Colbath v. H. B. Stebbins Lumber Co.

• Decision Date: 01 January 1929
• Citation: 144 A. 1
• Parties: COLBATH v. H. B. STEBBINS LUMBER CO.
• Court: Maine Supreme Court

144 A. 1

COLBATH

v. H. B. STEBBINS LUMBER CO.

Supreme Judicial Court of Maine.

Jan. 1, 1929.

Exceptions from Supreme Judicial Court, Aroostook County, at Law.

Action by George M. Colbath against the H. B. Stebbins Lumber Company. Verdict for plaintiff, and defendant brings exceptions and general motion. Exceptions sustained.

Argued before WILSON, C. J., and PHILBROOK, DEASY, STURGIS, and BASSETT, JJ., and MORRILL, Active Retired Justice.

W. R. Pattangall, of Augusta, R. K. Wood, of Presque Isle, and W. S. Brown, of Mars Hill, for plaintiff.

Cook, Hutchinson & Pierce, of Portland, for defendant.

BASSETT, J. Action on the case to recover under a written contract for an alleged excess of spruce and fir logs above an amount stated in the contract. Plea, general issue, with brief statement that there was in fact no excess and that any excess was not proved within the time provided by the contract. Verdict of $5,317.98 for plaintiff. Case comes up on exceptions and general motion.

The plaintiff and defendant, by its treasurer, H. B. Stebbins, entered into a written contract dated August 30, 1920, by which the plaintiff agreed to construct a rossing mill at Squa Pan Lake, and cut during the ensuing logging season, and sell and deliver, the last delivery to be shipped by December 1, 1921, to the defendant 8,000 cords of rossed pulp wood and the defendant agreed to buy the pulp wood at specified prices.

The plaintiff by May 14, 1921, had cut and put into the lake all the logs to be used under the contract and had delivered some of the pulp wood to the defendant.

The defendant, conditions having changed, did not want to complete the contract. It was rescinded; the defendant agreeing to credit the plaintiff on his open account with an agreed sum for the logs in the lake, and the parlies making a new written agreement which was made up of two parts, both dated and executed on May 14.

By one of these parts, drawn first, the plaintiff agreed to complete his sawmill on the lake and have it ready within 30 days to manufacture the logs then in the lake, the approximate amounts of which were stated, and to manufacture and ship the logs according to orders furnished by the defendant, and to pay the defendant a commission of 5 per cent. on the selling price, the proceeds to be applied first upon a mortgage given that day by the plaintiff to the defendant upon the logs to secure in part an advance payment of the balance due on stumpage of the logs, and of an amount not exceeding $40,000 to be advanced by the defendant to complete the mill. The plaintiff agreed to manufacture and ship on orders of the defendant a sufficient quantity of lumber to pay the mortgage on or before December 31, 1921.

The defendant agreed to advance not exceeding $40,000 to complete the mill and put it into condition to manufacture the lumber and to pay the balance due on stumpage, and when the mortgage had been paid, then to pay plaintiff the amount, less commission, of shipments made thereafter within 60 days of the date of shipment.

On May 14, the plaintiff and defendant met and drew a second part, which is the center of the controversy, as follows:

"In connection with our agreement of May 14th, 1921 and of cancellation of our agreement of August 30, 1920, H. B. Stebbins Lumber Company agrees to turn over to G. M. Colbath money required for labor bills in the manufacturing of logs under our agreement of May 14th, 1921, not to exceed $6.00 a thousand on lumber as it is shipped under that contract. If by December 31, 1921 it proves that G. M. Colbath now has cut and in Squa Pan Lake to apply on our contract of May 14th, 1921, Spruce and Fir logs in excess of 4,590,666, we will pay you an amount equal to $10.00 a thousand on such excess of Spruce and Fir logs, but not to exceed $8,355.00. If it should prove by December 31, 1921 that the amount of Spruce and Fir logs now cut and in Squa Pan Lake to apply under our contract of May 14, 1921 is less than 4,590.666 G. M. Colbath agrees to pay H. B. Stebbins Lumber Company an amount equal to $10.00 a thousand on such shortage."

