139 P. 671 | Cal. | 1914
In this action to recover damages for the breach of a contract, there was a jury trial resulting in a verdict and *276 judgment in favor of the defendants. The plaintiff appeals from an order denying its motion for a new trial.
The defendants were lumbermen owning timber lands, and operating a sawmill in Siskiyou County. Plaintiff was a corporation engaged in the purchase and sale of lumber. On May 15, 1909, the parties entered into a written contract, whereby defendants agreed to sell, and plaintiff to buy, all the lumber of specified grades which defendants should manufacture at their sawmill during the year 1909. The contract contained this clause: "All of said lumber shall be graded, on the basis of the rules for grading California sugar and white pine as published by the second party (ie., the plaintiff) by Mr. S.J. Hollihan, or some other grader whom the second party may designate for that purpose, and the decision of said Hollihan, or said other grader with respect to the grades of such lumber, shall be final and conclusive upon the parties hereto, and the cost of inspection and the expense of the inspector shall be borne equally by both parties hereto share and share alike."
It was then provided that the lumber should be delivered in piles and piled by defendants on a described parcel of land, and thereafter loaded on cars as ordered by the plaintiff. The prices for the various grades were stated, and payment was, under the contract to be made as follows: On the tenth day of each month plaintiff was to advance to defendants fourteen dollars per thousand feet for all lumber so delivered (i.e. piled) during the preceding month, and thereafter, when the lumber should have been loaded, plaintiff was to pay defendants, on the tenth day of each month, for all lumber loaded on cars during the preceding month, the prices specified for the various grades, less the fourteen dollars per thousand feet already advanced. By a further provision the first parties (defendants) "agree and guarantee that the amount of lumber of the kind and quality herein contracted to be sold and delivered by the first parties to the second party shall amount to at least one million seven hundred and fifty thousand feet."
The complaint was in three counts. The first is based on a breach of the clause last quoted, alleging that defendants had delivered to plaintiff only nine hundred and ninety-five thousand five hundred feet of lumber (instead of 1,750,000 as *277 agreed) and that plaintiff had thereby been damaged in the sum of $3,018. The second count alleges that plaintiff had expended, in the inspection of lumber furnished under the contract, the sum of $588.30, one-half of which, or $294.15, the defendants had refused to pay, although bound under the contract to do so. The third count was based upon an advance or loan of $183.57 by plaintiff to defendants.
The defendants admitted the execution of the agreement. The answer to the second and third causes of action consisted merely of denials of the expenditures and advances claimed to have been made by plaintiff.
In answer to the first count, the defendants denied that plaintiff had performed all the conditions of the contract on its part, and in this regard alleged that none of the lumber was graded upon the basis of the rules as published by plaintiff and according to the contract, "but defendants allege the fact to be that all of said lumber so delivered was graded contrary to said rules and contrary to the covenants of said contract; and defendants show that said lumber was graded by said grader, S.J. Hollihan; and in grading said lumber, said grader rejected a large amount thereof, to wit: about five hundred thousand feet, board measure, all of which was of the proper grade to be, and which fairly graded according to said contract, should have been received by plaintiff in fulfillment of said contract; that by reason of said Hollihan rejecting said lumber, defendants were damaged in a large sum, to wit: the sum of $2500." The answer contains a further plea to the effect that the plaintiffs refused to pay defendants the sum of $655.75, due on April 10, 1910, for lumber delivered during March, 1910, and that, upon such refusal, defendants refused further to perform said contract.
The verdict was general in favor of the defendants, and plaintiff specifies the insufficiency of the evidence to sustain a verdict against it on each of the three counts.
We find nothing in the evidence to warrant a finding against the plaintiff on the second and third causes of action.
The second is based on the provision of the contract that "the cost of inspection and the expense of the inspector shall be borne equally by both parties . . ." The contract named S.J. Hollihan as the grader who was to make the inspection, and he did in fact make it. His testimony, which *278 was not contradicted, was that he was engaged in this work for 77 3/4 days, and that his wages were one hundred and fifty dollars per month and expenses. He then went on to say that his "wages and expenses while at this work were $3.70 a day." The last statement would seem to make his wages, together with expenses, come to less than the wages alone, figured at the rate of one hundred and fifty dollars per month. The appellant interprets the testimony as meaning that the portion chargeable to defendants was $3.70 per day, which would make the claim on this count $287.67, or $6.48 less than the amount sued for. But even if the total of wages and expenses be taken to have been $3.70 per day, there was nothing offered by defendants to meet plaintiff's demand for reimbursement of one-half of this amount for the 77 3/4 days.
