The transaction out of which this action arose is alleged to have taken place between Moore, Ferguson Co., assignors of the plaintiff, commission merchants and dealers in grain, of San Francisco, and the defendant, who was a resident and dealer of grain in Oregon. The claim is founded upon a quantity of grain-bags sold and delivered to the defendant during the year 1893, and not returned, amounting to the sum of $886.97, and as for money had and received $34.30, being a balance claimed on a transaction concerning a shipment of oats by the defendant to said Moore, Ferguson Co. In addition to the general denials, the defendant pleaded as a bar a judgment in his favor recovered in the circuit court of the state of Oregon for Benton County, upon the same cause of action stated in the complaint herein, brought by Moore, Ferguson Co. against said defendant, before the assignment to the plaintiff herein. But it appears, and the court so finds, that an appeal had been duly taken *Page 96 from said judgment before the commencement of this action, suspending further procedings thereunder.
On the trial herein E.W. Ferguson, a member of the firm of Moore, Ferguson Co., as a witness for the plaintiff, testified that he knew the defendant, Ingle; that he had corresponded with him and knew his handwriting. In connection with his testimony plaintiff introduced and read in evidence and relied upon the following: —
"OFFICE OF J.W. INGLE CO., "PHILOMATH, OREGON, Sept. 1, 1893.
"Received from W.F. Crosby 14,500 bags, at Philomath warehouse, for the purpose of shipping grain. Said bags are the property of Moore, Ferguson Co., of San Francisco, and are to be shipped to them filled with grain, during the season of 1893-94, according to the terms of a certain warehouse agreement entered into with W.F. Crosby on July 28, 1893, all bags not shipped or unaccounted for at the expiration of this agreement, May 31, 1984, I hereby agree to pay for at the market price at time of delivery seven (7) cents each. "J.W. INGLE."
John Cook, also a member of the firm of Moore, Ferguson Co., as a witness on behalf of the plaintiff, testified in reference to the bags shipped by said firm, and the amount and value thereof, not returned to them by said defendant, and also testified in reference to the shipment of oats by defendant to said firm, and the balance due in the transaction as alleged in the complaint. On cross-examination the witness was asked whether he knew that Mr. Crosby had entered into an agreement with Mr. Ingle about grain-bags and oats and other things, which question, upon plaintiff's objection, the court refused to allow answered.
The defendant also offered in evidence the agreement referred to in the receipts relied upon by the plaintiff, entered into July 28, 1893, between the said W.F. Crosby, of Albany, Oregon, as the party of the first part, and the defendant, as party of the second part, wherein it is agreed: "The party of the first part agrees to furnish the party of the second part with bags and twine for receipts and shipment of all grain passing through said houses; and assist the party of the second part in paying for service of his employees, by making *Page 97 small advances upon the salaries due them, said advances to be deducted from payments due said party of the second part, as hereinafter mentioned; the said party of the second part agrees to operate said warehouses at his own expense, receive, clean, store, sack, and ship grain to the order of the party of the first part, make purchases of farmers for said party of the first part at a cost to the party of the first part of two and a half cents per bushel; said payment to be made by the party of the first part to the party of the second part upon shipment of said grain, less amount of said advances to employees. The bags furnished by the party of the first part shall be accounted for by the party of the second part as the property of said party of the first part, and at the expiration of this agreement, on May 31, 1894, all bags not accounted for the party of the second part agrees to pay to the party of the first part the market price of said bags so unaccounted for, at the market price at the time of delivery." All evidence as to what the parties to said agreement did thereunder was excluded by the court. The court also, upon objection of the plaintiff, refused to allow defendant to introduce correspondence between Moore, Ferguson Co. and himself, and between them and their agent, Crosby, concerning the transaction in question. In one of these letters, written by Moore, Ferguson Co. to the defendant, under date of San Francisco, June 30, 1893, they say: "Yours of the 28th inst. received and noted. Evidently you have misunderstood Mr. Crosby in reference to our engaging you to look after any warehouses for us, as we have no knowledge of any such arrangment, and are not running any warehouses. No doubt Mr. Crosby intended that you should understand that he is employing you on whatever terms he and you may have agreed upon. Mr. Crosby has for a number of years been shipping grain to us, and we have been making him advances on shipments, and helped him otherwise in a financial way, and have made no change in this respect for the coming season. . . . We have not yet heard anything from Mr. Crosby in reference to his arrangement with you; when we hear from him we will know more about your arrangement with him." In Crosby's letter to Moore, Ferguson Co., dated at Albany, Oregon, June 29, 1893, the following occurs: "In talking to Mr. Ingle *Page 98 yesterday he said he wrote to you about bags and sight drafts, warehouse receipts, etc., all of which is in error. He asked me on Monday of last week, when I first talked to him about it, if he was dealing with Moore, Ferguson Co. or myself. I told him, with me. But that the grain would go to you, and I would probably get bags of you. If you send the bags, he wants 5,000 each at Philomath and Wrens, and wants them by next steamer." A letter by Moore, Ferguson Co. to Crosby, under date of San Francisco, July 1, 1893, acknowledges the receipt of the letter from Crosby of the 29th of June, just referred to, in which the following occurs: "Will ship those to Ingle by next steamer; also the twine ordered. Your arrangements with him appear to be all right. We suggest, however, that you include in your arrangements that he is to be responsible for the number of bags that may be shipped to him until they are returned with grain, and, if not so returned or accounted for as being on hand, that he shall pay for them." It will be seen by reference to the warehouse agreement between Crosby and Ingle that the suggestion of Moore, Ferguson Co., that Ingle should be responsible for the bags until their return with grain, was not incorporated in said agreement. The following letter from Moore, Ferguson Co. to the defendant was also, upon plaintiff's objection, excluded by the court: —
"310 CALIFORNIA STREET, MOORE, FERGUSON CO., "COMMISSION MERCHANTS. "SAN FRANCISCO, August 17th, '93.
