General Cooperage & Timber Co. v. Hedges , 141 Ark. 393 ( 1919 )

Hart, J.,

(after stating the facts). The parties to this lawsuit entered into a written contract whereby appellees agreed to sell the white oak, red oak and ash staves which they should manufacture at their stave mill at Wilmot, Ark., to appellants for a stipulated price per thousand f. o. b. cars, Wilmot, Ark.

The contract provides that the inspectors shall be governed by certain designated standard rules, but the contract is silent as to the place of inspection. Appellants agreed to advance appellees $1,000 for the purpose of purchasing a stave mill and appellees agreed to give appellants a mortgage on the mill. The contract further provides that appellants shall advance appellees a stipulated sum per thousand on the staves as they may be delivered to the railroad at Wilmot, Ark., when as many as 50,000 have been delivered; but that no advances shall be made on lots less than 50,000. The difference between the amounts advanced and the contract price was to be credited on the $1,000 note. The manufacture was to begin at once and full delivery made before June 1, 1914. The date of the contract was October 15, 1913. Under this contract appellants claim that the sum of $14,484.40 was advanced to appellees, and that appellees delivered staves of the contract value of $11,503.43, leaving a balance due to appellants of $2,980.97. On the other hand, appellees claim that appellants advanced to them only the sum of $10,246.36, and that they delivered to appellants staves of the contract value of $12,446.55, leaving a balance due appellees by appellants $2,200.20; for which judgment is prayed in the cross-complaint.

The chancellor found that the amount advanced to appellees was $10,763.70; and that the value of the staves shipped under the contract was $12,446.55, leaving a balance due appellees of $1,682.85; and a decree was entered accordingly. The finding of the chancellor was based on a holding that there was an understanding between the parties that all the staves were to he delivered, inspected and accepted by appellants on the railroad at Wilmot, Ark.

There are some miscellaneous items to be taken into consideration in stating an account between the parties, but it is admitted by counsel on both, sides that the correctness of the chancellor’s finding in the main depends upon whether or not the inspection should have been made at the point of shipment, or at the place of destination. If the inspection ought to have been made at Wilmot, Ark., the appellants accepted the staves there and could not afterwards make any charges against appellees on account of defects in the staves, which were discovered by a subsequent inspection made after the staves reached the point of destination. On the other hand, if the staves were not to be inspected until they arrived at New Orleans, the point of destination, the evidence of appellants shows that when inspected there they were found to be defective, and that, after throwing out the culls, appellants were only liable to appellees in the amount stated above, which was less than the amount advanced to appellees by appellants.

It is conceded by counsel on both sides that, the contract for the sale of the staves being an executory one, appellants had the right to inspect the staves in order to ascertain whether they were such as the appellees had agreed to ship them, and such. is the law. Deutsch v Dunham, 72 Ark. 141, and Ward Furniture Man. Co. v. Isbell, 81 Ark. 549.

The written contract contains a provision that the inspector shall be governed by certain designated standard rules; but is silent as to the place where the inspection is to be made. In the Gase at bar, however, both parties testify that a separate oral agreement was made as to the place where the inspection was to be made; but their testimony is in irreconcilable conflict as to the terms of that agreement. Thomas Sanders represented appellants in the matter, and was asked if anything was said by appellees about inspecting the staves at Wilmot, Ark. He answered: “No; on the contrary, it was distinctly understood that the staves were not to be inspected and graded at Wilmot, Arkansas, but were to be inspected and graded at points of destination, that is, at points where the staves were to be shipped. That is why Hedges & Moore provided for advances to be made by Mr. Carter on the staves. It was understood that the staves were to be examined as to quantity or number at Wilmot, Arkansas; that advances of part of the purchase price were then to be made as soon as the staves were delivered to the railroad, and the balance of the purchase price was to be paid after the staves had arrived at destination and had been inspected and graded. If it had been agreed upon or understood that the staves were to be inspected ■and graded at Wilmot, Arkansas, then there would hav,e been no provision or agreement about advances when delivered to the railroad at Wilmot, Arkansas; for, if the staves were to be inspected and graded at Wilmot, Arkansas, before delivery to the railroad, then the purchase price of the staves would have been due and payable and the question of advances would not have arisen. ’ ’

In addition it was shown by appellants that they had sold the staves to the Brooklyn Cooperage Company at New Orleans, and had directed appellees to ship the staves to the company; that on on one occasion appellee G. W. Moore had been summoned to New Orleans on account of the inspector of the consignee finding so many defective staves; that the staves were then reinspected in the presence of both H. B. Carter and G. W. Moore, and that Moore had expressed himself as satisfied with the inspection.

