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[Sheffield Furnace Co. v. Hull Coal & Coke Co.]

in express terms is emphasized by the fact that they all along, after condition performed, treated the contract as mutually and absolutely binding; and their declarations and conduct would certainly suffice to remove any doubt there could possibly be as to the absolue contractual duty of the coke company to deliver and of the furnace company to receive the quantity of coke specified in the writings.—Comer v. Bankhead, 70 Ala. 141.

But the writing of January 30, 1888, is more than a mere construction of the previous agreement; it is itself an undertaking, absolute in form and substance, on the part of the coke company to sell and deliver, and on the part of the furnace company to take and pay for, all of the 3,900 cars of coke mentioned in the first paper, except 66 cars which had previously been delivered. It is therein unconditionally stipulated that the deliveries contracted for in the writing of August 30 should be postponed for a certain time, and that said deliveries should again commence about the first day of May, 1888, and thence continue at the rate of about ten cars per day until the whole quantity-3,900 cars, less the 66 cars previously delivered-should be delivered. We do not hesitate to declare, upon the considerations to which we have adverted, that there was an existing and mutually obligatory contract between the parties at the time of the alleged violation of it by the defendant, in July, 1888, for the sale and delivery of the specified quantity of coke.

2. We are equally free from doubt to the conclusion that there is no question of agency between the coke company and the furnace company in this transaction. It is manifest, we think, as well upon the words of the writings, as from the situation and course of dealings between these companies, that the coke company was in no sense the agent of the furnace company to purchase coke from the operators for the latter, but was itself the seller on its own account of the coke to the furnace company. And we deem it unnecessary to further discuss this feature of the case.

3. As has been indicated, one of the prominent questions on the trial below was as to whether, under the contract, the duty of paying freight on deliveries of coke at Sheffield was upon the furnace company or the coke company; the former contending that it was not required to make any payment whatever until the 10th of the

[Sheffield Furnace Co. v. Hull Coal & Coke Co.]

month succeeding that in which deliveries were made; and the latter insisting that, by the terms of the contract, as read in the light of a custom of the trade, which the court allowed to be proved against defendant's objection, the furnace company was required to pay the freight charges on each car as it was received at Sheffield, and was entitled to a credit for the amounts so paid in any month on a settlement on the 10th day of the next month There are only three provisions or expressions in the writings which bear upon this matter. In the out-set the contract provides for a sale and purchase of "Flat Top Coke at $5.10 per net ton (2,000 lbs.) f. o. b. cars, Sheffield, Ala." It also contains this provision: "Buyers to remit on or before the 10th day of each month for all shipments made during the preceding month." And this recital: "It is understood that Hull Coal & Coke Co. have freight rates to Sheffield, Ala., on which the above price is based, but, if during the time this contract is in force, this rate should be advanced, then buyers have the option of taking any undelivered portion, due on this contract, at the advance, or of cancelling it, provided sellers do not elect to stand said advance." The trial court admitted evidence of a general custom in the coke trade, in line with plaintiff's contention, to the effect that under contracts like this it was upon the buyer to advance the freight, and take a credit for the aggregate of such bills paid during a month on settlement the 10th day of the succeeding month; and upon the writings and this extrinsic evidence submitted it to the jury to determine what the contract was in this regard. The action of the court on this subject clearly and confessedly can be sustained only on the assumption that the expressed or implied terms of the contract as reduced to writing were ambiguous in respect to this matter. think this assumption is not justified by the language the parties have set down in the writings. It was mainly if not entirely rested upon the use of the letters, "f. o. b." in the connection shown above: these were supposed to be of such doubtful meaning as to authorize and require a resort to extraneous evidence in their interpretation. We do not so understand the principle on which the court acted. These letters have long been used and have now come into such general use in contracts of sale, where the property sold is to be transported, that their

We

[Sheffield Furnace Co. v. Hull Coal & Coke Co.]

significance is a matter of common knowledge, and, hence, of judicial cognizance. It is commonly known, and therefore courts must be held to know, that these are but the initial letters of three several words, and that these words, in connections like this, are 'free on board." And even were it conceded that courts do not judicially know what they stood for and mean, and evidence aliunde is resorted to as in this case, such evidence could go no further than to supply the missing letters of the words, of which these letters are by such evidence shown to be the initials. The necessity, in other words, to show by extrinsic evidence what the full words are is met when the completed words are put before the court, and it affords no occasion or justification for giving, by proof of custom or usage, or other extrinsic fact, a different meaning or operation to them than would have attached to them had they been originally inserted in full in the writings. Thus in a case where parol evidence was admitted to show that the letters C. O. D., (and which are not better understood than the letters f. o. b.), in a receipt given by an express company for a package to be transported by it, were the initials of the words "collect on delivery," the court held, these words being proved, it was not competent to prove by parol what the full words meant, or to change their natural significance and effect in the case by evidence of custom or usage, or of previous dealings between the parties, so as to relieve the carrier from the duty of collecting the price of the goods from, before delivering them to, the consignee.— American Express Co. v. Lesem et al., 39 Ill. 312. And in another case, where the carrier, the Adams Express Co., was under a contract to carry goods from New York to Boston, the package was marked thus: "A. King, Windșor. N. S., C. O. D. $375, from Turner's Express, Boston, Mass.," and in the receipt given for the goods was contained the directions as marked on the package. The package was delivered to Turner's Express at Boston by the Adams Express Co. without collecting therefor. The consignor sued the latter company alleging a breach of the contract, and on the trial" the defendant was allowed to prove that the whole direction meant, that Turner's Express should collect of the consignee; also, what was the custom existing among express companies receiving packages with a C. O. D. from connecting lines." It was

