La Moine Lumber & Trading Co. v. Kesterson

• Decision Date: 26 July 1909
• Docket Number: 3,135.
• Court: U.S. District Court — District of Oregon
• Parties: LA MOINE LUMBER & TRADING CO. v. KESTERSON et al.

171 F. 980

LA MOINE LUMBER & TRADING CO. v. KESTERSON et al.

No. 3,135.

United States Circuit Court, D. Oregon.

July 26, 1909

This is an action by the La Moine Lumber & Trading Company, a corporation organized and existing under the laws of the state of California, against H. G. Kesterson and A. W Silsby, who are citizens and residents of the state of Oregon, to recover damages for the breach of a contract entered into between the Griffin & Skelley Company, which is also a California corporation, and the defendants. By the terms of the contract the defendants undertook and agreed to deliver to Griffin & Skelley Company, and the latter agreed to receive, at Woodville Station, in the county of Jackson and state of Oregon, the entire cut of lumber of the defendants for the season of 1906; all of said lumber to be delivered on or before the 15th day of November, 1906, and the said Griffin & Skelley Company agreeing to pay the defendants therefor within 10 days after delivery. It is alleged in the complaint that the lumber comprised by such contract was so purchased and sold, to be shipped immediately on delivery, as agreed, from said Woodville Station, in the state of Oregon, to San Francisco and other points in the state of California, and the portion delivered was actually so shipped and transported. The plaintiff is the successor by assignment of this contract from Griffin &amp Skelley Company, and brings this action for a breach thereof.

The answer puts in issue the allegations touching the purchase and sale of such lumber to be shipped on delivery to California, and for a first, further and separate defense it sets up the want of capacity in the plaintiff corporation to buy, take, or hold such contract, or to collect or sue upon claims for damages arising from a breach of the same.

For a second further and separate defense, it is alleged that Griffin & Skelley Company, being a foreign corporation failed to comply with the laws of the state of Oregon by which it was entitled to be admitted to transact business within the state, and that it, without authority or license from the state of Oregon so to do, engaged in the business of buying and selling lumber, and continued in such business of buying and selling lumber from the plaintiffs and others, in the counties of Jackson, Josephine, and Douglas, within the state of Oregon, until the year 1907.

For a third answer and defense, it sets up that the plaintiff is the successor by assignment of the contract with Griffin & Skelley Company, Company, and that it also transacted business in the state of Oregon without complying with the laws of the state entitling it to do business herein, or paying the requisite license.

And for a fifth defense it is alleged: That plaintiff, in receiving and scaling the lumber delivered by the defendant at Woodville, Or., defrauded the defendants by grading said lumber below its actual grade to their loss and damage in the sum of $1,000; that, because of the fraudulent acts of the Griffin & Skelley Company and plaintiff in grading the said lumber to the defendants' loss and damage, the defendants, in the month of September, 1906, rescinded the said contract and refused to deliver the lumber; that after the rescission of the contract, as aforesaid, the defendants sold the lumber out that was to be delivered under said contract, but the amount cut was 4,000,000 feet, board measure, and no more, and the same was sold for the sum of $12.50 per 1,000, and no more, and was of no greater market value than $12.50 per 1,000.

To these several separate answers and defenses the plaintiff interposed a demurrer, and the cause was heard thereon.

Platt & Bayne, Ben C. Dey, and Wm. D. Fenton, for plaintiff.

Robert G. Smith and J. M. Long, for defendants.

WOLVERTON, District Judge (after stating the facts as above).

The demurrer to the first separate defense should be sustained, as the defendants are not in a position to raise the question of plaintiff's capacity to sue because of its want of corporate power. That is a matter for the state, not for a private party, to assert. Clark & Marshall, Private Corporations, vol. 1, Sec. 229.

The demurrer, however, should be overruled as to the second and third separate defenses. The allegation in the complaint that the lumber contracted for was purchased for shipment into the state of California stands denied by the answer. This constitutes an issue under the pleadings. Supplementing this issue, then, is the further matter contained in said defenses.

It is explicitly admitted that the contract set up in the complaint was entered into and executed in Oregon. Now the question arises upon the pleading whether these answers constitute good defenses to p...