General Cooperage & Timber Company v. Hedges

• Decision Date: 22 December 1919
• Docket Number: 74
• Citation: 216 S.W. 712,141 Ark. 393
• Parties: GENERAL COOPERAGE & TIMBER COMPANY v. HEDGES
• Court: Arkansas Supreme Court

216 S.W. 712

141 Ark. 393

GENERAL COOPERAGE & TIMBER COMPANY v. HEDGES

No. 74

Supreme Court of Arkansas

December 22, 1919

Appeal from Ashley Chancery Court; E. G. Hammock, Chancellor affirmed.

STATEMENT OF FACTS.

The General Cooperage & Timber Company and H. B. Carter brought this suit in equity against Z. T. Hedges and G. W. Moore to recover an amount alleged to be due them under a contract for the sale of certain staves. They alleged in their complaint that the defendants were insolvent, and asked for the appointment of a receiver to take charge of the defendants' stave mill and a large quantity of staves on hand in it which are alleged to belong to the appellants. A receiver was duly appointed and took charge of the property. The appellees denied that they were indebted to the appellants, and by way of a cross-complaint allege that the appellants were indebted to them, and they also ask for damages which accrued by reason of the appointment of a receiver.

The original contract between the parties was duly signed by them and reads as follows: "This memorandum of agreement made and entered into this day of October, 1913, by and between Z T. Hedges and George W. Moore of Pulaski County, Arkansas parties of the first part, and the General Cooperage & Timber Company of New Orleans, La., party of the second part.

"Witnesseth That for and in consideration of the sum of one dollar in hand, paid by the party of the second part to the parties of the first part, the receipt of which is hereby acknowledged the parties of the first part do hereby sell to the party of the second part and the party of the second part hereby buys from the parties of the first part, the following staves, towit: 200,000 34 in. x 3/4 in. air dried and listed white oak whiskey staves at the price of $ 42 per 1,000 on basis of 4 1/2 in. average, f. o. b. cars Wilmot, Arkansas.

"100,000 34 in. x 3/4 in. air dried and listed white oak barrel staves at the price of $ 20 per 1,000 on basis of 4 1/2 in. average, f. o. b. cars Wilmot, Arkansas.

"100,000 staves, width may be either 34 in. x 3/4 in. air dried and listed red oak at $ 19 per 1,000 on basis of 4 1/2 in. average, f. o. b. cars Wilmot, Arkansas, or 30 in. x 5/8 in. ash pork staves, air dried and listed at $ 14 per 1,000 on basis of 4 1/4 in. average, f. o. b. cars Wilmot, Arkansas, or parties of the first part may deliver part red oak and part ash so that the total number of such staves delivered will not exceed 100,000.

"Inspectors shall be governed by the standard rules agreed to by the Tight Barrel Stave Manufacturers' Association and the National Coopers' Association.

"Party of the second part agrees to advance the parties of the first part the sum of $ 1,000 cash. Said $ 1,000 to be used in the purchase and installation of a country stave mill, and, upon the purchase of said plant, the said first parties hereby agree to give to the said second party a mortgage covering the said stave mill outfit as a further protection of their note for $ 1,000 payable at four months from date and bearing interest at the rate of 6 per cent. per annum, which first parties agree to furnish upon the signing of this contract and before said sum of $ 1,000 is advanced to said first parties.

"The second party also agrees to advance to the first parties the sum of $ 17.50 per 1,000 on the white oak staves above purchased, $ 15 per 1,000 on the red oak and $ 11 per 1,000 on ash, as they may be delivered to the railroad at Wilmot, Ashley County, Arkansas, when due as many as 50,000 have been so delivered. The object being that the second party shall make advances only upon lots of 50,000 or more.

"Second parties agree that upon the signing of this contract by the parties of the first part to furnish the sum of $ 1,000 by their check mailed from their office in New Orleans promptly upon receipt by them of this contract properly executed.

"It is understood that the difference between the amount advanced as the staves are delivered to the railroad and the contract prices shall be credited upon the note of $ 1,000, which second party agrees to cash under the terms of this contract.

"It is understood and agreed by the parties hereto that the manufacture of staves herein contracted will begin as soon as possible and full delivery made not later than June 1, 1914.

"It is also agreed between both parties that no other staves shall be sold to or manufactured for any party by said first parties until this contract is completed and all obligation hereunder canceled.

"This contract is executed in triplicate.

"Witness the signatures and seals of the parties hereto this 15th day of October, 1913."

