69 F. 302 (6th Cir. 1895), 262, McElwee v. Metropolitan Lumber Co.

Docket Nº:262.
Citation:69 F. 302
Case Date:July 02, 1895
Court:United States Courts of Appeals, Court of Appeals for the Sixth Circuit

Page 302

69 F. 302 (6th Cir. 1895)

McELWEE et al.



No. 262.

United States Court of Appeals, Sixth Circuit.

July 2, 1895

Page 303

Two separate actions of replevin, instituted by McElwee & Carney, as plaintiffs, to recover the possession of a large quantity of lumber from the Metropolitan Lumber Company, were by agreement consolidated and tried together. The judgment was against the plaintiffs and for the defendant, in the sum of $29,064.05, the value of the lumber taken from the possession of the defendant by the writ of replevin. The plaintiffs have sued out this writ of error. The facts involved, so far as necessary to be here stated, are as follows: The plaintiffs below, and plaintiffs in error here, were commission merchants and dealers in lumber, engaged in business at Chicago, Ill., and were citizens of the state of Illinois. The defendant was a corporation of the state of Michigan, and was operating a large sawmill for the manufacture of lumber at Metropolitan, in the state of Michigan. On the 25th of May, 1892, the Metropolitan Lumber Company entered into a contract in writing with S. B. Barker, residing and doing business as a dealer in lumber at Chicago, under the firm name of S. B. Barker & Co., for the sale and delivery at Chicago of all the product of its mill then on hand at its mill yard, and all which should be cut during the lumbering season of 1892, estimated at 14,000,000 feet of pine lumber; also all laths and shingles made at the mill during the season. A specific price for each kind and quality of lumber was agreed upon, which included freight from the mill to Chicago. The other provisions of the contract necessary to be stated were as follows: 'It is hereby agreed that the amount of lumber, lath, and shingles in pile at said mill on the 1st day of June, 1892, shall be estimated by two inspectors, one to be chosen by each of the parties hereto, or said estimate shall be made by Mr. George Gilbert, if said party of the second part shall prefer; and that such estimate shall be so made on the first day of each month thereafter, of the lumber, lath, and shingles manufactured during each preceding month. The said parties of the second part agree to give to said first party their promissory note, dated June 1, 1892, due in ninety days after date, without interest, for the full amount of the purchase price of the lumber, lath, and shingles then manufactured and estimated as aforesaid; and said second parties agree to give to said first party on the first day of each succeeding month thereafter their promissory note due in ninety days after date, without interest, for the amount of the purchase price of the lumber, lath, and shingles manufactured during each preceding month, and estimated as aforesaid. And it is also agreed that, if said parties of the second part do not desire said lumber, lath, and shingles shipped as fast as estimated as aforesaid, said first party will extend the time on, or renew the notes given for the purchase price of, said lumber, lath, and shingles,