Likewise, with respect to the third count, the testimony of plaintiff's president was that the unpaid balance of advances made by the plaintiff to defendants was $183.57. Not only was there no direct contradiction of this testimony, but one of the defendants, in a letter, and again while a witness at the trial, admitted an indebtedness for advances of $167.65.
The only attempt to support the verdict on the second count is by the claim that Hollihan was assisted in the grading by one Davidson, Hollihan acting for the buyer and Davidson for the seller. This fact, assuming it to have been established by the evidence and to have been material to the issues raised, constituted no defense. The contract provided for inspection by Hollihan, or some other grader designated by the plaintiff, and evidently contemplated that the grader, while compensated by both parties, was to act primarily as the representative of the buyer. There is, therefore, no ground for the claim that the expense of Hollihan's grading was not incurred pursuant to the contract. In answer to the contention that the verdict on the third count is unsupported, the respondents urge that the sum due was offset by defendants' damage through improper grading, and that plaintiff's refusal to pay the amount due from it in April, 1910, justified defendants in failing to further comply with their contract. As to these suggestions, it is sufficient to say that the defenses thus attempted to be made are affirmative *279 in their nature, and that neither of them is presented by the answer to the third count.
The first count sought damages for the failure of defendants to deliver one million seven hundred and fifty thousand feet of lumber as agreed. The complaint alleges a delivery of only nine hundred and ninety-five thousand five hundred feet, and the answer admits that no more than 1,075,659 feet were delivered. Two excuses for the failure to deliver the entire amount were pleaded as above set forth. One of them was based on the averments that Hollihan had not graded the lumber according to the rules, but had rejected about five hundred thousand feet of lumber which should have been received by plaintiff under the contract, to the damage of defendants in the sum of two thousand five hundred dollars. At the commencement of the trial, the plaintiff moved to strike from the answer these allegations, on the ground that they were irrelevant and "at variance with the contract." The motion was denied, and plaintiff excepted. The ruling was erroneous. The contract provided in express terms that the decision of Hollihan or such other grader as might be designated should "be final and conclusive upon the parties" with respect to the grades of the lumber. Nothing is better settled than the rule that where the parties agree that the performance or nonperformance of the terms of a contract, or the quantity, price or quality of goods sold, is to be left to the determination of a third person, his judgment or estimate is binding, in the absence of fraud or mistake. (9 Cyc. 617; Palmer
v. Clark,
The error thus committed was material and must be treated as ground for reversal, unless we can say from the record, that the verdict in favor of defendants on the first count should have been reached on some other ground. We cannot so say. The answer, as we have already pointed out, set up as further matter of defense, the refusal of the plaintiff to pay $655.75 due April 10, 1910, and the consequent refusal of defendants to further perform their contract. The weight of authority in this country supports the proposition that, where there is an entire contract for the sale of a quantity of goods, to be delivered and paid for in installments, "a refusal without sufficient cause by the seller to furnish, or by the buyer to take or pay for, any installment, justifies a repudiation of the contract by the party not in default." (Los Angeles Gas Elec. Co. v. Amalgamated OilCo.,
There is no merit in respondents' contention that plaintiff failed to introduce any evidence warranting a finding that it had suffered damage in any specified sum through the failure to deliver the agreed amount of lumber. The measure of damages in a case like the present is defined by section 3808 of the Civil Code as "the excess, if any, of the value of the property to the buyer over the amount which would have been due to the seller under the contract, had it been fulfilled." The value to the buyer is deemed to be the price at which he might have bought an equivalent thing in the nearest market. (Civ. Code, sec.
For the reasons above stated, we think there should be a new trial on each of the three causes of action.
The order appealed from is reversed.
Shaw, J., and Angellotti, J., concurred. *282