Canton Lumber Co. v. Liller

Pearce, J., delivered the opinion of the Court. This suit was brought to recover damages for an alleged breach of contract, The declaration alleges in substance that the defendant, the Canton Lumber Company of Baltimore City, agreed to sell and deliver to the plaintiff on or before July 1st, 1903, all the lumber necessary for the erection at Keyser, West Virginia, for the Baltimore and Ohio R. R. Co. of an ash pit, coal tipple and sand house, said lumber to conform to certain specifications set out in the declaration, and to be subject to B. & O. R. Co.’s inspection; the plaintiff to pay for same at the rate of $20 per thousand feet; but that the defendant did not deliver lumber conforming to said specifications, nor within the required time, and that the lumber delivered was inspected by the B. & O. R. R. Co. as provided by the contract; and was rejected as not complying with said specifications; and that because of said breach of contract the plaintiff was obliged to purchase in the open market about 466,837 feet of lumber at a price in excess of that agreed upon between the plaintiff and defendant, and to incur large addi ¹⁶² tional expense on account of the delay in procuring said lumber, the whole loss to the plaintiff being the sum of $8,961.21. The plaintiff obtained a judgment for $3,350, and the defendant has appealed. The case was tried upon the general issue plea, and there was considerable conflict in the testimony as to the specifications, and the inspection made, which resulted in the rejection of most of the lumber, and it will be necessary to summarize the more important parts of the evidence, before going into the law of the case.

The plaintiff and defendant had previous business relations, and there had been some correspondence between them in anticipation of the awarding of the contract for the erection of this coal tipple and sand house to the plaintiff by the B. & O. 'R. R. Co. In order to aid the plaintiff in securing this contract, the defendant named the price $20 per thousand at which it would be willing to furnish the necessary lumber, if the contract should be given to him, and he should determine to purchase the lumber from the defendant. On March 28th, 1903, the plaintiff wrote the defendant that 'the contract had been awarded to him, and that he would furnish defendant as soon as possible with list of sizes of material “which you are to furnish me at $20 per M. ft. all around, f. o. b. B. & O. cars your city.” He had previously bn March 24th, sent defendant an approximate list of the sizes of material, stating that as soon as the contract was actually awarded and signed he would furnish corrected list. On March 31st, he wrote defendants, enclosing corrected list of number of pieces, sizes, dimensions, and kind of lumber to be furnished.

The testimony of the plaintiff himself, and of Mrs. Ayer, his stenographer who wrote the letter of March 31st, was that upon the margin of this list there was written by the plaintiff in blue pencil, “All stock to be Ga. Y. P. or heart white oak, except what is marked N. C. Y. P. and all subject to B. & O. inspection.” On April 2nd defendant acknowledged receipt of revised list of material, and returned n order that all items of N. ¹⁶³ C. pine might be designated. On April 3rd plaintiff again returned the list marked as requested, and on April 4th defendant acknowledged receipt of same. These letters constitute the formal contract between the parties, together with the corrected- list of material.

The plaintiff himself testified that he made the blue pencil memorandum, “all subject to. B. & O. inspection,” on the corrected list of material before sending it to defendant on March 31st, but that memorandum was not on the approximate list sent defendant March 23rd, and that the original offer of $20 per M. was made on the approximate list. Mrs. Ayer, plaintiff’s stenographer, testified that she typewrote the letter of March 31st.and the corrected list enclosed and that she saw Liller write the blue pencil memorandum on that list at that time; that she saw this list when defendant returned it for notation of N. C. pine, and that the blue pencil memorandum was then on it, just as originally written. Mr-.

Virdin, secretary of defendant, testified that he conducted the correspondence of the company; that in the preliminary negotiations leading up to this contract Liller told him the lumber was for a coal tipple for the B. & ü. R. R. Co. and that he went over the estimated list with Liller, and was quite sure Liller understood that as high a grade of timber as they had been fnrnishing him, which was merchantable timber, was not required and therefore he could furnish it at $20 per M. He testified that when he received the corrected list of material in the letter of March 31st there was no blue pencil memorandum thereon, nor any reference to B. & O. inspection, and that he furnished the lumber in pursuance of plaintiff’s letter of April- 3rd already referred to. On cross-examination he said this corrected list was not •returned to him with letter of April 3rd, but only a carbon copy on which there was a marginal note as follows: “All stock to be G. Y. P. or heart white oak, except what is marked N. C. Y. P. all subject to B. & O. inspection,” but that he understood that was merely a matter between the plaintiff and the B. & O. R. R. under their contract with him, and therefore made no difference to defendant. ¹⁶⁴ -■ Mrs. Hamill, the defendant’s book-keeper and stenographer, testified that she copied the corrected list on April 2nd, before it. was returned to plaintiff for notation of N. C. pine, and that there was then no blue pencil memorandum thereon. The contract between the plaintiff and the R. R. Co. was not actually signed until April 22nd though awarded March 28th.

