Tacoma & Eastern Lumber Co. v. A.B. Field & Co.

• Decision Date: 01 February 1918
• Docket Number: 14310.
• Citation: 100 Wash. 79,170 P. 360
• Court: Washington Supreme Court
• Parties: TACOMA & EASTERN LUMBER CO. v. A. B. FIELD & CO.

170 P. 360

100 Wash. 79

TACOMA & EASTERN LUMBER CO. v. A. B. FIELD & CO.

No. 14310.

Supreme Court of Washington

February 1, 1918

Department 1. Appeal from Superior Court, Pierce County; M. L. Clifford Judge.

Action by the Tacoma & Eastern Lumber Company against A. B. Field &amp Co., a corporation. Judgment for plaintiff, defendant appeals. Reversed and remanded.

Huffer & Hayden, of Seattle, for appellant.

Hayden Langhorne & Metzger, of Tacoma, for respondent.

MAIN J.

This action was brought by the Tacoma & Eastern Lumber Company, the plaintiff, against A. B. Field & Co., the defendant, to recover the purchase price of certain lath. The cause was tried to the court and a jury, and resulted in a verdict in favor of the plaintiff. From this judgment the defendant appeals.

The facts are these: The respondent is a corporation located at Tacoma, Wash., and engaged in the business of buying and selling lumber, lath, and similar products. The appellant is a corporation located at San Francisco, and is also engaged in buying and selling such commodities. On the 12th day of October, 1914, these parties entered into an agreement in writing, in which the respondent agreed to sell and the appellant agreed to purchase lath, the amount of which was not specified in the contract, but there is now no controversy over the number of lath purchased or delivered. The contract, so far as here material, was as follows:

' Amount, Specification and Grade.--1 1/2X4' Douglas fir lath, usual California grade as per Domestic List No. 6.

' Inspection and Tally.--To be made at the expense of sellers by inspector of Pacific Lumber Inspection Bureau, in accordance with grading rules of Domestic List No. 6, its certificate to be final.

* * *

* * *

' Delivery.--F. a. s. exporting vessel Chicago-Milwaukee wharf, Tacoma, on flat cars or gons.

* * *

* * *

' Payment.--Buyer's San Francisco office to remit within five days after receipt of vessel's receipt for pieces. Invoices in sextuplicate and Bureau Inspection certificates in triplicate.'

It will be noted that this contract requires the lath to be delivered f. a. s. exporting vessel Chicago-Milwaukee wharf, Tacoma, on cars. On November 7, 1914, the contract having been executed during the previous month, the respondent was notified that the steamship Grace Dollar would, on or about November 11th, arrive in Tacoma to take the lath to San Francisco. The lath were loaded from the mill of the Eatonville Lumber Company on three gondola cars of the Chicago, Milwaukee & St. Paul Railway Company, and by this company transported to alongside the steamship Grace Dollar at Tacoma. While the lath were being loaded upon the cars at Eatonville, they were inspected by an inspector of the Pacific Lumber Inspection Bureau. Thereafter, and on November 10th, the inspector designated by the Pacific Lumber Inspection Bureau issued a certificate of inspection under the seal of the bureau. This certificate recited that the lath had been personally surveyed and inspected according to the grading and survey rules, 'as per Domestic List No. 6 adopted by the West Coast Lumber Manufacturers' Association.'

On November 12th the lath were taken aboard the steamship Grace Dollar and transported to San Francisco, where they arrived on November 21st, and the discharge thereof at the wharf of the Hart-Wood Lumber Company in that city was at once begun. When the lath were discharged from the vessel the appellant refused to accept them, because it claimed that they were not up to grade, 'as per Domestic List No. 6,' and, through its Tacoma manager, notified the respondent of this fact. Thereafter the parties, through their respective managers at Tacoma, had a number of conversations touching the controversy. On one or more occasions it was suggested by the manager of the appellant that a reinspection be had in San Francisco, but the manager of the respondent declined to accede to this request, claiming that the inspection made before shipment was, by the terms of the contract, final, and it was therefore binding upon the parties. However, on December 3, 1914, the respondent wrote a letter to the appellant, the substance of which is as follows:

'We have requested Mr. Alexander, of the Pacific Coast Lumber Inspection Bureau, to have their California inspector reinspect this stock. We do this with the idea that he certainly will confirm the inspection certificate, which we note your contract states plainly would be final, and that your people will then settle with us in full.'

