Southern Creosoting Co. v. Chicago & A. R. Co.

• Decision Date: 19 July 1918
• Docket Number: No. 19262.,19262.
• Citation: 205 S.W. 716
• Court: Missouri Supreme Court
• Parties: SOUTHERN CREOSOTING CO., Limited, v. CHICAGO & A. R. CO.

205 S.W. 716

SOUTHERN CREOSOTING CO., Limited, v. CHICAGO & A. R. CO.

No. 19262.

Supreme Court of Missouri, Division No. 2.

July 19, 1918.

Rehearing Denied October 5, 1918.

Appeal from Louisiana Court of Common Pleas; E. B. Woolfolk, Judge.

Action by the Southern Creosoting Company, Limited, against the Chicago & Alton Railroad Company. Judgment for plaintiff, and defendant appeals. Affirmed.

The plaintiff, a corporation located at Slidell, La., recovered judgment in the circuit court of Pike county on two counts, on the first count for $9,623.25, and on the second count for $972, and from that judgment defendant appealed.

The defendant in 1912 had a contract with the Farney-Massman Construction Company, of Kansas City, Mo. (hereafter, for convenience, called "Construction Company"), to construct a guide pier at the railroad bridge over the Mississippi river at Louisiana, Mo. The amount to be paid the Construction Company was to be determined by the actual work done and material furnished, according to prices for the several items set out in the contract. The Construction Company made a contract with the plaintiff to supply the creosoted lumber to be used in the work. The contract for that lumber was made through the Western States Lumber Company, agent of the plaintiff at Kansas City, Mo.

Recovery on the first count of the petition is sought on an order upon the defendant given to plaintiff by the Construction Company, the original contractor. It is alleged that the defendant accepted this order, and the issue determined in the first count was whether or not there was such an acceptance. While the work was in progress the Construction Company wrote and delivered to plaintiff the order, dated Kansas City, Missouri, April 29, 1913, as follows:

"Mr. IL T. Douglass, Jr., Chief Engineer, Chicago & Alton R. R. Co., Chicago, Ill.: This is asking you to pay the Southern Creosoting Company of Slidell, La., $14,471.84 due them on lumber for your guide pier for your bridge at Louisiana, Mo. [Signed] Farney-Massman Coast. Co., by A. E. Farney."

The order, with a letter addressed to the chief engineer of the defendant at Chicago, Ill., was mailed May 1st by the plaintiff. This letter recites a copy of the order and says:

"We will thank you to acknowledge receipt of this order promptly, and to favor us at the same time with advice as to whether or not it is in proper shape, it will be honored by your company and remittance made to us accordingly, and, if it is practicable for you to do so, about when and in what amounts these remittances will reach us."

On May 6th the chief engineer of the Chicago & Alton, in Chicago, acknowledged the last-mentioned letter and said:

"I have been requested by the Farney-Massman Construction Company, to make certain payments to you, and doubtless, when they have completed their work, the amount due you will be available. I am not very sure as to the status of their work. They have been paid $11,000 on the contract, which is estimated to run about $45,000. Manifestly no remittances will be made until the work performed and materials furnished are applied under their contract. I will ask our counsel to advise me just how these payments should be made, so the interests of the Chicago & Alton Railroad will be thoroughly protected."

At the time the order was made the Construction Company wrote to the defendant's chief engineer, calling attention to the order, suggesting that the amount should "be paid by you as fast as the lumber is put in place and estimates are due." On June 10, 1913, the plaintiff wrote from Slidell, La., to the defendant, calling attention to the balance due plaintiff by the Construction Company, and used this language:

"Are you yet in position to advise us definitely that remittance will be made by your company to us direct in payment for this material as per written request of the contractors on you dated April 29th, and sent you with our letter of May 1st? If matters will be handled in this way, can you now tell us when and in what amounts payments will reach us until the total of $14,471.84 covered by contractor's request on you has been paid to us?"

In reply to that letter, on June 17th, Mr. Douglass, defendant's chief engineer, after an explanation of the condition of the work and stating that for the present he was withholding all payments until the general solicitor got all matters connected with assignments properly disposed of, said:

"It is my belief that all demands on account of this work will be satisfactorily disposed of. I would very much prefer making no settlements whatever until the work, in its entirety, is completed, and which, I believe will be accomplished in about six weeks or two months. This company is now indebted to the Farney-Massman Construction Company in a considerable sum, but I do not want to incur any liability by making payment before we are positively assured of all claims and demands in which this company would be in any degree liable."