On March 23rd defendant wrote plaintiff, saying they understood “nothing was binding until papers are signed,” but asking for memorandum of sizes, &c., “so that we can do some figuring.” It was obviously in reply to this that the approximate list of March 24th was sent. The lumber was shipped to the plaintiff at Keyser where it was unloaded from the cars, was inspected by the B. & O. inspectors, and the greater part was condemned as not coming up to the specifications. The plaintiff cut up and used irt the construction of the tipple, a portion of the lumber which passed inspection, and the defendant subsequently removed the rejected lumber, and the plaintiff purchased other lumber elsewhere to enable him to fulfill his contract with the B. & O. R. R. Co. The plaintiff notified defendant on July 31st, 1903, that.Mr. James, one of the B. & O. inspectors, thought he would be obliged to condemn the lumber as not up to the specifications, and plaintiff in that letter said it was probable the B. & O. people would send an inspector from Baltimore to go over the whole lot, and advised defendant to have a representative on the ground also. There does not appear to have been any reply to that letter, but there are subsequent letters between the parties relating to that subject, in which the defendant apparently acquieces in the right of inspection bp the B. & O. R. Co. Thus on August 3rd plaintiff wrote defendant that he put in a whole forenoon with Mr. James, and that the outlook was better than at first appeared, but that the lumber then thrown out was nearly all saps or contained large unsound knots; that Mr. James was going to Baltimore that evening with samples he had sawed off, and that plaintiff was afraid there would be further trouble; that he was doing all he could for defendant in the matter and try ¹⁶⁵ ing for the sake of “Auld Lang Syne” to get them out of the matter as whole as possible.

On .August 4th defendant acknowledged plaintiff’s letter of the 3rd with thanks, and expressed the hope “that you will come out as well as you anticipate, saying “we can do nothing but await results.” On August 7th defendant acknowledged receipt of two letters, of 3rd and 6th inst. (which are not in the record) and expressed regret that the B. & O. people want to open the timber question again, and say “if they decide to put an inspector on this lumber, we think it would be better to have him come here and inspect what is on the steamer now as we load it on cars, so there will be no come back on that.” On August 8th plaintiff replied that he thought it would be best to hold upa day or two longer until the inspector reached Keyser and they could find out what he was going to do about lumber already there. In none of these letters, and in none of the correspondence prior to defendant’s letter of September 10th, is there any denial of the right of inspection by the B. & O. people, or any intimation of any dissent therefrom. Plaintiff had written defendant on September 9th notifying it of the final rejection of the lumber and that he should hold them liable for loss involved, to which they replied saying that the lumber came fully up to specifications, and declining to recognize any liability to plaintiff.

Mr. Virdin testified that he knew this lumber was for a tipple and sand house for the B. & O. R. R. Co. and that he knew whatever the plaintiff put in for B. & O. work was subject to its inspection, but that he furnished the kind and grade of lumber agreed upon between him and the plaintiff; he admitted that on August 10th he replied to plaintiff’s letter of the 8th inst., and said, “We think, as you, that it is best not to stir up the B. & O. people about an inspector, and if they decide to forget it; they will have our everlasting blessing.” He explained that in writing that letter, he was interested in Mr. Liller as a good customer, and did not want the lumber turned down, because he would have to compel plaintiff to pay for it. The blue print specifications governing the contract between ¹⁶⁶ plaintiff and defendant were as follows: “Lumber to be of good quality, free of large, unsound, or loose knots also free of sap or other defects which will materially affect its strength. It must be sawed to true dimensions and straight.”' The contract of plaintiff with the B. & O. R. R. Co. provides: “All timber must be sound and free from sap, loose or rotten knots, wind shakes, or any other defects, which would impair its strength and durability, and shall be acceptable to the engineer: it must be in addition to the above straight grained.and sawed perfectly straight and to the exact dimensions, with full corners and square edges.” Thus it will be seen that the latter specifications are some what more rigid than the former, though the difference is not very great. The two principal grounds of defense set up, are, first that there was go requirement for inspection by the B. & O. R. R. Co. and second that even if there were this requirement, the inspection made was under the specifications of the plaintiff’s contract with the B. & O. and not under the specifications of the contract between the parties to this suit.

