Lumber Legal Opinions

by Unknown

Question—A company in Boston sells to A in New York 800,000 feet of lumber and on the sales slip are the words, “for delivery, one cargo in June, and one in July.” The lumber was shipped in four cargoes, about 200,000 feet in each. The first two were shipped in July; the third cargo on the 18th of August, and the fourth on the 21st of August. The first two cargoes were accepted at the contract price, $27, but the customer refuses the third and fourth cargoes, claiming that we were late on the deliveries. It is a well known fact that all through this year vessels have been very hard to obtain. Has the New York dealer a right to refuse to accept the third and fourth cargoes at the contract price? The price has dropped from the spring to the present time from $27 to say $24. The customer claims the last two cargoes at the going market price prevailing at the time they arrived. Inasmuch as the cargoes cannot be sold over again, except at a less price than the New York customer offered, we were obliged to let him unload the last two cargoes. We claim that the customer has no right to deduct anything, owing to the lateness of delivery, because our orders read, “subject to delays caused by fires, strikes or other causes beyond our control.”

Reply: We suppose the clause quoted by our correspondent, “subject to delays,” etc., is incorporated in the contract or is so prominently printed on the order blank that the buyer cannot fail to understand that the sale is made subject to it. If that is true, and if it is also true that the delay in this case actually arose from a cause beyond the control of the sellers, then the buyer’s position was not tenable at the beginning. It is possible, however, that the buyer can maintain his position now by reason of the acquiescence of the sellers. The buyer had a right to ask that a deduction in the price be made by reason of the delay. If the sellers had refused this request and demanded expressly that the cargo be accepted at the contract price, or not accepted at all, they could have enforced their demand. It does not appear very clearly what answer the sellers made to the buyer’s request for a lower price. Our correspondent says: “Inasmuch as the cargoes cannot be sold over again, except at a less price than the New York customer offered, we were obliged to let him unload the last two cargoes.” There was plainly a dispute as to whether the delay was one which was excusable under the terms of the contract, and, if the act of the sellers, or their answer to the request of the buyer for a lower price, can be construed into an acquiescence in that request, the sellers are now bound by such acquiescence. If the sellers have always insisted that the contract price must be paid, that the goods must be accepted in strict accordance with the contract, or rejected, then they are in position to collect the full contract price for all the lumber.

Opinion No. 24.

WHEN LUMBER IS SOLD FOR DELIVERY THERE IS A BREACH OF CONTRACT IF NOT DELIVERED.

Question from Buffalo, N. Y.—A sells B a carload of lumber at a given price delivered, Boston rate of freight for shipment from the West. B gives directions which are accepted by A for shipment of car to a point taking a Boston rate of freight. The lumber is shipped as per contract, and the consignee pays a sight draft with bill of lading attached according to terms. While in transit the lumber is destroyed. Is the shipper not responsible to the consignee for the lumber, as it was not delivered, as the contract called for; and after the lumber is destroyed does the consignee have an option of insisting on having the shipment replaced or canceling the order?

Reply: Our correspondent calls attention to the fact that the contract in this case called for a delivery of the lumber at the end of transportation. This being so, the seller was bound to carry and deliver the lumber, as well as to furnish it. The carrier was an agent of the seller and if the lumber is not delivered the seller is to look to the carrier for damages, while the buyer looks to the seller. What the seller undertook to do in this case was to supply the lumber, to carry it, and then to deliver it. If he fails in either point he is guilty of a breach of contract. He has failed to deliver the lumber; the buyer may regard this as a breach of contract, which it is, and sue for such damages as may have come upon him as a result of the breach. The buyer cannot compel the seller to replace this lumber with other; but if the seller would rather do that than pay damages, and if the buyer is willing to have it done, then, of course, it may be done.

Opinion No. 22.

A LIQUIDATED DEMAND CANNOT BE SETTLED EXCEPT BY PAYMENT OF THE WHOLE AMOUNT.

Question—An individual in Providence, R. I., who was indebted to me, forwarded a check for less than the amount of his entire indebtedness. He stated on the face of it “settlement in full.” This in nowise discharged his obligation to me and I wrote him that I would credit his check on account and requested a remittance of the balance. He takes the position that under the Rhode Island law he has discharged his indebtedness. Please advise what rights I hold in the premises.

Reply: We do not find any statute or decision in Rhode Island to the effect that a payment of this kind constitutes payment in full. All the reported decisions by the courts of that State we have been able to find lay down practically the same rules upon the subject that are enforced by the courts of New York. This payment was made in New York, and the laws of this State govern it in any event. The law upon the subject here (and, so far as we can learn, in Rhode Island, too), is briefly this: If there is no doubt, and no dispute, as to the amount due, then payment of less than that amount will not discharge the debt, even though the creditor agree to accept it as a discharge, if there is no release under seal and no new consideration given. If the debt is unliquidated, if there is a doubt or dispute as to the amount of it, then the debtor’s offer of so much as payment in full constitutes his estimate of the amount really due. The creditor cannot accept the money without accepting the estimate. The debtor has a right to go into court to have the dispute settled, and if the creditor is unwilling to accept the condition under which the money is sent he is bound to return the remittance and allow the whole matter to be determined in some authoritative way. For decisions to the effect that part payment of a debt that is liquidated and certain is not payment in full, even when the creditor accepts the money and uses it, see 23 N. Y., 684; 108 N. Y., 470; 1 R. I., 496; and 8 R. I., 381.