L. C. Morgan Co. v. Christensen

STURTEVANT, J.

The plaintiff commenced an action against the defendant to recover moneys alleged to be due according to the terms of a written contract. Judgment went for the plaintiff and the defendant has appealed.

[475]

On May 21, 1921, the plaintiff and defendant entered into a written agreement as follows, to wit:

“May 21, 1921.

“Mr. Con Christensen,

“McCann, Calif.

“Dear Sir: In harmony with our conversation of this date we agree to handle your ties at $1.00 per M feet commission from date until Nov. 1st, 1921, applying same on our orders until filled. Basing the price at $27.00 per M feet until the railroads place additional orders to establish a price.

“Then if it is higher we are to pay you the additional amount and if lower you are to protect us on the decline.

“Payments to be made as soon as received from the company to whom they are sold.

“In the event that you get an order direct we will cancel this agreement. Tours truly,

“The L. C. Morgan Co.

“By L. C. Morgan.”

It was the theory of the plaintiff in the trial court, and is its theory in this court, that the above instrument by its terms, when properly construed, protected the purchaser against a fall in prices on railroad ties, both before and after November 1, 1921, and until the plaintiff had sold and turned over the railroad ties which it had already manufactured. On the other hand, it was and is the theory of the defendant that said instrument protected the purchaser against a decline in prices down to, but not subsequent to, November 1, 1921. As we view the instrument a proper interpretation of it requires a consideration of the circumstances under which it was executed. Although the written instrument does not so state, the writing was executed in Humboldt County, and the subject matter of the contract was railroad ties that had been manufactured and were then in the Humboldt redwood timber belt. Immediately before the paper was executed, Mr. L. C. Morgan, representing the plaintiff, and his brother, B. F. Morgan, another officer of the plaintiff corporation, and the defendant, Mr. Christensen, were together in the office of the plaintiff discussing the matter of the purchase by the plaintiff of railroad ties from the defendant. At that particular time the defendant had on hand a quantity of ties and had