Weyerhaeuser Timber Co. v. First Nat. Bank

Decision Date23 April 1935
Citation43 P.2d 1078,150 Or. 172
PartiesWEYERHAEUSER TIMBER CO. et al. v. FIRST NAT. BANK OF PORTLAND et al.
CourtOregon Supreme Court

In Banc.

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

On rehearing.

Decree modified and, as modified, affirmed.

For prior opinion, see 38 P.2d 48.

Unpaid sellers of lumber held not entitled to proceeds which were assigned by buyer, notwithstanding sale was for cash, where invoice for shipment showed that lumber was to be shipped to buyer and by assenting to such shipment sellers consented to ownership and dominion over lumber by buyer. ORS 75.180.

V. V. Pendergrass, of Portland (Pendergrass, Roehr &amp Zollinger, of Portland, on the brief), for First Nat. Bank of Portland.

W. E Heidinger, of Tacoma, Wash. (Chas. H. Paul, of Longview Wash., and D. V. Kuykendall, of Klamath Falls, on the brief), for respondents.

BEAN, Justice.

This is a rehearing in a suit in equity brought by the plaintiffs to determine the right to the proceeds of certain lumber sold to the Henry D. Davis Lumber Company. Our former opinion is reported in 38 P.2d 48, where a full statement of the facts may be found. The Henry D. Davis Lumber Company purported to assign a part of the invoices on resale to the First National Bank of Portland. The lower court found a decree in favor of plaintiffs for the full amount; the First National Bank of Portland and Thomas H. Mills, as receiver for the Henry D Davis Lumber Company, appealed.

There were involved nine parcels of lumber sold by plaintiffs to the defendant company, and, in our former opinion, we found that the bank was entitled to the proceeds of parcel 7, lumber sold by the Weyerhaeuser Timber Company and described in the invoice, Exhibit G, amounting to $1,928.94, known in the record as the Bremerton shipment. No rehearing was asked in regard to this parcel of lumber, and therefore it is out of the case, except in so far as the circumstances in regard thereto might have a bearing on other parts of the case.

During the time from January 28, 1932, to February 13, 1932, both 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 delivery be made F. A. S. Ship's Tackle, Mill Dock, and designated as places of final destination points on the Atlantic Coast. The orders contained the words, of which the following is a sample: "Vessel destined to Philadelphia, Pa." The other orders named different places. Each of these orders specified the terms "100% Advance Less 2% Discount 15 Days." The Weyerhaeuser Sales Company seemingly was better informed, in regard to the financial standing of the Henry D. Davis Lumber Company, than the defendant bank, and refused to accept any of the orders on such terms, and, immediately upon receipt of each order, 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 acknowledgment.

Mr. W. W. Conger, who made most of the purchases for the Henry D. Davis Lumber Company, upon 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, that he did not take the matter up with the Sales Company, as he would if he had not accepted the terms as made by it to the Henry D. Davis Lumber Company. On cross-examination, he testified in part: "Q. When I say insisted, I mean you tried to get 15 days, and they came back and said, 'No, we want cash?' A. Yes, that is right."

They proceeded to carry out the order as accepted by the Sales Company, and, no objection to the terms having been made to the Weyerhaeuser Sales Company, the Weyerhaeuser Sales Company allocated the orders, two to the Snoqualmie Lumber Company and the other five to the plants of the Weyerhaeuser Timber Company. They were all filled in due course, the shipments in each case being about two weeks 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 received by it.

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 the point of ultimate destination was designated as follows: "Vessel destined to Norfolk, Va." This order also specified the terms: "100% Advance Less 2% Discount 15 Days." The Long-Bell Lumber Sales Corporation would not accept the order on such terms, and, on the following day, 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 be sold only on cash terms. The Henry D. Davis Lumber Company made no objections 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 the company prepared and mailed to the Henry D. Davis Lumber Company of Portland, Or., the proper documents, consisting of invoice, mate's receipt, and P. L. I. B., which were received. All of the invoices stated the terms as contained in the acknowledgment, namely, "Cash Less 2% Upon Receipt of Papers." Copies of the invoices were attached to the complaint and marked as exhibits. The shipment of the Long-Bell lumber was from three to four weeks subsequent to the receipt of the order and the submission of the acknowledgment. The deliveries of all the aforesaid lumber were made from February 15 to February 27, 1932, both dates inclusive.

It appears from the testimony that the Henry D. Davis Lumber Company well understood that the terms of the sale of the lumber was cash upon receipt of documents or papers, and it drew checks in favor of the respective plaintiffs for the amounts due them, but failed to mail the checks to plaintiffs, and none of the plaintiffs were ever paid for any of such lumber. The proceeds of the sale involved are in somewhat different categories. The appellant bank is not interested, other than as trustee, in parcels 1 and 2. One shipment was resold by the Henry D. Davis Lumber Company to private parties and the others were sold to the government. Soon after the Henry D. Davis Lumber Company received the documents for the parcels of lumber shipped to the Atlantic Coast, it procured bills of lading therefor and caused the lumber to be shipped to purchasers on the Atlantic Coast, designating the Henry D. Davis Lumber Company in the bills of lading as shipper, and the subpurchasers as consignees. None of the plaintiffs were advised of this. All 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 copies of such invoices covering all the lumber, except parcels 1 and 2, to the appellant bank.

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 (except parcel 7) was then still on board ships and in the course of transit to subpurchasers on the Atlantic Coast of the United states.

Upon learning of such assignments, and of the insolvency of the Henry D. Davis Lumber Company, each of the plaintiffs 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 plaintiffs, for the reason that same was sold as a cash sale and the purchase price had not been paid, and in the event that title had passed, plaintiffs claimed the right of stoppage in transitu as unpaid sellers.

A stipulation was then entered into between all of the parties hereto, except the appellant receiver who had not yet been appointed, whereby it was agreed that the plaintiffs should each withdraw their notices of stoppage in transitu; that the lumber should be delivered to the subpurchasers and the appellant bank would collect the purchase money payable by the subpurchasers and hold the same in a special trust fund in lieu of the lumber; and that all rights, and interest of each and all of the parties involved, to any of the lumber mentioned in plaintiffs' complaint, or the proceeds thereof, should be determined in one judicial proceeding, to which all parties interested should be made parties plaintiff or defendant. After the appointment and qualification of said receiver, the court made and entered an order making him a party to said agreement and to such proceedings. Upon the signing of said stipulation, each of the plaintiffs withdrew its notice of stoppage in transitu and the lumber was delivered to the respective purchasers. The net proceeds of the different parcels involved were collected by the receiver and...

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