On the other hand, G. W. Moore denies this. He admitted that he went to New Orleans, but his version of what occurred between him and Carter after arriving there is that he never expressed himself as being satisfied with any inspections there. He said he went to the factory where Carter said the staves were, and that Carter tried to show him the culls; that he asked Carter where the good staves were and that Carter answered that they were in the dry kiln; that he turned to Carter and asked him how he figured on him, Moore, inspecting staves in the dry kiln; that he then told Carter that he had not sold him finished staves, hut rough ones; that there was no use to look any .further; and that he looked to Carter to pay for all the staves that had been shipped under the contract; that the representative of the consignee asked him why he did not sell direct to a factory like itself, instead of selling to a middle man like Carter; that he could make more money by doing so. Moore further testified that the agreement was that the inspection was to be made at Wilmot, Ark.,, and that appellants sent a man there every time he, Moore, drew a draft on them, and that the representative of appellants came and inspected and counted the staves at Wilmot, Ark.; that Mr. McQuay, Mr. Carter’s son and Mr. Baxter, who stayed at Wilmot about three months, were the representatives of appellants sent to Wilmot from time to time to inspect the staves; that Baxter made a report to appellants on every car and did his own inspecting and culling; that Baxter accepted the staves shipped and so reported to appellants.

Mr. McQuay testified for appellants that he was sent there once -or twice to count the staves ready for shipment; but said that he had no directions with regard to inspecting them for quality and did not do so. Neither Carter’s son nor Baxter were called as witnesses nor was any attempt made to explain their not being called to testify.

Z. T. Hedges also testified in positive terms that the contract was that the inspection was to be made at Wilmot, Ark. He said that he owned the timber out of which the staves were to be manufactured and expected to get his pay therefor out of the staves which Moore would ship to appellants; that for this reason he was interested in the inspection being made at Wilmot and was not willing to wait until the staves arrived'at New Orleans.

It was shown that twenty-three car loads were shipped, and that the staves run all the way from 15,000 to 19,000 staves to the car load. The staves were hauled to Wilmot and deposited on the five-acre lease preparatory to inspection and shipment according to the testimony of appellees. They also stated that many culls were there after the shipment of staves was stopped.

The record shows that from time to time a bill of sale to the staves then deposited ón the five-acre lease at Wilmot was made by appellees to appellants. Under this state of the record, it can not be said that the finding of the chancellor that the parties agreed that the inspection should be made at Wilmot is against the preponderance of the evidence. The testimony of the parties -to the agreement on this point is in direct conflict.

Moore and Hedges testify that the agreement was that the inspection should be made at Wilmot, and that pursuant to the agreement appellants sent Mr. McQuay, Mr. Baxter and H. B. Carter’s son to Wilmot, and that they inspected the staves, took out the culls and accepted the staves for appellants every time Moore drew on them for the purchase price of the staves.

Counsel for appellants point to the fact that McQuay testified that he was only sent there to inspect for Quantity and that he did not inspect for quality. Of course, this tended to contradict the testimony of Moore, but, on the other hand, neither Carter’s son nor Baxter who did the greater part of the inspecting testified in the case, and no explanation is made as to why they were not called as witnesses relative to so vital a matter.

Again it is said that Moore is contradicted by Carter and the representative of the factory to whom Carter had sold the staves in New Orleans. They both testified that Moore expressed himself as satisfied with the inspection made there. Moore denied this, and said he told Carter that he expected to hold him to the inspection made at Wilmot. The fact that a lot of culls were left on the five-acre tract of ground which appellants had leased at Wilmot for the purpose of having the staves deposited preparatory to shipment tended to corroborate Moore. The parties knew approximately how many staves a car would hold, and if quantity was all the inspection at Wilmot was to be made for, it seems that it was a vain and useless thing to do; for the bill of lading would show approximately the number of staves and this could accompany the draft drawn by Moore on appellants for the purchase price of the staves. Then, too, several bills of sale were executed by appellees to appellants from time to time to staves piled on the five-acre lease. This indicated that these staves had been accepted by appellants. After a careful consideration of the testimony from its different angles, we can not say that the finding of the chancellor with regard to the point of inspection is against the preponderance of the evidence.

There were four items which are referred to as miscellaneous items, and one of these is for $400. Moore testified positively that he did not get this money. Appellants undertook to set out all the checks and drafts that they had paid in favor of Moore for stave's. This one was not among them, and the chancellor was right in not allowing it. The other three items are small ones, and we do not think it can be said that the finding of the chancellor with regard to them is against the preponderance of the evidence. We do not regard them of sufficient importance to merit a separate and detailed discussion.

Upon the cross-complaint but little need be said. It is true Moore testified that he was solvent at the time the receiver was appointed, and has continued solvent since that time. But the evidence also shows that the' receiver never actually took the property out of Moore’s possession, and permitted him to continue to manage and operate it just as he had done before. Hence the appellees have not suffered any loss by the appointment of the receiver, and the chancellor was right in not allowing them any damages on account thereof.

Therefore the decree will in all things be affirmed.