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diff --git a/old/60134-0.txt b/old/60134-0.txt deleted file mode 100644 index 1bf41bc..0000000 --- a/old/60134-0.txt +++ /dev/null @@ -1,4932 +0,0 @@ -The Project Gutenberg EBook of Lumber Legal Opinions, by Anonymous - -This eBook is for the use of anyone anywhere in the United States and most -other parts of the world at no cost and with almost no restrictions -whatsoever. You may copy it, give it away or re-use it under the terms of -the Project Gutenberg License included with this eBook or online at -www.gutenberg.org. If you are not located in the United States, you'll have -to check the laws of the country where you are located before using this ebook. - -Title: Lumber Legal Opinions - -Author: Anonymous - -Release Date: August 18, 2019 [EBook #60134] - -Language: English - -Character set encoding: UTF-8 - -*** START OF THIS PROJECT GUTENBERG EBOOK LUMBER LEGAL OPINIONS *** - - - - -Produced by Richard Tonsing and the Online Distributed -Proofreading Team at http://www.pgdp.net (This file was -produced from images generously made available by The -Internet Archive) - - - - - - - - - - LUMBER - LEGAL OPINIONS - - -[Illustration] - - 1910 - - - PUBLISHED BY - - NATIONAL WHOLESALE LUMBER DEALERS ASSOCIATION - - 66 BROADWAY, - NEW YORK - - - - - OFFICERS 1910–1911 - - - President ROBERT W. HIGBIE - First Vice-President FRED R. BABCOCZ - Second Vice-President FRANKLIN E. PARKER - Treasurer FRED’K W. COLE - Secretary E. F. PERRY - - - BOARD OF TRUSTEES - - Terms expire in 1911 - - LEWIS DILL Baltimore, Md. - C. H. PRESCOTT, Jr. Cleveland, O. - G. F. CRAIG Philadelphia, Pa. - A. L. STONE Cleveland, O. - W. W. KNIGHT Indianapolis, Ind. - W. E. LITCHFIELD Boston, Mass. - W. W. REILLEY Buffalo, N. Y. - - - Terms expire in 1912 - - R. D. BAKER Pittsburg, Pa. - G. C. EDWARDS Ottawa, Ont. - F. W. COLE New York City - R. H. DOWNMAN New Orleans, La. - F. E. PARKER Saginaw, Mich. - R. W. HIGBIE New York City - HORTON CORWIN, Jr. Edenton, N. C. - - - Terms expire in 1913 - - F. R. BABCOCK Pittsburg, Pa. - N. H. WALCOTT Providence, R. I. - T. J. MOFFETT Cincinnati, O. - F. S. UNDERHILL Philadelphia, Pa. - L. L. BARTH Chicago, Ill. - J. V. STIMSON Huntingburg, Ind. - W. A. GILCHRIST Memphis, Tenn. - - - - - PREFACE - - -In presenting “Lumber Legal Opinions” to our members and to some of our -friends whom we particularly desire to become members of our -Association, not only for the good their co-operation will do us, but -for their own benefit as well, we desire to say that this compilation is -based upon the practical working out of specific cases for our members -during the past few years. An examination will, we think, prove the work -to be practical and dependable, and generally to express good common -sense, and consequently good law. You will, we hope, find it worth your -careful study and guidance. In some instances the opinions may be -affected by court decisions of the respective States; some of these -decisions are specifically referred to, but, as a rule, it has been our -aim to secure opinions covering a general situation. - -This gives us an opportunity to remind you of the special work which -this Association is constantly undertaking for its members and -especially that it is worthy of your earnest co-operation and special -effort to bring in new members, so that the influence of the -organization may be enlarged and made in every way worthy of its name. - - * * * * * - -[Sidenote: Purpose of the Association] - -The Charter defines the Purpose of the Association to be “to protect the -members against unbusinesslike methods in the wholesale and retail -trade; to foster such trade and commerce; to reform abuses in such trade -or business; to secure freedom from unjust or unlawful exactions; to -diffuse accurate information among its members as to the standing of -merchants and others by and with whom said trade or business is -conducted, and as to other matters to produce uniformity and certainty -in the customs and usages of said trade and of those engaged therein; to -settle differences between its members, and to promote a more large and -friendly intercourse between them.” - -[Sidenote: Bureau of Information or Credit Department] - -The Charter and By-Laws of the Association defines the duty of this -Bureau to be as follows: “To diffuse accurate information as to the -standing of merchants.” There are in the records of this Bureau at the -present time 28,000 reports showing the financial condition of an equal -number of buyers of lumber. In addition to these financial statements -all of these buyers of lumber are rated by the Bureau as to their credit -standing as well. It is the unanimous opinion of our members who use -this Bureau that the reports are superior to those of any other -mercantile agency or other source of information. The Bureau makes a -specialty of securing reports only on lumber buyers or users, and it -therefore furnishes more complete and reliable reports as to moral and -financial standing and business methods than any other agency. A system -is also a part of the Bureau whereby important information is sent to -each subscriber without the subscriber making special request therefor; -in other words, it is the aim of the Bureau to keep its subscribers -fully and promptly advised of all important business changes. - - -[Sidenote: Legal and Collection Department] - -In connection with and as a part of the Bureau of Information there has -been established a legal and collection department. This department -handles commercial claims, past due accounts, etc., sent to it with -promptness and at a minimum cost when compared with the usual methods -employed by attorneys and the courts; also has on file much information, -including legal opinions and court decisions which are furnished upon -request without charge. - - -[Sidenote: Railroad and Transportation Bureau] - -The Railroad and Transportation Committee through its Bureau is in a -position to be of the greatest service to our members, because of the -intimate knowledge which our Traffic Manager has of all matters that -have to do with our relations with the railroads. - -Information and assistance covering a wide range of transportation -subjects is being constantly rendered. There are also on file complete -lumber tariffs which are kept up to date, and this enables our members -to obtain correct information as to rates, routing, etc. Upon request, -shipments are traced and prompt deliveries effected. The above services -are furnished to our members entirely free of charge. - - -This Bureau also investigates and collects claims for loss or damage in -transit, overcharges in rates, weight, mis-routing, etc. For these -services a nominal charge is made based on the actual amount collected. -The manager of this Bureau has had years of experience and possesses -intimate knowledge of the methods pursued by the various claim -departments of the railroads and he is therefore in a position promptly -to collect any just claims and