Pullman Palace-Car Company v. Metropolitan St. Railway Company

This action was brought by the Pullman Palace-Car Company to recover from the Metropolitan Street-Railway Company the sum of $54,219.70, with interest from March 14, 1888, alleged to be due to it under a certain contract for the construction of cars for the defendant company.

The principal defense was that the defendant rightfully rescinded the contract, and tendered the cars back to the plaintiff, who refused to receive them, and that, after such rescission and refusal, the defendant company stored the cars in a proper place, subject to the order of the plaintiff. The defendant also, by way of counterclaim, sought damages against the plaintiff for failure to perform the contract.

The action arises out of certain facts set forth in a special finding by the court below. Those facts are substantially as follows: Prior to May 15, 1887, the Metropolitan Street-Railway Company, a corporation of Missouri, was engaged in the construction of a double-track railway on certain streets in Kansas City. The maximum grade of its line was 13 and 14 feet ascent in a distance of 100 feet. There were a number of grades on the line running up to 10 per cent., and also numerous sharp curves.

On the 15th of May, 1887, the defendant's roadbed having been constructed and the tracks laid, its chief engineers wrote to Charles Pullman, the general agent of the Pullman Palace-Car Company, at Pullman, Ill.: 'We write to say that we are now ready to take cars for our Wyandotte and Twelfth street lines, and should be glad to have you call on us at your convenience.' Upon receiving this letter, Pullman, who had a general knowledge of the grades and curves of the defendant's line, went to Kansas City to discuss the proposed contract. From Kansas City he went to Chicago, and from the latter place, under date of June 21, 1887, sent to the president of the defendant company a letter written by the general manager of the plaintiff, under date of June 21, 1887, as follows: 'I beg to inclose herewith contract with specifications attached, executed by me in duplicate, for the building of twenty-five combination closed and open street cars for your company. Kindly sign, and return to me one copy of contract for our files. You will notice in the specifications that the space for the lettering has been left blank, and I would be glad if you would indicate on the specifications returned the lettering you desire applied to the cars.'

The contract referred to in that letter was in these words: 'Pullman's Palace-Car Company will build for the Metropolitan Street-Rai way Company twenty-five combination closed and open cable cars, as per general specifications hereto attached and made a part of this agreement, and deliver the same f. o. b. [free on board] Pullman Junction, Kensington, Ill., on or before October 10th, 1887, delays by fires, strikes, and unavoidable hindrances excepted, for the sum of two thousand dollars each. Terms, cash on deliveries. Cars to be inspected and accepted at our works. Your written acceptance hereof will constitute a contract mutually binding upon both companies.' To this contract were appended the above general specifications. These specifications called for cars in length 34'9" 'over all,' in width 6'6" or more over sides. They contained nothing relating to brakes except the following: 'Brakes to be operated by gripmen, with lever, both trucks.'

On the 27th of June, 1887, defendant's chief engineers wrote to the plaintiff as follows: 'Your letter of the 21st, inclosing contracts and specifications in duplicate for the twenty-five combination cars for our Twelfth street line, addressed to our president, Morse, has been referred to us for attention in his absence, and we inclose you with this one copy, duly executed by us on behalf of the company. Will you kindly advise about when we may expect to get the general plans which Mr. Pullman, when here, promised to let us have?'

Between the 1st and 16th of July, 1887, the plaintiff's engineer, Twyman, visited Kansas City, stating that the general purpose of his visit was to determine upon the general features of the cars, the shortest curve and other physical conditions of the road, the radius of the shortest curve a car would have to go around, and to arrange with reference to the outside width and the extra length over all, the relative position of the trucks, the height of the wheels, the steps and the seats, and the distance between the seats, etc. He was at the office of the defendant for some time, had access to the plans and profiles of the road, and, while in Kansas City, certain specifications were approved by defendant's engineers, and were submitted to him. These specifications increased the length of cars to 38 feet 'over all,' and prescribed their width, width of floor frame, height from top of track to top of floor, distance between center of trucks, wheel base of truck, distance from front of car to center of forward truck, length of close part of car, length of open portion, as well as of rear platform, size of wheels and 16 cross seats to be fixed as decided.