On December 15, 1914, one A. F. E. Irwin, an inspector of the Pacific Lumber Inspection Bureau, in response to the respondent's request to that bureau for a reinspection, inspected the lath on the wharf of the Hart-Wood Lumber Company in San Francisco, and made a witten report thereof to the inspection bureau. This report is in the form of a letter, and is addressed to the Pacific Lumber Inspection Bureau, Incorporated, at its office in Seattle, Wash. The Irwin inspection did not confirm the previous inspection, but held that the lath were below grade. The appellant persisted in its refusal to make payment, and, finally, after notice, sold the lath to pay freight charges and storages which had accrued, and tendered the balance of the proceeds to the respondents. This tender was promptly refused, and the present action instituted, which, as above stated, was for the purpose of recovering the purchase price.

The first question relates to the ruling of the trial court in refusing to admit in evidence the letter or certificate of inspection of the San Francisco inspector, Irwin. The appellant advances two theories upon which it is claimed this letter should have been admitted. The first is that the parties had agreed to a reinspection, and that therefore the Irwin inspection superseded the previous inspection, and was controlling; but the report of this inspection was not admissible upon this theory. The parties, by their contract as above set out, had agreed that the lath should be inspected by the Pacific Lumber Inspection Bureau in accordance with grading rules of Domestic List No. 6, 'its certificate to be final.' Under this contract the lath were inspected when they were placed aboard the cars at Eatonville, and were found to meet the contract standard. Thereafter they were delivered f. a. s. the Chicago-Milwaukee wharf at Tacoma, as required by the contract. So far as the respondent was concerned, the contract then became an executed one.

The respondent claims that, since the contract was no longer executory on both sides, the subsequent agreement for a reinspection, assuming now that the letter above referred to constituted such an agreement, was of no validity because not supported by an independent consideration. The rule is that, while a contract remains executory on both sides, an agreement to annul on one side is a consideration for the agreement to annul on the other, but that, if the contract has been executed on one side, an agreement without a new consideration that it shall not be binding is without consideration and void. The rule is well stated in 9 Cyc. p. 593, as follows:

'While a contract remains executory on both sides, an agreement to annul on one side is a consideration for the agreement to annul on the other, and vice versa. On the other hand, if the contract has been executed on one side, an agreement without any new consideration that it shall not be binding is without consideration and void.'

This rule finds support in many adjudicated cases, only a few of which will be here assembled. Wilson v. Wilson, 115 Mo.App. 641, 92 S.W. 145; George v. Lane, 80 Kan. 94, 102 P. 55; Zerr v. Klug, 121 Mo.App. 286, 98 S.W. 822; Weed v. Spears, 193 N.Y. 289, 86 N.E. 10.

Applying the rule to the facts in the present case, the evidence fails to show an independent consideration, and therefore, since the contract had become executed on one side, it could not be modified except by an agreement supported by new consideration.

The appellant relies upon the case of Long v. Pierce County, 22 Wash. 330, 61 P. 142, but a careful reading of that case will disclose that the subsequent agreement there involved was made while the contract remained executory on both sides. The report of the San Francisco inspection was not admissible upon the theory that the parties had agreed upon this reinspection, and that the previous inspection had been superseded thereby. Something is said to the effect that the San Francisco inspection could as well be the one provided for in the contract as the inspection which took place at Eatonville, but the contract plainly contemplates but one inspection, and it is reasonably inferable from its terms that this inspection was to be made prior to the shipment.

The other theory upon which it is claimed that the report of the San Francisco inspector is admissible is that, in making the inspection, he was the agent of the respondent. This contention seems to be meritorious. As already pointed out there was no binding agreement for the reinspection, even if the parties had assumed to make such an agreement. The letter referred to and quoted from in the statement, by which the Pacific Lumber Inspection Bureau was requested to have its California inspector reinspect the lath, in effect, as we construe the letter, makes the bureau the agent of the respondent, and, if this be true, it follows that Irwin, in making the reinspection, would be the agent of the respondent. The letter recites that the inspection is requested 'with the idea' that it will confirm the previous inspection which the contract states should be final, and that then settlement will be made. The respondent claims that Irwin acted under the authority of this...