Horn v. Schlosser ( 1927 )

Crownhart, J.

The respondent resided in Chicago and was in the freight-carrying business. The appellant resided in Milwaukee and was a dealer in forest products. The appellant, in June, 1923, had about 15,000 cedar ties and about 33,000 cedar posts at Agate Harbor, Michigan, which he desired transported. He wrote to the respondent:

“I have about 15,000 cedar ties and 33,000 cedar posts at Agate Harbor, Keewenaw Peninsula, and think your boat, ‘Chas. Horn,’ would just about carry this. . . . What freight would you expect if in position to carry this cargo?”

Respondent replied that he thought the quantity of cedar “would hardly make a load for the Horn,” and inquired, “Do you.think it would? What rate do you expect to pay, or, as we know nothing about loading conditions there, we would prefer to charter the boat to you by the day.”

Appellant replied that he thought the cedar “would make a cargo, but to avoid any controversy as to that I would make a lump freight of five thousand dollars for the ties and posts.” Respondent replied:

“We do not believe that the quantity you mention would make a load for the Horn, but as we have never had a load of cedar on her, and as you know the boat, you probably know about as much as we do about this, and probably more.”

Negotiations proceeded and finally resulted in a contract for the trip, for a full load of cedar ties and posts. The contract clearly indicates that the price was fixed for the trip and for a full load. It begins with the statement:

“Confirming agreement made with you while you were in our office this forenoon, you are familiar with our steamer Charles Horn, formerly the steamer Marion. As soon as this boat completes her present trip, that is, discharges a cargo of grain at Montreal, we will load her with coal for an upper lake port, and as soon as same is discharged will send her to Agate Harbor for a full load of cedar ties and posts you have there.”

And later in the contract :

“The matter of when the boat is loaded or the amount of cedar to be loaded is to be left to the judgment of the captain. The boat, however, is to carry as large a quantity of these ties and posts as is possible, consistent with good seamanship judgment on the part of the captain.”

Here is the idea, clearly expressed, that the boat might not be able to carry the full quantity of ties and posts, and the amount of the cargo was to be left to the judgment of the captain.

“When parties have entered into a contract or arrangement based upon uncertain or contingent events, purposely as a compromise of doubtful claims arising from them, and where parties have knowingly entered into a speculative contract or transaction, — one in which they intentionally speculated as to the result, — and there is in either case an absence of bad faith, violation of confidence, misrepresentation, concealment, and other inequitable conduct mentioned in a former paragraph, if the facts upon which such agreement or transaction was founded, or the event of the agreement itself, turn out very different from what was expected or anticipated, this error, miscalculation, or disappointment, although relating to matters of fact, and not of law, is not such a mistake, within the meaning of the equitable doctrine, as entitles the disappointed party to any relief either by way of canceling the contract and rescinding the transaction, or of defense to a suit brought for its enforcement.” 2 Pome-roy, Eq. Jur. (4th ed.) § 855.

“If A. enters into a contract knowing that he has not sufficient or exact knowledge of a material fact, he cannot avoid such contract on the ground of mistake because such fact turns out differently from what he had hoped. The use of the tei;m ‘mistake’ implies that the parties are not in ignorance whether the subject matter is in existence or not, deliberately assuming the risk of its non-existence. Where the parties are aware that the existence of the subject matter is doubtful, and contract with reference thereto, each party taking the chances of the event’s being adverse to himself, the contract is valid.” 1 Page, Contracts (2d ed.) § 253.

Also, Kowalke v. Milwaukee E. R. & L. Co. 103 Wis. 472, 476, 79 N. W. 762.

Neither party to the contract knew the exact carrying capacity of the steamer Charles Horn for the commodity covered, but the appellant had looked up the registry of the boat and had himself determined its carrying capacity. On the other hand, the respondent had disclaimed any positive knowledge as to the load of cedar that the vessel would carry. He had never loaded the vessel with cedar before. He wrote the appellant, “We would prefer to charter the boat to you by the day.” The appellant replied: “I think the 15,500 ties and 32,000 post would make a cargo, but to avoid any controversy as to that I would make a lump freight of five thousand dollars for the ties and post. ...” Negotiations continued, and finally the parties agreed that the boat was to take a full load and “for making this trip you are to pay a freight of $5,500.”

There is no question in the evidence but that the boat was loaded to the full extent that would allow it to get out of the harbor. If the harbor entrance had been deeper the boat would have carried an additional quantity of cedar, but not all of it.

The appellant contends that this case is on all-fours with Ontario P. Co. v. Neff, 261 Fed. 353. An examination of that case shows a clear distinction. In the Neff Case both parties were ignorant of the carrying capacity of the steamer as to the paper to be transported; both parties participated ■in a computation as to what the ship would carry; the freight charge was dependent upon the number of tons the boat would carry; their computation was mutually erroneous ; and the contract was to cover a shipping season. The amount the boat would carry, as erroneously computed, was more than two and one-half times its actual capacity.

In the instant case there was no attempt at computation. True, both parties lacked information as to the carrying capacity of the boat, but to avoid any controversy a lump freight was agreed upon for a full load and for the trip. The charge was not dependent on the number of posts or ties, but was on a full load and trip basis. The contract did not call for any definite number of ties or posts to be carried, but required the boat to carry a full load, — a full load to be left to the judgment of the captain. There is no' question but that the boat did carry a full load.

The findings of the court cannot be disturbed, and the judgment must be sustained.

By the Court. — The judgment of the circuit court is affirmed.