3 N.W.2d 316 | Mich. | 1942
[EDITORS' NOTE: THIS PAGE CONTAINS HEADNOTES. HEADNOTES ARE NOT AN OFFICIAL PRODUCT OF THE COURT, THEREFORE THEY ARE NOT DISPLAYED.] *390
[EDITORS' NOTE: THIS PAGE CONTAINS HEADNOTES. HEADNOTES ARE NOT AN OFFICIAL PRODUCT OF THE COURT, THEREFORE THEY ARE NOT DISPLAYED.] *391 On May 20, 1938, defendant B.J. Pollard, who was engaged in the business of selling stone, obtained an order from the Works Progress Administration of the Federal government for 30,000 tons of crushed stone of an odd size, to be used by the W.P.A. for pavement of alleys. Pollard rented a parcel of property of approximately 13 acres on West Fort street, Detroit, Michigan. It has a frontage on one side of 625 feet, or thereabouts, abutting on the Rouge river, near where it runs into the Detroit river. The government contract was elastic in that it gave the government the privilege of increasing or decreasing the order to the extent of 25 per cent. The contract provided that deliveries could not be made without the government's consent after June 30, 1938. The government accepted delivery of the full 30,000 tons and evidently a cancellation had not been anticipated. The crushed stone was not of a standard size carried by quarries and as a rule would have to be manufactured, although in this particular case it could largely be gathered together from the small pieces left over in the quarrying of large-sized stone. Pollard negotiated with the Thunder Bay Quarries Company, plaintiff herein, for stone to fill the government contract. Just what the agreement with the plaintiff was became one of the main issues of the present litigation. It is conceded *393 that plaintiff was to furnish stone at 90 cents per ton less 5 cents discount should payment be made in 30 days.
Pollard claims that he ordered only one boatload of stone on May 20, 1938, and it was shipped June 2, 1938, by the steamship George F. Rand. It was delivered at Pollard's dock with the charges paid by plaintiff in accordance with a purchase order for one boatload of the stone, signed by Pollard, sent plaintiff. Pollard's dock consisted of unimproved property on the Rouge river. Pollard had covered part of it with a sprinkling of lime waste, evidently to keep the stone clean when it arrived. This dock, consisting of land abutting the shore, had no reinforcement or artificial support either under or on the surface along the bank. Shortly after the delivery of this first cargo consisting of 9,689 tons, and after some telephone conversations, two other shipments were made. On June 16, 1938, 8,791 tons, and on July 8, 1938, 9,573 tons, of the specified stone were consigned to Pollard by the steamer Consumers Power. All of plaintiff's three bills referred to order C 229. The second shipment was made after plaintiff received a letter signed by Pollard. It stated that:
"Relative to our telephone conversation of June 9th, about placing second cargo of stone on my dock to apply on W.P.A. order 51 34182 this material to be billed as of date when 75 per cent. of present cargo has been removed. I further agree that none of this material will be used to fill any other than above-mentioned order."
The third shipment was sent after the receipt of a letter from Pollard, which stated:
"This is to authorize the placing of 3d cargo of 4" down stone on my dock in Detroit. Billing to be *394 made as of when 75 per cent. of 2d cargo has been used by W.P.A.
"It is agreed by me that none of this stone will be used to fill any orders other than W.P.A. 51 34182."
The order for the first shipment did not contain the agreement by Pollard that the material would not be used to fill any order other than this specific one from the W.P.A., but the stone of odd size was ordered for this purpose. At the time that the second shipment was made by plaintiff, no part of the stone from the first shipment had been delivered to the government. At the time the third shipment was made, a small quantity, less than either of the first two shipments, had been delivered to the government. However, the government was beginning to take a substantial amount almost at regular short intervals of a day or two from and after July 1, 1938.
Eleven hours and 35 minutes after the completion of the unloading of the third shipment on Pollard's dock, the bank of the river gave way and sheared off and an undetermined portion of the stone piled thereon slid into the river. Some of the stone was retrieved but 3,180 tons were never recovered. Pollard was ordered by the United States War department to clear the river of the stone in order to restore the navigability of the stream and he was put to a large expense in recovering part of the stone. One of the main controversies in the case is, Who is responsible for the loss of the stone that was not retrieved and for the expense of recovering that which was salvaged?
