allegation of a special contract between the parties plaintiffs and defendant previous to the execution of the notes, and as consideration therefor, whereby the former agreed to manufacture and to sell to the defendant for and at the price agreed a roasting cylinder and the necessary apparatus connected therewith, described in the plea, and also to manufacture for and deliver to the defendant a 20-stamp dry-crushing silver-mill and its connected apparatus, and to erect and put the same in their places so as to be run and operated at the mine owned by the defendant in the county of _____, state of Colorado, known as the _____ mine; all of which (cylinder, mill, and connections) the plaintiffs warranted, when put in their proper places, under the directions of one Angus McKay, would properly and satisfactorily and in all ways subserve the purposes for which they were purchased by the defendant. The plea further alleged that the cylinder, mill, and apparatus, when erected and put in their places, were defective in many particulars, so as to be unfit for the uses for which they were designed, and that by reason of these defects the consideration of the notes failed; and that to remedy the same and make the mill operate with efficiency the company was put to large expense for material and new machinery, and was subjected to great loss and damage by the long period of delay in the operations of the mill. The expenses and the special damage thus sustained were pleaded as a failure of consideration, set-off, counter-claim, and recoupment.

On the trial the plaintiffs introduced as a witness William J. Chalmers, who testified as to the execution by the defendant of the promissory notes sued on, and further testified in answer to questions asked as follows: 'Question. Has the firm [meaning the plaintiffs] now any account, not including these notes, against the defendant? Answer. Yes, sir. Q. [Paper shown witness.] Look at that account, and see whether this is a copy of the account? A. Yes, sir. Q. State whether the articles mentioned in that account were ordered by the defendant, and, if so, when.' To which question counsel for defendant objected on the ground that the items could not be proved wholesale by the list; but the objection was overruled by the court, to which ruling of the court defendant then and there excepted, and thereupon the witness proceeded: 'A. They were ordered at various times, by letter and verbally, between the 25th day of July and December 30, 1882.' The witness then proceeded to read the paper handed him, showing an itemized statement of account aggregating $2,531.78. Said witness further testified as follows: 'Q. You may reckon the interest [on said account] from January 1, 1883, up to this time, at 6 per cent. A. $233.59.' To which question and answer the defendant objected on the ground that it was immaterial, but the objection was overruled by the court, to which ruling defendant then and there excepted.

The defendant introduced as a witness one George K. Sabin, who testified that his occupation for the past 20 years had been mining, and that he was in the employ of the defendant as superintendent at the time of the erection of the mill in controversy, and so continued until the mill was shut down. He further testified, inter alia, as follows: 'I have been engaged in mining twenty years, and am acquainted with stamp-mills, quartz-mills, and mining machinery. Question. What was the fair rental value of this mill and its attachments? And in giving your answer you can give it at so much per month, year, or such other division of time as may be most convenient and intelligible.' To this question counsel for plaintiffs objected on the ground that it was not the proper measure of damages; and further, because the witness had not shown himself competent to speak on the subject; and the objection was sustained on the last-mentioned ground by the court; to which ruling and decision of the court the defendant then and there excepted. 'Q. Have you been engaged about mills enough to know what work they perform, what they can do, what they can earn? A. I have of gold-mills. This was the first silver-mill I was connected with. Q. Do you know their cost? A. I think I do know something of their cost; have been engaged in their construction. The cost of this mill was about $75,000, inclusive of the machinery and everything connected with it. Q. What was the fair rental value per month of this mill and its attachments?' To this question counsel for plaintiffs objected on the ground that the witness had not shown himself competent, and the objection was sustained by the court; to which ruling the defendant then and there excepted. The said witness further testified that the defendant company operated a mine near this mill, from which the ore was procured to run through said mill. 'Q. Was there sufficient quantity of ore in this mine accessible to employ the mill and keep it running to its full capacity? A. Yes, sir. [615]

Q. How long have you been mining and been acquainted with ores? A. I have been mining since 1860. Q. Have you, during the same time, been acquainted with the milling of ores? A. Yes, sir. This mill at Columbus was the first silver-mill I had been with; had been engaged in gold ores. Q. You have been acquainted to some extent with silver ores and silver-mills. A. Yes, sir. Q. What was the value of these ores delivered at the Columbus mill in this raw state, as taken from the mine ready to be melted; what was the value for milling purposes?' To this question counsel for plaintiffs objected, and the objection was sustained by the court, to which ruling the defendant then and there at the time duly excepted. 'Q. Do you know of any silver-mills of the same kind in that neighborhood? A. No, sir; there are none in that immediate neighborhood. Q. At what distance away do you know of any? A. Up in Leadville. I do not know of any in operation now. There was one in operation the other side of Leadville a year ago, in Soda Creek. Q. Do you know of any silver-mills being rented at Leadville? A. I do not know of any being rented in the state anywhere.'