frequently has been able to collect -claims which our members have been unable to collect themselves. In this -connection it may be well to state that all shippers of lumber are -entitled to free allowances in weight of five hundred pounds for car -stakes used on flat and gondola cars, and this Bureau has secured many -refunds on past shipments for members who have not been allowed this -free weight. The Bureau is also in a position to compel the railroads -not now making the allowances, to do so. - - -[Sidenote: Arbitration] - -The By-Laws define the duties of the Arbitration Committee to be “to -settle differences between our members.” The services of this committee -are at the disposal of our members at the actual cost of the expenses of -three selected men from among the members of this committee who -thoroughly understand the customs of the lumber trade. Any member who -avails himself of the services of this committee consequently obtains at -an actual cost the services of a jury of experts, with the result that -differences are settled fairly, equitably and promptly and without any -annoyances and undue expenses. - - -[Sidenote: Legislation Committee] - -“To reform abuses” and “to secure freedom from unjust or unlawful -exactions” is jointly the work of several Committees. For freedom from -unjust and burdensome laws and for laws granting us security and -reasonable opportunity in the conduct of our business, we look to the -Legislation Committee, whose duty it is to scrutinize acts affecting the -trade, to oppose those which oppress, and to favor and forward those -which assist. - - -[Sidenote: Forestry and Conservation] - -“To foster such trade and commerce” by perpetuating the raw material -which forms the basis of all lumber business, we have our Forestry -Committee. The people of this country, with its tremendous sources of -timber supply, must be educated to grasp the possibility of a future -famine, and needful legislation must be enacted to reduce the problem of -reforestation to a practical business proposition before the scarcity of -timber shall enhance the values of stumpage to the point of placing -trees as a crop in the same class with grain and cotton. The Advisory -Forestry Committee links our Association with the country at large in -this movement. - - -[Sidenote: Fire and Marine Insurance] - -The services performed by the members of these committees in past years -have most fully justified their existence in the reduction which has -been obtained not only for our members, but for all lumbermen both in -fire insuring companies as well as in marine insuring companies. These -savings amount annually to a sum which is estimated at more than one -million dollars in premiums. - - -[Sidenote: Hardwood Inspection] - -Our Association stands for not only a national but an international set -of rules to govern the grading and inspection of hardwood lumber. In all -lines of business nothing is more desirable and necessary than -uniformity. It is the aim of the Hardwood Inspection Committee to secure -the adoption of a reasonable and universal set of rules for the -inspection of hardwood lumber. - - -[Sidenote: Management] - -The Active Management of the Association is in the hands of a board of -twenty-one trustees, operating with the Officers and the Executive -Committee, through the Secretary and his assistants. - - -[Sidenote: Headquarters] - -The offices of the Association are at 66 Broadway, New York, centrally -located in the business section of the city. Members have the -unrestricted privilege of using these offices as the headquarters for -receiving mail and telegrams, and for business conferences. - - -[Sidenote: Membership] - -The four hundred Lumbermen who are members are ready and willing to -testify to the advantages to be derived from connection with this -Association. Coming from 28 States and Canada, they are qualified by -numbers and ability to cope with all questions affecting the manufacture -and wholesale distribution of lumber. - - -Membership in our Association is restricted to legitimate manufacturers -of lumber and wholesale dealers in lumber who are in good standing in -the trade. - - -There is no initiation fee. The annual dues are $50.00, with a charge of -$50.00 additional to those who desire the benefits of the Bureau of -Information. The Collection Department and Transportation Bureau are -open to all members without charge other than the very moderate fees -scheduled for actual work performed. - -[Illustration] - - These opinions and abstracts were compiled, and arranged under the - supervision of the LEGAL DEPARTMENT, BUREAU OF INFORMATION, W. W. - Schupner, Department Manager. - - - - - INDEX - - -The cross index is arranged so as to bring out the several points in -each opinion or extract. The number at the left, following each opinion -or extract, indicates the number of such opinion or extract referred to -in the index. The first number after the subject gives the number of the -opinion and the second the page number, for example: after “acceptance -of checks sent in full settlement” appear 18–21, denoting that the -information can be obtained from opinion 18 on page 21. The other -figures after the same subject indicate the other opinions and pages -where similar information is given. - - * * * * * - - =First number gives number of opinion; second number gives page number.= - - _Agent._ - Authority of salesman to bind principal, 35–36 - Carrier as agent—see common carriers - License in New York City, 3–17 - May receive notice for principal, 88–74 - See also certificate to do business. - - _Acceptance of_ - checks sent in full settlement, 18–21, 20–28, 51–49, 66–60, 80–68, - 95–77 - delayed shipments avoids claim for delay, 87–73 - draft does not avoid claim for inferior lumber, 92–76 - less than invoice price, 109–89 - offer constitutes valid contract, 72–65, 96–79 - order through salesman, when it is complete, 96–78 - shipment affected by statute (New Jersey), 81–69 - shipment affected by warranty, 62–57, 102–83, 108–89 - shipment unless promptly rejected, 62–57 - shipment validates verbal contract, 65–59, 86–72 - shipment when it is all or partially used, 34–36, 90–75, 102–83 - shipment when it is retained, 6–17, 31–48 - shipment when it is used may depend on a private custom, 90–75 - - Acceptance necessary to make valid contract, 72–65, 96–79 - - Accord and satisfaction, 18–21, 20–28, 51–49, 66–60, 80–68, 95–78 - - Accounting by executor, 23–26 - - Accounts stated—what does it consist of and what advantage, 101–82 - - Assignment for creditors voided by bankruptcy, 14–22 - - Assignment of account by foreign corporation (New York), 63–58 - - - _Banking._ - Certification of check releases maker, 45–43, 104–85 - Liability of bank for failure to give notice of protest to endorser - of note, 99–81 - Protest not always necessary, 52–50 - - _Bankruptcy._ - Avoids assignment of creditors, 14–22 - Discharge not prevented by giving bad check, 41–39 - Discharge, what will prevent it, 97–79 - - _Bill of Lading._ - in name of buyer may not release seller, 53–51 - may be required for surrender of shipment, 29–34 - stipulation as to delivery, 11–20 - stipulation as to notice of arrival, 25–31 - to order retains title, 70–62 - - Breach of contract—see contracts. - - Buyer’s position when lumber offered is not as per contract, 37–33 - - - Cancelling contract when one party guilty of breach, 5–14, 47–44, - 67–61, 71–64 - - Cancelling order by purchaser before accepted by seller’s home office, - 96–79 - - Cancelling order for non-delivery or delay, 43–41, 84–71 - - Carload of lumber must all be in accordance with order to fulfill - contract, 76–66 - - Certification of check binds bank and releases maker, 45–43, 104–85 - - Certificate for individual to do business in New Jersey or New York, - 10–22 - - _Certificate to do Business._ - Indiana, 106–86 - Kentucky, 106–87 - Maryland, 55–52 - Michigan, 106–88 - Mississippi, 106–87 - New Jersey, 17–18, 64–58 - New York, 17–19, 26–32, 63–57, 106–88 - Ohio, 106–87 - Pennsylvania, 19–24 - Tennessee, 106–87 - West Virginia, 106–86 - - Change in original order no excuse for refusing shipment, 1–13 - - Checks sent in full settlement, etc., 18–21, 20–28, 51–49, 66–60, - 80–68, 95–77 - - _Common Carriers._ - Agent for buyer, 33–77, 53–51, 70–62, 88–74 - Agent for seller, 22–28, 37–33, 70–62, 88–74 - Can insist upon acceptance of delayed delivery, 13–47, 56–53 - Claim for loss or damage, 13–47, 46–42, 56–53, 59–54, 73–65 - Liability as warehouseman, 8–16, 48–44 - Liability for delay, 13–47 - Liability for delivery without surrender of Bill of Lading, 29–34, - 58–54 - May return rejected shipment to consignor, 58–54 - Must deliver shipment as directed, 11–20, 61–56 - Not always compelled to notify consignor that shipment is rejected by - consignee, 61–56 - Not bound to act as intermediary, 58–54, 61–56 - Notice to, when loading complete, 8–15 - Obligation to send notice of arrival, 8–16, 25–31, 28–33, 48–44 - Should pay value at destination for lumber lost, 59–55, 73–65 - Stopping shipments in transit, 27–29, 79–68, 105–85 - When can charge demurrage, 25–31 - When liability begins and ends, 8–16, 48–44 - - Conditional clauses on letter-heads, orders, etc., 24–27, 110–48, - 50–46, 82–70 - - Confirmation of order by home office, 65–59, 96–78 - - Confirmation as to time of shipment, 36–35 - - _Contract._ - Acceptance of offer constitutes valid contract, 72–65, 96–79 - Against liability for delay in shipping, 24–26 - Breach for failure to make good delivery, 6–18, 37–33 - Breach for non-delivery, 22–28, 30–30, 39–38, 43–41, 84–71 - Conditions must all be part of contract, 24–27, 50–46, 110–48, 82–70 - Incomplete when only part of car as per order, 76–66 - May be cancelled when one party guilty of breach, 5–14, 47–44, 67–61, - 71–64 - May be void if a mistake in it is obvious, 72–65 - Should be in writing and signed, 65–59 - Valid by acceptance of offer, 72–65, 96–79 - - Conveyance in F. O. B. shipment, 42–40 - - Corporations (foreign) see certificate to do business. - - Credit cannot be demanded when business transferred, 40–39 - - Credit must be kept good, 30–30, 39–38, 47–44, 67–60, 71–64, 79–68, - 91–75 - - Custom—private and general—as to using a shipment, 90–74 - - - Damage claim against carrier, amount of claim, 13–47, 46–42, 56–53, - 59–54, 73–65 - - Damage in transit, who responsible, 8–15, 54–51 - - Delay beyond shipper’s control, 50–46, 84–71 - - Delay by carrier, liability for, 13–47 - - Delay in shipment, liability for, 24–27, 50–46, 84–71 - - Delayed delivery, acceptance of, avoids claims for damages, 87–73 - - Delayed delivery by carrier should be accepted, 13–47, 56–53 - - Delayed delivery need not be accepted as fulfilling contract, 84–71, - 87–73 - - _Delivery._ - Delayed, liability for, 24–27, 50–46, 84–71 - In installments, 5–14, 43–41, 44–41, 47–44, 86–72, 102–83 - Liability for non-delivery, 22–28, 30–30, 39–38, 43–41, 49–45, 91–75 - May be stopped when buyer becomes insolvent, 27–29, 71–64, 79–68 - May not affect original purchaser, 38–35 - Delivery must be complete, 31–48, 76–66 - Delivery must be made by carriers as directed, 11–20, 61–56 - Not in accordance with contract, 37–33 - On consignee’s side-track, 48–45 - What constitutes, on F. O. B. sales, 8–15, 37–33, 42–40, 53–50, 70–62 - - Demand that shipment be returned cannot be enforced, 6–18 - - Demurrage—see common carriers. - - Discount must be in accordance with terms, 18–21, 57–53, 69–61 - - Draft (accepted) with Bill of Lading does not avoid claim for inferior - lumber, 92–76 - - Draft with Bill of Lading to order, 70–62 - - Due notice, what does it mean, etc., 83–71 - - - Endorser on note entitled to notice of protest, 99–81 - - Executor, time for accounting, 23–26 - - - False statement may prevent discharge in bankruptcy, 97–79 - - Fire delaying shipment, seller’s liability, 50–46 - - F. O. B.—what constitutes delivery, 8–15, 37–33, 42–40, 31–48, 53–50, - 70–62 - - Foreign corporations—see certificates to do business. - - Freight as a consideration for passing title, 9–23, 53–50, 54–51 - - Freight rate advance, 110–48 - - Fraud, statute of, 65–59 - - - Indefinite quantity, order for, 98–80, 103–84 - - Indiana—necessity of foreign corporations filing certificates, 106–86 - - Insolvents, shipments to, can be stopped, 27–29, 71–64, 79–68 - - Insolvency, cause for declining further shipments, 67–61, 71–63, 91–75 - - Inspection on arrival—privilege of, 62–57, 92–76, 102–83 - - _Installment Shipments._ - Acceptance of one installment validates verbal contract, 86–72 - Contract for delivery, not separable, 5–14, 93–77, 102–83, - (see Minnesota case), 107–88 - Cancelling for non-payment, 47–44, 71–64 - Cancelling order for non-delivery, 43–41 - Delay in shipment, 44–41 - Using one installment may constitute waiver of objection to - subsequent installments, 102–83 - - Invoice terms not effective unless part of contract, 82–70 - - - Judgment in one state ground for suit in another, 60–55 - - - Kentucky, necessity of foreign corporations filing certificate, 106–87 - - - Loss for non-delivery of lumber, 49–45 - - Loss for reselling shipment refused on arrival—method of recovery, - 1–13, 5–14, 78–67, 94–77 - - Lost shipment, amount of claim against carrier, 59–55, 73–65 - - - Maryland, necessity of foreign corporations filing certificate, 55–52 - - Maximum and minimum amounts in contract of sale, 98–80, 103–84 - - Measure of claim against carrier, 13–47, 46–42, 56–53, 59–54, 73–65 - - Michigan, necessity of foreign corporations filing certificate, 106–88 - - Mississippi, necessity of foreign corporations filing certificate, - 106–87 - - Mistake must be obvious to avoid contract, 72–65 - - - New Jersey—certificate for individual dealing under assumed name, 10–22 - - New Jersey lien law, 21–32 - - New Jersey—necessity of foreign corporations filing certificate, 17–18, - 64–58 - - New Jersey statute affects acceptance, 81–69 - - New York City license for agent, 3–17 - - New York State certificate for individual dealing under assumed name, - 10–22 - - New