Lumber Legal Opinions

by Unknown

Reply: Usually the measure of damages in a case of this kind is based upon the value of the goods at the time and place and in the condition in which they ought to have been delivered; the freight is to be deducted from this, if it has not been prepaid, and then interest is to be added from the day on which delivery ought to have been made to the day of payment; there is to be added also any expense to which the owner of the goods has been put as a necessary and natural result of the loss. What the carrier is bound to do is to put the owner of the goods as nearly as possible in the same position he would have occupied if the carrier had done his full duty in the first place. If the carrier had done his duty the owner could have sold the goods at the market price on the day of delivery at the place of delivery, he would have had the interest on the money thereafter, he would have escaped all incidental expenses arising out of the loss, and he would have been called upon to pay freight to the carrier, if it had not been paid in advance. There is only one exception to the rule that is at all common. If the goods have already been sold for delivery at destination, at a price less than that which chances to prevail when the day of delivery arrives, and if the carrier, at the time of shipment, had actual or constructive knowledge of this fact, then the owner can demand only the selling price with interest. In that case, if the carrier had done his duty, the owner would have obtained for his goods, not the market price, but only the contract price. Whether the carrier had or had not notice of the sale makes a difference in this respect; that a carrier is not to be held for a larger loss than he had in contemplation when the freight rate was fixed and the degree of care demanded of him was settled. If he had no knowledge of the sale, actual or constructive, he is bound for damages based upon the market price, as in the other case. The fact that other goods at a different price were sent to replace the lost shipment does not enter into the matter.

Opinion No. 46.

RISK IN SENDING CHECK TO DRAWER’S BANK FOR CERTIFICATION.

Question—We received a check from one of our customers and sent it to the customer’s bank for certification. The bank failed before the end of the next day and our check was not paid. Can we not return it to the maker and demand the face of it from him?

Reply: If the drawer of the check in this case had sufficient money on deposit to meet it our correspondents have no other recourse except against the assets of the insolvent bank; the depositor is discharged. The usual rule is that when a check is delivered that is drawn upon a bank in the same place in which the payee resides the drawer guarantees the solvency of the bank during the remainder of the day on which the check was delivered and the whole of the next day. The holder has this much time in which to present the check and draw the money; if the bank fails meanwhile the loss is upon the drawer of the check and the holder takes the risk of failure after the second day. But this rule does not apply when the holder of the check takes it to the bank and has it certified before the end of the next day after he receives it. Certification binds the bank and releases the drawer. So far as the drawer and holder are concerned, the effect is precisely the same as if the holder had drawn the money and had then deposited it to his own credit in the same bank.

Opinion No. 45.

A CONTRACT MAY BE CANCELLED WHEN ONE PARTY IS GUILTY OF BREACH.

Question—Lumber has been sold for delivery in installments running through a considerable period. Payments are to be made in installments also. The buyer has been very lax in this regard, however; he has not made a single payment strictly on time, and in some cases has delayed until the seller has been compelled to threaten suit. Is the seller bound to go on making deliveries to the end of the time named in the contract, getting his money whenever and however the tardy buyer sees fit to pay it?

Reply: If a seller agrees to deliver the goods at certain times, and the buyer agrees to pay for them in installments at given dates, each promise is a consideration for the other. If either the buyer or the seller fails to do his full duty under the contract he is in no position to demand that the other shall do what he has agreed to do. In other words, as soon as either is guilty of any breach of the contract the other may declare the whole agreement at an end; he may refuse to do anything further under the contract himself, and may demand damages of the person who was guilty of the breach. If a buyer fails to meet any payment promptly when it is due, the seller, if he chooses to do so, may immediately rescind the contract and bring suit for the unpaid installments and for damages. If he had not this privilege he might be compelled to go on for months delivering his goods to one who had already shown his unwillingness or inability to make good his promise of payment.

Opinion No. 47.