[Sheffield Furnace Co. v. Hull Coal & Coke Co.]

held by the Court of Appeals that the admission of this evidence was erroneous; that while it was competent to give parol evidence to explain the meaning of the letters C. O. D., and thus remove all ambiguity, the contract, being thus made clear, could not be varied; that the additional words, being of familiar and ordinary and not of technical use, and having a well defined meaning, could not be explained or varied, or a different meaning given them, nor was it competent to prove a custom or usage inconsistent therewith."-Collender v. Dinsmore, 55 N. Y. 200. As has been indicated, our own opinion is, that the meaning of the letters C. O. D. in express carriage contracts, and f. o. b. in contracts like that involved in the case at bar is a matter of judicial knowledge, and that parol evidence is not needed or admissible in their interpretation.-State v. Intoxicating Liquor Co., 73 Me. 278; U. S. Ex. Co. v. Keefer, 59 Ind. 263; Moseley's Adm'r. v. Mastin, 37 Ala. 216. But whether the words of which the letters are initials are filled in by drawing upon judicial knowledge or by extrinsic evidence, the effect and result are the same: the perfected words, in either case, are inserted in the writing instead of the letters, and the instrument is to be read and construed precisely as if the words had been originally embodied in it. Applying these principles to the present case, the words "free on board" are substituted for the letters f. o. b., and we have a contract by which the coke company agrees to sell to the furnace company 3,900 cars of coke at $5.10 per net ton of 2,000 pounds free on board the cars at Sheffield, Ala. There can be no doubt as to what these wordsfree on board-mean in the connection we find them here. Their meaning in contracts of this sort is plain and well understood. They import that the purchaser shall be free from all expense which may have attended the shipment and transportation to the point named. Had the provision related to the initial point of the transportation, the buyer would have been entitled to the shipment at that place free from all expense incident to loading the cars-all expense indeed incurred in the premises up to and including the loading of the cars. Then it would have been upon the buyer to pay the freight-the cost of transportation-to the final destination of the consignment. The provision here having relation to the point of final delivery, it can mean noth

[Sheffield Furnace Co. v. Hull Coal & Coke Co.]

ing else than that the seller is to pay all costs and charges up to that point, and that the buyer is entitled to receive the consignment free of all such costs and expenses. And, as we have seen, these plain terms of the contract can not be changed or varied in any way by evidence of a custom existing in the coke trade, according to which the purchaser is to pay freight charges. There is, therefore, no consideration referable to the use of the letters f. o. b. which inject an element of uncertainty into the contract, or afford any ground for parol evidence in explanation of them or of the words for which they stand. The other terms of the writings bearing on this point are equally free from ambiguity and equally exclusive of the construction sought to be put upon the contract by the evidence of custom which the court allowed to go to the jury. The price to be paid was $5.10 per net ton of 2,000 lbs. This was the price of the coke the amount to be paid for each ton of the commodity-on cars at Sheffield, Ala. There is no more suggestion of freight charges in this provision of the contract, than there would have been had the coke been stored at Sheffield and as stored sold by the coke company to the furnace company at a specified price per net ton. In each case the cost of transporting the coke from the ovens to Sheffield would be a constituent element or factor to be considered by the seller in fixing a price to be proposed to the would be buyer, just as the price paid by the seller to the operators for the coke at the ovens, and as the value of the seller's time and services spent and rendered in buying, shipping and delivering the coke would be constituent factors, going along with freight charges and the amount of profit the seller sought to make, in the gross sum of $5.10 per ton; and there is, on the stipulations so far considered, just as much reason and no more for holding that the furnace company was required to pay in advance of the 10th of the succeeding month, or that it was doubtful whether the contract did not require the furnace company to so pay that part of the $5.10, or so much of the $5.10, as was necessary to pay the operators what they were to receive for the coke at the ovens; and so with the coke company's profit and the value of its time and services. If this needs further demonstration it is found in the recital of the contract, that "It is understood that Hull Coal &

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