The plaintiff then proceeded with the work of construction. The defendant gave no direction in relation to the brakes on the cars otherwise than that they should be extra heavy and extra powerful; nor were any plans or specifications for brakes furnished to the defendant during their construction. The brake put upon the cars was designed and constructed by Twyman, plaintiff's engineer.

In December, 1887, in response to plaintiff's request that defendant send one of its employees to Pullman to inspect the cars, Lawless, defendant's superintendent, went there for that purpose. Ten or twelve cars were then shown to him as completed, and standing in the shops of plaintiff on the floor where they were run out. Lawless made a thorough examination of them, inside and out, and upon examining the brakes by having them worked from within, and observing their operation and application while under and at the side of the car, announced himself as satisfied with them, and requested the representative of the plaintiff present to finish the others up in the same way, and forward them. No further request was made by Lawless for testing the cars, and no other facilities were offered by the plaintiff for making such test and examination.

The first five cars were shipped by plaintiff February 24, 1888; the next shipment, of eight cars, was on March 1, 1888; the next, of two cars, March 17, 1888; five cars were shipped March 27, 1888; and the remainder on the 30th day of March, 1888.

When the cars reached Kansas City, they were stored in defendant's power house, because the eastern extension of its line was not then in readiness for operation. They were taken into the house by passing them over a curved track from the street. This curve was 30-foot radius. When the first lot of cars were being passed around this curve, it was found that the wheels 'bound against the sills.' Thereupon defendant's engineer teiegraphed plaintiff as follows: 'Forward truck of cars will not pass around 30-foot radius curve. Lengthen syay-chains, and cut away lower corner of middle sills.' To this telegram plaintiff answered: 'Telegram received. Will make alterations requested.'

On the 22d of March, 1888, before all the cars had been shipped, the east end of the Twelfth street line was completed so that a car could run over that part of the line. Defendant's superintendent took out one of the cars for trial, when difficulty about the brakes manifested itself. The difficulty was that, when the brakes were so adjusted that they could be used to stop the car on a straight, level track, in passing around a curve or up a grade they would bind against the wheels, causing them to slip, and at times throwing the car from the track. If the brakes were so adjusted that they would not bind on the curves or grades, then they would not work on a straight, level track so as to stop the cars.

On the 23d of March, the defendant, by its superintendent, wrote to the general manager of the plaintiff: 'We tried one of your cars over the line yesterday, and found that the brakes would not work satisfactorily; in fact, were perfectly useless. I think the reasons for this are: There being so many connections, and consequently so much lost motion, that before the shoes hug the wheels, the brake lever comes to the limit of the quadrant. Before starting out with the car, we adjusted the brakes so that the shoes touched the wheels, but, notwithstanding this, we could not lock the wheels, or even hold the cars on the lightest grades. As a perfect working brake is an imperative matter with us, I would like to hear from you on the subject, and what remedy you propose.'

In response to this letter, Twyman, the plaintiff's engineer, came at once to Kansas City, and attempted to remedy the trouble with the brake, and, on leaving, claimed that he had done so.

On the 5th of April, 1888, the manager of the plaintiff wrote to the defendant's president: 'The entire lot of twenty-five cars have been delivered, thirteen of them having been shipped in February. Bills have been rendered your company for the amount of $50,000, being the original contract price without extras, bills for which will be sent your auditor in a few days. Will you kindly direct a prompt remittance for the bills already rendered?'

The defendant's whole line was ready to be opened on or about the 7th or 10th day of April, 1888, when the cars for the first time were placed on its road. This was shortly after Mr. Twyman had left Kansas City.