York—necessity of foreign corporations filing certificate, 17–19, - 26–32, 63–57, 106–88 - - Non-suit for foreign corporations—see certificates to do business. - - _Notice._ - As to non-delivery, 49–45 - Of arrival by carrier, 8–16, 25–31, 28–33, 48–44 - To agent is notice to principal, 88–74 - To carrier when loading complete, 8–15 - To carrier as to measure of damages, 46–43 - What constitutes reasonable notice, 83–71 - - - Offer accepted constitutes valid contract, 72–65, 96–79 - - Offer may be withdrawn until accepted, 96–79 - - Ohio—necessity of foreign corporations filing certificate, 106–87 - - Order, confirmation by home office, 65–59, 96–78 - - - Partial payment validates verbal contract, 65–59, 86–72 - - Partial shipments—see installment shipments. - - Pennsylvania—necessity of foreign corporations filing certificate, - 19–24 - - Postscripts on letters or contracts should be signed, 82–70 - - Principal bound by notice to agent, 88–74 - - Principal not always bound by salesman’s act, 35–36 - - Prompt rejection of shipment necessary to avoid acceptance, 62–57 - - Protest not always necessary, 52–50 - - - Quantity, order for indefinite quantity, 98–80, 103–84 - - - Railroads—see common carriers. - - Reasonable time for shipment, unless otherwise agreed, 36–35 - - Reasonable time, what does it mean, 13–47, 62–57, 83–71 - - Refusal of seller to make deliveries, 49–45 - - Refusing shipment on arrival, 1–13, 5–14, 56–52, 78–67, 94–77 - - Refusing to send shipping instructions for lumber ordered, 12–20 - - Rejection of shipment by notice to railroad, 88–74 - - Rejected shipment may be returned to consignor by carrier, 58–54 - - Rejection of shipment, carrier not always compelled to notify - consignor, 61–56 - - Rejection of shipment must be prompt, 62–57 - - Reselling lumber refused on arrival, 1–13, 5–14, 78–67, 94–77 - - Retaining lumber shipped constitutes acceptance, 6–17, 34–36 - - - Sales in installments—see installment shipments. - - Sales on credit, 30–30, 39–38, 40–39, 47–44, 67–60, 71–64, 79–68, 91–75 - - Sales of indefinite quantity, 98–80, 103–84 - - Salesman’s order, when accepted, 96–79 - - Salesman’s power to bind principal, 35–36 - - Selling lumber refused on arrival, 1–13, 5–14, 78–67, 94–77 - - Shipping instructions for lumber ordered, refusal to send, 12–20 - - Stated accounts, advantage of, 101–82 - - Statement of assets, etc., if false, may prevent discharge in - bankruptcy, 97–79 - - Statute of fraud, 65–59 - - Stopping shipment in transit, 27–29, 71–64, 79–68, 105–85 - - Storing lumber refused on arrival, 1–13, 5–14, 78–67 - - Strike delaying shipment, seller’s liability, 50–46 - - Suit can be instituted in one state on judgment obtained in another - state, 60–55 - - Suit by foreign corporation may not be maintained because of failure to - file certificate—see certificate to do business. - - - Taxes of foreign corporations, 89–74. - See also certificate to do business. - - Tender in fulfillment of contract should be accepted or rejected as a - whole, 31–48 - - Tennessee—necessity of foreign corporations filing certificate, 106–87 - - Terms of sale must be part of contract, 82–70. - See also conditional clauses on letter-heads, etc. - - Terms of sale should stipulate discount, 18–21, 57–53, 69–61 - - Time of shipment, confirmation of, 36–35 - - Time of shipment, reasonable unless otherwise agreed upon, 36–35 - - Title, during transit (carrier’s assumption), 61–56 - - Title, not affected by freight payment, 9–23, 53–50, 54–51 - - Title, when it passes, 8–16, 22–28, 31–48, 48–45, 53–50, 54–51, 70–62 - - Title, transfer after purchase holds original buyer, 38–35 - - - Using lumber shipped constitutes acceptance, 34–36, 90–75, 102–83 - - - Verbal contract, when valid, 65–59, 86–72 - - - Warehouseman, carriers’ liability as, 8–16, 48–44 - - Warranty may survive acceptance, 62–57, 102–83, 108–89 - - West Virginia—necessity of foreign corporations filing certificate, - 106–86 - - - - - CHOICE OF REMEDIES WHEN LUMBER IS REFUSED ON ARRIVAL. - - -Recently a member took an order from a dealer in Pennsylvania for a car -of lumber, and after order had been forwarded to the mill, the buyer -requested that a change be made in a certain size included in the order, -which our member advised would be made if shipment had not already gone -forward from the mill. It developed, however, that shipment had been -made and that it was too late to alter any part of the original order. -Upon arrival the buyer refused to accept the lumber on the ground that -it was not as ordered. - -In connection with this case we have the following opinion from an -experienced attorney: - - Seller has the choice of one of three things, viz.: First, he - may store or retain the property for the vendee and sue him for - the entire price. Second, he may sell the property, acting as - the agent for this purpose of the vendee, and recover the - difference between the contract price and the price of resale. - Third, he may keep the property as his own and recover the - difference between the market price at the time and place of - delivery and the contract price. Usually, the best course to - pursue would be to elect the second remedy, to wit: that of - acting as agent for buyer and dispose of the carload of lumber - and recover the difference between the contract price and the - price of resale. By proceeding in this manner, they may have the - use of the price realized from the sale, and they have done all - that good faith required to the end that any loss sustained be - reduced to a minimum. Of course, the seller on the resale must - dispose of the goods in good faith and the best mode calculated - to produce their value, whether it be public auction or by - broker, or any other mode that can or could be easily adopted. - -=Opinion No. 1.= - - -A metropolitan dealer writes: - -We took an order in writing from a party for 25,000 feet of lumber, -5,000 feet to be delivered the latter part of May, June, July, August, -and until all should be taken. Buyer accepted the delivery of the -shipments until June, when he refused the shipment, writing us a letter, -as trade was dull, to please not ship any more goods on account of order -until he notified us. We immediately wrote him that we should insist on -his living up to the terms of the contract. We had our truckman make -note of the fact that he tendered the goods at their factory and that -they refused to receive them. Now, can we sue and collect for these -goods, and in the future if they refuse to receive them after tendering -them can we sue? If we should instruct our truckman to leave these goods -on the sidewalk in front of their place of business, could we sue, -claiming this was a proper delivery and collect for same? - - Reply: When goods are to be delivered in a number of - instalments, as in this case, the buyer’s refusal to accept - delivery of any one instalment is a breach of the whole - contract; the seller may declare the contract at an end, from - that moment, and may sue and recover any damage that the breach - of