Saxe v. Penokee Lumber Co.

• Court: New York Court of Appeals Court of Appeals
• Writing for the Court: PARKER
• Citation: Saxe v. Penokee Lumber Co., 159 N.Y. 371, 54 N.E. 14 (N.Y. 1899)
• Decision Date: 06 June 1899
• Parties: FRANK J. SAXE, as Surviving Partner, Appellant, v. PENOKEE LUMBER COMPANY, Respondent.

159 N.Y. 371

54 N.E. 14

SAXE

v.PENOKEE LUMBER CO.

Court of Appeals of New York.

June 6, 1899.

Appeal from supreme court, appellate division, Third department.

Action by Frank J. Saxe, as surviving partner, against the Penokee Lumber Company, to recover for the breach of a lumber contract. From an order of the appellate division reversing a judgment for plaintiff (42 N. Y. Supp. 69), he appeals. Reversed.

The referee's findings of fact were not reversed by the appellate division, and, with the exception of the formal findings touching incorporation, dissolution of partnership, etc., they are as follows: Between the 31st day of January and the 7th day of February, 1890, the plaintiff and the defendant entered into a contract in writing, by which the defendant agreed to sell and deliver to the plaintiff 4,000,000 feet of lumber at $28.50 per 1,000 feet. The lumber so agreed to be sold and delivered was known in the trade as ‘No. 2 cutting up and better,’ and the same was to be sawn from logs the defendant was then getting out in Ashland county, Wis., and to be sawn at the mills of said defendant at Morse Station, Ashland county, Wis., in dimensions as directed by plaintiff, to be made in quantities of different thicknesses in the proportion and the amount of about 666,666 feet of 1 inch thick, 2,666,666 feet of 1 1/4 and 1 1/2 inches thick, and 666,666 feet 2 inches thick and better. The plaintiff agreed to accept such lumber, and to pay to defendant therefor $28.50 per 1,000 feet, and plaintiff further agreed to pay to the defendant, as an advance upon said purchase price, the sum of $40,000. All of said lumber was to be delivered at Tonawanda, free on board canal boats, to the plaintiff, before October 1, 1890. It was further agreed that, in the event that the defendant delivered any of the lumber under said contract after the 1st day of October, 1890, the defendant was to pay such canal freights on any balance which was delivered after that date as might be in excess of the average rate of canal freights paid on the lumber delivered during the month of September; but it was agreed that all said lumber should be delivered before the close of canal navigation for the season of 1890. The plaintiff paid to defendant the sum of $40,000 as advances upon the purchase price of said lumber, as required by the contract, and the defendant undertook to deliver the lumber required under said contract, and in all delivered 2,791,100 feet. The amount of lumber which the defendant failed to deliver to the plaintiff under the contract, and which the defendant was bound to deliver, amounted to $1,208,900 feet, which balance is referred to as ‘shortage’ on said contract, and the shortage of the different thicknesses aforesaid was as follows: 85,160 feet of 1 inch, 781,950 feet of 1 1/4 and 1 1/2 inch, 341,790 feet of 2 inch and thicker; making a total shortage of 1,208,900 feet. During the delivery of said lumber under the contract some questions arose between the plaintiff and defendant as to the inspection of said lumber, and, in order to make the inspection come up to the requirements of the contract the Penokee Lumber Company, the defendant, on the 5th day of September, 1890, allowed the plaintiff the sum of $2,357, and reduced the price of the lumber to be thereafter delivered under said contract $1 per 1,000 feet, making the price on all lumber thereafter to be delivered $27.50 per 1,000 feet, instead of $28.50. The acceptance by the plaintiff of this proposition was not to affect the terms of the original contract, and the Penokee Lumber Company agreed that subsequent shipments of lumber would be as good as last shipment. The several grades of lumber above the grade of No. 2 cutting up are as follows: ‘Uppers,’ ‘selects,’ and ‘fine common,’ and the lumber agreed to be delivered under said contract was the product of the Penokee Lumber Company, and was known in the trade as ‘Penokee lumber,’ and the Penokee lumber of that season and the year before was a superior grade and quality of pine. By the terms of the contract made between the parties