Ramey Lumber Co. v. John Schroeder Lumber Co.

• Decision Date: 15 June 1916
• Docket Number: 2307.
• Citation: 237 F. 39
• Parties: RAMEY LUMBER CO., Limited, v. JOHN SCHROEDER LUMBER CO.
• Court: U.S. Court of Appeals — Seventh Circuit

237 F. 39

RAMEY LUMBER CO., Limited, v. JOHN SCHROEDER LUMBER CO.

No. 2307.

United States Court of Appeals, Seventh Circuit.

June 15, 1916

Rehearing Denied October 3, 1916.

In June, 1910, plaintiff in error, herein termed 'plaintiff,' and defendant in error, herein termed 'defendant,' entered into a written contract signed by the plaintiff, and, on behalf of defendant, by one J McCauley, manager of the Chicago branch of the defendant's business. This contract involved a large amount of lumber, something over 1,000,000 feet, and was fully executed. In November, 1910, plaintiff wrote defendant:

'In the matter of next season's stock from this and adjoining localities it begins to look as if there could be considerable of the better grade secured as we have investigated the situation some and from the present outlook there will be a fair amount produced by the various small mills.

'The mills that we have in mind will have as good lumber as our own, and it will be well manufactured and properly handled and with our assistance it should prove very satisfactory.

'Since this subject has been mentioned to you we conclude that the manner of handling this for you will be agreeable to both interests as we feel that your interests can be protected as to quality and grade and the cost will be a minimum base.

'We would like very much to be taken into consideration when you give this section attention and this will include the better stocks on the Clearwater as we are now considering the stock from one of the best mills over there and one that cuts the same stock as ours.

'This arrangement looks to us as if it will yield us a fair margin and save you much expense in the handling of sundry stocks that you might secure.'

To this defendant replied on November 17, 1910:

'Your favor of the 4th received and contents carefully noted.

'As advised your Mr. Spencer, we will be in the market next season for all of the factory pine of a certain type and character that we can get hold of at a reasonable market value. We see no reason why we could not handle a percentage, if not all, of the available stocks in your territory, and, as advised you personally, we expect to give you consideration along this line when we are contemplating making contracts for next season's cuts in your district.'

On January 6, 1911, defendant wrote:

'Yours of the 30th received and contents carefully noted.

'We note that you will have at your own mill around two million feet and the contracts that you now control will give you an output of about three and one-half million feet for the season of 1911.

'It will not be our policy to send our men into your locality, or interfere with you at all, if you control that business and we control the outputs through you; that is, we want to arrange for a contract with you covering all the stock that you will manufacture and all of the stock that you will contract for. In this way it will give us the assurance that whatever stock you contract for we will control, and certainly we would not put our men in the same territory to buy stock in competition with you, when we have a contract with you to control all of the output. This would depend of course as to whether or not you would be able to control this output. In making such an arrangement with any one we expect to work in harmony with them, otherwise we would not want to contract with them at all.

'Now in reference to prices for product of 1911, we would prefer deferring price proposition until the writer visits the West, which will be within a few weeks. In this connection, we can afford to pay you as much as any one in the same kind of business that will pay you for your stock. You can appreciate that a small factory would pay you a higher value than we could, but you would have to give them the stock as they want it. We take the stock as you want to deliver it and pay you for it as loaded. As you state you have had offers along other lines, kindly advise us what you consider the values are for this season.'

On January 24, 1911, plaintiff wrote the defendant as follows:

'Price would be $18.00 for the D and $30.00 for the C.

'As soon as the time arrives for you to take up the matter of thick shop lumber for the coming season we would be glad to hear from you as this subject is being agitated considerable now and we want to learn from some one about what we can depend upon for this coming year.

'We are logging as hard as possible and expect to put in a much larger cut than we did last season and our timber is running much better than last year.'

On January 25, 1911, defendant, through McCauley, wrote:

'It is nearing the season for the contracting of factory plank in your district. Last year we had the matter up with you in reference to your company looking after what factory plank would be produced in your district for our account. Will you kindly advise if you are still contemplating purchasing factory plank in that district in excess of your own production. We prefer to have some one like ourselves in the territory to take care of the small contracts and would pay you a profit for handling rather than to contract for the outputs ourselves, providing we would not have to pay you too much for this service.'

