Dexter Sulphite Pulp & Paper Co. v. McDonald & Fisher

Jones, J., delivered the opinion of the Court. In this case the appellees sued the appellant in the Court below alleging in the first count of their narr. that they were wholesale paper dealers and that the defendant was a corporation engaged in the manufacture of paper; that on the 19th of December, 1902, the Government of the United States issued printed forms for proposals for furnishing rope Manilla paper for the public printing and binding from March 1st, 1903, to February 29th, 1904; that the appellees informed the appellant that they intended proposing to furnish to the Govern ³⁸³ ment the said paper and requested the defendant to name to them a price which it would charge for manufacturing said paper of which they sent to the appellant a sample; that the appellant named to them a price on the basis of which they made a proposal to furnish to the Government said paper; that the appellees were the lowest bidders on the said proposal and had awarded to them a contract to furnish said paper and were required to give a bond of indemnity to secure the performance of the said contract; that they notified the appellant of the same and it thereupon agreed with the appellees to manufacture for and furnish them the paper necessary to carry out said contract — said paper to be in accordance with the sample theretofore furnished the appellant “and to be delivered in Washington at the price of four dollars and seventy cents ($4.70) per hundred pounds less four per cent asa commission on and less three per cent discount for payment within thirty days, no discount or commission to be allowed on freight;’’ that the appellees thereafter demanded of the appellant the .paper and it refused to deliver the same. And in •the second count that the appellant agreed to manufacture for the appellees a quantity of paper — the same to be in accordance with a sample furnished by the appellees to the appellant but refused to so manufacture said paper. The defendant filed the general issue pleas and the case was tried before a jury.

The questions in the case are brought up by eight exceptions to the rulings of the Court below; the eighth of which is to the action of that Court upon the prayers of which the appellees, as plaintiffs below, offered three and the appellant, as defendant, eight. The Court granted all of the former and refused all of the latter. The principal question in the case is presented by this action of . the Court upon the prayers. Other exceptions relate to questions arising on rulings upon the evidence.

The evidence consists for the most part of a voluminous correspondence between the parties extending over a period of several months from the 20th of December, 1902, to the 6th of July, 1903. The reciprocal rights and obligations of ³⁸⁴ the parties with reference to which the questions raised in this case are to be determined depend upon the effect to be given to what appears in this correspondence. In passing upon these questions therefore it will be necessary to set out and ascertain the purport of what thus appears. On the 20th of December, 1902, the appellees wrote the appellant as follows: “Baltimore, Md., Dec. 20, 1902.

Dexter Sulphite Pulp & Paper Co. Dexter, N. Y. Gentlemen: The Government Printing Office will open bids on Jan. 12th, for three thousand and five hundred reams, they call Rope Manilla, but we are pretty sure there is no rope in it. We enclose you a sample and would like to bid for you on this item, as we were so successful with your paper in the Interior De.partment, and they like it very much. This item was awarded last year, we think at five and oqe-tenth cents, but will advise you positively about this in a few days. The paper is called for in several sizes all good sizes and weights.

It is put up flat in frames, and is trimmed square on four sides, and the orders are always good large ones, and nice runs. We should like to bid on these different Washington orders for you, and feel that if you want the. business we can get you a good share of it, and be as successful with your paper as any one. If you do not care to bid, will you kindly return our samples. In bidding on the Government Printing Office, you do not need to submit a sample, but must be to match the Government Printer’s sample in strength, etc., which we think would not be very hard to do with your papers.” (Signed) McDonald & Fisher, per McD, It was, in connection with the offer in evidence of the foregoing letter, testified that the sample of paper which would be wanted as indicated therein, was sent to the appellant with the letter.

On December 22d, 1902, the appellant replied to the letter of the appellees just set out as follows: Messrs. McDonald & Fisher. Gentlemen: Replying to yours of the 20th. The sample of paper which you have sent us, as rope Manilla, contains no rope whatever.

We note that it calls for a tensile strength of 55 on a Mullen Testor. Of course we can get a great deal better test than this. Now in reference to price. You gentlemen go ahead ³⁸⁵ and get the order if you can get it anywhere near the price which you mentioned, and we will stand back of you.

The paper we would furnish you would be up to requirements both as to color, finish, tensile strength, and everything else. We therefore trust you will be successful. (Signed) Dexter Sulphite Pulp & Paper Co. On the 24th of December, 1902, the appellees wrote to the appellant this letter: Dexter Sulphite, Pulp & Paper Co. Gentlemen: We enclose you samples, which the Government Printing Office are issuing and asking for a price on thirty-five hundred reams. This paper was awarded last year at five and one-tenth cents per lb. delivered in Washington.

As rope paper was very high last year, we doubt whether there was any rope in the paper furnished. Please let us know if you would like to bid on this item, and what price you can guarantee to match the sample enclosed, price to hold good for a year. They go a great deal in the Government Printing Office on test of the Morrison Machine, and we think your papers would out test the enclosed. We should like to bid for you, and will put in your price, subject only to a' cash discount of four per cent., so please make your price delivered the department with the understanding, that when we pay the bill, take off four per cent., we to put in the price you give us.

