Pond Creek Mill & Elevator Co. v. Clark

• Decision Date: 05 October 1920
• Docket Number: 2734.
• Citation: 270 F. 482
• Parties: POND CREEK MILL & ELEVATOR CO. v. CLARK.
• Court: U.S. Court of Appeals — Seventh Circuit

270 F. 482

POND CREEK MILL & ELEVATOR CO. v. CLARK.

No. 2734.

United States Court of Appeals, Seventh Circuit.

October 5, 1920

Rehearing Denied January 6, 1921.

J. D Woley, of Chicago, Ill., for plaintiff in error.

E. C Tourje, of Chicago, Ill., for defendant in error.

The suit was for breach of contracts for sale of flour. The first contract was for 1,000 barrels, and is evidenced by the following correspondence between defendant in error, Clark, a flour dealer at Chicago, and plaintiff in error, a milling company at Pond Creek, Okl.:

Telegram Clark to company, March 4, 1907 (decoded): 'Book one thousand barrels same price.'

Telegram, company to Clark, March 5, 1907 (decoded): 'Booked one thousand barrels more Lily. Shipping today car Expansion in jute. We have no half barrel sacks.'

Letter, company to Clark, March 5, 1907: 'We are in receipt of your message asking that we book a thousand barrels more of Lily at the same price as yesterday's purchase $3.15 net bulk basis Chicago. * * * '

Letter, Clark to company, March 5, 1907: 'I have your telegram of even date accepting my offer for another one thousand barrels of Expansion which is all in order, advising also shipping a car of Expansion in jute. * * * Will give you shipping instructions soon.'

A second contract for 200 barrels, as follows:

Letter, Clark to company, March 8, 1907: ' * * * I have several orders on the book for Clear and wish you would book 200 barrels of this Clear at $2.75 jute Chicago to go with patent. * * * You might fill and hold for shipping directions one or two cars in half barrel sacks. * * * I have sold 125 barrels * * * to the Millers' Product Co. at $3.15 bulk Chicago. * * * '

Letter, company to Clark, March 11, 1907: ' * * * Have entered your order as requested for 200 barrels of Clear at $2.75 net jute basis Chicago, shipments to be made with your Lily shipments.'

A third contract for 2,000 barrels, as follows:

Telegram, Clark to company, March 30, 1907 (decoded): 'Book one thousand barrels at $3.20 and one thousand barrels at $3.15 net.'

Telegram, company to Clark, March 30, 1907 (decoded): 'Entered your order for 1,000 barrels at $3.20 and 1,000 barrels at $3.15 net bulk Chicago.'

Letter, company to Clark, March 30, 1907: 'We are in receipt of your message and now confirm same to you 1,000 barrels Lily at $3.20 and 1,000 barrels $3.15; these prices net to us in bulk basis Chicago.'

Letter, Clark to company, March 30, 1907: 'I wired you this morning to book 1,000 barrels of Lily at $3.20 bulk and 1,000 barrels at $3.15 bulk Chicago, all of which I now confirm. I will be sending you sacks for filling, and will give you shipping directions as soon as I can get same from customers.'

From time to time the total of 3,200 barrels covered by this correspondence was ordered by Clark to be shipped, but no shipment was made; the company claiming it could not get the flour. Finally Clark, unable to obtain delivery of the flour, on the following June 10th purchased flour in the Chicago market to cover these contracts, being required to pay an advance which, on the 3,200 barrels, amounted to $4,150 over the agreed prices.

The suit was begun in September, 1917 (more than six years after the cause of action accrued), in the municipal court of Chicago, and removed to the federal court. In defense it was pleaded, inter alia, that the contracts were not in writing, and action thereon was barred by the Illinois statute of limitations barring actions on oral contracts not brought within five years after right of action accrued; also that they were contracts of the state of Oklahoma, that by the statutes of that state action on oral contracts is barred in three years and on written contracts in five years after right of action accrues, and that by the statute of Illinois a cause of action barred in the state where it arises is barred in Illinois.

The replication alleged the contracts to be Illinois contracts, that the cause of action accrued in Illinois, and that action is not barred till ten years after right of action accrued.

Before BAKER and ALSCHULER, Circuit Judges, and FITZHENRY, District judge.

ALSCHULER Circuit Judge (after stating the facts as above).

