Pulp Wood Co. v. Green Bay Paper & Fiber Co.

• Decision Date: 17 June 1914
• Citation: 157 Wis. 604,147 N.W. 1058
• Court: Wisconsin Supreme Court
• Parties: PULP WOOD CO. v. GREEN BAY PAPER & FIBER CO.

157 Wis. 604

147 N.W. 1058

PULP WOOD CO.

v.GREEN BAY PAPER & FIBER CO.

Supreme Court of Wisconsin.

June 17, 1914.

Appeal from Circuit Court, Brown County; Samuel D. Hastings, Judge.

Action by the Pulp Wood Company against the Green Bay Paper & Fiber Company. From a judgment for defendant, plaintiff appeals. Reversed and remanded.

This action arises out of a series of contracts made between the plaintiff and the defendant, whereby plaintiff agreed to supply the defendant with pulp wood for consumption at its paper mill. These contracts were made from year to year and covered the years 1904 to 1909 inclusive. A formal contract was not made covering the year 1909, but it is alleged that a contract was made by letter for that year similar to those covering previous years. The formal contracts are alike in terms except as to the amount of wood to be furnished and the so-called base price to be paid therefor. These contracts are attached to the complaint as exhibits and made a part thereof. Exhibit B, covering the year 1905, is printed and is as follows:

“Whereas, the Pulp Wood Company of Appleton, first party has requirements during the year 1905 of 91,800 cords of pulp wood and has contracted to deliver to the Riverside Fiber & Paper Company 19,000 cords and the Thilmany Pulp and Paper Company 1,000 cords, and the Lindauer Pulp Company 1,650 cords, and the Outagamie Paper Company 3,500 cords during the same season, making a total of 116,950 cords; and whereas, the Green Bay Paper & Fiber Company of Green Bay, the second party, has need during the season of 1905, for its own use, of 5,000 cords of spruce pulp wood, and 17,500 cords of hemlock pulp wood, and 2,000 cords of balsam pulp wood: Now, therefore, it is mutually agreed:

First. That the first party will use due diligence to furnish to the second party said 5,000 cords of spruce pulp wood, and 17,500 cords of hemlock pulp wood, and 2,000 cords of balsam pulp wood, during said year, that being amount of the estimated requirements of the second party, all pulp wood to be of the quality and dimensions equal to that provided by the first party for its own use and for said third parties above mentioned.

Second. That the second party shall receive and pay for its pro rata share of the entire amount of pulp wood, which the first party shall of necessity deliver in order to operate economically, during the season of 1905, if in excess of the 141,450 cords above specified, based on the amounts above specified for delivery. And that it will accept its pro rata share of the pulp wood which the said first party is able to deliver during the season, if same is less than 141,450 cords, to the end that said second party shall acquit the first party of all liability for diminution in amount if the first party is not able to furnish the entire 141,450 cords. And that the first party shall be relieved of excess or surplus.

Third. Said first party will receive and said second party will pay for said pulp wood its pro rata share of cost including all expense of operating by said first party and 7 per cent. interest on the capital employed in cutting, getting out and delivering the 141,450 cords more or less of wood above specified.

Fourth. Said first party shall deliver said pulp wood in the storage booms of the party of the second part at Green Bay, Wisconsin, either from raft or by skow at option of second party, and if, at any time, said storage booms are full, then said first party may deliver the above mentioned wood alongside said storage booms at the risk and expense of the second party. But it shall be optional with the first party as to whether all deliveries shall be made by water or part by rail, excepting that enough wood must be delivered from time to time by rail if necessary to keep second party's mill running, subject to clause fifth.

Fifth. Delivery shall be made of said pulp wood from time to time to said second party pro rata with deliveries for the requirements of the first party and the requirements of the third parties mentioned.

Sixth. On the second Monday following a Saturday's completed delivery, said second party shall and will pay to said first party on all wood not theretofore paid for as follows: On spruce pulp wood $9 per cord. On hemlock pulp wood $5.50 per cord. On balsam pulp wood $5.75 per cord. But if said second party shall choose to anticipate payment, it shall be entitled to credit at the rate of 7 per cent. per annum, and if it shall not pay promptly on day for payment, it shall and will pay 7 per cent. per annum for the time bill remains overdue.

