Choate v. Hoogstraat

• Decision Date: 21 January 1901
• Docket Number: 662.
• Citation: 105 F. 713
• Parties: CHOATE v. HOOGSTRAAT et al.
• Court: U.S. Court of Appeals — Seventh Circuit

105 F. 713

CHOATE v. HOOGSTRAAT et al.

No. 662.

United States Court of Appeals, Seventh Circuit.

January 21, 1901

On October 17, 1893, the defendants in error, who were the plaintiffs below, and the firm of Brown & Robbins, contracted with the Fair Lumber Company, a corporation, by which the former sold to the latter, and agreed to be manufactured from pine timber upon certain specified lands in the state of Michigan, at prices stated in the contract, namely, $10.50 per 1,000 feet for lumber; the prices for the shingle and lath depending upon the grade specified. Four dollars per 1,000 feet was to be paid under the contract on the 5th day of each month for all lumber put in pile during the previous month, and the remaining $6.50 per 1,000 feet was to be paid on the 5th day of each month for all the lumber loaded and shipped during the preceding month; the lath and shingle shipped during that period to be paid for in full at that date. The manufacture of the lumber was to be completed on or before April 1, 1894, and the Fair Lumber Company agreed to make final settlement for the lumber, lath, and shingle manufactured under the contract on November 1, 1894. Brown &amp Robbins, on October 25, 1894, transferred their interest in the contract to the defendants in error, who thus became the sole owners of the interest of the parties of the first part therein. The lumber was manufactured and piled, as provided on or before April 1, 1894, and prior to November 1, 1894 the Fair Lumber Company had paid the $4 per 1,000 feet specified in the contract. The lumber was to be and was piled in the yards of Brown & Robbins, at Robbins, Mich., and was to be and to remain in their possession, and to be delivered upon demand of the Fair Lumber Company at its planing mill or upon cars for shipment. The lumber was to be insured by the Fair Lumber Company, loss payable to the other parties to the contract as their interest should appear, and the policies delivered to them. The contract provided further: 'If, when said stock is reduced to one million feet, or thereabouts, and the parties of the first part feel themselves insecure, they may demand security before said lumber is shipped; or, in case of financial failure of said second party, the lumber remaining unshipped shall revert to said first party as their own to the amount in full of their claim. ' On November 9, 1894, the Fair Lumber Company was owing about $4,000 for lumber delivered to it in October preceding and about $27,600 for the lumber then in the possession of the defendants in error. The latter had forbidden further shipments of lumber without payment or security for the debt due them upon the lumber. Thereupon, on that day, the Fair Lumber Company settled for the balance due for the October shipments, partly in cash and partly by acceptances, which were afterwards paid; and with respect to the balance of $27,600 the president of the Fair Lumber Company at Robbins, Mich., suggested to the defendants in error that they should all go to Oshkosh, where Mr. Leander Choate, the plaintiff in error, resided, and make some arrangement by which shipments would be permitted, and the delivery of the lumber continued upon Mr. Choate's becoming security for the Fair Lumber Company. The parties accordingly proceeded to Oshkosh, and met with Mr. Choate. The latter was president of the Oshkosh Log & Lumber Company, which was a creditor of the Fair Lumber Company to the amount of from ten to twelve thousand dollars. He was also a member of the firm of Bray & Choate, which firm was indorser upon the paper of the Fair Lumber Company to the amount of from six to seven thousand dollars. The Oshkosh Log & Lumber Company had also a bill of sale, never placed upon file, of the factory plank in the stock manufactured by the defendants in error. On September 13, 1894, the Fair Lumber Company had sold to the Williamson & Libbey Lumber Company, of Oshkosh, all of the factory plank in this stock of lumber, of which fact Choate had been informed prior to the interview of November 9, 1894. At this interview Mr. Choate declined to go security for the debt of the Fair Lumber Company, stating that Fair had misrepresented his indebtedness, and that the lumber company was owing him enough. Then, according to the testimony for the defendants in error, they said to him that, if he would not go security, they would stop Fair from shipping, to which he replied, 'If you do, you will bust the poor fellow,' and one of the defendants in error answered, 'If we don't stop him, he will bust us,' and that Mr. Choate replied that he was in a hurry to attend a funeral; that he had not made up his mind just then about going on this paper, but said, 'I will write you, and until that time I will go good for what they are shipping;' This part of the conversation was denied by Mr. Choate. The defendants in error claim that they, upon the faith of Mr. Choate's promise, permitted the Fair Lumber Company to ship the lumber until the 13th day of November, 1894, the date of a letter received from Mr. Choate. The amount of lumber so shipped, with interest, amounted to $1,922.72, part of the verdict in this cause. Mr. Choate testified, somewhat obscurely, that by the bill of sale, which was not produced, the Fair Lumber Company turned over to the Oshkosh Log & Lumber Company, of which he was president, the factory plank in the stock manufactured by the defendants in error; that he could not say that his company received all the proceeds of the factory plank shipped during November, but might have got a little something. On November 13, 1894, Mr. Choate wrote to the defendants in error the following letter:

