Wis. Sulphite Fibre Co. v. D. K. Jeffris Lumber Co.

• Citation: 111 N.W. 237,132 Wis. 1
• Parties: WISCONSIN SULPHITE FIBRE CO. v. D. K. JEFFRIS LUMBER CO. ET AL.
• Decision Date: 19 March 1907
• Court: United States State Supreme Court of Wisconsin

132 Wis. 1

111 N.W. 237

WISCONSIN SULPHITE FIBRE CO.

v.D. K. JEFFRIS LUMBER CO. ET AL.^a1

Supreme Court of Wisconsin.

March 19, 1907.

Appeal from Circuit Court, Outagamie County; John Goodland, Judge.

Action by the Wisconsin Sulphite Fibre Company against the D. K. Jeffris Lumber Company and another. From a judgment in favor of plaintiff, defendants appeal. Modified and affirmed.

This is an action to recover a balance claimed to be due upon a contract for the manufacture and sale by the defendant lumber company of a large quantity of lumber from logs belonging to the plaintiff. The contract was made in March, 1896. At that time the plaintiff owned between 4,000,000 and 5,000,000 feet of pine saw logs which had been cut during the previous winter, the most of which were banked in Trap Lake near Monico Junction and a small portion at a railroad siding two miles north of Monico. The plaintiff owned no sawmill, but the defendant lumber company owned and operated a mill at Jeffris about 20 miles distant from Monico. The contract provided that the defendant lumber company should load all the logs above referred to on cars, and take them to the mill at Jeffris, and there saw them into lumber, shingles, lath, and lumber products to the best advantage of all parties, pile the same separately, plane the same as far as necessary to make advantageous sales, make sale thereof as far as possible to the best advantage from time to time, load and ship on cars and collect all moneys due on sales as far as possible with due diligence, insure the product for the use of the parties, and perform all the conditions in a workmanlike manner, using due diligence in collecting the money due on sales. It was further provided that plaintiff was to be paid out of the first proceeds received from sales “at the rate of $5 per 1,000 log measure until the same shall be fully paid.” After this payment the defendant lumber company was to retain from the proceeds of sales the actual cost of removing, hauling, sawing, piling, planing, selling, loading, and insuring, and the balance was to be divided equally between the two parties. The work of sawing was to begin July 15, 1896, and continue night and day. Monthly statements of sales were to be furnished, and monthly remittances and annual settlements were to be made. The lumber company was to keep the logs and product free from liens and incumbrances, and to carry accident insurance so as to prevent liability from accidents to employés, and the “logs and products” were to be kept separate. Other provisions relating to the division of insurance moneys in case of fire are not material here. The contract contained no provision stating how the “log measure” on which the defendant was to pay the plaintiff $5 per 1,000 feet should be determined.

Soon after the execution of the contract, the defendant company transported the logs banked at the siding by rail to Jeffris, and dumped them in the mill pond or small lake at the mill, and inclosed the same in a separate boom. These logs made 85 car loads, averaging somewhere from 4,000 to 5,000 feet to the car. The lumber market was depressed during the summer of 1896, and the parties concluded that it would be best to postpone the manufacture of the lumber to the following year, and the logs in the lake at Monico were left there until the spring of 1897. In August, 1896, however, an order was received by the defendant company for eight by eight timbers, and the defendant commenced the manufacture of the same from the plaintiff's logs. The logs were not scaled as they went into the mill, and there is a dispute as to how many feet of logs were then manufactured; the plaintiff claiming that more than 100,000 feet were sawed, while the defendant claimed that not more than 40,000 to 50,000 feet were then sawed, and the referee found that the amount did not exceed 100,000 feet. Of the amount so cut, one car load, containing 11,648 feet, was immediately shipped to fill the order for timber. According to the defendant's testimony, the balance then cut was piled separately in the defendant's millyard. The defendant claims that, soon after this cutting, an oral supplemental agreement was made by which the scale of the logs on which the $5 per 1,000 was to be made was to be determined by deducting 25 per cent. from the scale or tally of the No. 3 and better sound lumber cut from the logs. This is denied by the plaintiff, and the referee made no finding on the subject. It is admitted that the following written agreement was made May 6, 1897: “It is further agreed that the D. K. Jeffris Lumber Company are to start sawing on Wisconsin Sulphite Fibre Company's logs not later than June 1, 1897, and that the log scale shall be determined by deducting 25 per cent. from the actual scale or tally of sound lumber cut from aforesaid logs.”

