Albion Lumber Co. v. Lowell

Plaintiff brings the action to recover for the breach of an alleged contract entered into between plaintiff and defendant, November 5, 1908, for the sale and purchase of redwood ties. It is alleged that, about March 1, 1909, plaintiff notified defendant of its readiness to receive the ties but defendant repudiated and refused to carry out said contract. Defendant denies that he entered into any contract with the plaintiff, as alleged or at all. As further answer: that the agreement sued upon is for goods and chattels of value exceeding two hundred dollars and is in violation of the statute of frauds, not having been in writing subscribed by defendant. As a third answer, defendant alleges that he “entered into certain negotiations with one Donald McDonald in reference to said redwood ties . . . and said McDonald thereupon wrote in his own handwriting” the following instrument:

“Nov. 5, 08.

“Bot. of A. J. Lowell for the Albion Lumber Co. 35M to 40M 6x8x8 split redwood ties at 34c each fob" vessel West-port subject to our inspection when loaded on vessel. Payments to be made in cash to Geo. D. Gray 110 Mkt. St. San Francisco as fast as these ties are moved. Donald McDon

aid”; that this is the alleged agreement sued upon; that no part of said ties was received or accepted by said McDonald or said plaintiff nor has any part of the purchase price been paid therefor; that as part of said agreement on the part of the buyer and as part of the consideration it was agreed that the buyer “should begin moving and accepting said ties within ten days or two weeks from said November 5th, 1908, at the latest” and so continue until all were accepted and moved by the buyer and were to be paid for as fast as accepted and moved; that said time of acceptance was “expressly made part of said consideration of purchase and was a material part of said consideration” and “was expressly made the essence of the contract of purchase”; that, through the fault of plaintiff, “said ties were not taken nor accepted nor paid for within said time nor within a reasonable time thereafter”; that, thereupon, defendant promptly notified plaintiff “that the said defendant refused to sell or deliver the said ties or any part thereof; that any contract, verbal or otherwise, claimed or alleged by said McDonald or plaintiff to have been entered into with reference thereto by the defendant, was rescinded by said defendant.” For a fourth separate answer, among other things, it is alleged that “at the time of the agreement on the part of the buyer, said defendant informed said McDonald that it was necessary that said ties should be accepted and defendant have the money for said ties in the immediate future in order that said defendant .might pay one Geo. D. Gray for certain timber lands” for the purchase of which defendant had a contract from Gray, “and said McDonald then and there agreed that said ties would be taken and paid for in the immediate future, ’ ’ payments to be made to Gray, to which he consented; that plaintiff did not offer to take said ties or pay for them until about March 1, 1909, and said delay was unreasonable “and defendant thereupon refused to deliver said ties”; that, prior to said offer to take said ties, said Gray had notified defendant that “he would no longer deal with plaintiff and would cancel said option or contract of sale to this defendant unless said defendant should make some other arrangement for the sale of said ties and payment to said Geo. D. Gray” and that, “by reason thereof and said unreasonable delay on the part of plaintiff and said McDonald, . . . defendant

refused to sell or deliver said ties,” and so notified plaintiff. Defendant pleaded a set-off or counterclaim, alleging that, by reason of plaintiff’s failure to accept and pay for the ties he “was compelled to and did make two trips from his place of business at Westport to the city of San Francisco” and expended for his necessary expenses on said trips one hundred dollars and “lost twenty-four days from his other business” and was thereby damaged in the sum of two hundred and forty dollars; and that, by reason of plaintiff’s .said failure, “defendant was compelled to and did pay to said -Geo. D. Gray the sum of five hundred dollars for an extension of the said option . . . until this defendant could secure the necessary money to pay the said Geo. D. Gray therefor.” A general demurrer to this defense was sustained “and motion to strike out matter .from said counterclaim granted.” Plaintiff’s answer to defendant’s separate defenses is a denial of the averments.