contract may have caused him. The seller has the choice of - three remedies. He may keep the goods as his own and sue for the - damages; he may hold the goods as agent of the buyer, informing - the buyer that they will be delivered to him upon his demand, - and sue for the contract price of the goods; or he may sell the - goods, for account of the buyer, giving the latter prior notice - of the time and place of sale and then hold the buyer for any - deficiency. A delivery of the goods upon the sidewalk in front - of the buyer’s place of business would be of no advantage to the - seller and it might make him liable for that part of the goods - if the buyer neglected to take charge of them. The seller cannot - sue for the price of each instalment, when it has been tendered - and refused. This would be to put the buyer to the expense of - defending a number of suits, all arising out of one contract, - and this the law does not sanction. Though it calls for delivery - at different times, the contract is one and not several, and it - may be made the basis of only one action. Suit may be brought as - soon as there is a breach of it, it is true, but that suit must - be for all the loss arising by reason of the buyer’s - unjustifiable act, not simply for the value of the single - instalment tendered and refused. When any suit is brought the - court will assume that it is for all the loss arising out of the - contract and further suits upon the same cause of action will be - barred. - -=Opinion No. 5.= - - - - - INTERPRETATION OF “F. O. B.” SHIPPING POINT OR DESTINATION. - - -As there seem to be many opinions on the question of “ownership in -transit,” or delivery of lumber F. O. B., and as the association has -received numerous inquiries from members covering various phases of the -subject, the question has been submitted by the association to Mr. -Walter W. Ross, General Counsel to the Car Stake and Equipment Complaint -Executive Committee, and an experienced railroad attorney, for opinion. -While it must be conceded that such an opinion can cover only a specific -case, it will probably be of value to many of our members when the -question of ownership in transit arises, and if followed, if adopted as -a practical solution, will help to bring about a better understanding -between shipper and buyer, always keeping in mind however, that the laws -differ in various States. - -His opinion is as follows: - - If A sells lumber to B and the contract of sale provides that A - shall deliver the lumber free on board (F. O. B.) cars at a - certain point, the title to the lumber remains vested in A, the - seller, until he has delivered the lumber at the point agreed - upon to the buyer or his agent the carrier. - - If the lumber is damaged while in the possession of the carrier - in transit to the point of agreed delivery, the question of the - loss is between the seller A and the carrier. If the lumber is - damaged after delivery at the point agreed upon, but while in - possession of the carrier the question of loss is between the - buyer and the carrier. - - The question arises what constitutes delivery f. o. b. In the - case of shipment of lumber by rail it is customary for the - shipper to load the lumber properly on the car. It has been held - by some of the courts that it is not necessary for the shipper - having completed the loading to give formal notice of delivery - to the carrier in order to place the consignment in the - possession of the carrier—(but it is safer to notify the carrier - of such fact thereby eliminating a possible controversy). If the - sale is f. o. b. point of shipment the delivery by the seller to - the carrier is delivery to the buyer and from that time the - carrier until it has performed its contract of transportation is - the agent of the buyer. This principle of law is subject to the - exceptions arising under the law of stoppage in transit, as for - instance if the buyer becomes insolvent after the shipment has - been made—but before arrival at destination. - - It has been held that the liability of the carrier begins as - soon as the consignment has been placed in its possession, even - though the bill of lading has not been issued. - - The question also arises when does the liability of carrier as - such terminate by delivery to the consignee. - - The general rule is that when the carrier has placed the car of - lumber on the track which is the usual and customary place for - the consignee to unload and consignee has had reasonable - opportunity to unload, then its liability as carrier terminates - and it is liable only as a warehouseman while the consignment - remains on such track, which means that the carrier is required - to exercise only the degree of care which an ordinarily prudent - person would exercise to protect his property from loss or - destruction. In some states the statutes provide, or the courts - hold, that the carrier having placed the car in such position - for unloading by the consignee, it is then the duty of the - carrier to send due notice of that fact to the consignee; and - until such notice and reasonable opportunity has been given, the - carrier’s liability as such continues. In other states the - carriers are not required either by statute or rule of the - courts to give such notice of arrival of consignments, it being - held to be the duty of the consignee to keep himself informed as - to the time of arrival of his freight. This rule is gradually - being superseded in most states by the more reasonable rule that - it is the duty of the carrier to send due notice to consignee of - arrival of freight. - -=Opinion No. 8.= - - - - - BUYING AND SELLING AGENT NEEDS NO LICENSE IN NEW YORK CITY. - - -Very often out of town members who contemplate opening an office in New -York City, inquire as to whether it is necessary to obtain a license in -order that their agent may legally represent them. The following appears -to cover the ground: - -Question from Baltimore, Md.—I am acting here as a buying and selling -agent for a lumber company outside of the State, they supplying me with -the money with which to buy the lumber to ship to them on their orders, -and I crediting them with the proceeds of the sales of lumber shipped to -me to sell for their account, my compensation being a commission on the -sales and purchases. Under these conditions I do not pay a license here -in Baltimore, but as I expect shortly to move the office to New York, I -will thank you to let me know if I would require a license to conduct -this business in that city, and if so, where should I apply for same? - - Reply: No license is required in New York City in order to carry - on such a business as our correspondent describes. One who - simply buys and sells here, as agent, need not make a report or - pay a fee to any public officer. But if at any time he carries - on a general mercantile business, as agent, he must register and - pay a fee. The statute is as follows: “Any person now carrying - on or conducting a general mercantile or manufacturing business - within this State, or hereafter commencing such business at or - in a fixed location as agent or manager for another or others, - shall—at the commencement of such business, file a sworn - statement, verified by such agent and principal or principals, - in the county clerk’s office of the county within which said - business is carried on, stating the nature of the business and - the full name and residence of such principal or principals.” - The fee is $1.00, and failure to file the statement is a - misdemeanor. - -=Opinion No. 3.