To this, plaintiff replied:

'We will have considerable shop lumber other than that we manufacture at our mill, possibly two million feet, as we have contracted with two or three small mills and are arranging for the cut of as many more for their cut of shop and we may have in all about 3 1/2 millions this season, including our own.

'Of course if your policy is to send your own men into this locality and offer the same price as that you would pay us our opportunities would be very much curtailed but if you do not do this we feel that the greater portion of the shop on this line as well as on the Clearwater line can be secured by us. This would have no reference to anything the Craig Mt. Lumber Co. produced.

'The better way in our opinion to handle this stock that we will have will be at a price f.o.b. loading point with all expenses included and we would pay you for the loading, shipping and grading. * * *

'It will be agreeable for us to represent you entirely in the above named districts provided this can be done without your men's interfering in any way other than with the exception above noted.

'Please indicate your best proposition as to prices covering our stock for this coming season and we can very soon advise you of our conclusions in the matter. * * *

'Please advise us promptly as to your conclusions regarding the manner of our handling this shop lumber in the districts named and also the best prices you care to offer us for the stock. * * * We will be glad to see your Mr. McCauley whenever he comes west and we hope his trip may be made soon.'

On March 25, 1911, the contract was entered into between plaintiff and defendant, the latter acting through said McCauley, which contract was as follows:

'Memorandum of agreement entered into this 25th day of March, A.D. 1911, by and between Ramey Lumber Co., Ltd. (a corporation), of Vollmer, Idaho, party of the first part, and John Schroeder Lumber Co. (a corporation) of Milwaukee, Wis., party of the second part: Witnesseth, that in consideration of the covenants and promises made herein by the party of the second part the said first party hereby agrees to sell to said second party all the western pine shop lumber said first party will manufacture or own during the season of 1911, consisting of 5/4, 6/4 and 8/4 stock at the following prices loaded on cars in the rough:

'For 5/4 and 6/4 stock that will grade No. 3 $11.50 for No. 2 $17.00 for No. 1 $25.00 and for C. & better $32.00 and for 8/4 No. 3 $11.50 and for 8/4 No. 2 $19.00 and for 8/4 No. 1 $27.00 and for 8/4 C & better $34.00.

'Said first party agrees to grade and ship all the above named stock as soon as said stock is dry enough to ship without any additional expense to said second party.

'All the lumber sold under this agreement shall be manufactured in a workmanlike manner and inspected carefully in accord with the rules of the Northern Pine Manufacturers' Association and in the event that complaints are made as to the said grade then the said association's conclusions shall be final.

'All the above named lumber is to be loaded out as it comes from the piles, that is to say, that all lumber grading No. 3 and better to be loaded in same car as comes from the piles.

'Said second party agrees to purchase and receive the above named lumber as it is loaded by said first party and to pay therefor the above named prices in the following manner. By sight draft attached to each invoice for each car of lumber as shipped with bill of lading attached thereto. Less 2 per cent.

'The receipt of one dollar ($1.00) as a valuable consideration for the execution and delivery of this agreement is hereby admitted.

'In witness whereof the said parties hereto have set their hands and seals by their proper authorized agents this 25th day of March, A.D. 1911.

'Ramey Lumber Co., Ltd.,

'By W. J. Ramey, Pres.

'John Schroeder Lumber Co.,

'Witness: R. L. Spencer.

J. McCauley.'

Defendant denies that it approved the contract, and denies McCauley's authority to execute it.

In pursuance of the contract, plaintiff, a manufacturer of lumber near Vollmer, Idaho, shipped to defendant, a dealer in lumber at Chicago and Milwaukee, to the address of Minnesota Transfer, 32 cars prior to August 1, 1911, which were accepted and paid for. Thereafter 20 cars were shipped before receipt of request, but delivered after defendant had requested that shipments be delayed, and the defendant, on August 29, 1911,...