The court made the following findings: That plaintiff and defendant entered into a contract, on November 5, 1908, by which “defendant agreed to sell to the plaintiff and the plaintiff agreed to buy from defendant 35,000 split redwood ties” upon the terms stated in the agreement set out in defendant’s answer, and, on said date, McDonald, “who was the general manager and duly authorized agent of the plaintiff corporation, having authority so to do, wrote, signed and delivered to defendant an instrument in writing” (the same as set out in the answer); that, “thereafter the defendant duly ratified, acknowledged and accepted the terms of said contract by several instruments in writing subscribed by him in his own name”; that “the said written instrument contains all the terms of the contract between the plaintiff and defendant.” It is further found that, after said memorandum was signed by McDonald and delivered to and accepted by defendant, “further conversation was had between the defendant and the agent of plaintiff as to when plaintiff would receive said ties; but plaintiff did not agree that it would begin moving said ties within ten days or two weeks from said November 5, 1908, or at any specified date; that no time of acceptance was made part of the consideration of said contract nor was the time of acceptance and payment particularly or expressly or at all made the essence of the

The pleadings and findings of fact present a fairly clear" exposition of the various contentions of the parties.

Aside from some alleged errors of law assigned by defendant in the course of the trial, the principal if not the only point presented by defendant is: That there was no contract or memorandum in writing signed by defendant and therefore the agreement was invalid.

There was evidence that, on November 5, 1908, Lowell met McDonald, whose agency and authority to act for plaintiff in the matter is admitted, for the purpose of selling the ties in question then on the landing at Westport, Mendocino County; that the meeting resulted in McDonald’s agreeing to purchase and Lowell agreeing to sell on the terms set forth in the written memorandum signed by McDonald on behalf

Time was not made of the essence of the contract by its terms and McDonald testified that he made no promise to move the ties at any specified time. Hence plaintiff was allowed a reasonable time to perform. The court found, on sufficient evidence, that the delay resulted from causes beyond plaintiff’s control and was not unreasonable. (Salinas Lumber Co. v. Magne-Silica Co., 159 Cal. 182 , [ 112 Pac. 1089 ].) Nevertheless, it is urgently contended that defendant is not liable because, as is claimed, he never, in writing, agreed to the sale. And this brings us to an examination of what further followed the signing of the memorandum by McDonald.

There is a conflict in the evidence as to what he did with the memorandum after signing it. He testified that he gave it to Lowell, retaining a copy. Lowell testified that McDonald handed it to McFaul, who afterward, he did not remember when, gave it to him. This was the memorandum produced at the trial by defendant. It is perhaps not important which received it, for McFaul was there in Lowell’s interest and in a sense acting for him or at least jointly with him in bringing about the sale though not a party to the sale. However, the court accepted McDonald’s version and so must we. The parties separated with the understanding that the memorandum expressed the terms of the sale. On the twentieth day of November, 1908, fifteen days after the memorandum was in Lowell’s hands, he wrote McDonald a letter in which, among other things, be said: “Have you made any further arrangement in regard to shipping the ties L sold you? My object is that I had ordered some freight from San Francisco and referred shippers to the Bishop Lum

Turning to the memorandum signed by McDonald, it will be found to lack nothing to charge plaintiff. The mere delivery of the memorandum to Lowell would not bind Lowell, but it is not the law that before he would be bound he must himself write and sign a memorandum equally specific. Any communication in writing by Lowell to plaintiff sufficiently definite to show his acceptance of or acquiescence in the memorandum of purchase signed by plaintiff or showing that he treated' it as an existing obligation of plaintiff and binding on himself would satisfy the statute. There is nothing in the statute of frauds requiring the signed memorandum of a contract to be contained in a single paper. Two or more papers properly connected may constitute a-sufficient memorandum. (20 Cyc. 278; Brewer v. Horst & Lachmund Co., 127 Cal. 643 , [ 50 L. R. A. 240 , 60 Pac. 418 ].) The evidence very clearly shows that the contract was treated as valid and binding by both parties until the latter part of February, 1909, four months after its execution, and it was then disavowed by defendant not because it was never entered into but because of plaintiff’s alleged failure to promptly move the ties.

The rule stated by the code is that for a breach of contract the measure of damages is “the detriment proximately caused thereby, or which, in the ordinary course of things, would be likely to result therefrom.” (Civ. Code, sec. 3300.) To be proximate the damages must be such as “next immediately follow and are produced by the act complained of,” or if not proximate, “such as in the ordinary course of things would be likely to result therefrom.” (Friend & Terry L. Co. v. Miller, 67 Cal. 464 , [ 8 Pac. 40 ].) The damages claimed (by defendant) could not well have been contemplated by the parties when they entered into the contract. They were not proximate as proximate damages are above defined and we do not think they were such as would be likely to result in the ordinary course of things. They were too remote. (See Martin v. Deetz, 102 Cal. 55 , [ 41 Am. St. Rep. 151 , 36 Pac. 368 ]; Wallace v. Ah Sam, 71 Cal. 197 , 60 Am. Rep. 534 , 12 Pac.,46].)