= - - - - - RETAINING LUMBER SHIPPED CONSTITUTES ACCEPTANCE. - - -The acceptance of lumber, where the grade is disputed, is the subject of -the following correspondence: - -Question.—We recently shipped a car of lumber to a dealer, who claims -that same is not up to the grade bought. We have asked him to return -shipment and guaranteed to replace same with material that was -absolutely right. He refuses to do so, and states that he will not -return it until he receives lumber to replace the lot he refused to -accept. We have sold this car to another party, who asks for delivery. -We believe that the original purchaser is making an unjust claim. Can we -demand that the lumber be shipped back to us, as the party has refused -to accept same and has not paid for it? In case he refuses to return it -are we under any obligation to make a second delivery? - - Reply: The purchaser in a case of this kind has no right to any - material that previously belonged to the seller except under the - contract which he has with the seller. When the seller sends the - purchaser any lumber and the purchaser keeps it, he keeps it - either wrongfully or else as being in compliance with his - contract. But the courts will not allow any man to claim, for - his own advantage, that he is a wrong-doer when there is a - possible and reasonable explanation of his act which makes it - lawful. For this reason, among others, a buyer of lumber when - there has been no warranty of quality, who retains the lumber - sent to him, and refuses to return it, is always held to retain - it as being perfectly satisfactory and in compliance with the - contract. Any complaint he may make about the delivery is of no - importance; it is his act that counts. The courts will insist - upon taking the most charitable view of his conduct, whatever he - may say, and the most charitable view is that he is doing right, - and not wrong, and is keeping the lumber because it is a good - delivery under the contract. Our correspondents can demand that - the lumber be returned if they choose to do so, but they cannot - enforce the demand. If the buyer does return the lumber, in - answer to such a demand, he will have a claim against the - sellers for another delivery, and a valid one under the - contract, or for a breach of the contract in failing to make a - good delivery in the first place. If no such demand is made, or - if it is made and not complied with, the buyer can be compelled - to pay the contract price of the goods on the theory that his - holding them is an acceptance under the contract. It is idle for - him to say that he does not accept them; keeping them is - acceptance. No second delivery need be made unless the first - delivery is promptly and properly refused and returned. - -=Opinion No. 6.= - - - - - OBTAINING CERTIFICATES PERMITTING FOREIGN CORPORATIONS TO DO BUSINESS - AND MAINTAIN AN ACTION IN NEW YORK OR NEW JERSEY. - - -Almost every State in the Union, and especially the States of New York, -New Jersey, Pennsylvania, Massachusetts, Connecticut, etc., require -foreign corporations, that is, corporations formed under the laws of -other States, to procure a license or certificate to do business within -such State, and in default thereof penalties or fines are imposed. - -In considering the necessity of such license the first question is to -ascertain whether the corporation is transacting its business in a -manner which could be interpreted as “doing business” in its legal -sense, and this means generally filling all orders obtained in that -State when more than two or three incidental orders have been obtained -or the maintaining of a place of business in such State. The -difficulties in obtaining the certificates are not great but the details -are technical and the expense ranges from $10 upwards, depending upon -the laws under which the company is incorporated, there being -retaliatory laws in some States. The average expense is about $25, and -the certificates are generally good for an indefinite period; the only -annual requirements being a formal report which does not involve the -giving of the details of the corporation’s business and there is no -annual taxation unless the corporation has both property and is doing -business within such State. - -In many cases where valid claims exist in favor of a corporation of -another State against a New York debtor, a serious obstacle arises where -the foreign corporation has not obtained a certificate to do business in -this State, and, therefore, cannot maintain the action. By the statutes -as last amended this prohibition covers also any one to whom such -foreign corporation has assigned the claim for collection. The -provisions of the New York corporation law in this matter are easily -complied with. There has to be a sworn copy of the charter of such -foreign corporation and the designation of some person on whom process -can be served. - -The objection to complying with the statute in this respect is the -possible liability to taxation after the corporation gets its name on -the State Register. All that is taxable in New York State is the amount -of capital used in the State, and this would be so small as to be -unimportant provided, of course, that the proper returns to the tax -departments at Albany and New York are made out each year. This, we -understand can be done in ordinary cases, at a charge of $10, for the -two reports, one to Albany and one to New York, and this sum is a very -small tax to pay for what must be the advantages of selling lumber and -maintaining the legal rights connected with such sales in New York -State. - -=Opinion No. 17.= - - - - - A CARRIER IS BOUND TO DELIVER LUMBER AS DIRECTED. - - -Question.—My shipper consigns me a car of lumber and marks the bill of -lading “via P. R. R. delivery.” If this car arrives by the C. R. R. of -N. J., can I be compelled to accept same from them, or does my original -contract entitle me to insist on P. R. R. delivery? - - Reply: One of the important and imperative duties of a carrier - is to deliver the lumber as he is directed to deliver it. A - direction to deliver it to a specified connecting carrier or - delivery concern cannot be fulfilled by delivering it to - another, any more than a direction to deliver it to a certain - consignee can be carried out by delivery to another individual. - If the carrier makes a wrong delivery, as here described, he is - guilty of conversion. The consignee is not bound to accept the - lumber from the connecting carrier to whom it has been wrongly - delivered. He may sue the original carrier for the value of the - lumber as soon as he learns that a different delivery from that - directed by the bill of lading has been made. - -=Opinion No. 11.