Upon the recurrence of the trouble in operating the cars, the defendant, under date of April 11, 1888, wrote to plaintiff: 'I have delayed answering your letter of April 5th for some days, as I wished to see your cars in practical operation before making a reply. The Twelfth street cable line has been running since Saturday, and we should now be operating with a full equipment if we had not been obliged to make constant repairs and changes to the car brakes. These are very unsatisfactory, and we have hardly been able to make a round trip with a car without stopping to make repairs, and on several occasions have been obliged to run over a considerable portion of the line with no power to set the brakes. I will make no attempt to go into this matter in detail, but wish to say that I whall insist on these cars being made right I shall insist on these cars being made right approve your bills. If you will send a practical man here to take charge of these necessary changes, it will be the best plan; otherwise we shall be obliged to make them, and charg you with the expense. There are some other things about the cars which are not as they should be, but which do not interfere with the operation of them. Many of the panels are badly cracked, and the painting on part of the cars, at least, is very poorly done. The attention of your engineer was called to these points, and he admitted that the work was not as it should be. I have no desire to delay the settlement of your bills, and would gladly approve your vouchers for them to-day if we could use the cars, as it is costing the company a very large amount of money every day that we cannot operate with a full equipment. Let me hear from you in regard to what action you will take as to the brake repairs at your earliest convenience.'

To this letter the plaintiff, under the date of April 13, 1888, replied: 'Your favor of the 11th instant received and noted. I regret to hear that you are having any further trouble with the brakes on the combination cars, as our engineer reported on his return that the trial made on the brakes on one of the cars while he was there, after some slight changes had been made, proved entirely satisfactory, and there was every reason to supposed that with these little changes the brakes would work well on the remaining cars. I regret that your engineer or superintendent did not wire us of the situation as indicated in your letter, as we would have sent our engineer over immediately. As it is, he will leave for Kansas City to-night, and I trust that, in conjunction with your people, the defects reported can be easily remedied. Our engineer did report on his return that the paint was acting badly on a portion of the new cars, and we are sending out two experienced men to attend to the paint work on such of the cars as require it. It is proper to explain just here that the defect seems to be with the middle panel, which is painted with what is called crimson lake,' and which is one of the most difficult colors to hold. We regret exceedingly that there has been any trouble in this regard, and you may rest assured that the defects will be remedied without expense to your company. Speaking of the paint reminds me that our people report that the alkali water is very severe on the finish of your cars, as we know from our own experience with sleeping cars where alkali water is used. Another suggestion in this connection I beg to make is that, if your people would take the new cars in shop within about four or five months after they are received, and give the paint a thorough cleaning, and then two coats of varnish, they would run for at least a year without having to be varnished again, and it would also preserve the life of the paint.'

Immediately thereafter the plaintiff's engineer, Twyman, came to Kansas City to look after the trouble in question, and did some work on the brakes while there; but, being called away be letter or telegram, he left for Chicago, stating that he would soon return and complete the work. Instead of so doing, he wrote a letter, saying: 'I am sorry not to be able to return to Kansas City as quickly as I anticipated. We have, however, arranged to send you a man immediately, who will take charge of the necessary alterations of your cars. There will be no necessity of his leaving Kansas City until everything is arranged to your satisfaction, and I will probably come out there again towards the end of the week.' Immediately following this letter, the plaintiff's mechanic, one Overton, came with typewritten instructions from Twyman, and went to work to remedy the defect in the brakes. He went over the cars one by one, and pronounced them ready for service. This mechanic stated that he had done all he could do to remedy the difficulty in question, and, if it did not accomplish that end, he did not know how to remedy it. Notwithstanding the work and effort of this mechanic, the same difficulty thereafter continued to manifest itself in the operation of the cars as to the working of the brakes.

The defendant's president then wrote to the plaintiff, under date of May 12, 1888: 'I have delayed corresponding with you further in regard to the Twelfth street cars until your mechanic had finished his work. The result of this work has been very little material improvement in the action of the brakes, and the cars at no time during the progress of the repairs have been in a satisfactory condition to operate, and not in such condition now. This fact has been reported to the board of directors, with has to-day passed a resolution rejection the twenty-five cars furnished by your company for Twelfth street on account of the imperfect brakes and other seriously objectionable features, and has instructed me to notify you to this effect, and that the cars are subject to your order.'

