138 A. 85 | Pa. | 1927
Argued April 20, 1927. This action of the William F. Mosser Company, for the use of the assignee of its rights, is based on a contract entered into with the Cherry River Boom Lumber Company, defendant. The former purchased from the latter bark for use in its tanneries, and had, in 1902, agreed to buy all produced from certain lands at a fixed price. In 1908 additional property was acquired by defendant, which it desired to develop, and it then agreed to cut and sell all of the hemlock bark from the designated tract at a fixed price per ton. It undertook to deliver not less than 10,000 nor more than 20,000 tons each year, which might be cut on the new or old acreage as desired. The contract, which gives rise to this dispute provided, in part, as follows: "As a further inducement for making this contract, the William F. Mosser Company, party of the second part, hereby agrees to advance to the party of the first part one hundred and fifty thousand dollars ($150,000) on the bark contracted for in this agreement; seventy-five thousand dollars ($75,000) to be paid when this agreement is signed, and seventy-five thousand dollars ($75,000) on the 30th day of January, 1909. This one hundred and fifty thousand dollars ($150,000) advance payment to be returned to the party of the second part, without interest, by allowing a credit of one dollar ($1) per ton on all bark shipped from lands included in this contract of April *70 25, 1908, only; that is to say, the Cherry River Boom Lumber Company shall bill said bark to the party of the second part at seven dollars ($7) per ton and shall allow said party of the second part one dollar ($1) per ton credit thereon until the aggregate amount of credits so made shall amount to the advance payment of one hundred and fifty thousand dollars ($150,000); or until one hundred and fifty thousand (150,000) tons of bark shall have been delivered under this contract; but it is understood and agreed that this credit of one dollar per ton does not apply to bark to be shipped under the original agreement of March 7, 1902."
The advance payment provided for was made, and deliveries of the material contracted for continued thereafter until December 15, 1925, when the parties determined a further supply could not be secured, and that it was impossible to furnish, by 6,815.15 tons, the amount agreed upon, and for which the $150,000 had been paid on account. This action was brought to recover back the amount claimed to be due the plaintiff at the rate of one dollar per ton for the deficiency. An affidavit of defense was filed raising a question of law, in which it was insisted that no cause of action had been set forth. It was claimed that the relation of debtor and creditor did not exist, and that the seller was discharged from any further obligation when it turned over all the bark which could be secured from the land in question. The court below sustained the position of the defendant, and entered judgment in its favor, and plaintiff has appealed.
The solution of the controversy depends upon the construction of the written agreement of the parties. It will be noticed that the $150,000 furnished defendant was called "an advance payment to be returned to the [Mosser Co.] without interest by allowing a credit of $1 per ton." "While the word [advance] in its strictly etymological significance indicates money paid before or in advance of the proper time of payment, and does not therefore imply a loan, it has been so frequently used as *71
its equivalent that it may be said that the word, whether taken according to its meaning in law or according to its meaning in common usage, includes loans" (2 C. J. 32), and is distinguished from an irrevocable gift, called an advancement: High's App.,
Defendant contends the transaction was in effect a sale of all the bark on a specified tract to the plaintiff, who advanced funds for the development of the property, so that plaintiff's needs might be amply supplied, and that it therefore took the risk of any deficiency. But the contract does not so state, for it provides that the purchase should be of bark at the rate of $7 per ton when cut and delivered, and stipulates that the advance shall be repaid as money by allowing a credit of $1 on the purchase price "until the aggregate amount of credits so made shall amount to the advance payment of $150,000; or until 150,000 tons of bark shall have been delivered under this contract." "In arriving at the intention of the parties, where the language of a contract is susceptible of more than one construction it should be construed *72 in the light of the circumstances surrounding them at the time it is made," and there must be considered "the nature and situation of the subject-matter, and the apparent purpose of making the contract" (13 C. J. 542), in attempting to arrive at the true meaning.
At the time of the execution of the contract it was apparently assumed by both parties that there was more available bark than the number of tons which defendant agreed to furnish, and, acting on this belief, the advance of $150,000 was made. One who by mistake of fact pays more than is due may recover the over-payment: 2 Williston on Contracts, 2786; Riegel v. American Life Ins. Co.,
It is urged, however, that, though the advance in the present instance be treated as a loan, yet it was made solely payable, in a particular way and manner, by the application of credits on the sale price of $1 for each ton delivered, and since no such source is longer available, all bark having been exhausted, there can be no recovery here, or any personal claim made against the defendant for the deficiency arising. It is undoubtedly true that, where parties have agreed to look to a special fund for payment, there can be no further recovery when it is exhausted (Chambers v. Jaynes,
There was no sale of the bark when the $150,000 was paid, though the time of repayment of the sum advanced was fixed, and the right to reimbursement was not limited to funds arising from credits on account as stipulated for. All of the available material, the subject of the contract, has been disposed of, and it is impossible to supply more, as the parties have agreed. There still remain undelivered 6,815.15 tons, and there has not been repaid the amount claimed in plaintiff's statement. The facts averred, if true, as must be assumed in the present proceeding, exhibit a cause of action sufficient in law to make necessary the filing of an affidavit of defense by the defendant (Rhodes v. Terheyden,
The judgment of the court below is reversed, and a procedendo awarded.