The General Cooperage & Timber Company advanced $ 1,000 to G. W. Moore on the 15th day of October, 1913, and G. W. Moore and Z. T. Hedges gave their written obligation in payment therefor and agreed to give the General Cooperage & Timber Company a mortgage on the mill plant as security for the note. On the 15th day of October, 1913, G. W. Moore and Z. T. Hedges entered into a lease contract with H. B. Carter, which is as follows:

"Memorandum of agreement to the lease between Hedges & Moore, of Wilmot, Arkansas, as lessors, and H. B. Carter of New Orleans, La., as lessee, entered into this 25th day of May, 1914.

"The said lessors hereby lease and demise to said lessee the following described premises for and in consideration of the sum of $ 1 cash in hand paid to the lessors by the lessee, the receipt of which is hereby acknowledged.

"Five acres, more or less, located in the tract of land belonging to A. M. Kellar, west of railroad in the town of Wilmot, Arkansas, the said five acres being located on the west end of said tract on lake bank and west of small ravine running to lake.

"Tract above described is more specifically set forth in lease from Maingault & Gorham to G. W. Moore, dated November 5, 1913, to which reference is here made.

"It is agreed between the lessors and the lessee that this lease shall remain in effect and full force as long as any staves are piled on the herein described land on which moneys are advanced, under terms of a certain contract, entered into between Hedges & Moore and the General Cooperage Company under date of October 15, 1913."

H. B. Carter by assignment succeeded to the rights of the General Cooperage & Timber Company in the original contract. The court found that all the staves involved in the controversy between the parties were, by the terms of sale, to be delivered, inspected and accepted by appellants on the railroad at Wilmot, Ashley County, Arkansas, and that the items recharged to the defendants on account of the inspection and rejection of the staves at New Orleans, their point of destination, were not legitimate charges, and the defendants' exceptions thereto should be sustained.

The court found that the total charges against the appellees should aggregate $ 10,763.70, and that the total credits to which appellees are entitled aggregate $ 12,446.55, leaving appellants indebted to appellees in the sum of $ 1,682.85. The court further found that the receivership and injunction obtained by the appellants at the beginning of this suit were wrongfully obtained, but that appellees had not been damaged thereby. It was therefore decreed that appellee G. W. Moore should recover of the appellants the sum of $ 1,682.85 with interest at the rate of 6 per cent. per annum from August 11, 1915, until paid.

To reverse the decree, appellants have prosecuted this appeal, and appellees have taken a cross-appeal.

Decree affirmed.

G. P. George and Geo. W. Hays, for appellant; Gardner K. Oliphint, on the brief.

1. The decree is clearly against the preponderance of the evidence; it is shocking to the sense of justice. The contract is incomplete as to the exact place of inspection of the staves, and hence the parties resorted to parol evidence to prove the real intention of the parties where inspection was to be made. The testimony shows that the inspection was to be made on arrival at point of destination, New Orleans, and the law so fixes the destination as the point of inspection. The evidence on that point is definite and competent. 135 Ark. 31. The balance due on the staves was to be paid after inspection, whether at Wilmot or New Orleans, according to the rules of the Tight Barrel Stave Manufacturers' Association, etc. The chancellor erred in finding that the inspection was to be made on the railroad at Wilmot and the staves accepted there.

"F. O. B." means "free on board;" used in the sale of goods, it only denotes the duty of the seller to deliver the goods free from all charges on board the carrier. This is all it denotes. 81 N.E. 1017; 23 R. C. L., sec 159, p. 1337.

2. There was no actual inspection at Wilmot, as the testimony shows at most a count of the number. Mr. Moore's visits strongly indicate that the inspection was to be at New Orleans. 46 Ark. 131.

3. The chancellor should have debited appellee's account with $ 4,125.16 for staves rejected because not up to contract, and the testimony for appellant and of H. B. Carter is sufficient to base judgment for the rejected staves. The law applicable can be found in 101 P. 233; 136 Ark. 342; 76 Id. 177-179; 35 Cyc., pp. 384-386, 391-7, 403. See also 81 Ark. 549. The contract was not an entire contract, and appellants are entitled to the charges for failure of the staves to come up to standards and specifications as to quality and character. The contract entitled appellant to inspect separately each and every car load shipped as to character and quality to determine the amount of credit appellees were entitled to on each car. 81 Ark. 559-560.

4. The contract was not entire, but, if so, under the evidence and...