Before MAJOR, Chief Judge, FINNEGAN and SWAIM, Circuit Judges.
The plaintiff, Morton, Alpirn, d/b/a Western Smelting & Refining Co., was engaged in the business of buying and selling metal products, including steel pipe, as a broker, wholesaler and dealer in Omaha, Nebraska. On November 14, 1947, after the exchange of several letters and telegrams and after he had been furnished a sample of steel pipe, the plaintiffs ordered by letter from the defendant, Herman Williams, d/b/a Williams Steel & Supply Co., in Milwaukee, Wisconsin, "new steel pipe" which was described as follows:
"1/2 inch new galvanized hot dipped steel pipe 21 feet lengths as per sample recently submitted, the pipe not to be plugged, 40,000 feet at 13 1/2 per foot FOB Chicago, Illinois. Shipment to be made November 18, 1947."
This letter also stated that the plaintiff was enclosing a bank cashier's check in the amount of $4,000.00; and that the parties had agreed that, should any lengths be received by the plaintiff which were plugged, Williams would accept the return of same and allow the plaintiff freight charges also. The letter also authorized the defendant to draw a draft on the plaintiff for the unpaid balance of the purchase price. The total price of this pipe, at 13 1/2 per foot, was $5,400. In later communications the parties agreed that the pipe was to be shipped to the plaintiff C.O.D. as to the unpaid balance of $1,400, and the pipe was so shipped.
When the shipment of this pipe arrived in Omaha it was sent to the warehouse of Morris Levey to whom the plaintiff had negotiated a sale of the pipe at 18 3/4 per foot. When Mr. Levey arrived at the warehouse the truckdriver had unloaded 40 or 50 pieces of pipe and had then been stopped by Levey's foreman who did not consider the pipe satisfactory. After Levey's arrival he examined the pipe that had been unloaded and then took a few pieces off of the truck "to see if it was probably some just on top, and we walked around that truck and looked as far as we could without unloading it all, and when we saw that it was all of that nature I (Levey) said, 'Let's call Morton Alpirn.'"
Mr. Alpirn said that when he arrived at Levey's warehouse about 50 pieces of the pipe had been removed from the truck and that Mr. Levey and his employee and the plaintiff's brother-in-law were inspecting them. The plaintiff testified that after the pipe had been inspected he notified the defendant that the pipe had arrived and was rejected because it was not in accordance with the contract.
The plaintiff thereafter brought an action for the alleged breach of the contract in the United States District Court for the Eastern District of Wisconsin against the defendant Herman Williams and against the corporate defendant Williams Steel and Supply Co., which had then become the successor to the business of the individual defendant and had assumed the obligations of his business. The plaintiff alleged damages of the $4,000 he had paid to the defendant as part of the purchase price and $2,100 as a loss of profit by the plaintiff on the resale of the pipe to Levey which the plaintiff alleged he could not make because of the failure of the pipe to meet the specifications of the contract of purchase from Williams.
The defendant filed an answer and counterclaim alleging that the pipe shipped to the plaintiff substantially met the specifications of the contract and that the plaintiff had rejected the shipment without cause and refused to pay the balance of the purchase price. The defendant further alleged that after plaintiff's rejection, defendant, in order to minimize the damage, took possession of the pipe and resold it and that after charging to the plaintiff the expenses on the resale, there was a balance due plaintiff of $1,233.88 from the $4,000 which the plaintiff had originally paid but that the defendant had sustained damages of $907.35 because of a writ of attachment which plaintiff had caused to be issued against the pipe without cause and that this amount should be deducted from the refund owing to the plaintiff, thereby leaving a balance of only $326.53 due to the plaintiff.
The action was tried to the District Court without a jury. The court found that the defendant had breached the contract "in that the pipe as tendered was not in accordance with the written specifications and express warranties contained in the contract between the parties, and, further, was not as per sample furnished." As specific instances of the defects in the pipe the court found that:
"(a) The pipe was rough on the outside to an excessive degree, making it difficult to thread the said pipe by the use of a guide die.
"(b) The galvanizing on the pipe was uneven and irregular.
"(c) The pipe did not permit the insertion through it of a baling wire approximately ...