Seventh. Second party will not purchase any pulp wood from any person, firm or corporation other than as agreed above for use during the year 1905.

Eighth. The scale of the first party taken at the points where the pulp wood is put in the water shall be final and conclusive upon both parties, as to all pulp wood delivered by water, excepting that the second party shall be entitled to the same percentage of reduction on the scale of the wood that is delivered to it as the diminution on the whole amount handled by water shall prove to be.

Ninth. Each kind of wood shall be delivered separately, that is, one kind shall not be mixed with another.

Tenth. A settlement shall be had at the end of the season, and thereupon, the first party shall return to the second party, or the second party shall further pay to the first party such balance as there may be for or against the second party, on account that the price fixed in paragraph sixth for the pulp wood shall prove to be greater or less than the price as fixed by clause third.

In witness whereof, the said parties have caused these presents to be signed in duplicate by their respective Presidents and Treasurer or Secretaries this 22nd day of December, 1904.”

The amended complaint alleges that the plaintiff is a corporation organized for the purchase and sale of pulp wood and that the defendant is a corporation engaged in the manufacture of paper. The making of the various contracts before referred to is then set forth. The complaint then alleges that on September 25, 1903, the plaintiff entered into a contract with one Perry to enable the plaintiff to furnish spruce pulp wood to its customers and that a copy of such contract is annexed to the complaint. Certain modifications of the Perry contract are then set forth and said modifications are also made a part of the complaint. The complaint then alleges that the defendant, before making the contract for the year 1904, knew of the contract with said Perry and knew of the modifications of said contract about the time the same were made, and that spruce pulp wood was delivered under said contracts for the years 1904 to 1907 inclusive, to the amount stated in a schedule annexed to the complaint marked Exhibit 1. It is then alleged that on account of 4,201 cords of spruce pulp wood delivered to the defendant for the year 1904 the sum of $37,058.05 was paid by the defendant, that being the sum which appeared to be due at the time the calculation for the cost of the wood for that year was made and supposed by the parties to be the contract price for the wood furnished, and that other like purchasers made payments on the same basis; that on account of the 5,549 cords of spruce pulp wood delivered to the defendant under the 1905 contract, $47,688.59 was paid to the defendant as the calculated cost of the wood furnished for that year, being the amount supposed by the parties to the contract to be the price therefor, and that other purchasers made a like payment; that payment was made on a like basis for 4,116 cords of pulp wood delivered for the year 1906; that in the year 1907 it became apparent that plaintiff would sustain a loss on the Perry contract and that such loss could not at that time be ascertained; that the 5,601 cords of spruce pulp wood delivered to the defendant under the contract for the year 1907 were partly settled for, such settlement being made on the same basis as for the three previous years, except that the parties left the loss on the Perry contract to be adjusted when the amount of the loss should be ascertained, and that the other purchasers made payments on the same basis; that in 1907 Perry refused to further perform or fulfill his contract and was then insolvent and on April 13, 1910, was adjudged bankrupt on his own petition by the District Court of the United States for the Western District of Michigan; that plaintiff lost through such failure the sum of $81,468.21, on account of advances made to him pursuant to such contract, which loss was not ascertainable until after September, 1910; that said plaintiff advanced to said Perry under said contract in the year 1907 a sum in excess of $110,000; that the failure of Perry and the consequent loss made the spruce pulp wood delivered by said Perry under his contract as modified cost the plaintiff $81,468.21 more than it would have cost if said Perry had carried out his contract; that the annual calculations of the cost of pulp wood made between the plaintiff and the defendant and other like purchasers were based on the expectation that Perry would carry out his contract as modified; that the total amount of spruce pulp wood delivered by the plaintiff to the defendant and other like purchasers under the contract for the year 1904 was 123,270 cords, the amount delivered to the defendant being 4,201 cords; that the total delivery for the year 1905 was 71,201 cords, of which amount 5,549 cords were delivered to the plaintiff; that the total delivery for the year 1906 was 71,373 cords, of which amount 4,116 cords were delivered to the defendant; that the total delivery for the year 1907 amounted to 73,124 cords, the amount delivered to the defendant being 5,601 cords; that the total amount of spruce pulp wood delivered by plaintiff to all its customers under said contracts for four years was 338,968 cords, and the...