Please make your price delivered in Washington as you now have freight there, which you got for the Interior contract. (Signed) McDonald & Fisher. The appellees wrote again on the 26th of December, 1902, as follows: Dexter Sulphite, Pulp & Paper Co. Gentlemen: We have yours of December 23d in reference to the paper for the Public Printer and thank you for the same. We felt sure that there was no rope in the paper, and that your paper would out test it.

You do not have to supply a sample to bid on this order, but to bid to match the sample of the Public Printer enclosed, in color, strength and finish, and there must be no ground wood in the paper. These are the requirements of the Public Printer. Now as we said before, delivered in Washington. The paper is to be trimmed on four sides, put up flat and in frames, two reams to the bundle, and is always ³⁸⁶ good large sizes, heavy weights and long runs.

Now we want you to look at this sample, and to make us your price for same, and we will make our price to the Public Printer. We do not know just how the price will go this year, as this is not very much of a sample for quality. Some of the jute mills may go less, so we want you to make us the very best price, at which you will match this sample, delivered in Washington, less your usual cash discount 2 f0 for thirty days, 3 % for ten days, and as said above, we will make our price to .the Public Printer, and try to win the order, and we ask you if any one else, in or outside of Baltimore, asks you for a price for this order that you will not give it to them, but trust yourselves to us, on this department business, we will appreciate it, and bid for you only. We expect to have an order for another car load for the Interior Department in a day or two, and will give you all the time we can to make the order.

These prices go in January 12th, so we should like to have your price at once. (Signed) McDonald & Fisher, per McD. On the 28th of December, 1902, the appellant wrote the appellees: Messrs. McDonald & Fisher.

Gentlemen: Your two letters under dates of Dec. 24 & 26 at hand and answering same we beg to say that we will quote you in accordance with the sample which you enclosed a price delivered in Washington, of $4.70 per 100 lbs. As we understand the matter, this price will be for delivery in car load lots, as it is under this freight rate that we are bidding. You understand the terms of payment would be net payment in 30 days from date of invoice less 3 % for payment within 10 days; you would be allowed a commission of 4 % of the sale, to all of which we agree, it being understood of course, that there would be no discount or commission taken off for freight; the freight would have to be net. We trust of course that you will succeed in landing this business. * * * (Signed) Dexter Sulphite, Pulp & Paper Co. Secy.

Answering this letter the appellees wrote January 5th, 1903. Dexter Sulphite Pulp & Paper Co. Gentlemen: Replying to yours of Dec. 28th we shall bid on your paper in the Government Printing Office alone, and not receive bid ³⁸⁷ from any one else. Paper to match the sample we sent you in color and finish, and test to be equal to or better than that printed on the sample. In other words, a tensile of 55 on the Mullen Tester to 'the thickness of 5 Micrometer Gauge.

We simply mention this to have the thing plain, as we have no doubt, as you say in yours of Dec. 22nd that you can get a great deal better test than called for. Now the price is to — four dollars and seventy cents per 100 lbs. delivered in Washington, car load lots from which we are to deduct the selling commission of 4% and 3 % for cash in thirty days. In your letter you say ten days, but the Government does not pay that quickly. It takes at least ten days to get the paper delivered and at least thirty days before we get our money, and as the orders might be large, rve should want to pay you when the Government pays us, which is in thirty days, so we ask you to change that part of your quotation if you will, and make 3 % thirty days from date of invoice.

We think this makes the matter plain, and we ask you if it is satisfactory. If so, we will go ahead on these terms, and hope to get the order. You understand that if we get this order, you will have to fill all requisitions in thirty days. * * * (Signed) McDonald & Fisher per McD. On January 6th, 1903, the appellant wrote.

Messrs. McDonald & Fisher. Gentlemen: We have your favor of Jan. 5th and note contents. In reference to 3 % discount for cash in 10 days would say that we shall waive this and make it 30 days as "you request.

We have taken into consideration the points referred to in refererence to weight, tensile strength of paper, etc., and believe we will experience no trouble in this direction. Trusting that you may be successful in landing this order, &c. * * * (Signed) Dexter Sulphite Pulp & Paper Co. Secy. January 13th, 1903, the appellees wrote that they were the lowest bidders “on the Rope Manilla Items” for which the appellant had given them price in the Government Printing Office. January 26th, 1903, the appellant wrote the appellees: “We are very pleased to note that you landed the order for the rope paper.