The defendant also introduced as a witness A. E. Smith, who, being duly sworn, testified that for 12 years he had been running stamp-mill works and quartz-mills, and manufacturing assayers' supplies; that he had been in the employ of defendant as foreman of the mill at Columbus, Colo., from March, 1882, to December, 1883; and that he had aided in the erection of the mill in controversy. He also testified in answer to questions as to the capacity and work of said mill, as follows to-wit: 'Answer. In the month of September (1882) we milled 721 cars of ore, which averaged 1,200 pounds each, which makes an average of 13 tons a day. In October we run 977 cars, which averaged 1,200 pounds each, averaging 19 tons a day and a fraction; and in November 117 cars, 22 tons per day; in December 902 cars, 18 tons a day. Q. Can you state the amount of ore that was milled during the months of March and April following.' To this question counsel for plaintiffs objected on the ground that it was immaterial, irrelevant, and incompetent, and the objection was sustained by the court, to which ruling and decision defendant excepted. 'Q. Can you give the amount of ore that was milled during the month of January?' To this question counsel for plaintiffs objected on the ground last above given, and the court sustained the objection, to which ruling and decision of the court the defendant then and there excepted. 'Q. What was the capacity of that mill per day upon that ore from September 4 to December 31, 1882, but for the defects in the cylinder and conveyors, which have been described? A. We run 30 tons a day afterwards. Q. With the mill in good working order, what would have been its capacity? A. Thirty tons per day. Q. What was the worth of milling that ore per ton?' Plaintiffs' counsel objected to this question on the ground that it was immaterial, and not the proper measure of damages. By the court (to the witness:) 'What was the cost? A. About six dollars per ton, and a few cents.' The witness further testified as to the expense of operating the mill, the number and wages of the men, and cost of fuel, the number of days the mill was idle, wholly or partially, by reason of the defects complained of, the saving of wages by diminution of the working force when the mill was idle, and the extent to which employees were turned to other labor while the mill was not running; and was then further interrogated by counsel for defendant: 'Q. What wages would you have been compelled to pay to other men had you employed them to do that same work for which you paid these men, during the time the mill was stopped?' To this question counsel for plaintiffs objected, and the objection was sustained by the court, to which ruling and decision of the court defendant then and there excepted.

The defendant also introduced as a witness one H. A. Hurlbut, who testified that he was a managing director of the defendant company in 1881 and 1882, and also testified, among other things, that one Riotti was a mining expert, and a metallurgist, upon whom the defendant relied as to the best method of extracting silver from the ore; that upon his recommendation the white roasting furnace had been selected, and that defendant had employed the plaintiffs as machinists to erect it; that the defendant relied on said Riotti as to the proper process for the separation of the ores, but relied solely on the plaintiffs for the mechanical construction and erection of the machinery; and further, in answer to questions, testified: 'Question. What was Riotti directed or authorized to do about the specifications? Answer. He was authorized to give the draughtsman the incline of the hill, the room there was into the base of the retaining wall, the relative positions of where the stamps and the roasting cylinder were to be, and where the furnace should be placed in position, and to give relative positions and distances. Q. Had he anything to with the mechanical construction of the mill? A. No, sir.'

The plaintiffs recalled, in rebuttal, the witness William J. Chalmers, who further testified: 'Hurlbut said that Riotti had been engaged by the New York parties as consulting engineer, as they wanted to hold some one responsible for the working of the ores. We were notified to comply with Riotti's directions. In looking over the original plan of the furnace the conveyors were shown in the plan. But Riotti said he preferred * * * desired us to follow the drawing in making the furnace. This drawing showed the conveyors, as afterwards put in the mill. We changed the original specifications. They were never accepted by the company, they refusing to accept them. We had the acceptance of Riotti of the plans.'

At the conclusion of the testimony the defendant requested the court, in writing, to give to the jury the following instructions on the right of defendant to recoup damages in said cause: 'If the plaintiffs undertook to supply and put up, so it should be complete and in good running order, the mill or machinery mentioned in defendant's second defense, and entered upon the performance of such agreement, and if the machinery supplied proved defective and mechanically inadequate for the purpose intended, or was not complete, nor executed in proper manner, or if the work was unskillfully performed, then, in this action, the defendant would be entitled to recover from the plaintiffs the damages actually sustained by reason of such failure of the plaintiffs to perform their agreement; and in measuring the damages, if any, sustained by defendant, you may consider the loss of the use of the mill and machinery, either wholly or partially, resulting from such defects and unskillful performance; and any sums paid out by defendant in remedying defects and making repairs in such mill and machinery in consequence of such defects.' Which instruction the court refused to give, and to such decision and refusal the defendant then and there at the time duly excepted. 'In estimating defendant's damages in consequence of plaintiffs' breach of their undertaking, if you find there was such a breach, you may also consider the necessary and immediate loss of profits incurred by the defendant during the period when the said defendant was, by reason of the alleged defects, deprived of the use of such mill and machinery.' Which instruction the court refused to give, and the defendant excepted. After the conclusion of the evidence and the argument of counsel in said cause the court of its own motion instructed the jury as to the law of said cause, and on the question of the measure of defendant's damages, the court gave certain instructions, to the giving of which, and to each several proposition therein contained, defendant at the time duly excepted.

H. E. Tremain and Mason W. Tyler, for plaintiff in error.

Mr. Justice LAMAR, after stating the facts as above, delivered the opinion of the court.