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so long as the same remains in the possession of said first party, not to exceed ninety days, but upon the express condition that said second parties shall pay such rate of interest on said notes during the time of such extension or renewal as the said party of the first part may have to pay to have said notes discounted. It is further agreed that the final settlement for said lumber, lath, and shingles shall be made on the inspection and measurement thereof made on the dock at Escanaba, Michigan. And it is agreed that the parties of the second part shall take all risk of damage by fire of such part of said lumber, lath, and shingles as may be carried over and not shipped during the season of 1892, and shall pay for all insurance thereon during the time it is so carried over. It is also understood and agreed that the within described lumber, lath, and shingles are to be manufactured in a good and workmanlike manner, as directed from time to time by second party. It is also agreed that, in settling for the lumber each month on estimate, that notes are to be given less the freight to Chicago, viz. $1.50 per M.' There was evidence tending to show that the lumber on hand June 1, 1892, was inspected and estimated according to contract, and the negotiable notes of Barker & Co. executed for same to the lumber company, and that on the first of each month thereafter a like inspection and estimate of the lumber cut the preceding month were had, and the notes of the buyer executed therefor, according to the agreement, less $1.50 per thousand, the rate of freight to point of delivery. Purchase-money notes aggregating more than $50,000 were renewed in February, 1893, by notes maturing in May, June, and July, 1893. These renewals were claimed and granted under the provision in the original contract in respect of renewals for notes for lumber remaining in possession of the seller at time renewals should be asked. On the 30th of May, 1893, Barker & Co. failed, at which time more than $40,000 of purchase money remained unpaid, represented by notes, many of which had been indorsed by the lumber company, and discounted for its benefit. At the date of this failure, lumber to the value of $27,234.78 was in the actual possession of the lumber company, being either on the dock at Escanaba, and under the control of the agents of the lumber company, or piled in the mill yard at Metropolitan. Defendant in error at once, upon the failure of Barker & Co., asserted a right to retain the lumber in its possession till the price was paid. The plaintiffs in error, claiming to be purchasers from Barker & Co. of all the lumber which had not been delivered to them at Chicago, demanded possession, and were refused. Thereupon they instituted two actions of replevin in the circuit court, one for the lumber at Escanaba, and another for that in the mill yard at Metropolitan. Plaintiffs in error insisted that the written contract above set out had been modified in many important particulars. The learned district judge submitted a number of questions, to be answered by the jury, in respect of the alleged modification. These questions and the findings thereon are in these words: 'First. Was the contract of May 25, 1892, by and between Barker & Co. and the Metropolitan Lumber Company, modified by the parties on or about November 14, 1892? If so, where was the modification made, and was it oral or written? Yes, in Chicago; orally, at Chicago, November 14, 1892. Second. If you find that said contract was modified, was it agreed that Barker & Co. should have possession of the lumber then sawed and in the possession of the Metropolitan Lumber Company under the agreement of May 25, 1892? Yes. Was it agreed that Barker & Co. should have title in said lumber? No. Was it agreed that Barker & Co. should have the right to sell said lumber? Yes. Third. Did the plaintiffs, before bringing suit, demand from the defendants the lumber taken in replevin? Yes.' The defendant moved the court to set aside the special finding made by the jury to the question: 'Was it agreed that Barker & Co. should have the right to sell said lumber?'-- upon the ground that there was no evidence to support the finding. The plaintiffs moved the court for a judgment for the plaintiffs upon the verdict rendered in said cause, on the ground that the general verdict was inconsistent with the special findings of the jury, 'and under said special findings, and according to the rules of law, the judgment should be entered for the plaintiffs.' Both of these motions were overruled, and judgment entered against the plaintiffs for $27,234.78, the value of the lumber at the time it was seized, and $1,829.27, interest thereon, and for one dollar, the damages sustained, in all $29,064.05.

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To all of which the plaintiffs duly excepted. Many exceptions were also taken to the charge as delivered and to the refusal of the court to charge as requested. Such of these exceptions as have been made the subject of an assignment of error, and as are necessary to an understanding of the rulings thereon, appear in the opinion.

F. O. Clark and Hanchett & Hanchett, for plaintiffs in error.

F. D. Mead and Ball & Ball, for defendant in error.

Before TAFT and LURTON, Circuit Judges, and SEVERENS, District Judge.

LURTON, Circuit Judge, after stating the facts as above, .

Though the agreement was originally executory, being for the sale of lumber to be manufactured, yet, when the product of a particular month was completed, and it had been inspected and measured, there was a complete bargain and sale of the lumber thus designated. That particular lumber became appropriated to the contract, and the vendee under the agreement was obliged to make his promissory note to the vendor for the price, payable 90 days after date. The element necessary to a perfect and complete sale was supplied by the appropriation of a particular lot of lumber to the contract. In the absence of a contrary intention, clearly expressed by other parts of the contract, the right of property and of possession would vest in the buyer upon the execution of his promissory note payable to the seller. The provision for a final inspection at Escanaba after the delivery had begun was merely for the correction of errors before final settlement, and does not operate to defeat the presumption that title passed when the lumber was first inspected and accepted and conditional payment made. Macomber v. Parker, 13 Pick. 183; Cotton Press Co. v. Stanard, 44 Mo. 71. To say that title remained with the vendor after the lumber had been appropriated to the contract and accepted by the buyer, and after the negotiable notes of the vendee had been delivered in settlement, would leave the vendor liable for loss by fire or other casualty...

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