Because plaintiff was unwilling to extend credit to Pollard either for the large amounts that would become due it, and inasmuch as Pollard's credit was not too strong, and the government would not permit *395 the assignment of the proceeds of the contract, Pollard agreed that the government should forward its checks, made payable to Pollard, to plaintiff, and that Pollard would thereupon indorse them over to plaintiff up to the amount of his indebtedness. This agreement was assented to by the government. Pollard at first for some time carried out this agreement after the slide occurred. Later, however, when plaintiff presented checks to him for indorsement, he retained them and refused to return them to plaintiff. The latter thereupon filed a bill for specific performance in the instant case to compel Pollard to turn over the checks duly indorsed to it according to the agreement. Pollard, in turn, in addition to his answer, filed a cross bill in which he impleaded the American Steamship Company, which owned the steamer Consumers Power, and also Boland and Cornelius, its managing agents, as defendants. The steamship company and agents finally withdrew their objections to being thus impleaded so that the entire controversy could be settled in one suit. As a court of equity was the proper forum in which to file a bill for specific performance in the first place, and the impleaded parties consented to the jurisdiction, and no claim of error is made on that account, all questions were disposed of in this equity suit. The judge held that, as there was no liability on the part of plaintiff Thunder Bay Quarries Company or cross-defendant American Steamship Company or its agents, Pollard was liable for the balance due plaintiff for stone that had been delivered. Defendant Pollard appeals from decree against him and from denial of a decree against plaintiff and the others as cross-defendants.
The questions involved are largely those of fact. Did Pollard absolutely purchase the three cargoes of stone, did he enter into a conditional sales contract, *396 was he simply a gratuitous bailee who took reasonable care of the stone which was lost, as he claims, without any fault on his part, or what was the agreement? Were the steamship company and its agents liable for carelessly unloading the stone contrary to instructions given by Pollard, and was this the cause of the cave-in? In view of our decision and that of the circuit judge, we need not discuss whether plaintiff would be liable for the carelessness of an independent carrier by which the stone had been delivered, or, if the steamship company alone was liable, we should remand the case in accordance with the stipulation between the attorneys, in order to ascertain the damages.
The first question is, what was the contract between plaintiff and Pollard? In regard to the last two cargoes, Pollard concedes that the plaintiff obligated itself to furnish the additional stone should he need it over and above the first cargo and up to the total amount of 30,000 tons of stone. The testimony clearly indicates that the plaintiff finished the mining or collection of stone for the second and third shipments before Pollard required them; that its bins were filled to overflowing, so that it had no place to store the stone, and that plaintiff's agent telephoned Pollard informing him of these facts and asking him for permission to make the second and third shipments immediately, and this Pollard did only upon the condition that the billing in each case should at least not be dated until W.P.A. should use 75 per cent. of the preceding shipment. Pollard contends that he never acquired title to the second and third cargoes and that the transaction amounted to a conditional sale or a bailment. If, as Pollard claims, the sale was a conditional one and title retained by plaintiff merely to secure performance of the obligations of the contract, Pollard would be *397 liable for the loss under the uniform sales act, Act No. 100, § 22(a), Pub. Acts 1913 (2 Comp. Laws 1929, § 9461 [Stat. Ann. § 19.262]). We have examined the record with much care and conclude from it that the transaction in question falls midway between an absolute and conditional sale and constituted a sale with privilege of return. It did not constitute a bailment. If the W.P.A. did not use an amount equal to 75 per cent. of each of the respective cargoes, plaintiff could not bill Pollard for it. Pollard could not sell the later cargoes to anyone but the W.P.A. He would have no personal use for the stone and hence would have no alternative but to return the second or third cargo, or both, to plaintiff as the case might be. The additional time in billing gave Pollard the favorable terms that he was entitled to.
