Long-Bell Lumber Co. v. Stump

PHILIPS, District Judge, after stating the case as above, delivered the opinion of the court. The conservative rule in instructing a jury is to confine the charge to the real and decisive issues in the case. By so doing, mere discursive discussion of abstract questions is avoided, whereby the minds of jurors are often diverted to the consideration of improper issues, ealcu578 lated to mislead to tbe prejudice of one of tbe parties. If there was no estoppel in tbe case, as claimed by defendant, tbe vital question at issue was whether or not any of tbe lumber, and bow much, was un-merchantable. This was a fact to be determined by tbe method stated in tbe contract, to wit, “Subject to tbe grades adopted by tbe Southern Lumber Manufacturers’ Association.” Tbe contract does not, in terms, specify by whom or when this grading was to be made. The reasonable inference would be that both parties were to participate. One thing, however, is clear, and that is that tbe contract, on its face, does not contemplate that tbe grading by which tbe merchantable character of tbe lumber was to be ascertained was to be made by plaintiff alone at tbe time of stacking at tbe mill, so as to bind tbe defendant. This was, in terms, guarded against in the last paragraph of tbe written contract, as follows: “It is expressly understood and mutually agreed upon that the company [that is, the defendant] is under no obligation, by reason of taking the entire output of the mill, to accept any lumber that will not meet the requirements of the grades referred to.” Looking at the contract as an entirety, from its four corners, and having regard to the situation of the parties, the practical meaning of it is that as the plaintiff, before shipment, was to receive on all the lumber stacked up, except as to star and clear, $5 per 1,000, on 120-day acceptances, with the option of a 4 per cent, discount for cash payments, and the remainder on the same terms, “when the stock is shipped out,” the object of taking an inventory at the mill becomes obvious. To secure the purchaser, the lumber was then to be insured, and turned over to the agent, which lumber “was to become [not which then and thereby became] the property of the said company,” the defendant. This prepayment evidently was to enable the plaintiff to obtain the necessary means for running the mills and paying the bands. If any doubt remained as to this interpretation, it is entirely removed by the conduct and actions of the parties. There is no better established rule, or one more instinct with the spirit of equity, in the construction of contracts wanting in perspicuity or clearness of meaning, than to adopt that which the parties, by their course of dealing, placed upon it 'before any controversy arose between them. “In cases where the language used by the parties to the contract is indefinite or ambiguous, and hence of doubtful construction, the practical interpretation of the parties themselves is entitled to great, if not controlling, influence. Tbe interest of each generally leads him to a construction most favorable to himself, and when differences have become serious, and beyond amicable adjustment, it can be settled only by arbitrament of law. But in an executory contract, and where its execution necessarily involves a practical construction, if the minds of .both parties concur there can be no great danger in the adoption of it by the court as the true one.” Chicago v. Sheldon, 9 Wall. 50, 54; Topliff v. Topliff, 122 U. S. 131, 7 Sup. Ct. 1057. “Courts may use the actual construction put thereon by the conduct of the parties under the contract as a controlling circumstance to determine the construction which should be put upon the contract in enforcing the rights of the parties.” Thomas v. Railway Co., 81 Fed. 919; Sanders v. Munson, — 579 — 20 C. C. A. 581, 74 Fed. 651. Again it is held that one of the most satisfactory tests of ascertaining the true meaning of a contract is by putting ourselves “in the place of the contracting parties when it was made, and then considering, in view of all of the facts and circumstances surrounding them at the time it was made, what the parties intended by the terms of their agreement. When their intention is thus made clear, it must prevail in the interpretation of the instrument, regardless of inapt expressions or careless recitations.” Rockefeller v. Merritt, 22 C. C. A. 608, 70 Fed. 915. During the whole period of dealings between these parties after the lumber was shipped, as it came in by car loads, it was graded by the defendant at the point of destination, under the rules of the Southern Lumber Manufacturers’ Association. Thereupon the accounts of these shipments and gradings were sent at the beginning of each month, by mail, to the plaintiff, with acceptances for the amount due thereon, which plaintiff' accepted, without more. What occasion, therefore, was there for the court to say to the jury, as it did in the instructions excepted to, ihat when the plaintiff sawed, stacked, and insured the lumber at the mills, etc., “the lumber at the mill became ihe lumber of the Long-Bell Company, as soon as the agent had received said lumber, and furnished a statement thereof to the plaintiff company”? The issue in this respect being solely as to whether ihe lumber delivered contained culls, and, if so, how much, why advise the jury that when the plaintiff turned the lumber over to defendant’s agent the lumber at the mill became the lumber of the defendant? The contract simply said, “Which [meaning the lumber] was to become the property of said company.” The effect of this was manifestly calculated to impress the jury with the thought: If the defendant then and thereby became the owner of the lumber, the plaintiff had performed its part of the contract; and why, therefore, should defendant undertake to bind the plaintiff by any grading afterwards done by its agents and servants in the absence of the discharged vendor? The court went further in this direction, by charging the jury “that, when the lumber was so received by the Long-Boll Lumber Company as their lumber, it was received as * merchantable lumber, under the terms of the contract.” It is true, this was qualified by adding, “subject to be graded under the rules adopted by said association.” But this did not prevent misconception by