Assuming that the above-recited correspondence constitutes the contract between the parties, there was no question of its breach by plaintiff in error, and the right of recovery by defendant in error is clear, unless the action is barred by limitation. In the state of Oklahoma actions on oral contracts are barred in three years, and on contracts in writing in five years, after cause of action accrues. Section 4657, Rev. Laws Oklahoma. In Illinois the statute is five years on oral, and ten years on written, contracts. Chapter 83, Sec. 16, Hurd's Rev. Stat. Ill.

The suit having been brought more than six years after the cause of action accrued, if the statute of Oklahoma has application, the action is barred, regardless of whether the contract is oral or written; the Illinois statute providing that, where the action is barred in the state where the right of action arises, it is barred in Illinois. Chapter 83, Sec. 20, Hurd's Rev. Stat. Ill. If the right of action arose in Illinois, the action is still barred unless the contract is in writing.

It is maintained for plaintiff in error that the contract is oral, because the writing is wanting in features essential to a contract, viz. time of delivery and payment. True, neither of these conditions is specified, but the law provides that where a contract, otherwise complete, specifies no time for delivery of goods sold, the delivery must be made within a reasonable time (Minneapolis Gas Light Co. v. Kerr, etc., Co., 122 U.S. 300, 7 Sup.Ct. 1187, 30 L.Ed. 1190; In re Hellams (D.C.) 223 F. 460; Brick Co. v. Raymond, 219 F. 477, 135 C.C.A. 189; McKinnie v. Lane, 230 Ill. 544, 82 N.E. 878, 120 Am.St.Rep. 338; Driver v. Ford, 90 Ill. 595); and if it does not specify time for payment it should be on delivery (Guarantee T. & T. Co. v. First Nat. Bank, 185 F. 373, 107 C.C.A. 429; Audenried v. Randall, Fed. Cas. No. 644; Dwyer v. Duquid, 70 Ill. 307; Metz v. Albrecht, 52 Ill. 491). The contract is not void for want of these specifications, but will be construed as though it incorporated the elements of delivery within reasonable time, and payment upon delivery. Leis v. Sinclair, 67 Kan. 748, 74 P. 261; Atwood v. Cobb, 16 Pick. (Mass.) 227, 26 Am.Dec. 657; and cases before cited.

Some evidence appeared tending to show that in past dealings between the parties deliveries were made by the seller at Chicago, and payment was made by draft payable on arrival of goods there. But if such things could in any event be shown for the purpose of importing into the contract conditions as to these subjects, other than those which the contract provides, or, what is the same thing, the law fixes, it would be supplementing the written contract by terms not included therein, and, if this were permissible at all, we would then have a contract resting partly in writing and partly in parol, which under the law would make of the entire agreement a parol contract (Merchants', etc., Co. v. Furthmann, 149 Ill. 66, 36 N.E. 624, 41 Am.St.Rep. 265; Driver v. Ford, 90 Ill. 595; Cameron Coal, etc., Co. v. Universal Metal Co., 26 Okl. 615, 110 P. 720, 31 L.R.A. (N.S.) 618; Atwood v. Cobb, 16 Pick. (Mass.) 227, 26 Am.Dec. 657), and in such case the limitation statutes of either state would bar the action.

Counsel for defendant in error unqualifiedly concede that the contract is an Oklahoma contract, in that the final acceptance of it was in Oklahoma by the plaintiff in error, who resides there. But they earnestly contend that by the terms of the contract it was to be performed in Illinois, by delivery thereof the subject-matter of the contract, the flour, and that it was in Illinois, therefore, that the right of action on the contract accrued. On the other side, it is claimed delivery to the carrier in Oklahoma was delivery to the buyer there, and that this made Oklahoma the place of performance and accrual of the right of action.

Whether delivery to buyer was to be at Oklahoma or Chicago depends on the effect to be given to the words 'basis Chicago' as employed in the correspondence. No cases have been cited and we are unable to find any wherein construction has been given to the word 'basis' as here employed. In the suit of Kaw City, etc., v. Purcell, etc., decided by the Oklahoma Supreme Court, 19 Okl. 357, 91 P. 1022, in a contract of sale of corn by a firm at Kaw to the buyer in Indian Territory, the term 'basis Kaw' was employed. It was stipulated in the case that 'basis Kaw' had reference to the price, and that it meant that, regardless of the place...