Poole Engineering & MacHine Co. v. Swindell

Offutt, J., delivered the opinion of the Court. Walter B. Swindell, Charles J. Swindell, and Walter B. Swindell, Jr., co-partners, trading as Swindell Brothers, have for many years been engaged in the manufacture and sale of bottles at their factory at Bayard and Russell Streets in the City of Baltimore. The process of manufacturing the bottles which they sell consists of reducing certain materials to a mass of molten glass and by means of machinery transforming that mass into bottles of divers sizes and shapes. In the course of it the molten glass is discharged from a feeder, in lumps or gobs approximately uniform in size, into moulds in a bottle-making machine through which by the application of condensed air it is forced into the desired shapes.

Tlie machinery employed in the operation is extremely complicated, and its efficiency depends largely upon its capacity to maintain the flowing glass at fixed temperatures for definite periods through the several stages of manufacture. The bottle-making machine used in the final stage of manufacture is heavy, durable and designed to stand the wear and tear of continuous use under working conditions over considerable periods of time. The moulds are more fragile, have a comparatively short life, under usual operating conditions must be frequently replaced, and are sufficiently expensive to constitute a material element in the economical operation of the business. They naturally vary as the size and shape of the bottle to be made varies, and, as the number of bottles of a given shape made from a single set of moulds increases, ⁵⁷⁴ the expense of the moulds allocated to each hottle decreases.

The machines ordinarily used by the appellees prior to the occurrences referred to in the declaration in this case were designed to operate with twelve moulds. The expense of making so many moulds to produce a comparatively small number of bottles of a given size or design necessarily made the cost of each bottle proportionately higher than it would have been had a greater number been produced. For that reason the use of a machine which would operate with four moulds would be more economical in producing a small number of bottles of a given size and shape than the use of one which would not operate effectively with less than six or more. There was, therefore, in the bottle manufacturing business, a need for a machine which would operate effectively with a small number of moulds, and Clarence Reuben Nixon, an employee of the appellees, undertook to design and construct such a machine, and at the same time to test on it a device which he had invented for producing a more perfect bottle than those ordinarily made on standard machines.

At that time, what might be called the standard method of manufacture, in making each bottle, utilized two moulds, the receiving mould into which the gob of molten glass was first discharged by. the feeder, and the final or “blow mould,” into which it was transferred after its treatment in the receiving mould had been completed. Nixon’s device introduced an intermediate stage, by having the forming bottle transferred from the receiving mould to a forming mould before it was finally completed in the blow mould. In that method the1 first mould is called a “preliminary blank or pattern,” the second the “forming blank or pattern” and the third the “mould.” He finally constructed a machine having four moulds and utilizing the device which has been described, but which was so made that, in order to preserve the ratio of time and temperature to the volume of the flowing glass essential.to the moulding process, it was necessary to alternately drop one gob from the feeder into the receiving mould and one into a reeeptable called a “basement,” so that one-half the material discharged by the feeder was wasted. That waste could be ⁵⁷⁵ avoided if the bottle-making machines were of snch a size that two of them could be operated in connection with a single feeder, and when so operated such machines would effect- a material economy in filling “small orders.” There was evidence in the case tending to show that the Nixon machine when completed adequately demonstrated its own practical utility, as well as the value of the Nixon device, and the appellees were so impressed by its possibilities that they formed the design of having it strengthened, perfected, manufactured, and sold to the trade.

While they manufactured their own moulds and did much of their own repair work, they were not equipped for the construction of such machines, so that, while that which Nixon constructed was adequate for experimental purposes, it was not apparently strong enough to stand the strain of prolonged operation under -ordinary working conditions, and appellees felt it necessary to have the machine, which they had in mind, manufactured by some company regularly engaged in the manufacture of machinery. Subsequently negotiations began between them and the Poole Engineering & Machine Company, the defendant below, and the appellant here, for the construction of such a machine. Whether they were initiated by them or by tbe appellant does not clearly appear and is not material, but it does appear that they began prior to March 5th, 1928, and that on May 11th, 1928, one of the appellees addressed the following letter to the appellant: “I have just returned from a convention at Atlantic City and find your letter of May 8 before me, hence the delay in answering. “I am very glad you are progressing so satisfactorily with the drawings and general lay-outs for the new machine. In accordance with your request, I enclose one of our order blanks on which we give you authority to proceed with this work for us, and this will become a matter of record with your order department.” Following that letter, the appellant, hereinafter referred to as “Poole,” undertook the construction of a bottle-making machine for the appellees at the cost of construction plus ⁵⁷⁶ twenty per cent, thereof, and in July, 1929, it delivered what purported to he such a machine at the appellees’ factory.