= - - - - - IF A BUYER REFUSES TO TAKE LUMBER ORDERED THE SELLER HAS A CHOICE OF - REMEDIES. - - -Question.—Some time in March last we received an order for two cars of -32–inch lath. A few days after the order came to hand we received a -letter from our customer requesting us to defer shipment on account of -the threatened strike in the coal regions, which request was complied -with. The difficulties between the miners and operators have of course -been adjusted and operations were resumed some time ago, but our -customer has so far failed to furnish shipping directions for the lath, -which we had cut especially for his order and piled on our docks ready -for shipment at the time his request was received to hold the order. -Would we not be justified in loading this stock up and putting cars in -transit in accordance with the original order and insisting upon -acceptance of same upon arrival? - - Reply: This buyer has not, in our opinion, lost his right to - select the route by which the goods shall be shipped to him. - There is no question that his delay in giving such instructions - has been unusually great, but the sellers on their part have - given no indication of an objection to such delay. It is clearly - their right now to demand that he send shipping instructions - immediately and to inform him that they will send the goods by a - route of their own selection if he does not name a route by - return mail; then, if the buyer does not reply, or if he refuses - to issue shipping instructions, or undertakes to repudiate the - contract, the sellers will have a choice of three remedies: They - may ship the goods to him by any suitable carrier and compel him - to pay for them; they may inform him that the goods are held - subject to his order, to be shipped in whatever manner and at - whatever time he may select, and then compel him to pay for - them, or they may name a time and place at which the goods will - be sold at auction for his account, giving him sufficient - opportunity to be present at the sale, and may then sell them at - such time and place, holding him liable for the necessary - expenses of advertisement and sale and for any amount, by which - the selling price may be less than the contract price. - -=Opinion No. 12.= - - - - - UNDER CERTAIN CONDITIONS THE ACCEPTANCE OF PART OF A DEBT DOES NOT - RELEASE THE REMAINDER. - - -Question.—One of our customers recently sent us a check for less than -the amount of his bill, saying in his letter that he was remitting the -full amount due us. If he had taken advantage of the regular discount on -his last purchase (which he did not do) the amount now due us would have -been within a few dollars of the size of the check, but even then the -check would not represent the exact amount due to us. He does not say in -so many words that he is claiming a discount, just sends the check and -writes, “enclosed please find amount of my bill to date.” Something of -this kind happens rather frequently, and we would like you to advise us -whether we must forego using that check until we can write and -straighten out the matter with him. More is due to us than he has paid -us, and it seems a hardship that we should be kept out of even this part -of our claim during the week or month which it may take to have a full -understanding with our customer. - - Reply: The creditor, in a case of this kind, is justified in - cashing the check and still demanding the amount yet due; this - amount he can recover by suit if it is not paid voluntarily. The - buyer, it seems, was not entitled to a discount, and he has not - made a specific claim to any. Being indebted to a certain amount - he simply sends a check for part of that amount. He does not say - that he claims a discount. If this check for less than the full - amount due had been accompanied by a demand that it be either - accepted as payment in full, or else returned, a different - question might have arisen; but even then the check might safely - have been cashed under the facts of this case. This case is - simply that of a man who owes $100 and who sends his creditor a - smaller amount. The proper course for the creditor is to accept - what is sent as a payment upon account and still maintain his - claim for what is yet due. - -=Opinion No. 18.= - - - - - BANKRUPTCY AVOIDS AN ASSIGNMENT FOR CREDITORS. - - -Question.—We made a sale to a firm who became embarrassed and offered a -compromise to their creditors. We accepted the settlement offered, 25 -per cent. cash and 25 per cent. by note at one year. The note given us -was not paid and after some delay the concern now goes into bankruptcy. -Please inform us whether our claim in the bankruptcy proceedings would -be the note only or the full amount due under the original sale? - - Reply: The compromise in this case, in so far as it has not been - carried out, will probably be set aside and all the bankrupt’s - estate be held liable to his creditors under the bankruptcy - proceedings. It has been held that “an adjudication of - bankruptcy at the instance of the bankrupt’s creditors on the - ground of a general assignment, avoids such assignment and - subjects the property assigned to the jurisdiction of the - bankruptcy court to be administered under the Bankruptcy Act - which the creditors have invoked.” - -Opinion No 14. - - - - - AN INDIVIDUAL MAY TRANSACT BUSINESS UNDER A CORPORATE TITLE IN NEW - JERSEY. - - -Frequently the question arises regarding a person’s legal right to start -business under a corporate title; for instance, as “Can John Smith -conduct business as the Pine Lumber Company,” etc. - -Question from New Jersey.—A person wishes to start a lumber business in -New Jersey. Can he adopt a style such as “The Crescent Lumber Company” -without being incorporated, the manager being the sole proprietor? Is -there anything necessary to be done in such a case beyond hanging out -his sign at his place of business? - - Reply: In New York no person is now allowed to establish a - business under any name, corporate or individual, except his own - name, until he has first placed on record in the county clerk’s - office, in the county in which the business is to be carried on, - a statement of the facts. So far as we can find, however, there - is no similar statute in New Jersey. It is a comparatively - recent law in this State and there are not many other States - that have adopted it. The public cannot be misled to its - detriment by such a method of doing business as our - correspondent proposes, and there is no common law rule against - it. If any creditor supposes that the business is being carried - on by a corporation he will not be harmed by the mistake, - because the liability of an individual owner, or of a firm, is - greater than that of the stockholders of a corporation. A - creditor who learns that his business belongs to an individual, - instead of a corporation, will be benefited by the knowledge, - not damaged. If there should be a statute just enacted requiring - registration, the county clerk will know of it. - -=Opinion No. 10.