To this letter the plaintiff replied, under date of May 17, 1888: 'Your letter of the 12th instant, relating to the twenty-five combination cars built by this company for your company, has been received and noted. You are cognizant of the fact that the cars were built according to plans approved by your chief engineer; the material used, as well as the workmanship, being first class in all respects. The cars before shipment were inspected and accepted by your general superintendent. The cars were then shipped to, received, and put in use by you. Subsequently you made complaint that the brakes did not in all respects work satisfactorily, and a competent mechanic was promptly sent to examine the brakes and make any adjustment found necessary. When the brakes were examined and adjusted on one car, your officers pronounced them satisfactory. Thereupon the brakes were in like manner examined and adjusted on the remaining cars, all the cars then being in use by your company. In view of the facts, your present statement to the effect that you reject the cars on account of 'imperfect brakes and other seriously objectionable features' is quite atonishing, and I must assume that you have been misinformed as to the condition of the cars, as I am unwilling to believe that you would knowingly allow yourself to be a party to such an unreasonable and unfounded claim. I have to request, therefore, that you will without further delay remit the amount due this company for said cars, as per bills heretofore rendered, and thus avoid the necessity of any action on our part to enforce the payment of the amount due us.'

The following additional facts were found by the court:

'The cars could not be operated successfully on defendant's railroad track for which they were designed with this brake, nor upon similar lines, and this defect or inability in the brake was not apparent nor discoverable upon any reasonable inspection made at the place of their manufacture, and could not be discovered without a practical test on the defendant's railroad track or over a like track. The defect in the brake was a latent one, which did not and could not develop to the observation on inspection, and was only discoverable when put into use on the defendant's track or similar track.

'The defendant paid the freight and drayage on said cars from Chicago to Kansas City, the sum of $1,088.50, and paid for building house in which to store the rejected cars $1,850.

'After the sending of the letter by defendant's president to the plaintiff informing it that the cars were rejected and were at plaintiff's disposal, the defendant built a car house at or near Kansas City, and stored therein these cars, where they have ever since remained.

'The defendant operated upon its said road combination cars of a similar character, weighing about six hundred pounds less than the cars in controversy, which were manufactured by the Laclede Car Company, of St. Louis, Missouri, and were operated by a brake of a different pattern, costing from seventy-five to one hundred dollars apiece.

'The defendant did not use and operate the cars in question longer than was reasonably necessary to ascertain whether they could be successfully operated with the brake furnished therewith.

'During the time defendant ran the cars on its road, during the tests made, a hereinbefore found, passengers were received thereon and fares collected from them by defendant. The successful running of the trains was frequently interrupted by breaking of the cable and the locking of the car wheels, in consequence of the defective construction of the brakes, and defendant so continued in the attempt to run said cars during the time of plaintiff's promises to repair the alleged defect, and on such trips received on board of said cars passengers, and collected from them the customary fare. On the trial, defendant offered to prove that, owing to the insufficiency of the brakes, the cars were run at a loss, and that no profit resulted from collection of fares. On plaintiff's objection, this testimony was by the court excluded.

'Defendant had in its employ during the time in question two engineers of skill and experience, one of whom, Mr. Lawless, the same person who went to Chicago to inspect the cars at plaintiff's yards, had experience in the construction and practical operation of cable cars in San Francisco, California, prior to the time of taking service from defendant.'

Upon the foregoing facts, the court, on its own motion, declared the law to be that the defendant had the legal right to rescind the contract for the purchase of said cars in the time and manner above set out, and that the defendant rescinded the contract in accordance with its legal right so to do, made a lawful tender of the cars to the plaintiff, and was not liable for the contract price of them, or any other sum; and that the defendant was entitled to recover from the said plaintiff the freight and drayage on said cars from Chicago to Kansas City, amounting to the sum of $1,088.50, for which judgment was entered.

John S. Runnells, William Burry, and Gardiner Lathrop, for plaintiff in error.

Wallace Pratt and Frank Hagerman, for defendant in error.

[Argument of Counsel from pages 105-106 intentionally omitted]

Mr. Justice HARLAN, after stating the facts in the foregoing language, delivered the opinion of the court.