In the spring of 1897, the boom inclosing the remainder of the siding logs in the millpond at Jeffris broke, and the greater portion of the logs escaped into the lake and mixed with the defendant's logs, all of which had been cut during the immediately preceding winter. Defendant claims that the plaintiff's logs were easily recognizable, and were at once marked, and that the greater portion of them as they came to the mill were placed in a pocket by themselves. Plaintiff claims, however, that many, if not most, of them were manufactured into lumber indiscriminately with defendant's logs, and went into the defendant's piles. Early in June, 1897, the defendant put in loading works at the lake at Monico, and took out the logs in the lake and transported them by rail to Jeffris. June 24, 1897, the defendant commenced sawing the plaintiff's logs, and sawed exclusively thereon until September 6th, when all had been sawed except a few deadheads subsequently picked up. During this time the plaintiff employed two men, Dennis and Tubbs, who scaled the logs on the log deck as they came into the mill; one working during the day and the other at night. Their scale aggregated 3,584,540 feet. The tally at the tail of the mill during this time showed a cut of 4,039,286 feet of lumber of all grades. The defendant's testimony tends to show that all of this lumber, together with the amount previously cut, was piled in a separate place and marked with an “M.” The defendant company had a large amount of its own lumber in the yard. It did a large wholesale business. There were no cash or retail sales. All the lumber sold went out by cars. When orders were received, they were filled from defendant's piles and plaintiff's piles, as was most convenient, and in a large majority of the cases there was lumber from both stocks. The defendant's employés were instructed to keep the Monico stock shipped in separate items marked “M” on their tally cards as they made shipments, and testified that they did so. These tally cards were turned in at the office and the bookkeepers were instructed to keep account of the Monico stock sold and shipped, and it appears that they attempted to do so. The defendant's mill was burned in December, 1897, and soon after this the books of account were moved to Janesville, where they were afterwards kept. The defendant claimed that, under the supplemental agreement, the amount of logs on which it should pay $5 per thousand was to be determined by deducting 25 per cent. from the total amount of sound lumber No. 3 and better tallied into cars according to the books from the Monico stock, and adding thereto a small remnant left unsold in the yard in November, 1899, viz., 39,184 feet, which was inventoried by the parties at that time and sold to the defendant; that the total amount of all grades as so ascerained is 4,060,646 feet, of which 3,374,805 feet was sound lumber No. 3 and better, three-fourths of which amount is 2,476,224 feet, which, at $5 per 1,000 amounts to $12,381.12 to be paid for the logs. The defendant also claimed that the total amount received on sales of lumber was $44,443.25, and that, deducting from this the $12,381.12 to be paid for logs, there was left a balance of $32,062.13 as the proceeds of sales on joint account. The defendant claimed to have paid $11,800 on the log account, leaving $581,12 due thereon. It also claimed that the expense account aggregated $28,577,69, leaving a balance on the joint account of $3,484.44, one-half of which belonged to the plaintiff, viz., $1,742.22, making a total on log and joint account of $2,323.34, to which should be added certain other items, resulting in a total balance due plaintiff January 1, 1902, of $2,751.80. The plaintiff claimed by its original complaint that the amount due on the log account and the point account over and above payments and expenses was $43,500, and upon the trial an amendment to the complaint was allowed by which a claim for damages in the sum of $25,000 for failing to use diligence in removing the logs and for negligent and unworkmanlike manufacture was also claimed.

The action was referred to a referee for trial. The referee found by his twentieth finding that the original agreement for the manufacture of the lumber was made by the parties, and that it was supplemented by the agreement of May 6, 1897, both of which have been previously stated. In this connection he further found: “That there was no consideration paid by defendant to procure the execution or the modification of the contract, and it was not the intention of the parties in executing said modification to rely upon the sound lumber scale; that there is no such grade known among manufacturers of lumber as ‘sound lumber’; that under all the agreements made between the parties the plaintiff is entitled to $5 per 1,000 feet upon the actual scale of the logs after deducting 25 per cent. from said actual scale. The actual scale of lumber of No. 3 and better cannot be determined, owing to the imperfect manner of keeping tally and keeping the books of the defendant.” The referee...