Weyerhaeuser Timber Co. v. First Nat. Bank of Portland

• Decision Date: 27 November 1934
• Citation: 150 Or. 172,38 P.2d 48
• Parties: WEYERHAEUSER TIMBER CO. et al. v. FIRST NAT. BANK OF PORTLAND et al.
• Court: Oregon Supreme Court

38 P.2d 48

150 Or. 172

WEYERHAEUSER TIMBER CO. et al. v. FIRST NAT. BANK OF PORTLAND et al.

Supreme Court of Oregon

November 27, 1934

Department 1.

Appeal from Circuit Court, Multnomah County; W. A. Ekwall, Judge.

Suit in equity by the Weyerhaeuser Timber Company, and others against the First National Bank of Portland, and others. From a decree, named defendant and another appeal.

Modified and, as modified, affirmed.

This is a suit in equity brought by the plaintiffs to recover the proceeds of certain lumber sold to the Henry D. Davis Lumber Company. The latter purported to assign a part of the invoices on resale to the First National Bank of Portland. From a judgment in favor of the plaintiffs, the First National Bank of Portland and Thomas H. Mills, as receiver of the Henry D. Davis Lumber Company, have appealed.

In February, 1932, and for some time prior thereto, the Henry D Davis Lumber Company, an Oregon corporation, was engaged in business in the city of Portland, Or., as a wholesale dealer in lumber. In the ordinary course of its business, it contracted to sell lumber to vendees procured by it, and would buy lumber from different manufacturers for resale to customers in different parts of the United States. The plaintiffs are each engaged in the manufacture and sale of lumber at plants within the state of Washington; the Long-Bell plant being at Longview, the Snoqualmie Falls Lumber Company's plant being at Snoqualmie Falls, and the two plants of the Weyerhaeuser Timber Company being one at Longview and one at Everett, all within the state of Washington. The Weyerhaeuser Sales Company, of Tacoma, Wash is a sales agent for the Weyerhaeuser Timber Company and the Snoqualmie Falls Lumber Company, and upon the receipt and acceptance by it of orders for lumber it allocates the same in its discretion, to and among the Snoqualmie Falls Lumber Company and the plants of the Weyerhaeuser Timber Company.

During the time from January 28, 1932, to February 13, 1932, both dates inclusive, the Weyerhaeuser Sales Company received from the Henry D. Davis Lumber Company seven orders for lumber for water shipment. Six of these orders directed that the delivery be made F. A. S. Ship's Tackle, Mill Dock, and designated, as the places of final destination, points on the Atlantic Coast, and one order directed delivery F. A. S., Everett Harbor, on board scow, designating Bremerton, Wash., as the place of final destination. Each of these orders specified the terms: "100% advance less 2% discount 15 days." The Weyerhaeuser Sales Company would not accept any of the orders on such terms, and immediately upon receipt of each order it mailed to the Henry D. Davis Lumber Company an acknowledgment thereof, but specified the terms as "Terms 98% Cash in Exchange for Documents," and on each of such acknowledgments was plainly printed the following: "Order accepted as written hereon. Please advise at once if not satisfactory." The Henry D. Davis Lumber Company made no objection to the cash terms, as stated in the acknowledgement. An officer of the Henry D. Davis Lumber Company, on the trial, testified, in substance, that the time for payment, of fifteen days' credit requested, was so short, and that there was so little difference in the proposition of the sales company, that he did not take the matter up with the sales company, as he would if he had not accepted the proposition as made by it to the Henry D. Davis Lumber Company, and they proceeded with the carrying out of the order as accepted by the sales company, and, no objections to the terms having been made, the Weyerhaeuser Sales Company allocated the orders, two to the Snoqualmie Lumber Company and the other five to the two plants of the Weyerhaeuser Timber Company, and they were all filled in due course, the shipments in each case being two weeks or more subsequent to the receipt of the order and submission of the acknowledgment. Upon the different shipments being made, the documents, consisting of invoice, mate's receipt, and P. L. I. B. (inspection certificate) were mailed to the Henry D. Davis Lumber Company at Portland, Or., and were duly received by it.

In the case of the Bremerton shipment there was no mate's receipt, the shipment being by scow. The invoice in each case plainly stated the terms of sale, as had been stated previously in the acknowledgment of the order, namely, "Terms 98% Cash in Exchange for Documents," copies of the invoices being attached to the complaint and marked as exhibits.

