Hurst v. Lake Co., Inc. | Kessler, Gilmore & Kronman | September 19, 2012


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by Kessler, Gilmore & Kronman

HURST v. LAKE & CO., INC., 141 Ore. 306, 16 P.2d 627 (1932): Plaintiff and defendant made a contract for the sale of horse meat scraps. According to the terms of the contract, if any of the scraps tested at less than "50% protein," the buyer was to receive a discount of $5.00 per ton. Roughly 170 tons of the scraps delivered by the seller contained less than 50 percent protein; of these 170 tons, 140 contained between 49.53 and 49.96 percent protein. The buyer took a $5.00 discount on the entire 170 tons, contrary to the seller's claim that he was entitled to do so on 30 tons only, When the buyer refused to pay the balance allegedly due, the seller brought an action against him. In his complaint the seller alleged "[t]hat at the time the written contract heretofore referred to for the sale of horse meat scraps was entered into on or about the 20th day of March, 1930, both plaintiff and defendant then were, and for some time prior thereto had been, engaged in the business of buying and selling horse meat scraps; that at the time said contract was entered into there was a custom and usage of trade in said business well known to both plaintiff and defendant as to the meaning of the terms 'minimum 50 per cent protein' and 'less than 50 per cent protein' used in the agreement between plaintiff and defendant. That by virtue of said custom so prevailing in said business of buying and selling horse meat scraps it was well known and understood among all members of the trade, including both plaintiff and defendant, that the terms 'minimum 50 per cent protein' and 'less than 50 percent protein' when used in a contract for the sale of horse meat scraps with reference to a test of its protein content, meant that a protein content  of not less than 49.5 per cent was equal to and the same as a content of 50 per cent protein."


The trial court granted the buyer's motion for judgment on the pleadings, but the Oregon Supreme Court reversed. In his opinion, Judge Rossman had this to say:


"The flexibility of or multiplicity in the meaning of words is the principal source of difficulty in the interpretation of language. Words are the conduits by which thoughts are communicated, yet scarcely any of them have such a fixed and single meaning that they are incapable of denoting more than one thought. In addition to the multiplicity in meaning of words set forth in the dictionaries there are the meanings imparted to them by trade customs, local uses, dialects, telegraphic codes, etc. One meaning crowds a word full of significance, while another almost empties the utterance of any import. The various groups above indicated are constantly amplifying our language; in fact, they are developing what may be called languages of their own. Thus one is justified in saying that the language of the dictionaries is not the only language spoken in America. For instance, the word, "thousand" as commonly used has a very specific meaning; it denotes ten hundreds or fifty scores, but the language of the various trades and localities has assigned to it meanings quite different from that just mentioned. Thus in the bricklaying trade a contract which fixes the bricklayer's compensation at "$5.25 a thousand" does not contemplate that he need lay actually one thousand bricks in order to earn $5.25 but that he should build a wall of a certain size: Brunold v. Glasser, 25 Misc. 285 (52 N.Y.S. 1021); Walker v. Syms, 118 Mich. 183 (76 N. W. 320). In the lumber industry a contract requiring the delivery of 4,000 shingles will be fulfilled by the delivery of only 2,500 when it appears that by trade custom two packs of a certain size are regarded as 1,000 shingles and that, hence, the delivery of eight packs fulfills the contract, even though they contain only 2,500 shingles by actual count: Soutier v. Kellerman, 18 Mo. 509. And where the custom of locality considers 100 dozen as constituting a thousand, one who has 19,200 rabbits upon a warren under an agreement for their sale at the price of 60 pounds for each thousand rabbits will be paid for only 16,000 rabbits: Smith v. Wilson, 3 Barn. & Adol. 728. Numerous other instances could be readily cited showing the manner in which the meaning of words has contracted, expanded or otherwise altered by local usage, trade custom, dialect influence, code agreement, etc. In fact, it is no novelty to find legislative enactments preceded by glossaries or brief dictionaries defining the meaning of the words employed in the act. Technical treaties dealing with aeronautics, the radio, engineering, etc., generally contain similar glossaries defining the meaning of many of the words employed by the craft. A glance at these glossaries readily shows that the different sciences and trades, in addition to coining words of their own, appropriate common words and assign to them new meanings. Thus it must be evident that one cannot understand accurately the language of such sciences and trades without knowing the peculiar meaning attached to the words which they use. It is said that a court in construing the language of the parties must put itself into the shoes of the parties. That alone would not suffice; it must also adopt their vernacular. . . .


"The defendant cites numerous cases in many of which the courts held that when a contract is expressed in language which is not ambiguous upon its face the court will receive no evidence of usage but will place upon the words of the parties their common meaning; in other words, in those decisions the courts ran the words of the parties through a judicial sieve whose meshes were incapable of retaining anything but the common meaning of the words, and which permitted the meaning which the parties had placed upon them to run away as waste material. Surely those courts did not believe that words are always used in their orthodox sense. The rulings must have been persuaded by other considerations. The rule which rejects evidence of custom has the advantage of simplicity; it protects the writing from attack by some occasional individual who will seek to employ perjured testimony in proof of alleged custom; and if one can believe that the parol evidence rule is violated when common meaning is rejected in favor of special meaning, then the above rule serves the purpose of the parol evidence rule. Without setting forth the manner in which we came to our conclusion, we state that none of these reasons appeals to us as sufficient to exclude evidence of custom and assign to the words their common meaning only, even though the instrument is non-ambiguous upon its face. . . .


". . .We believe that it is safe to assume, in the absence of evidence to the contrary, that when tradesmen employ trade terms they attach to them their trade significance. If, when they write their trade terms into their contracts, they mean to strip the terms of their special significance and demote them to their common impart, it would seem reasonable to believe that they would so state in their agreement. Otherwise, they would refrain from using the trade term and express themselves in other language. We quote from Nical v. Pittsvein Caol Co., 269 Fed. 968:


"Indeed, when tradesmen say or write anything, they are perhaps without present thought on the subject, writing on top of a mass of habits or usages which they take as a matter of course. So (with Professor Williston) we think that anyone contracting with knowledge of a usage will naturally say nothing about the matter unless desirous of excluding its operation; if he does wish to exclude he will say so in express terms. Williston, Contracts, §653.


"Nothing in the contract repels the meaning assigned by the trade to the two above terms unless the terms themselves reject it. But if these terms repel the meaning which usage has attached to them, then every trade term would deny its own meaning. We reject this contention as being without merit. . . ."


Annotated Text Information

June 02, 2014 Hurst v. Lake Co., Inc. Hurst v. Lake Co., Inc.

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