The mill was completed about July 1, and the manufacture into lumber of the logs in the lake began and continued until about November 10, when the lake froze over, and manufacturing was suspended until the following spring. During 1921 about half of the logs had been manufactured. During the winter of 1921-22 the plaintiff landed on the ice of the lake another cut of logs, which were boomed. The logs in question were loose. The plaintiff from time to time shipped lumber manufactured from the logs in question upon orders of the defendant, and the defendant received the stipulated commission. By August 23, 1922, all the logs were manufactured, except 521 which became mixed with the new cut. On September 15, 1922, the plaintiff sent to the defendant the mill scale amount of the manufactured lumber, which showed an excess above the 4,590,666 stated in the second part of the contract. The defendant refused to pay: (1) Because the scale included some lumber graded as "red rot"; (2) because the lumber had been sawed scant at the mill, thereby making the mill scale appear more than actually sawed, so that with scale bill corrected by rejection of red rot and reduction for scant sawing there then was a shortage, not an excess; and (3) because the amount of any excess had not been determined by December 31, 1921.

The first exception raises the question whether, in determining the "excess" or "shortage" under the second part of the contract, lumber graded as "red rot," of which there was admittedly 433,204 feet board measure, should be excluded. In view of other instructions deemed to be erroneous and prejudicial, bearing on the plaintiff's right now to maintain his claim for an alleged excess, we think it is unnecessary to consider further this exception, other than to say the question was properly left to the jury and the exception cannot be maintained.

The second exception raises the question of the effect of the date, December 31, 1921. in the second part of the contract; the defendant contending that it was of the essence of the contract.

The parties on May 14, in executing the second part of the contract, had in mind a liquidation of the damages to the plaintiff for not carrying out the rescinded contract. They had agreed upon a sum, which was credited to the plaintiff based upon an agreed amount of logs in the lake, which amount the plaintiff believed to be less than the actual amount and the defendant believed to be more than, or at least not less than, the actual amount.

The completion of the first part of the contract was in no way dependent upon any difference between the actual and the fixed amount of logs in the lake as agreed upon in the second part of the contract. In fact, the two contracts are in no way dependent on each other. By the second part, the defendant promised that, if by December 31 it was proved there were in the lake on May 14 more than the stated amount of logs, he would pay the plaintiff a computed amount of money, and the plaintiff making a mutual and similar promise in case of shortage. Proving or determining by December 31 was not an impossible condition, nor at the date of the contract did it appear to be so. If to prove it would require taking the logs from the lake and piling them, "banking them" before and manufacturing them after the lake froze or running the plant more hours in the 24, that would not, though causing additional expense, be an excuse for nonfulfillment of the condition.

The defendant requested an instruction "that the alleged over-run not having been proved before December 31, 1921, the plaintiff cannot recover."

This was refused, and the jury were instructed, "Now I charge you * * * that in this contract that date, December 31, 1921, is not of the essence of the contract to such an extent as to make an absolute and precise and complete compliance with the matter of the scale at the tail of the mill to be such as to deprive Colbath of any rights on the ten dollars phase of the contract after that date, —on stuff sawed after that date. * * * If the evidence now in the case, spoken and written, has satisfied you that on that day in 1921 when their minds met in the contract they both knew and appreciated that the defendant's liability was to end on December 31, 1921, you may find that that date was of the essence of the contract and govern your further deliberations accordingly. Generally the date does not bind. If they both knew and appreciated the fact and agreed to it in May, it certainly does bind."

The defendant excepted to the refusal to instruct and to the instructions given, because (1) under the contract time was of the essence of the contract, (2) because that question should not have been left to the jury, and (3) because of the words in the charge, "generally the date does not bind."

In general, it may be said that at law time is always of the essence of the contract, Snowman v. Harford, 55 Me. 197, 199; Hill v. Fisher, 34 Me. 144; Williston, Contracts (1921) II, § 845; 6 R. C. L. § 285. at page 898; 13 C. J. 686; Jennings v. Bowman, 106 S. C. 455, 91 S. E. 732; although in equity a different rule prevails. Time in equity is held to be of the essence or not, according to the circumstances of the case. Snowman v. Harford, supra; Williston, Contracts II, § 852; 13 C. J. 686; Telegraphone Corp. v. Canadian Telegraphone Co., 103 Me. 454. 69 A. 767. And under some circumstances, in law time may or not be of the essence according to the intent of the parties.

But when it is said that time is of the essence, the proper meaning of the phrase is that the performance by one party at the time specified in the contract is essential in order to enable him to require performance from the other party. One party may make his promise expressly conditional on the exact performance of any agreed condition, and therefore...