We shall be in a position to take care of you when called upon to do so.” On the same date the appellees wrote appellant: “As we have written you, the award at ³⁸⁸ the Govejnment Printing Office on your paper has been made to us, and the contract goes into effect March 1st. Please let us know if the accident which we heard has occurred at your mill, will delay you making this paper * * *” January 29th, 1903, the appellant wrote: “Answering your favor of the 26th beg leave to say that, as we wrote you a day or two ago, we have succeeded in buying large.quantities of the best foreign and domestic sulphite which approach ours in anyway as to quality, and are keeping our paper mill in operation continuously so that we do not expect we will have any trouble in filling your government orders. ” In this connection there was evidence that the áppellees were in the wholesale paper business and that the appellant operated a large mill as manufacturer of paper. In pursuance of the award by the Government Printing Office to the appellees of the contract for furnishing paper referred to in the foregoing correspondence, they executed to the Government a contract dated February 2nd, 1903, to furnish rope Manilla paper, &c., for one year from the 1st day of March, 1903, to the 29th day of February, 1904. Among other things this contract provided that the paper was “not to contain in its manufacture any ground wood or mechanically prepared wood pulp, nor bleached or unbleached sulphite pulp in greater quantities than in the standard sample;” and among the specifications accompanying the contract was one that “no paper containing mechanically prepared wood pulp, or ground wood, will be received in any instance.

Paper will not be received which contains bleached or unbleached sulphite pulp in greater quantities than in the standard sample.” It appears in the evidence that to determine the correspondence between the Government sample and the paper to be furnished under the contract of the appellees as respects the presence in the paper of ground wood or sulphite pulp the paper would be subjected to a certain acid test. There was not in the contract nor in the specifications any reference to the acid test and no stipulation in regard to its application. The appellees made their bid for, and obtained, the contract in question for fur ³⁸⁹ nishing paper at the price of $4.90 per 100 pounds for 3,500 reams of the size and weight required. The appellant never furnished any paper under the contract, whatever that may be found to have been, that it had with the appellees either to the Government or to the appellees for the Government.

As a defense to this suit brought upon this failure to furnish the paper in question, and as going to the construction and effect of the contract it had with the appellees, the appellant urges that, in making the contract with the Government for the furnishing of the paper in question, the appellees were factors; and that the meaning of the contract between the appellant and the appellees, as extracted from the correspondence, is that the latter were to make the bid for the contract with the Government “for and on behalf of" the appellant, and at the price named by it. .That the appellees, not observing their- duty to the appellant, departed from the authority given them and, without the appellant’s knowledge, put in a different bid. That by this bid they secured a better price for the paper than that named to them by the appellant, and now claim to have made their bid and secured the contract with the Government on their own account. That a fraud was thus practiced upon the appellant and no obligation was imposed upon it to furnish the paper to carry out the undertaking of the appellees with the Government. The appellant sets up also the further defense, that, at the time of making the contract with the appellees for furnishing paper, it was not informed that such paper would be submitted to, and would have to stand, the acid test spoken of in evidence, in consequence of which it was called upon to furnish paper it had not contracted to furnish.

On the other hand the appellees have .brought their suit on the theory that they had with the Government a contract to furnish paper as specified therein; and with the appellant a contract of purchase of paper of the kind so specified to be manufactured and supplied in quantities and at the time stipulated for, to enable the appellees to carry out their contract with the Government. ³⁹⁰ The question thus raised as to the construction of the contract, which is the cause of action in the case, is one upon the decision of which the disposition of all other questions presented by the record will depend. It is therefore the one to be first determined. As has been said the evidence of the contract between the parties before the Court is be found in the correspondence contained in the record; and its terms and stipulations are to be found in that part of the correspondence which preceded the award by the Government, to the appellees, of the contract which was executed in form by them as of the 2nd of February, 1903. The earlier part of this correspondence gives color to the contention of the appellant as to the construction of the contract in question, but taken as a whole and in its finality its substance and effect are stated in the first count of the narr. in the case.

This is more particularly evidenced by the letters of the 26th and 28th of December, 1902, and of the 5th and 6th of January, 1903, in which the specific terms of the contract are expressed, In the letter of December 26th the appellees had said “now we want you to look at this sample, and to make us your price for the same, and we will make our price to the Public Printer. We do not know just how the price will go this year, as this is not very much of a sample for quality;” and further on in the same letter said “so we want you to make us the very best price, at which you will match this sample * * * and as said above, we will make our price to the Public Printer and try to win the order.” Thus the appellees indicated that the bid to the Government was to be their bid if the language used is to be given its ordinary import. That the language was used advisedly and not inadvertently is indicated in the repetition of it. The expression “we do not know just how the price will go this year” which accompanied that of “we will make our bid to the Public Printer” indicated an uncertainty in the mind of the appellees at the time as to what would be the price they would bid.

That the appellant understood that the appellees were to make their own bid to the Government and that it was male ³⁹¹ ing a contract with the appellees, and not through them with the Government, is inferable from its answer of December 28th to the letter of the appellees of the 26th. This answer makes no dissent from the proposition of the appellees to make “our (their) price to the Public Printer,” though it is emphasized by repetition; but the appellant proceeds to name a price for its paper as asked by the appellees and then to state specifically the terms of payment. It is not to be presumed it was proposing terms of payment to the Government. The Government makes its own terms and parties seeking contracts with it bid on those terms.

A letter dealing with or seeking to fix the terms of the contract would, as respects the Government, be more appropriately one of inquiry rather than of dictation. Following the letter of the 28th of December are those of the 5th and 6th of January, 1903, which made a further adjustment of the terms of the contract and brought to a finality the agreement of the parties. The letter of the appellees of January 5th recited the terms of