tin; jury. It was calculated to shift in the minds of the jury the burden of proof. The last clause of the contract, as already shown, purposely guarded the purchaser, by reason of taking the entire output of the mill, against any liability for any lumber that did not meed the requirements of the grades referred to. More than this, as already adverted to, the course of dealing between the parties declared their understanding to be that the defendant was to render an account of the grading, and finally settle therefor, after the lumber wms received at Van Burén. It was then and there that the defendant threw out what it deemed to be culls. Why, then, instruct the jury that when the lumber was received at the mills it was received as merchantable lumber? Under the pleadings, the burden rested on the plaintiff to show that the lumber was merchantable. Rather, therefore, should the jury have been told that no implication arose that all the lumber — 580 — stacked and inventoried at tbe mills was merchantable, within the terms of the contract; but its quality remained to be ascertained, subject-to the test of the rules of the Southern Lumber Manufacturers’ Association. These' instructions were misleading and liable to prejudice the jury against the defendant. It was therefore error to give them, in the form employed. The more important question, as it is more decisive of this cpntro-versy, is the estoppel pleaded in the answer. It is a well-settled and wholesome rule' of law that, between merchantmen dealing with each other in a successive series of like transactions, accounts rendered by one to the other from time to time, showing the state of dealings between them, and not objected to within a reasonable time, become stated accounts, concluding the parties, so that they cannot be reopened except for fraud or mistake. Wiggins v. Burkham, 10 Wall. 129; Oil Co. v. Van Etten, 107 U. S. 333, 334, 1 Sup. Ct. 178; Lockwood v. Thorne, 11 N. Y. 170; Burke v. Isham, 53 N. Y. 631. ‘When the account is stated between the parties, or when anything shall have been done by them which by their implied admission is equivalent to a settlement, it has then become an ascertained debt. * * * All intricacy of account, or doubt as to which side the balance may fall, is at an end.” Toland v. Sprague, 12 Pet. 333. The evidence shows, clearly enough to put it beyond debate, that, for the two years or more during which the shipments of lumber were made under this contract, the defendant; at the beginning of each month, up to the assignment of the contract to the bank, rendered to the plaintiff a full account of the lumber received the preceding month, — giving the date, quantity, and grading, as also the amount due thereon to the plaintiff, — and forwarded the statements, with defendant’s acceptances therefor, which the plaintiff at once cashed or negotiated. And after the assignment of the contract to the bank a like course was pursued, in rendering these statements to the bank, and making payments thereon to it, which were accepted by the bank without one word of objection or protest. Mr. Petross, one of the plaintiffs, at the trial testified as follows: “Q. Each of the statements they sent you showed the number of culls, and the amount? A. Yes, sir. Q. Shows the dimensions of the pieces of culls that were thrown out, does it not? A. Yes, sir.” On every principle of justice and fair dealing, it was the duty of the plaintiff, as of the bank, its assignee, on receipt of this statement, and before the appropriation of the proceeds of the acceptance, to have examined the accounts so rendered (and the presumption is that it did so), and, if dissatisfied with the grading or computation,.to have, by post or messenger, promptly notified the defendant of any dissatisfaction with the account. ■ Wiggins v. Burkham, supra. This course was demanded in justice to the defendant company. After it had rendered an account therefor each month to the plaintiff, and paid therefor, the lumber would be sold, and pass out of its present form into various structures, and the culls would be abandoned to waste and decay. And it was of the utmost importance to the defendant to know whether it was tó be held liable to further inspection, grading, and accounting. The plaintiff produced not a .word of evidence, in a — 581 — single lei tor, mating complaint oí the gradings and accounting. All the correspondence between them in evidence only showed complaint (or, rather, suggestions) from plaintiff pertaining to such matters as shortage in quantity in some car, or some particular car not accounted for. Home of these discrepancies were explained in the letters, and the presumption is to be indulged that they were all satisfactorily adjusted, as no further complaints appear in the correspondence. The only attempt on the part of plaintiff, at the trial, to show any objection to the statements rendered to it, consisted in the most trivial and unsatisfactory statements by some of the employes of plaintiff as to some talk had at some indefinite 1 one with some of the employés of defendant, to the effect that they thought the defendant’s agents were reject fag too much of the lumber shipped. But there was no reliable, Tangible evidence to warrant a jury in saying that any such complaints were made directly by plaintiff to the defendant company. And, even if such talk had occasionally occurred between some of the employés of the two concerns, yet if thereafter the plaintiff and its assignee, the bank, received payments from the defendant on statements sent in, without making a direct protest within a reasonable time, it ought not now to be heard to ask that the accounts be reopened. The only avoidance of the legal effect of the stated accounts is to impeach them for fraud or mistake. The answer pleaded the facts constituting estoppel. The reply put in issue nothing hut a denial of the fact that defendant had rendered the accounts, or that plaintiff acquiesced in any settlements. No issue of fraud or mistake in the stated accounts was raised by The reply. The only question, therefore, to be passed upon by the jury touching this issue, was, were the accounts so rendered, and did plaintiff thereafter, in a reasonable time, make objection thereto? 