Demarest v. Dunton Lumber Co.

• Citation: 151 F. 508
• Parties: DEMAREST v. DUNTON LUMBER CO.
• Decision Date: 21 February 1907
• Court: U.S. District Court — Southern District of New York

151 F. 508

DEMAREST v. DUNTON LUMBER CO.

United States Circuit Court, S.D. New York.

February 21, 1907

McKelvey & Mattocks, for plaintiff.

Rounds & Dillingham, for defendant.

RAY District Judge.

This action was brought by the abovenamed plaintiff, Charles R Demarest, assignee of one Alfred Vanhorn, to recover the damages which Vanhorn claimed he sustained by the failure of the defendant, the Dunton Lumber Company, to perform a written contract made by it with W. E. Kelley & Co. for the sale and delivery of lumber to Kelley & Co.

(1) December 11, 1900, W. E. Kelley & Co., of Portland, Me., as party of the first part, entered into a written contract with the Dunton Lumber Company, of the same state, as party of the second part, whereby the first party agreed to buy of the second party, and the second party agreed to sell and deliver to the first party, its 'entire cut of white pine lumber for the year 1901, except such lumber as the party of the second part shall have to use for his retail trade in the city of Rumford Falls,' and the first party agreed to pay therefor 'the sum of $12.50 per thousand for the entire cut of the year 1901,' as follows:

'Terms Payment for the same shall be made by the party of the first part within ten days from date of invoice. The party of the first part having the right to discount the invoice one per cent. for cash payment.'

As to deliveries the contract provided as follows:

'It is agreed that the lumber shall be ordered by the party of the first part and shipped when dry by the party of the second part consigned to the order of the party of the first part at such destination as they may name. All deliveries to be made by the party of the second part f.o.b. cars at Rumford Falls, Maine. Invoice for each shipment to be dated the day of such delivery.'

The contract contained the following provisions also:

'The party of the second part agrees that the lumber used for his retail trade shall not be of the best contained in the logs from which the lumber shall be sawed, but will consist of lumber not better than the average grade.'

'Conditions. Provided that said lumber shall be sawed by the party of the second part in such manner as the party of the first part may direct from time to time. The party of the second part agrees to saw the lumber as near as he can on even inches, the widths of which shall be 4', 6', 8', 10', and 12'. Lumber wider than 12 inches may be any width. The lumber must be sawed inch, inch and one-fourth and inch and one-half, two inch or thicker, as the party of the first part may direct from time to time, and must be fair and full to the sizes given when dry. The party of the second part also agrees to have his logs cut twelve, fourteen and sixteen feet respectively, with at least sixty per cent. sixteen foot. It being agreed by the party of the first part that he will accept lumber shorter than twelve foot and some longer than sixteen foot. The poorest grade shall be sound, merchantable lumber, free from rot, and must be square edged. The narrowest width of lumber to be considered shall not be less than four inches wide, and the shortest lumber to be considered will not be less than eight feet long.'

Also the following:

'The party of the second part agrees to have at least 500,000 feet in pile by the last day of June, 1901, and not less than 1,000,000 feet in pile by the 31st day of July, 1901. The balance of which must be put in pile as fast as can be done by the party of the second part.'

Also the following, in connection with the last provision quoted:

'The party of the second part agrees that the amount of the year's cut will not be less than 2,000,000 feet, and as much more as the party of the second part can furnish.'

(2) June 19, 1902, W. E. Kelley & Co., by an instrument in writing, assigned this contract, with others, to said Alfred Vanhorn, and agreed therein to loan him $2,000 to enable him to prosecute the business of shipping and selling the product of the contracts, and Vanhorn agreed-- 'to hold sacred the proceeds of this business for the operating of same and the paying of these obligations, ' and further:

'It is understood and agreed that Alfred Vanhorn will prosecute with the utmost diligence the completion of these contracts and wind up this business at the earliest possible moment, and that he will not enter into any other contracts or enterprises which might prevent him from doing so, until the completion of this contract in all its features.' It was also provided in this assignment as follows:

'This contract becomes operative since the first day of April, 1902.'

