Salmon v. Helena Box Co.

• Decision Date: 16 July 1906
• Citation: 147 F. 408
• Parties: SALMON et al. v. HELENA BOX CO. (No. 2,309.)
• Court: U.S. Court of Appeals — Eighth Circuit

147 F. 408

SALMON et al. v. HELENA BOX CO.

(No. 2,309.)

United States Court of Appeals, Eighth Circuit.

July 16, 1906

Morris M. Cohn, for plaintiffs in error.

John L Moore, U. M. Rose, W. E. Hemingway, G. B. Rose, D. H Cantrell, and J. F. Loughborough, for defendant in error.

Before SANBORN, HOOK, and ADAMS, Circuit Judges.

ADAMS Circuit Judge.

This was an action at law instituted by the Helena Box Company defendant in error, against Hamilton H. Salmon and R. Brandt composing the firm of Hamilton H. Salmon & Company, plaintiffs in error, to recover damages for a breach of an executory contract for the sale of lumber, and in addition thereto, to recover a balance due for lumber actually sold and delivered. The terms of the contract are not disputed. They are found in a letter written and signed by defendant of date, January 14, 1904, addressed to the box company, as follows:

'You may enter our order for the following cottonwood lumber: (Here follows a description of 4,000,000 feet of different grades and sizes of common commercial lumber and the agreed price for each kind.) All of the above on the Helena, Ark., rate of freight. (Here follows a description of one million feet more of such lumber, and its price.) To be delivered on Cincinnati, Ohio, freight rate. * * * We can start shipping on the above at once, and understand that you will be in a position to ship us from 40 to 50 cars per month, in accordance with shipping directions. Shipments to be made in accordance with instructions, as given by us from time to time.

'(Signed)

Hamilton H. Salmon & Co.

Accepted:

Helena Box Company, by H. W. Mosby, Secretary.'

The main issue of fact on the claim for damages for breach of the contract was whether the plaintiff or defendants first breached it. Plaintiff claims that defendants, after giving shipping instructions for a certain quantity of lumber, ceased giving any further instructions and refused to take the lumber according to the requirements of the contract; that plaintiff was at all times ready to fill orders made according to the contract, and that after waiting a reasonable time for shipping directions, it sold the lumber for what it could get and sustained the loss sued for. Defendants claim that plaintiff first breached the contract by failing to fill orders according to instructions and by filling them, when done at all, with inferior quality of lumber; and for these reasons that they were justified in rescinding the contract. The case was tried to a jury and a large amount of proof taken on the issue just stated.

The learned trial judge after carefully stating the contentions of the parties so that there could be no misunderstanding about the issue joined in the case, concluded that part of the charge relating to liability as follows:

'Now if you find from all the evidence in this case that the defendants were not guilty of a breach of the contract, that they acted in good faith and were ready to take the lumber and the only reason they did not take it was because the plaintiff was unable to fill their orders, then your duty would be to find the issues * * * in favor of the defendants and that would be the end of it.'

Then the converse of the proposition was stated and the jury was told that if defendants, and not the plaintiff, were guilty of a breach of the contract, the plaintiff was entitled to recover. Considering the care with which the court defined the issues between the parties and the clear statement of the ultimate fact on which liability depended we think the jury was fully instructed and that there was no reversible error in not giving the instruction requested by defendants' counsel to the effect that plaintiff could not recover unless it had previously complied with the conditions imposed upon it by the contract. That proposition was substantially covered by the main charge, and it was not error to refuse to repeat it in the language chosen by defendants' counsel.

The next question for our consideration relates to the proper construction of the contract of july 14, 1904. On this the trial judge charged the jury substantially that the contract was valid and imposed the duty upon defendants to order lumber shipped within a reasonable time, and as to what was a reasonable time he charged as follows:

'What a 'reasonable time' is, depends upon the circumstances in each particular case. Now, in view of the fact that this contract provides that the plaintiff was to be ready to ship between 40 and 50 cars a month, what do you, as reasonable men, think would be reasonable * * * to require defendants to order shipped out during that time? * * * But on the other hand the law does not expect, in view of the fact that the contract provides, that they shall await shipping instructions, that the defendants must * * * have ordered every month between 40 and 50 cars.'