The machine was subjected to different tests, the last,of which was made on December 27th, 1929, and on March 21st following that test Poole demanded of the appellees payment of a balance claimed by it to be due for work and materials furnished in the- construction of it, amounting to $1,431.64. In reply to that letter the appellees stated that the machine was worthless, that they rejected it, and they not only refused to make any more payments on account of it, but demanded that Poole refund to them payments they had made to it, aggregating $23,881.64, on account of the construction of the machine, and upon the failure of Poole to comply with that demand, on September 8th, 1930, brought this action in the Baltimore City Court to- recover such payments, which in an amended bill of particulars filed in the case were shown to aggregate $23,701.51, made as follows: “June 10, 1928, $241.41; July 13, 1928, $194.30; Aug. 11, 1928, $461.63; 'Sept. 13, 1928, $427.05; Oct. 12, 1928, $175.19; Nov. 16, 1928, $2,863.12; Dec. 28, 1928, $1,-330.39; Jan. 24, 1929, $2,999.57; Eeb. 21, 1929, $7,504.56; May 1, 1929, $4,354.09; May 3, 1929, $1,317.81; June 17, 1929, $816.09; July 9, 1929, $699.61; Aug. 12, 1929, $316.69.” The case was. in due course tried before the court and a jury, and the verdict and judgment being for the plaintiffs for that amount, the defendant appealed. At the close of the whole case the plaintiffs offered one prayer and the defendant nine, of which the first, second and third were granted, and the others refused. The defendant also- specially excepted to the plaintiffs’ prayer, but its exception was overruled and the prayer granted.

Those rulings are the subject of the single exception presented by the record. The case was tried upon antithetical theories. The contention of the plaintiffs was that the defendant had contracted to- manufacture for and sell to them a machine for a known and definite use, that as part of the contract it warranted the fitness of the machine for that use, that relying ⁵⁷⁷ upon the warranty they made payments from time to- time on account of the purchase price of the machine, that the defendant, although given every reasonable opportunity to do so, failed to perform its contract, but tendered in pretended compliance with it a machine which was wholly unsuitable for such use aud worthless, and that because of that breach of its contract and warranty they were entitled to recover the payments they had made. The defendant’s contention was: (1) That the evidence in the case was legally insufficient t-O1 permit any inference other than that the only contract between the parties was one for labor and material, and not one of sale; (2) that, even if there was a contract of sale, the evidence was legally insufficient to support the hypothesis that the defendant had warranted that the machine when completed would have a known and described utility; (3) 'that, if there was such a warranty, the evidence was legally insufficient to allow a finding that the completed machine failed to comply with its terms; (4) that, even though the original contract contained a warranty of fitness, nevertheless, if the plaintiffs subsequently assumed control of the design of the machine, such conduct discharged the warranty, if the completed machine conformed to a design adopted, created, or approved by them.

