Ramey Lumber Co. v. John Schroeder Lumber Co., 237 F. 39

Ramey Lumber Co. v. John Schroeder Lumber Co.

237 F. 39 | 7th Cir. | 1916

ALSCHULER, Circuit Judge

(after stating the facts as above). The District Court properly held that McCauley had authority to execute the contract. The sharp decline in the,price of lumber seems to have been the only excuse fox the suggestion. The correspondence appearing in the record, some of which we have recited, leaves no basis for this defense.

The lumber was on hand, owned by plaintiff, at the time of the repudiation of the contract, and ready to be delivered. Defendant had accepted a part thereof which was shipped to it July 31, 1911. On August 5, 1911, defendant directed all shipments to be made to it at Minnesota Transfer until further notice. On August 9, 1911, objection was made by letter to drafts made on the Chicago office instead of the Milwaukee office. On the same day further directions were given by mail as to shipments. On August 14, 1911, defendant wired to discontinue shipments until instructed. Plaintiff replied that to stop shipments would be a great damage to it. On August 16, 1911, defendant notified plaintiff it should assume all collection charges. August. 16, 1911, defendant complained of the rush of cars of lumber, and renewed orders to stop shipments. On August 18th, further complaint was made on this score. Plaintiff replied to these requests that it did not receive notice in time, and that it had stopped, but complained that it would suffer injury therefrom. Then came a repudiation. It will be recalled that in the letter of January 6, 1911, the right to ship whenever ready was held out as an inducement, and the contract requires defendant to purchase, receive, and pay for the lumber so loaded. On September 8, 1911, defendant hints at the lack of authority of McCauley to execute the contract. We find in the record nothing to warrant the action of defendant in repudiating the contract. The plaintiff had this large amount of lumber on hand, and was anxious to avail itself of the opportunity to obtains cars before they would be required for grain shipment. So far as the record shows, it was in good.faith cárrying out its part of the contract.

[1] As to the defenses of uncertainty and want of mutuality, we are unable to concur in the decision of the trial court. The contract did not lack mutuality of obligation. While defendant promised to buy of plaintiff all the lumber of a certain quality that plaintiff might own during the season, plaintiff bound itself, if it did manufacture or acquire any such lumber, to sell all of it to defendant and to no one else. Thus plaintiff deprived itself of the right to sell lumber to whom it pleased. The promise to restrict its freedom by giving up its right to sell to others was real and definite. It was the substantial and contemplated consideration for defendant’s promise to buy all that plaintiff might own during the season. There was the mutuality of obligation essential to a bilateral contract; there was the consideration essential to the validity of any contract. Conley Camera Co. v. Multiscope & Film Co., 216 Fed. 892, 133 C. C. A. 96; Burgess Sulphite Fiber Co. v. Broomfield, 180 Mass. 283, 62 N. E. 367. That the plaintiff did not bind itself to acquire or manufacture any such lumber is, immaterial. Its promise to deal with defendant was the valid consideration for the obligation by defendant—a consideration that made the undertaking of the other party binding and enforceable.

*44[2] With regard to the question of uncertainty, a contract is void (save for the possibility of reformation in equity) because of uncertainty, only when it is so worded that the intention of the parties cannot be deduced therefrom. If the intention be clear, the mere uncertainty of the amount involved does not invalidate the obligation, however it may affect the possibility of proving damages for a breach. In the present case the preliminary negotiations demonstrate that defendant wanted to secure all such lumber that it could possibly obtain, without limit, and without binding plaintiff absolutely and under all circumstances to deliver any lumber. The parties had a right to make such a contract, even though the amount that would be deliverable thereunder was not specified, and was in a sense optional with the vendor; and this they did, in terms which are clear and certain.

The contract expresses without uncertainty the intention of obtaining all the lumber plaintiff might acquire and manufacture during that season. That plaintiff might take advantage of market conditions, and buy or refrain from buying heavily, was of the very essence of the agreement. Inasmuch as it gave a valuable consideration for this right, this case is distinguishable from Crane v. Crane, 105 Fed. 869, 45 C. C. A. 96; Tweedie Trading Co. v. Parlin & Orendorff Co., 204 Fed. 50, 122 C. C. A. 364; Oakland Motor Co. v. Indiana Automobile Co., 201 Fed. 499, 121 C. C. A. 319; and Velie Motor Car Co. v. Kopmeier Motor Car Co., 194. Fed. 324, 114 C. C. A. 284.

Moreover, there were definite limitations on the amount that could and must be tendered. While plaintiff had the option either to manufacture and to buy from others, or to refrain therefrom, it was absolutely obligated to sell all that it manufactured or owned during the season. When the contract was executed, the maximum amount that would be deliverable thereunder, while unknown to the parties, and ini that sense uncertain, was, under the finding of facts, the amount of specific grades of a definite kind of lumber that could be manufactured between March and July of the year 1911 either by plaintiff or others. So much thereof as plaintiff might own within a definitely limited time, the season of 1911,• was the amount that it had obligated itself to sell. This would necessarily have become certain during the season, even if the time limit for plaintiff’s ownership included, not merely the manufacturing season, but also the short period thereafter within which delivery must be made.

No claim, however, is made for any lumber not owned by plaintiff prior to defendant’s repudiation of the obligation. The amount then owned, and as to which, by reason of plaintiff’s ownership, both parties were bound, the one to sell, the other to buy, was necessarily certain, and the amount of lumber, in respect to which damages are claimed, was thus definitely.-fixed at the date of defendant’s repudiation.

We therefore conclude that the plaintiff is entitled to recover as its damages the loss it incurred from defendant’s nonacceptance of the .20 carloads, and on account of the 1,455,919 feet on hand at time of repudiation of the contract. As to the 903,600 feet rejected as not grading up to contract, we conclude that the fact of its discoloration *45warranted the finding that it never was of the grade' deliverable under the contract, and that no damages are predicable thereon.

Plaintiff telegraphed defendant on September 18, 1911, as follows:

“Railroads insist upon disposition of the twenty cars immediately and unless you pay for them we will dispose of them to the best advantage possible, charging you with any loss in consequence and proceed to collect this loss from you through courts.”

The 20 cars were shipped, as above stated, before plaintiff received notice not to ship, and were later delivered but rejected. In such case, the plaintiff might sell the 20 car lot and collect the loss from defendant, based on the difference between the'selling and contract prices. The court found that plaintiff, after due notice,' sold the 20 cars, and realized thereon $2,351.97 less than the contract price, and that plaintiff used due diligence in making the sale; and as to the 1,455,919 feet it found that, at the time of repudiation of the contract, its market price was $1.75 per M less than the contract price.

Giving to the findings of facts the weight properly accorded thereto, we find the recoverable loss 'to plaintiff through defendant’s unjustified repudiation of the contract is, as to the 20 carloads, $2,351.97, with interest thereon at 6 per cent, per annum from August 29, 1911, and as to the 1,455,919 feet applicable on the contract, $1.75 per M, or $2,547.85, with interest thereon at same rate from November 17, 1914. The said sums, aggregating $4,899.82, together with interest as stated, under the facts as found, we find to be the amount for which the District Court should have entéred judgment for the plaintiff.

The judgment is therefore reversed, and the cause remanded, with direction to the District Court to enter a judgment in favor of plaintiff for $4,899.82, together with interest as above stated to date of entry of judgment, and costs.