The testimony upon the first of these defenses has already been referred to, and that upon the second will now be briefly stated. . ■ The plaintiff testified that the B. & O. R. Co. inspectors had no right to inspect on any other scale than that of the blue print specifications but that in fact the lumber was condemned under the blue print specifications alone and that he had repeatedly told Mr. Virdin that the lumber was subject to B. &' O. imspection. Four witnesses testified for the plaintiff as to how the inspection was made» Mr. Jones, a civil engineer, testified that in the spring and summer of 1903 he was in charge' of the construction of the new plant of the B. & O. R. R. Co. at Keyser, that he knew Mr. Virdin as the representative of the Canton Lumber Company, and that in a conversation with him' in reference to this lumber, Mr. Virdin admitted he knew it was to be subject to B. & O. inspection, and that it'was inspected under the blue print specifications; that he himself had originally had supervision, and when he found so much of the lumber unfit, he took the matter up with Bal ¹⁶⁷ timore and they sent up some of their regular inspectors, among them a Mr. Stottlemeyer; and that the lumber did not measure up to the blue print specifications; that is 80 or 90 per cent did not; that it was sappy, had a great many large knots, and some was badly wind shaken; some was soft and doty — it was inferior lumber; that knowing the lumber was defective, he hesitated to condemn it because of the delay this would cause in getting the plant in operation, and turned the inspection over to the lumber inspector; that when the inspector came he gave him the blue print and told him to go ahead. Mr. Stottlemeyer testified that he had no instructions; that Mr. James gave him the blue print specifications and that he went ahead according to these and to his own judgment as to what the lumber was to be used for; that he inspected all the lumber under the blue print specifications offered in evidence and that none of the lumber he rejected, measured up to these specifications. On cross-examination, he testified that he did not let the blue print govern his judgment entirely and that he inspected the lumber in accordance with what is merchantable lumber.

On redirect examination he testified he inspected the lumber “on his judgment as it applied to the specifications on the blue print, and that the lumber rejected did not measure up to these specifications, and that if it had measured up to them he would not have rejected it.” Mr. Andrews testified that in the summer of 1903 he was assistant engineer of bridges for the B. & O. R. R. Co., that he knew Mr. Virdin and talked with him in December, ig02, about some lumber the Canton Lumber Co. was proposing to furnish the B. & O. for round houses at Keyser, and that he then told Mr. Virdin all lumber purchased by contractors for B. & O. work, was subject to B. & O. inspection; that after the inspection of the lumber now in question by Mr. Stottlemeyer, that the witness and Mr. Clay made a final examination; that he had seen the blue print specifications, and; that the lumber did not come up to their requirements, anc| ¹⁶⁸ that was the reason he rejected it. On cross-examination he testified that he turned the lumber down both for the reason that it did not conform to the blue print specifications, and also that it was unñt for the purpose for which it was to be used; that Mr. Kinsman, engineer of construction, directed that the inspection should be made under the contract of Liller with the railroad company, but that it was in fact made not on the wording of that contract, but on the wording of the blue print, and that he and his associates “only took into consideration the specifications as written on the blue prints.” Mr. Kinsman testified that after receiving the report of Mr. Stottlemeyer, Mr. James and Mr. Clay, he himself saw the lumber, that there were two specifications, the blue print, and those in Liller’s contract with the R. R. Co. that -he could not state under which of these the inspection was made, but that in his judgment the lumber did not measure up to the blue print specifications; that he directed Mr. Alexander to have it inspected both under the contract of the R. R. Co., and under the blue print specifications, and that if inspected under either it would have been condemned. Mr. Virdin testified for defendant that there is a recognized custom in the lumber trade that upon inspection the buyer must accept all or reject all, unless the seller consents to acceptance of part and rejection of part, and Messrs. Edward P. Gill, Wm.

M. Burgan and Louis Dill, all experienced lumber dealers, testified to the same effect. Mr. Berryman, general manager of the defendant, testified that he was familiar with the grading of lumber and was at one time inspector for the Tunis Lumber Co.; that he saw this lumber when it was discharged from the steamer and loaded on cars and that it compared favorably to the grade required by the blue print specifications; that Mr. James told him the lumber was unfit for the work required, and that he was condemning it “not under the blue print specifications, but under other specifications, and also as to what it had to be used for.” He further testified that there was a- great difference between the specifications under which Mr. James ¹⁶⁹ was inspecting and those under which plaintiff had ordered the lumber, the former being much more exactingffn its requirements. John H. Younger and William A. Barnes, sworn inspectors of the Baltimore Lumber Exchange, testified that they were furnished with the blue print specifications in evidence. Mr. Younger testified that he made the inspection under these specifications, but as will hereafter appear was not allowed to state whether the lumber was such as was called for by the specifications.

Mr. Barnes testified that he only inspected the lumber on the Schooner Arragon arid that he did not know whether that was used by Mr. Liller or not, but that all he inspected would come up to the specifications. During the delivery of this testimony six exceptions were taken by the defendant to the rulings of the Court, and the seventh exception was taken to the ruling on the prayers. While the plaintiff was on the stand, after stating that his last dealing with the defendant had reference to the purchase of lumber for the coal tipple and sand house of the B. & O. R. R. at Keyser in 1903, he was asked this question, “Had the Balto. &