the defendant agreed to sell and deliver to the plaintiff Penokee lumber, and the plaintiff agreed to purchase and pay for Penokee lumber, and no other. On the 31st day of October, 1890, the defendant notified the plaintiff that he would be unable to complete the contract with the plaintiff, and that they would probably be short 1,200,000 feet, and the defendant stated to the plaintiff that it would be necessary either to have the contract canceled, or have plaintiff give defendant permission to furnish the balance early next season; and plaintiff declined to do either, and defendant did not withdraw such notice. The reason why the defendant was unable to fulfill its contract was because it had made from the lumber it was procuring ‘board pine’ during the previous winter, and it had underestimated the effect that such manufacture would have on the quantity of lumber it was under contract to furnish this plaintiff, and because of defendant shutting down its mills earlier than usual on account of failure to get workmen. The Penokee Lumber Company, in the month of September, 1890, during the delivery of the lumber under said contract, stated to plaintiff that the average market value per 1,000 feet of the lumber they were then delivering under the contract at Tonawanda, N. Y., was at least $32.50 per 1,000 feet, and guarantied that all shipments thereafter would show an average valuation at Tonawanda of $32.50, and that this was the lumber that plaintiff was getting under this contract at $27.50 per 1,000 feet. The defendant stated to plaintiff, October 2, 1890, that the lumber it was then delivering under the contract showed an average value of $32.50 per 1,000 feet, and in fact the market value of the lumber defendant agreed to deliver to plaintiff under the contract was at Tonawanda, in the fall of 1890, $32.50 per 1,000 feet. The plaintiff, in addition to paying to defendant the full amount of the advances agreed to be paid under the contract, paid to it also the agreed contract price for all lumber delivered by defendant under the same; but defendant, on the 24th day of November, 1890, returned to plaintiff the sum of $146.39, being the final payment made by plaintiff on account of the contract price of the lumber so delivered to plaintiff. The plaintiff accepted all lumber of the grade, quality, and character required by the contract delivered by defendant to plaintiff during the season of 1890. The Erie Canal closed for navigation on the 30th day of November, 1890. The plaintiff always held himself ready to receive the lumber contracted to be delivered, if defendant would deliver the same during the open canal season of 1890, notwithstanding the defendant had failed to deliver the same prior to October 1, 1890, and the plaintiff so stated to defendant, even after defendant had notified plaintiff that it was unable to fulfill the contract. Pine lumber, the product of different mills, has different characteristics, and the product of no two mills is exactly alike. Penokee lumber, so called, the product of the mills of the Penokee Lumber Company, in the season of 1889 and the season of 1890 was a superior pine lumber, and had a ready sale in the market.

Hamilton Harris, for appellant.

Henry H. Seymour, for respondent.

PARKER, C. J. (after stating the facts).

The appellate division rested its reversal of the judgment entered upon the report of the referee upon exceptions taken to the refusal of the referee to permit two questions to be answered. Unless that court rightly determined that it was error not to allow the questions to be answered, its order of reversal is without support on this review. The findings of fact made by the referee are unreversed, and are controlling here, and fully support the judgment rendered. They show that the plaintiff and the defendant entered into a contract by which the defendant agreed to deliver to the plaintiff 4,000,000 feet of lumber, known in the trade as ‘No. 2 cutting up and better,’ and that the same was to be sawn from logs the defendant was then getting out in Ashland county, Wis., and to be sawn at the mills of said defendant at Morse Station, in dimensions as directed by the plaintiff, at $28.50 per 1,000 feet; said deliveries to be f. o. b. in canal boat at Tonawanda, and all completed before October 1, [159 N.Y. 377]1890; that the defendant failed to keep and perform its contract in that it...