We think the McDonald memorandum of November 5, 1908, was properly admitted in evidence. The objection that it specified no time of delivery is not tenable, for a reasonable time would be implied. (Civ. Code, see. 1657.)

It was not error to show by witness McDonald that plaintiff made no other contract for ties with Lowell. The purpose of the evidence doubtless was to show that Lowell’s letter of November 20th had reference to the memorandum of November 5th by showing that the parties had no other transaction. We think it would have been in aid of fraud rather than for its discouragement, to allow defendant to claim that he referred to some other transaction by having the evidence excluded.

The letters dated respectively November 20th and 30th were admissible. McDonald’s letter of March 3 and defendant’s of March 8, 1909, perhaps added nothing material to the case, but they were not prejudicial to defendant.

The plaintiff’s testimony that, upon defendant’s refusal to deliver the ties, it was compelled to go into the open market to supply them and' the testimony of witnesses to the market price of ties at the times mentioned was admissible.

We do not think it was material and hence not error to sustain objections to questions, put on cross-examination to

Some questions put and answers given and some rulings occurring in proving market value may be open to objection, but in the main the questions were proper and no prejudicial error is discoverable. The motion for nonsuit was rightly denied.

In his cross-examination Lowell was asked what ties he referred to in his letter of November 5th and, over objection, answered: “I referred to the ties he agreed to buy from me.” The objection is that parol evidence is inadmissible to prove the terms of a contract under the statute of frauds. The question did not tend to vary the contract or introduce any new condition. In fact, we think the letter was sufficiently definite on its face. If there was doubt as to his meaning the enforcement of the rule against parol evidence would aid rather than discourage fraud. (Beckwith v. Talbot, 95 U. S. 289 , [ 24 L. Ed. 496 ].)

It is contended that the evidence is insufficient to justify the finding that defendant “fully ratified, acknowledged and accepted the terms of said contract (the memorandum) by several instruments in writing subscribed by said defendant. ’ ’ The finding is supported if there was one such instrument and we think defendant’s -letter of November 5th was sufficient. We very much doubt the right of plaintiff to have •made proof of custom or usage in the matter of shipping ties and lumber from along the Mendocino coast as excusing delays in delivery in the manner it was attempted to be done. One witness in his answer simply gives his own experience as a shipper on one occasion, which did not tend to establish usage. The only other witness answered: “Well, the custom is a man undertakes to transfer lumber on the Mendocino coast is for his ability to do so, weather conditions, accidents and other things particularly controlling, that is the custom among all freighters on the coast.” The answer is meaningless and could not have been prejudicial.

Hart, J., and Burnett, J., concurred.

A petition to have the cause heard in the supreme court, after judgment in the district court of appeal, was denied by the supreme court on March 1, 1913, and the following Opinion then rendered thereon:

In denying a hearing in this court after decision by the district court of appeal of the third district, we deem it proper to say that the following paragraph, viz. :

“We do not think it was material and hence not error to sustain objections to questions, put on cross-examination to McDonald, for the purpose of showing that Lowell was selling the ties to protect himself upon the Gray option. Lowell’s relations with Gray did not concern plaintiff and defendant’s motive in selling the ties was not material. Conversations, at the time of making the contract would not be admissible to vary its terms,” does not contain a correct answer to the claims of error referred to therein. This matter is not urged in the petition for a hearing in this court. We think the lower court erred in its rulings in this matter, but it appears from the record that on recross-examination McDonald testified fully upon the matters which were sought to be elicited by the questions on cross-examination referred to.

Dissenting. I cannot concur in the view of the court that the testimony of McDonald on recross-exam-' ination cured the error of the trial judge in sustaining the objection to the questions previously asked for the purpose of showing that in the course of the negotiation for the sale of the ties he was informed by Lowell that the sale was being made at a sacrifice for the sole purpose of raising funds essential to the securing of a valuable option. This ruling was sustained by the appellate court on the ground that “Lowell’s relations with Gray did not concern plaintiff and that defendant’s motive in selling the ties was not material.” It is here conceded that McDonald’s knowledge that Lowell was selling the ties at thirty-four cents cash on delivery in order

I think the long delay in sending for the ties, while the defendant was kept waiting for his money, was altogether unreasonable.