'Gentlemen: I have just been talking with Mr. Fair, but have come to no settlement yet. I told him I should write you to that effect. He wanted me to write you that, if you would let him ship what few orders he had, he would stop shipping. It would hurt his trade if it should be reported that he had been stopped from shipping. I will become responsible for the $6.50, the amount of your claim on factory plank.

'Yours sincerely,

Leander Choate.'

The defendants in error claimed that they accepted the written agreement, and permitted shipments between the 14th and the 20th of November to the amount, with interest, of $839.08 also part of the verdict. On the 20th day of November an agreement in writing was perfected between all the parties, by which Fair agreed to transfer his stock and procure the election of Choate and Daly as directors of the Fair Lumber Company, and to place the general management of its business in the hands of Mr. Choate, who agreed to take the management and turn over to the defendants in error all moneys arising from the sale of the stock at Robbins as fast as received by him, until their claim against the Fair Lumber Company was paid in full, if the moneys received from the sale of the stock should prove sufficient therefor. The defendants in error agreed to waive the strict terms of the contract of the 17th of October, 1893, and agreed that Mr. Choate should have the necessary time to realize from the stock of lumber, and that the time of the payment of the amount due them November 1, 1894, under the contract, should be extended, and payment should be made monthly for all lumber disposed of during the previous month, and the full amount of receipts for the lumber should go to them until their debt was satisfied. Under this latter arrangement Mr. Choate remitted to the defendants in error from time to time the proceeds of sales and shipments, except the sum of $243.59, for lumber sold by him to the Oshkosh Log & Lumber Company, claiming that that company refused to pay the amount under some claim of offset against the Fair Lumber Company, or the defendants in error. In May, 1895, Mr. Choate declined to act further under that contract, and turned over to the defendants in error the lumber then on hand. They received it from Choate, and afterwards sold it. The suit was brought to recover (1) upon the alleged oral promise of Choate of November 9, 1894, for the property claimed to have been delivered on the faith of that promise; (2) upon the written promise of November 13, 1894, for the property claimed to have been delivered under that promise; (3) to recover the sum of $243.59 under the written contract of November 20, 1894. The defendant below denied (1) the alleged promise of November 9, 1894, and also charged that such alleged agreement was void under the statute of frauds; (2) nonacceptance by the defendants in error of the promise contained in the letter of November 13, 1894, and a denial that it was ever acted upon, or that the writing expressed any consideration as required by the statute of frauds; (3) as to the sum of $243.59 for lumber sold by him to the Oshkosh Log & Lumber Company, he denies that he had received that amount from the company, and charges that the defendants in error here and the Fair Lumber Company were both indebted to the Oshkosh Log & Lumber Company in a sum in excess of such bill of lumber, and that that company retained the sum, and refused to pay the same. He lastly alleges 'that after the making of the agreement of November 20, 1894, and about May 18, 1895, and in final settlement thereof, he turned back to the said plaintiffs, and they accepted, about $19,232.70 worth of lumber, then in the yards of the plaintiffs, in settlement and payment of their claim and demand against the Fair Lumber Company, and that the said lumber was by them accepted and retained by the said plaintiffs, and was in settlement and payment of all claims and demands due from the Fair Lumber Company to them; and that the said lumber was then and there reasonably worth the sum of $19,232.70, which was more than...