Plaintiff was the owner and operator of two saw mills, and by contract entitled to the product of other mills situated at or near Helena, Ark., and held either in stock or quickly available, cottonwood lumber of the dimensions in length, width, and thickness usually found in lumber yards. Defendants were large dealers, requiring such lumber to meet existing and future orders of their customers located in different parts of the country. In these circumstances the contract in question was made. It contains an express agreement for the purchase and sale of specified quantities of different dimensions of lumber, and agreement fixing the price of each kind specified, an agreement that shipments should be made according to shipping instructions to be given from time to time by defendants.

In the absence of any contrary provisions found in the contract for delivery, the general rule fixing the place of delivery at the place where the goods are located when sold, must prevail. Benjamin on Sales, Sec. 682; Hatch v. Oil Co., 100 U.S. 124, 134, 25 L.Ed. 554. The trial court properly held that the parties made a valid and enforceable contract obligating defendants to give shipping instructions to plaintiff within a reasonable time, to make shipments according to the instructions. No option was left to either party. The buyers could no more neglect to give shipping instructions without violating their obligation than the seller could neglect to make shipments after receiving the instructions without violating its obligation. The contention of defendants' counsel that the clause requiring shipments to be made according to shipping instructions to be given from time to time by the buyers renders the contract void for uncertainty or enforceable only at the option of the buyers is not sound. Hinckley v. Pittsburgh Bessemer Steel Co., 121 U.S. 264, 7 Sup.Ct. 875, 30 L.Ed. 967; Cold Blast Transp. Co. v. Kansas City Bolt & Nut Co., 32 C.C.A. 25, 114 F. 77, 57 L.R.A. 696; George Delker Co. v. Hell Spring & Axle Co. (C.C.A.) 138 F. 647; Boyington v. Sweeney, 77 Wis. 55, 45 N.W. 938; Excelsior Wrapper Co. v. Messinger, 116 Wis. 549, 93 N.W. 459; Ault v. Dustin, 100 Tenn. 366, 45 S.W. 981. It is contended that the following clause of the contract, 'We understand that you will be in a position to ship us from 40 to 50 cars per month in accordance with shipping directions' imposed upon defendants the obligation to order that much, at least, monthly. This clause was treated by the trial court as a limitation interposed in favor of the box company to safeguard it against excessive orders at any one time; and this, we think, in the light of all the other terms of the contract, was its intended function. This clause was also properly treated as one of the terms of the contract which the jury might consider in determining what, within the contemplation of the parties, would be reasonable expedition in the matter of giving shipping instructions.

Was the true rule governing the measure of damages given to the jury? Plaintiff's secretary testified as a witness for his company concerning the efforts made to sell lumber during 1904 and the prices received for what was sold. Another witness connected with a different lumber company testified at the instance of plaintiff, about making two trips, in July and August, 1904, through the states of Ohio, Illinois, Michigan, Iowa, Kansas, and Nebraska, a route which he says presented the most desirable market for sale of cottonwood lumber. Both of these witnesses referred to 'a market price,' and one of them to the market price at Helena. Moreover, the evidence discloses that St. Louis, Louisville, Cincinnati, Chicago, Kansas City, and Omaha each afforded a market for lumber such as contemplated by the contract.

Notwithstanding evidence of this character, the court charged the jury concerning the measure of damages as follows:

'All that the law requires the seller to do when there is a breach of the contract is to exercise reasonable diligence such as any business man similarly situated would exercise to get the best price that he can and if he obtained that price, if he does that, and there is still a loss then the loss must all on the party who breached the contract. So in this case it is for you to determine, if you find this issue in favor of plaintiff, (that the defendants breached the contract), how much less did the plaintiff have to take for the lumber in order to sell it, having exercised due diligence to obtain the best price, than it would have received under the contract price.'

An exception was taken to this portion of the charge by identifying it in a way satisfactory to and approved by the trial court. Expressing the same thought the court in another part of the charge told the jury as follows:

'The only measure of damages which is to govern you is this: What price could the plaintiff,

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