The first "and the most important consideration which occurs in reviewing the court’s rulings in reference to the plaintiffs’ prayer, the defendant’s demurrer prayers, and the special exceptions, is whether there was in the case evidence legally sufficient to support the hypotheses: (1) That the defendant contracted with the plaintiffs to “manufacture and sell” a machine; (2) that the defendant promised that such machine would have a given utility, to wit, that of making “merchantable bottles in merchantable quantities”, and (3) that the completed machine was incapable of making “merchantable bottles in merchantable quantities.” A second question is whether, if there was evidence legally sufficient to entitle the plaintiff to recover at all, the plaintiffs’ prayer fairly stated the conditions precedent to1 such a recovery under the facts of the case. ⁵⁷⁸ While the first question demands a searching and critical examination of the evidence, it would be impossible in an opinion of any reasonable length to do more than refer to such' parts of it as are essential to the conclusion reached as a result of such an examination. A great part of it dealt with the details of the construction and operation of bottle-making machinery, which, while perhaps necessary to' a clear understanding of the case in the trial court, has no necessary connection with the questions presented in this court. Much of it is expressed in technical language or trade vernacular in connection with exhibits before the trial .court, and is, apart from those exhibits, which are not available to this court, unintelligible. The real issues in the case were: (1) Did Poole contract with appellees to manufacture for and sell to them a bottle-making machine, which (2) would make merchantable bottles in merchantable quantities, (3) did it perform that contract, (4) if not, was its failure due to any want of skill or care on its part or to some fault in the specifications which it followed at the direction of the plaintiffs ?

In referring to the evidence relevant to those issues, it will be stated partly in narrative form, and in connection with the plaintiffs’ prayer, the special exceptions thereto', and the defendant’s demurrer prayers, and for that purpose, and for that purpose only,, so much of it as tends to support (a) the plaintiffs’ right to recover, or (b) the supposed fact that the design or plan of the machine conformed to directions given by the plaintiffs, will be assumed to be true. There had been some discussion between representatives of the appellees and Poole concerning the manufacture of a bottle-making machine by the latter at least as early as March 5th, 1928. By April of that year, Mixon’s work on the experimental machine had so far progressed that appellées were convinced of the practical utility both of the machine which he had constructed and of the device which he had invented. But to completely utilize the economical possibilities of that machine, it was necessary that it be of such a size that it could be economically used in combination with another machine of like size in connection with a single ⁵⁷⁹ feeder. ' The reason for that was this: The Nixon machine operated four moulds, but in order to maintain the temperature of the flowing glass at a point, essential to the manufacture of merchantable bottles, it was necessary that it flow in sufficient volume to feed eight moulds, and that at the same time there be a sufficient interval of time, between the discharge of the gob of molten glass into the receiving mould and its transfer to the forming blank and then to the blow mould, to permit the heat in the interior of the mass to penetrate to the exterior and soften a film or shell caused by its contact with the cooler iron of the receiving mould.

To preserve that balance of time and temperature, it was necessary, first, that the moulds be operated at a speed low enough to permit that reheating, and, second, that the volume of flow through the feeder be great enough to maintain the temperature required in the molten glass. The problem presented by these opposed but essential requirements was solved in this way: The volume of the flow needed to maintain the proper temperature was sufficient to feed eight moulds, but there were only four moulds on the Nixon machine. Nixon, therefore, so adjusted the feeding apparatus on his machine that it would cut off and deliver one gob to' the receiving mould, and cut off and deliver another to a receiving “basement.” In that -way he preserved the ratio of time between the stages of the moulding process, as well as the necessary volume of flow, but he wasted one-half of the raw material. To avoid that waste he proposed to operate two machines in connection with the single feeder, so that it would alternately drop one gob into a mould on each machine, instead of dropping a gob alternately into a mould and into a receptacle for waste.