On January 28, 1932, the Long-Bell Lumber Sales Corporation received an order for lumber from the Henry D. Davis Lumber Company, to be shipped by water. This order directed delivery F. A. S. Ship's Tackle, Mill Dock, and designated points on the Atlantic Coast as the places of ultimate destination. This order also specified the terms as "100% Advance Less 2% Discount 15 Days." The Long-Bell Lumber Sales Corporation would not accept the order on such terms, but on the following day, January 29, 1932, mailed to the Henry D. Davis Lumber Company an acknowledgment of the order specifying the terms as "Cash Less 2% upon Receipt of Papers," and there was plainly printed on such acknowledgment a notice that the order was accepted on the terms written thereon and to advise at once if the terms were not satisfactory. This acknowledgment was accompanied by a letter calling attention to the change in terms and advising the Henry D. Davis Lumber Company that the lumber would only be sold on cash terms. The Henry D. Davis Lumber Company made no objection to the cash terms as contained in the acknowledgment. As explained in the testimony of one of its officers, the order was filled by the Long-Bell Lumber Sales Corporation and then later the company, upon completing delivery, prepared and mailed to the Henry D. Davis Lumber Company at Portland, Or., the proper documents consisting of invoice, mate's receipt, and P. L. I. B., and the same was duly received.

The invoices stated the terms as contained in the acknowledgment, namely, "Cash Less 2% Upon Receipt of Papers," copies of the invoices being attached to the complaint and marked as exhibits. The shipment of such lumber was from three to four weeks subsequent to the receipt of the order and the submission of the acknowledgment. The deliveries of all of the aforesaid lumber were made from February 15 to February 27, 1932, both dates inclusive. None of the plaintiffs were ever paid for any of such lumber. The sales involved, or rather the proceeds thereof, are in somewhat different categories. The appellant bank is not interested, other than as trustee, in some of them. One shipment was resold by the original purchaser to private parties, while the others were resold to the government. The Bremerton shipment was delivered to the subpurchaser prior to the notice of stoppage in transitu.

The different sales are arranged and classified in parcels as follows: (Parcel 1) lumber sold by Snoqualmie Falls Lumber Company, described in the invoices, amounting to $656.34; (parcel 2) lumber sold by Weyerhaeuser Timber Company, described in the invoices, amounting to $2,176.14; (parcel 3) lumber sold by Weyerhaeuser Timber Company and described in the invoice, amounting to $416.58; (parcel 4) lumber sold by Weyerhaeuser Timber Company, described in the invoice, amounting to $1,980.56; (parcel 5) lumber sold by Weyerhaeuser Timber Company and described invoice, amounting to $1,197.37; (parcel 6) lumber sold by Weyerhaeuser Timber Company and described in the invoice, amounting to $205.13; (parcel 7) lumber sold by Weyerhaeuser Timber Company and described in the invoice (Exhibit G) amounting to $1,928.94; (parcel 8) lumber sold by Long-Bell Lumber Sales Corporation, described in the invoice, amounting to $1,974.65; (parcel 9) lumber sold by Long-Bell Lumber Sales Corporation, described in the invoice, amounting to $2,949.09.

The Henry D. Davis Lumber Company caused parcel 7 to be transported to Bremerton, Wash., by scow and there sold and delivered to the United States Navy Department. Soon after the Henry D. Davis Lumber Company received the documents for the other parcels, it procured bills of lading therefor and caused the lumber to be shipped to subpurchasers on the Atlantic Coast, designating in the bills of lading the Henry D. Davis Lumber Company as shipper and the subpurchasers as consignees. None of the plaintiffs were advised of this. All of the bills of lading were straight nonnegotiable bills of lading; no order bills of lading were taken.

The Henry D. Davis Lumber Company made out invoices on its own forms to its subpurchasers for the amounts of the subpurchase money and purported to assign such invoices covering all of the lumber, excepting parcels 1 and 2, to the appellant bank. The bank is not interested in the proceeds of parcels 1 and 2, excepting as trustee.

On March 5, 1932, the Henry D. Davis Lumber Company, being insolvent, made a general common-law assignment for the benefit of its creditors, and all of the lumber involved, excepting parcel 7, was then still on board ships and in course of transit to the subpurchasers on the Atlantic Coast of the United States. Upon learning of such assignment, and of the insolvency of their vendee, each of the respondents gave notice of stoppage in transitu to the carriers transporting the lumber, notifying such carriers that the title to the lumber had not passed from the respective respondents, for the reason that the same was sold as a cash sale and the purchase price had not been paid, and that, in event the title had passed, respondents claimed the right of stoppage in transitu, as unpaid sellers.

An agreement was then made between all of the parties hereto excepting the appellant...