"MR. J.W. INGLE, PHILOMATH, OGN. — DEAR SIR: —
"Yours of the 15th inst. is received and noted, and in reply will say that you seem to have a mistaken idea in regard to the first shipments of bags that we made to you. They were not shipped by us at your request, but at Mr. Crosby's request, we shipped them altogether on Mr. Crosby's instructions, and not on any communication from you.
"You will remember that from the beginning we advised you that if you wished us to ship you any bags we wanted that you should make arrangements first as to price and payment of the bags, — not but that we would be pleased to do business with you direct, but we understand you and Mr. Crosby have agreed between yourselves to do business together, *Page 99 and we do not wish to interfere with your arrangements, so whatever agreement Mr. Crosby may have made, it is between yourselves, and if you wish Mr. Crosby to ship you some more bags, better communicate with him. We are surprised that you should again write us on this subject, as we have already fully advised you in reference to this matter."
"We have received your carload of gray oats by last steamer, but so far have been unable to dispose of them, but will dispose of them first favorable opportunity. The markets are very much depressed, oats are very slow of sale, and wheat is easier again to-day, No. 1 Shipping Wheat about $1.05.
Yours truly, "MOORE, FERGUSON CO."
The theory of the respondent, which seems to have been adopted by the court in the exclusion of the offered evidence on behalf of the defendant, is, that the receipt is a contract complete in itself between the defendant and Moore, Ferguson Co., and did not require any explanation or reference to other writings concerning the transaction. His counsel says in his brief: "The real controversy is whether defendant was or was not bound to pay for the bags not delivered. His defense was, that he had stored the balance of the bags in certain warehouses in Oregon, belonging to third persons, and notified W.F. Crosby of that fact, and had received his approval; and he claims that Crosby was the agent of Moore, Ferguson Co. He offered no proof of any such agency; but plaintiff's evidence was, that Crosby was never their general agent."
As appears from the foregoing, however, the defendant did offer, and the court ruled out, evidence tending to establish the agency of Crosby. Before giving the receipt relied upon by the plaintiff, the defendant wrote to Moore, Ferguson Co. concerning the matter, and in their reply they say: "You seem to have a mistaken idea in regard to the first shipment of bags that we made to you. They were not shipped by us at your request, but at Mr. Crosby's request; we shipped them altogether on Mr. Crosby's instructions." And in Crosby's letter to said firm he informed them of the conversation he had had with Ingle in reference to the transaction, and asked them if they approved of the plan. In their letter to Crosby, in reply thereto, they say: "Your *Page 100 arrangements with him appear to be all right," adding then the suggestion heretofore noted. The receipt also says, "according to the terms of a certain warehouse agreement entered into with W.F. Crosby on July 28, 1893." The defendant, therefore, had the right to have that agreement considered in connection with said receipt, as they form parts of the same transaction between Crosby and defendant.
Several contracts relating to the same matters, between the same parties, and made as parts of substantially the one transaction, are to be taken together. (Civ. Code, sec. 1642) A contract may be explained by reference to the circumstances under which it was made and the matter to which it relates. (Civ. Code, sec. 1647; also, Code Civ. Proc., secs. 1856 (subd. 2) and 1860.) The defendant, it appears, stored the balance of the unused bags received by him under the receipt or agreement made with Crosby, and relied upon by plaintiff, in warehouses in Oregon leased by Crosby, and was authorized so to do by Crosby.
In addition to excluding the correspondence and agreements already referred to, the court ruled out all testimony offered by the defendant in reference to directions to him or conversations with him by Crosby concerning the bag transaction. On the last effort of defendant in this line the court remarked: "That brings up the old question again of his authority. If he was the agent of Moore, Ferguson Co., this testimony would be relevant, otherwise not," — and excluded the testimony so offered. This was clearly error. The excluded evidence tended to show that the defendant was justified in treating Crosby as the agent of Moore, Ferguson Co. in the premises, and in dealing with him as he did. (Civ. Code, secs. 2300, 2317, 2318, 2319.)
Judgment and order reversed.
Garoutte, J., and Harrison, J., concurred.
Hearing in Bank denied.
Beatty, C.J., dissented from the order denying a hearing in Bank, and filed the following opinion on the 25th of August, 1902: —