But that method of operation was not practicable unless the over-all size of the machines was substantially the same as that of the Nixon machine. The appellees therefore wanted a machine made which would be approximately of the dimensions of the Nixon machine, would embody its essential feature, would function in the same manner, but which would be sufficiently strong and durable to stand the ⁵⁸⁰ strain of prolonged, operation under ordinary working conditions. Following antecedent. correspondence and interviews, in April, 1928, representatives of Poole visited the Swindell plant to inspect the Nixon machine, with a view of submit ting a bid for the manufacture of such machines as the appellees required. On that occasion appellees informed Poole’s representatives that there was a question as to “what kind of person we should employ to build the machine, whether a bottle machine specialist, and we pointed out the various difficulties-connected with bottling machinery, the fact of the heat involved, the expansion and contraction, and we tried to impress what we considered was the difficulties of a bottle-manufacturing machine.” At that time appellees had in use other standard machines known as “Lynch” machines, and, after examining those machines, Clarence M. Davison, chief engineer for Poole, assured appellees that the question (as to their ability to do the work) was “perfectly ridiculous” and “practically said” that the Lynch machines “were a piece of junk, they could see right off the bat how they could change it and give us a greater and better production,” that it would be “a simple thing to reproduce” the Nixon machine, and Mr. Dudley Shoemaker, vice-president of Poole, who was present at the time, said it would take about three or four months to build the machine, and that it w'ould cost from $3,000 to $5,000, and “he took out a book and pencil and began to figure; I said, ‘How can you do it like that?’ and he said, ‘We have a method of computing according to weight, and we estimate that weight so and so much per pound or ton, and it should cost, oh, around three to five thousand dollars, and after the first "one is built, why, it might be as low as $1,500.’ ” Poole was “very anxious to get the job,” “were insistent that they were capable,” and, in answer to appellees’ expressions of doubt, assured them that it was nothing more than “a machine problem,” that there was “no difference between glass bottle machine manufacture • or their form of machine manufacture.” On the same occasion Poole was ⁵⁸¹ informed of appellees’ plan to use two of the machines together in connection with one feeder.

In respect to that, Walter B. Swindell, a member of appellees’ firm, testified: “Was anything ever said, to your recollection, and if so, to whom, and by whom, with respect to putting two machines under one feeder ? A. Unquestionably. Q. When was it? A. That was right at the beginning.

Q. To whom was that said? A. That should have been heard by both Mr. Shoerqaker and Mr. Davison. Q. By both Mr. Shoemaker and Mr. Davison? A. Should have been.

Q. By whom was anything said with regard to the two machines under one feeder? A. It was said by all of us, I imagine; I know I said it. * * * Q. Did you tell them about what you testified here yesterday about wanting to use this machine for small orders? A. Yes. Q. Could you tell them without explaining you intended tO' have two machines at the same outlet ?

A. Ho. Q. Have you any doubt that you told them that? A. Xone. Xixon, referring to the same conference and speaking of the Xixon machine, said: “Q. What did he say he could do about making the same kind of machine in a strengthened and workable fashion A. He could give us a machine that would stand up satisfactorily, he could duplicate this machine and put it into condition whereby it could stand the strain.

Q. Did he say he could make a machine that would produce commercial bottles? A. Yes, sir; he did.” And later the same witness said: “Q. Mr. Dixon, when did you first hear mentioned the two-machine idea in this matter, I mean in connection now with the Poole Engineering Company, or any employee of the Poole Engineering Company? A. The first day we all met in the factory, Mr. Davison, Mr. Shoemaker, Mr. Swindell and Mr. Harry Brawner. Mr. Dunnock, Lou Eickert and myself were there, we explained what we wanted was two single-unit machines.

The machine we had there was to be duplicated and kept down to a small machine, so it could be used under a feeder, that was in the beginning. John L. Dunnock, an employee of appellees, referring to the same occasion, testified that Davison said that Poole could ⁵⁸² easily reproduce the Nixon machine and “make one that would work.” Following those assurances, on April 30, 1928, Poole sent the appellees a letter in which it said: “I think that our engineers now thoroughly understand the requirements in the matter of the bottle-making machine that we have been discussing. “In accordance with our plan this morning, you will send the machine to us so that we can have it available for the purpose of checking when we make the full set of drawings, which will be necessary, of course, before we can proceed with the strengthened model. In the matter of making drawings, our Engineering Department will simply charge you straight draftsmen’s time for the work. Of course, it would be advisable to have, your men here with our people as the designs are developed. “On a job of this character, which is to some extent experimental and development work, it is impossible to estimate the exact cost, and' on the first machine we will charge you our factory cost plus twenty per cent., rendering bills monthly so that you can follow the expenditures as we go along. “Our boys are very enthusiastic over the machine and I feel quite sure that we can develop this proposition to your entire satisfaction and I am hopeful that it will lead to big future business.” That letter was followed by another dated May 8th, 1928, in which Poole said: “We plan to make a general lay-out proposition first in the drawing room and then from these lay-outs, which will be approved by your engineers, we will make detailed working drawings so as to proceed with manufacture in the shop.

