Navco Hardwood Co. v. Mobile Gulf Nav. Co.

The contract of February 26, 1921, deals with the construction of the boat and barges therein designated, provides that the Navco Company shall advance $30,000 towards the payment of labor and material, that, in addition thereto, Chalifoux was to advance $15,000, if needed — that is, if the amount so advanced by the Navco Company was insufficient to complete the construction — and for such other sum by the Navco Company as may be necessary to complete the boat and barges, should the amounts previously advanced by said company and Chalifoux be insufficient to do so. The contract also contemplates and provides that the boat and barges were to be the property of the Navco Company, and that Chalifoux was to have an equity for the $15,000 advanced by him, or so much thereof as may have been used in the cost of construction under the terms of same. The contract further provides for the use to which the equipment was to be put — that is, the transportation of logs for the Navco Company — and also gives the method of determining the cost of transportation, and authorizes the termination of same in the manner there provided. The contract further provides for an advance of $7 per thousand feet for logs delivered at the mill of the Navco Company on the 1st and 15th of each month. It does not, however, fix the amount of charges for hauling the logs, as this is expressly left open to be fixed by a subsequent agreement, but which does not appear to have been executed by the parties.

It is a well-settled legal principle that the contract of February 26, 1921, controls and governs all matters and transactions therein dealt with or involved, and excluded any previous agreement or understanding prior thereto, which relates to the subject-matter dealt with in the contract. Harrison v. Polar Star Lodge, 116 Ill. 279, 5 N.E. 546; Mobile Electric Co. v. City of Mobile, 201 Ala. 607, 79 So. 39, L.R.A. 1918F, 667; Dickey v. Vaughn, 198 Ala. 285, 73 So. 507. We therefore think that the Navco Company was the owner of the boat and barges under the terms of said contract, that the Gulf Company was a bailee only, and the Navco Company was entitled to the possession of same upon the termination of the transportation agreement, upon reimbursing Chalifoux the amount advanced by him, or so much thereof, not exceeding $15,000, as may have been used under the terms of the contract.

The Navco Company should also account to the Gulf Company for any amount expended by it in the construction over and above the sums advanced by the said Navco Company and Chalifoux, and the Navco Company is entitled to all material on hand and not used in the boat or barges which were completed.

As we view the contract, its whole scheme and purpose was the construction of the boat and barges for the sole use by the Gulf Company in transporting logs for the Navco Company to its mill, and there is nothing in same which authorizes the use of said boats for other purposes, and, if they were so used, the Gulf Company should account for the reasonable value of the use or hire of same. The trial court seems to have attached importance to the letter or document of October 2, 1920, requiring that the boat and barges be used only for the Navco Company, "unless by written consent from said company," and that the contract of February 26, 1921, is silent as to the use of the equipment by the Gulf Company, and indulges the presumption that written consent was given for the use of the equipment for other business or purposes, and holds that the Gulf Company was not chargeable for using the equipment in its own business, though not hauling logs for the Navco Company. In the first place, we do not think that the contract is silent as to the use for which the equipment was to be put, but provides that it shall be used in transporting logs for the Navco Company, and makes no provision for the use of same by the Gulf Company for other purposes. On the other hand, with or without the letter of October, 1920, if the Navco Company consented to such user, verbally or in writing, express or implied, the Gulf Company would not be liable for the use or hire, but this consent should be established by the evidence and not presumed without evidence showing an express or implied consent. Of course, we are aware of the rule that a bailee in the rightful possession of property, and who puts the same to an authorized use, is not liable for the use or hire of said property, but, if he becomes in default, by improperly withholding the property, or by diverting it to a use other than the one to which he was intrusted, he is chargeable for the value of the use or hire thereof during the period of the wrongful detention, and for the unauthorized use to which he put same.

We are inclined to agree with the trial court that any sums expended in the construction of the equipment, whether before or after the contract of February 26, 1921, for labor or material, should be included in the cost of construction and accounted for by the Navco Company, as it seems that the said equipment was not only in contemplation, but partially constructed, when the said contract was executed and it would be too narrow a construction to hold that the parties contemplated only the cost actually incurred after the contract was executed.

The contract clearly provides that the amounts to be advanced, both by the Navco Company and Chalifoux, should be used in the construction only, and repairs made after the construction were not chargeable against the Navco Company under said contract.

Nor do we think that repairs on the equipment are within the cost of transportation of the logs as the letter of March 4, 1921, from the Navco Company, which was, in effect, acquiesced in by the Gulf Company, excepts therefrom the cost of repairs, and includes only the labor and actual cost of operation for logs hauled subsequent thereto and by the boat and barges of the Navco Company.

While the proposition as outlined in the letter or document of October 2, 1920, was not carried out as to the boat and barges, and to this extent was merged into the agreement of February 26, 1921, it is manifest that the parties looked to it as fixing the charges to be paid the Gulf Company for the transportation of all logs prior to the contract of February 26, 1921, and which was not in fact changed until the letter of March, 1921, heretofore referred to, as this question was left open in the contract, and a new understanding as to charges for transportation was not reached until March 15, 1921. We cannot, therefore, agree to the appellant's contention that no price was fixed for hauling the logs prior to the letter of March 15, 1921, and that the Gulf Company was confined to a quantum meruit as for hauling the logs prior to March 4, 1921.

As to the Chalifoux claim, and whether or not it should bear interest: It is true, the contract does not provide that the advance by him was to bear interest from date, or that he was to be repaid with interest, but it does provide that he must be reimbursed before the Navco Company shall have the possession of the boat and barges, and his said claim, of necessity, matured when the transportation contract was terminated, and when said company demanded said property; and the trial court erred in not decreeing that Chalifoux's claim should bear interest as from the date that the Navco Company demanded the property, or at least when the original bill was filed.

The decree of the circuit court is affirmed in part, and reversed and remanded in part, so that it may conform to this opinion, and on cross-appeal is corrected and affirmed; cost of appeal to be taxed, one-half to Gulf Company and one-half to Navco Company.

SOMERVILLE, THOMAS, and BOULDIN, JJ., concur.

On Rehearing.