'hie first and third instructions asked by the defendant should have been given. While the first instruction went further than the issues required, in asking to have submitted to the jury any question at all respecting fraud or mistake, it was no reason for the rejection that the defendant thereby accorded to the plaintiff the benefit of such avenue of escape. This error was not cured by the charge given by the court on this issue. In the first place, the court left it entirely to the jury to find whether the notice, if any, of objection to the stated accounts, was given in a reasonable time. As applied to the facts of this case, where these accounts were rendered monthly through a period of two years and more, the question of reasonable time is wholly one of law. for the court. Wiggins v. Burkham, 10 Wall. 132, 133; Oil Co. v. Van Etten, 107 U. S. 334, 1 Sup. Cl. 178. In the second place, the court in its charge also applied the estoppel to the defendant if the jury found that the plaintiff had rendered accounts to it, and it failed to make objection thereto. There was no such issue presented by the pleadings. The plaintiff did not sue upon an account stated, but upon an open, running account. Nor was there any evidence to support such issue, if it had been within the pleadings. The instructions given by the court are in other respects objectionable, but as no exceptions were taken thereto, and no assignment of error was made thereon, they will not be noticed. — 582 — This brings us to the consideration of the final question raised in this connection. It is suggested that inasmuch as the defendant did not except to, nor assign error on, the instruction in question, as given by the court, it is presumed to have waived the exception taken to the action of the court in refusing the instructions asked by it, and to have acquiesced in the error committed by the court. To this we cannot assent. After diligent search, we find no precedent for this practice. The furthest the courts have gone in the denial of the litigant’s right to complain of the error of the court in refusing a proper instruction is wiiere the court, in another instruction given, laid down the equivalent of the declaration asked by plaintiff in error, or where, notwithstanding the court has improperly declared the law, the party complaining' has justified it by committing the same blunder in a declaration requested by him, or where he has invited the court to commit error. In Dows v. Rush, 28 Barb. 180, the court laid down the recognized rule of practice, that if a party would raise the objection to the charge given, that it is not sufficient or proper, it should appear that he had refused to deliver a correct proposition on the precise point desired by the party excepting. The court say: “If he had so refused, a proper exception would have been to such refusal.” In Railway Co. v. Boyce (Kan. App.) 48 Pac. 949, of the refusal to give a proper instruction, the substance of which was not given in the general charge, the court said: “Where special instructions, correct in point of law, and conforming to the facts at issue, are refused, their substance must be given, or the general charge, considered as an entirety, must sufficiently cover the matter presented.” So, in Milling Co. v. Ames, 23 Colo. 171, 47 Pac. 382, the court regarded the error sufficiently saved, when taken to the refusal of the court to grant an instruction asked for, where no equivalent of the proposition was found in other portions of the charge. The court said of this refusal: “This was error. We do not find that the substance of either of these instructions which were refused by the court was given in any of the instructions by the court of its own motion, but, on the contrary, in so far as there ’was an attempt to instruct upon these points the law was not correctly given.” The case of Earle v. Thomas, 14 Tex. 584, presents this question quite aptly. In speaking to the objection that the exception to the charge of the court was not properly saved in the assignment of errors, Wheeler, Js, said: “In the present case the error complained of is suggested by the instruction refused. It has sometimes been said that a party, to take advantage of any error in the charge of the court, must except; but by this it is not intended that he shall take a bill of exceptions, for he may attain the same purpose by asking such instructions as will place the law of the case in a proper light before the jury, which, if refused, will have the effect of a bill of exceptions.” In Evans v. Clark (Ind. T.) 40 S. W. 771, it is held that where the applicant requested the giving of a proper instruction, which was refused, it is not necessary, in order to insist upon error of such refusal, that the party should have excepted to an inconsistent instruction given by the court. The court said: — 583 — “Where a party takes proper exception to any matter in the record, it is not necessary to take oilier exception, if the exception thus taken covers tlie matter in issue.” While this is the language of the court of appeals of the Indian Territory, it is nevertheless valuable for the force of the reason assigned. See, also, Guinard v. Knapp, Stout & Co. Co. (Wis.) 70 N. W. 671, where the court lays down the rule to be that the refusal to give a correct instruction is reversible error, unless it appears that the same was substantially given in the general charge. Having requested the court to give a proper declaration of law, and the court, by its refusal, having declared that it held the law to be otherwise, to which exception was duly taken, why should counsel be required again to except to the converse or modified declaration given by the court? It would be but a repetition of the objection already expressed in the first exception. And, so far from the silence of counsel at the reassertion of the error by the court evidencing a waiver of the first error, it but evinces a respectful deportment by counsel towards the court, in refraining from repetitious objections at the ruling of the court, after having once taken exception involving in effect the same principle which would be represented in the second exception. In view of the conclusion reached by the court, it is not deemed necessary to consider other assignments of error. It results that the judgment of the circuit court is reversed, and the cause is remanded, with direction for further proceedings in conformity with this opinion.