We will be glad to have an order from you to proceed so that we can file it in our Order Department.” In reply to that letter 'appellees on May 11th, 1928, gave the following order: ⁵⁸³ “Purchase Order “Swindell Brothers “Bayard & Bussell Sts. “Baltimore, Md. “Mr. Dudley Shoemaker “Poole Engineering & Machine Co. “Baltimore, Md. “Enter our order for the following, subject to the conditions mentioned below. “You are hereby authorized to make up the detailed working drawings for the new Mixon machine, and to proceed with its manufacture when these drawings are mutually approved by your engineers and our machine department.” On May 12th, Poole, in a letter of that date acknowledging the order, said, “Your Mr. Mixon was here on Thursday and our Engineering Department is now ready to proceed with the lay-outs in accordance with his ideas,” and on May 14th followed it with another in which it further acknowledged the order “to make up detailed working drawings for the new Mixon machine and also to proceed with its manufacture when these drawings axe mutually approved by our engineers and your machine department.” Mo complete set of drawings ever was furnished appellees, and on June 4th, 1928, they, in a letter of that date, complained “that no greater progress had been made on their machine.” On June 5th Poole answered, excusing the delay on the ground that Davison, their engineer, -was absent, and on September 22nd, Davison wrote to Shoemaker: “There is no problem about this glass bottle machine that we cannot work out properly, and to the final satisfaction of the customer. We must, however, be allowed reasonable time for the proper consideration of each important detail item before the final adoption of any scheme. * * * We have four men at work making up detail drawings and if everything goes smoothly, we will be completed within about three weeks.” ⁵⁸⁴ Up to that time, while there were available detail drawings of parts, there were none of the machine as it would appear after the parts had been assembled, and, while appellees were ready to co-operate with Poole, Poole had sent no one to further inspect the machines at the Swindell plant, and its engineer, Davison, said he did not need to “see bottles to construct a machine”; that he would “make a machine that would knock their eye out.” From September until the following January, Nixon and other employees of the appellees visited the Poole factory at irregular but not infrequent intervals, to observe the progress in the construction of the new machines, but could form no idea of what its appearance or dimensions would be when completed, or how closely it would reproduce the Nixon machine. In January, however, Nixon and Dunnoek were shown the base of the new machine and were astounded at its size, and so informed W. B. Swindell, Jr. He was very much disturbed by the information and promptly went to look at the base himself, and when he saw it at once realized that it would be impossible to get two machines of the size indicated by the base under one feeder, and so informed Davison. But Davison assured him that the Poole machine would double the output of the Nixon machine, and so produce the same result as two of the Nixon machines.

Swindell then emphasized the fact that, if it would not do that, the Poole machine would be worthless to them, but Davison “insisted on it,” and showed him, “how, through taking advantage of what he figured to be the idle moments of the Nixon machine, he could double or more than double” its output. Even then Swindell was worried and hesitated “whether we would allow them to continue,” but Davison “said they (his doubts) were nothing; he could as well make a bottling machine as the people who were working on them all their lives; no question about the ability of the mould to make SO' many bottles. That seemed to worry us, because the number of bottles he was undertaking to deliver had never been done before, and has not yet been done.” ⁵⁸⁵ Mixon in his testimony gave this explanation of Davison’s confidence: “Undoubtedly, Mr. Davison didn’t understand that these idle periods he saw on our machine or the Lynch machine were due to the fact that they are the most essential periods in creating a bottle, that that period is known as reheating; after that glass has had contact with the iron, it is necessary that the heat go from the exterior to the interior, so that the veneer can be melted away until that all becomes at one universal temperature, before you dare insert air into it, for if you do insert air into it prior to the time it becomes evenly heated, naturally, the air pressure will go to the weakest point and it will break through the shell and your bottle will be thick and thin.” The dimensions of the Mixon machine were two feet eight inches in width by four feet in length, while the Poole machine was over five feet wide by seven feet two inches in length over all. After the assurances by Davison, Poole was permitted to proceed, and on January 15th, 1929, it addressed to