On July 5th the plaintiff wrote the defendant, referring to the letter of June 17th, and to its account against the Construction Company, and asked:

"Are you yet in position to advise us definitely that payment will be made to us by your company in accordance with that order? If so, we will thank you very much for a letter to that effect at your earliest convenience."

On July 7th the defendant's engineer wrote to plaintiff, acknowledging receipt of that letter, making some explanation as to the state of the accounts and materialmen claims, and said:

"For these reasons I have myself withheld all payments on this work until their estimate is completed, and it is my belief that this work will be accomplished in a month, or at most six weeks. * * * I understand Mr. Farney enjoys a very high reputation, and I believe that you need have no apprehension relative to the payments due you by him on account of the work referred to."

He then adds that the railroad company is protected by a bond. On July 15th the general solicitor of the defendant wired to Mr. Zunts, attorney for plaintiff, that the defendant would pay the plaintiff $6,277.50 on account of any indebtedness which defendant might owe the Construction Company, and added:

"We do not recognize that we now or at any time shall owe that company or any of its assignees any amount in excess of the timber actually used and to be used in the construction Louisiana guide pier, and will accept no assignments or pay no money on any other basis."

On July 16, 1913, the plaintiff's attorney, Mr. Zunts, telegraphed this reply to Mr. Strawn:

"Southern Creosoting Company will accept payment without committing Chicago Alton R. R. to any interpretation of Farney-Massman order and chief engineer's letter but reserving such rights as Southern Creosoting Company and Chicago Alton may respectively have under these documents."

On August 12, 1913, the defendant paid plaintiff on account of the order the sum of $6,277.50. This payment was by voucher which recited that it was pursuant to the order mentioned, and contained this recital:

"This payment is made pursuant to the order given the Chicago & Alton Railroad. Company by the Farney-Massman Construction Company under date of April 29, 1913. This payment shall be construed to obligate the Chicago & Alton Railroad Company to pay on account of the said order any amount in excess of what the Chicago & Alton Railroad Company may owe the Farney-Massman Construction Company for timber furnished by the Southern Creosoting Company, Limited, and actually placed in the above-mentioned work," etc.

On September 24, 1913, the defendant's chief engineer wrote to the plaintiff, as follows:

"The Farney-Massman Construction Company have requested that we make voucher covering estimate No. 8, amounting to $3,490.37, in favor of the Produce Exchange Bank, Kansas City. I would like very much to have your consent to do this. You appreciate that we are earnestly trying to help the Farney-Massman Construction Company out in this matter and wish to make payments both to your company and the Produce Exchange Bank, as requested by the Farney-Massman Company, in such manner as will be satisfactory to all concerned. I would like to have you advise me if you have any objections to making this month's full payment to the Produce Exchange Bank."

The letter also states that a copy of the same was sent to the plaintiff's attorney, with estimate No. 8 mentioned. On September 30th the plaintiff replied to that letter, and said that, while it had hoped to have full payment of the amount due for creosoting material before that time:

"We can understand the efforts you seem to be making, as outlined in your letters, to handle matters in a way that will avoid a tie-up and similar complications; and acting on this understanding, and with the further understanding that payment of estimate No. 8 to other interests will not affect assurances previously given us that we will be paid for all material furnished by us that is actually used in this work, we are willing should make voucher for estimate No. 8 in favor of the bane mentioned in your letter."

The letter then expressed the hope that payments might be made at an early date until the entire balance due wag adjusted. On December 5, 1913, Mr. Zunts, attorney for the plaintiff, wrote to the defendant's engineer, asking for advice as to the status of the contract with the Construction Company, and asking if there was any prospect of an early payment to the plaintiff. The defendant's engineer replied on December 8th, saying there was only a small amount of work to be done to complete the job, and added:

"In the meantime I am holding up all payments pending the final completion of this work."

We call attention to the most significant parts of the correspondence by Tatting them in italics. The second count is for $900, the price of lumber which it is alleged was sold by the plaintiff to ...