(3) Thereupon Kelley & Co. notified the Dunton Lumber Company of such assignment of such contract, but the Dunton Lumber Company expressly refused to assent to such assignment, or to recognize Vanhorn as the owner thereof, or to recognize him as a party or person entitled to demand or enforce its performance. Kelley & Co. thereupon wrote they would guaranty all payments for lumber delivered under the agreement, but the Dunton Lumber Company did not assent to the assignment even then, but gave notice it would only recognize and treat Vanhorn as agent and representative of Kelley & Co. Thereafter Vanhorn procured deliveries of lumber by selecting and having it loaded on the cars and invoiced to certain parties, but the Dunton Lumber Company persisted in its refusal to recognize the assignment, and persisted in treating Kelley & Co. as the principal, and in all cases made out the bills, etc., for the lumber to Kelley & Co., and sent them to that company, which retained them. Vanhorn, however, made payments on such bills or invoices, but the Dunton Lumber Company gave receipts to Kelley & Co. reciting that the money was received from Kelley & Co. 'by the hand of A. Vanhorn. ' Shortly before July 28, 1902, Vanhorn, who was obtaining the lumber and doing the business for Kelley & Co., as that firm had informed the lumber company he would do, claimed to that company that the contract had been assigned to him, whereupon that company made inquiry by letter, and in reply Kelley & Co. said:

'We thought you had been notified that this contract had been transferred to Mr. Vanhorn. We wish to take this opportunity of so notifying you, if you have not already been so informed.'

In reply the Dunton Lumber Company said:

'Gentlemen: Your favor with check for $22.55 received. We note what you say about the transfer of the contract to Mr. Vanhorn. As we do not know anything about Mr. Vanhorn or his financial ability, we shall still continue to charge what boards are shipped to W. E. Kelley & Co., as they are the only party that we know in this contract. If you wish to cancel the contract so far as you are concerned, that is another matter. We shall not accept any transfer to parties that we do not know, as we do not think it would be good, business judgment to do so. We are perfectly willing that Mr. Vanhorn should ship the lumber out as your agent or representative, and will help him all we can to get the lumber off quickly, but we must still hold W. E. Kelley & Co. responsible for the pay for the lumber, according to contract made to them.'

In reply, W. E. Kelley & Co. said, August 9, 1902:

'Gentlemen: We have your favor of the 7th inst. We are satisfied with your wishes in the matter of completing the contract made with us for the lumber which we had turned over to Mr. Vanhorn. We will guarantee the payment of the shipments which you make on this contract.'

But for the subsequent correspondence and transactions, this might be construed as an acceptance of and assent to the transfer to Vanhorn, with the guaranty of W. E. Kelley & Co. for all payments to come due under it. But the bills were made to Kelley & Co., the receipts for payments were given to it, as stated, and substantially all the correspondence was with that company, and September 9, 1902, in calling for payment for lumber delivered and more prompt taking of lumber, the Dunton Lumber Company said to Kelley & Co.:

'We should like to load these boards up as soon as possible because we are crowded for yard room. If there is any way you could move them a little faster we should like to have you do so.'

September 12, 1902, Kelley & Co. replied:

'We have your favor of the 9th inst., and have sent same to Mr. Vanhorn who will attend to the matter,' and September 15th Vanhorn wrote:

'About taking your lumber. We are ready to move as quickly as it is dry, but we do not propose to take any more of it until it is dry and in good shipping condition. I think in about a month it will be all right, and we expect then to get to work at it again.'

October 1, 1902, Vanhorn wrote to the Dunton Company, inclosing check:

'Kelley & Co. wrote me that they want all these matters sent to me as they don't care to bother with them.'

October 15th the Dunton Company again wrote Vanhorn urging the taking of the lumber, etc., and in reply Vanhorn said:

'We are now loading a vessel. * * * We expect to come to Rumford Falls. * * * We may be able to get to work,' etc.

Again, October 21st, he wrote, and in speaking of the lumber and contract four times stated what 'we' are to do or have done or will do. December 19, 1902, the Dunton Lumber Company wrote Vanhorn:

'We hereby forbid your sorting any more pine boards in our yard, as the contract with W. E. Kelley & Co. has not been fulfilled and we have notified them today that the contract is cancelled.'

On the same day, December 19, 1902, the Dunton Lumber Company wrote W. E. Kelley & Co.:

'The contract which we had with you for our pine boards is not being fulfilled by Mr. Vanhorn, and we hereby cancel said contract, and no more boards will be shipped on...