There are marked distinctions between a sale with the privilege of return on one hand and a conditional sale or bailment on the other. In a conditional sale, payment of the purchase price is a condition precedent for passage of legal title; while in a sale with the privilege of return, title passes on the delivery, but the vendee has the privilege of revesting it in the vendor by returning the goods. The uniform sales act, Act No. 100, § 19, rule 3, subd. (1), Pub. Acts 1913 (2 Comp. Laws 1929, § 9458 [Stat. Ann. § 19.259]). In a sale with the privilege of return, the vendee has the right to return the goods rather than pay for them; in a conditional sale, such act would constitute a breach of contract. In the instant case, had W.P.A. used less than the prescribed percentage of the preceding cargo or cargoes, Pollard would not only have had the privilege, but it would have been his duty, to return the shipment or shipments unused. In a sale with the privilege of return the decision whether to exercise the privilege rests *398 with the vendee, not the vendor; in bailment that decision rests entirely with the bailor, not the bailee, though the bailee may demand that the bailor take back his property. In the brief filed on behalf of Pollard, he seems uncertain as to the nature of the contract. Possibly he claims it was a bailment until he appropriated the goods. To us it seems to be a sale with the privilege of return, but irrespective of what it was, Pollard never elected to return any of the stone and title passed to him. W.P.A. did use an amount greater than the whole first cargo plus 75 per cent. of the second. Hence the "time fixed in the contract" for returning any of the stone has passed. 2 Comp. Laws 1929, § 9458 (Stat. Ann. § 19.259). After title has been "transferred to the buyer, the goods are at the buyer's risk." Uniform sales act, Act No. 100, § 22, Pub. Acts 1913 (2 Comp. Laws 1929, § 9461 [Stat. Ann. § 19.262]). Thus, "in a sale on credit with the right to return the goods and thereby divest liability for the payment of the price, the buyer remains liable though it becomes impossible without his fault to perform the condition (subsequent). The risk of accidental loss is on him." 3 Williston, Contracts (Rev. Ed.), § 809, and cases cited in note 3.
It will serve no useful purpose to review all of the testimony as to the placing of the contract and the orders. In the last analysis, the three cargoes were all deposited in one long pile of stone. They were not segregated in any way and there was no possible way of telling which stone went into the river. Pollard used up an amount equal to the first and second cargoes and almost two-thirds of the last cargo. As the record stands, by his own testimony Pollard does not know how much stone slid into the river, much less from which cargo or cargoes it came. Pollard cites and relies on Larkin v. Mitchell Rowland Lumber Co.,
The judge came to the correct conclusion. He did state that when the bills were sent for the second and third shipments they were entered by Pollard's bookkeeper in the bills payable book. The testimony showed that she did this without any instructions from Pollard and without his knowledge. The judge may not have believed the witnesses but even conceding that the bills were so entered, we believe that nonexercise of the privilege of return rendered the sale absolute, if it was not absolute before, and Pollard became liable for the balance due on all three shipments. After the suit was begun the amount received from the government was deposited in court and, by stipulation, sufficient was turned over to plaintiff without prejudice so that in the event it succeeded in the present litigation, only a comparatively small amount and interest would still be due it. Judgment was entered for this amount.
Pollard seeks to hold the steamship company and its agents liable on the theory that the slide was caused by the overloading of the dock in violation of his instructions given to the officers of the Consumers Power which delivered the third cargo. The testimony of Pollard and the other witnesses on his behalf on the one hand and that of the captain and first and second mates of the Consumers Power, while they agree in many details, are absolutely *400
irreconcilable as to others. The judge saw the witnesses and resolved the conflict in favor of the steamship company and its officers. Baker v. Frischkorn,
An expert witness was introduced on each side. Notwithstanding their highly technical and scientific testimony, and particularly that of appellant's expert, the most we can conclude from it is that the slide did take place, a fact already proven, because of subsoil conditions and the subjecting of the soil *404 and surface to a heavier load than it could stand. The expert for cross defendants was the senior engineer of the United States engineer's office, who had been employed as chief civil engineer in the war department and for four years had familiarized himself with the soil conditions in the vicinity of the dock and who visited the property within a day after the land sheered off into the river. He testified that it was impossible to tell whether it was the last load or the first two loads that caused the dock to collapse; that the only other pile of stone where there had been a collapse along the banks of the Rouge River had remained undisturbed for three months before the dock caved in. There is no question but that the piling of the stone on the dock was the cause of the cave-in, but we hold the judge had a right to believe cross defendants' expert, who testified that the slide might have occurred even if the third cargo had not been added to the pile.
Pollard, as appellant, raises only one other question that it is necessary for us to discuss. He claims that he is entitled to a discount of 5 cents a ton on the first cargo. The written order shows that he was only entitled to this discount if he paid within 30 days after delivery. This he did not do. He claims the time was extended. Plaintiff's witness denies that such extension was given. The judge believed the plaintiff's witness. Under the circumstances, we do not care to disturb the judge's finding.
Decree is affirmed, with costs to plaintiff and cross defendant.
CHANDLER, C.J., and BOYLES, NORTH, STARR, BUSHNELL, and SHARPE, JJ., concurred. WIEST, J., did not sit. *405