= - - - - - WHETHER FREIGHT IS PREPAID OR ALLOWED DOES NOT AFFECT TITLE TO LUMBER. - - -Question.—A dealer in Buffalo sells a car of lumber to a dealer in -Baltimore with the understanding that freight is to be allowed from -Buffalo to Baltimore. Please state whether there is any distinction as -to the ownership of the lumber in transit, whether the Buffalo dealer -prepays the freight in Buffalo or allows the Baltimore dealer to deduct -the amount of freight in settlement. If the freight is prepaid in -Buffalo at the time of shipment, and the lumber be lost in transit prior -to delivery, is the ownership of the lumber vested with the Buffalo or -the Baltimore dealer? - - Reply: If lumber is sold with an understanding that the seller - is to pay the freight, it makes no difference at all, as to - ownership during transit, whether freight is prepaid and - included in the price, or whether it is deducted from the price - and left for the buyer to pay. A seller is not bound to carry - the lumber to its destination and deliver it there unless he has - expressly agreed to do so. This is true whether the seller pays - the freight or not; in either case a valid delivery, - transferring risk and title, may be made, if the seller so - chooses, at the beginning of the transportation unless the - seller has agreed to deliver the goods elsewhere. - -=Opinion No. 9.= - - - - -OBTAINING CERTIFICATES PERMITTING FOREIGN CORPORATIONS TO DO BUSINESS IN - PENNSYLVANIA. - -A recent attorney’s opinion contained some valuable information -regarding the filing of certificates in New York State, permitting -foreign corporations to transact business in that State and maintain an -action. We have been asked for information regarding the requirements of -the Commonwealth of Pennsylvania in this matter and our attorney at -Philadelphia, William S. Furst, Stephen Girard Building, has forwarded -the following opinion. - - Herewith follows an opinion embodying the essential points in re - foreign corporations doing business in the State of Pennsylvania. - - The Act of Assembly approved April 22, 1874, provides that no foreign - corporation (this includes corporations created by other States) shall - do any business in this Commonwealth until such corporation shall have - established an office and appointed an agent for the transaction of its - business therein, and it shall not be lawful for any such corporation - to do any business in this Commonwealth until it shall have filed in - the office of the Secretary of the Commonwealth a statement under seal - of such corporation, and signed by the President or Secretary thereof, - showing the title and object of said corporation and the name of its - authorized agent, with a penalty attached thereto for violation, that a - person shall be guilty of a misdemeanor, etc. - - The words “doing business” do not include a sale in a foreign State, - although the goods are delivered in this State, or taking orders, or - making sales by salesmen through agents going into Pennsylvania from - another for that purpose. - - In short, a foreign corporation engaged in strictly interstate - commerce, may advertise its goods, send agents to solicit orders, take - orders, make contracts of sale respecting the same, and ship them to - customers in Pennsylvania, without violating the act, and may sue to - recover the price of any merchandise without filing the statement - required by the act, although the foreign corporation in question has - no office or place of business in Pennsylvania and no part of its - capital invested here. - - A foreign corporation, which has not complied with the Act above - stated, but has an office or place of business in Pennsylvania, or any - of its capital invested within the State, cannot enforce contract - rights in the courts of Pennsylvania. - - It has been recently decided by the Supreme Court of the State of - Pennsylvania (the court of last resort) that a foreign corporation - which invests most of its capital in the State of Pennsylvania for a - period of six months while constructing a railway, employs large - numbers of men, but does not file a statement in the office of the - Secretary of the Commonwealth, as required by the provisions of the Act - until two months after completion of the work, cannot recover for labor - and materials furnished in doing such work. - - With respect to the taxes imposed upon foreign corporations doing - business in the State of Pennsylvania, the Act of May 8th, 1901, - provides that all foreign corporations shall pay to the State Treasurer - for the use of the Commonwealth a bonus of one-third of one per centum - upon the amount of their capital actually employed or to be employed - wholly within the State, and a like bonus upon each subsequent increase - of capital so employed. This is not an annual tax. It has been defined - to be the price paid the Commonwealth for the privilege conferred on - such corporation by its charter. It is therefore in no sense a tax, and - the payment thereof does not relieve any corporation from any tax to - which it is otherwise subject. - - Respecting the taxation of foreign corporations, they are taxable like - domestic corporations on so much of their capital stock as is invested - within the Commonwealth under the provisions of the Act of Assembly - approved June 8th, 1898. The tax is imposed annually at the rate of - five mills upon each dollar of the actual value of the whole capital - stock of all kinds invested or represented by capital invested within - the State. - - The tax is settled by the accounting officers upon the basis of a - report required to be made by all companies subject to the tax, and - particularly upon the appraisement of the value of the stock contained - in such report. The report is filed between the first and fifteenth of - November in each year. - - Foreign corporations are also obliged to file a bonus report annually, - from which should appear whether there has been any increase in the - amount of the capital actually invested within the State, so that the - proper bonus charges may be made upon any such increase as above - stated. - -=Opinion No. 19.= - - - - - PAYMENT OF CLAIMS BY AN EXECUTOR—TIME FOR FINAL ACCOUNTING. - - -Occasionally the question arises as to what length of time an executor -has to close an estate, and the following, particularly the second -section, may be helpful: - -Question—Can an executor pay a bill of $10 or less, or what is the -largest amount he can pay, without having the claim verified before a -notary, according to law? - -2.—Within what time do the laws require that an executor’s accounts -shall be made up and ready for final settlement? - - Reply: 1. The law makes no distinction as to the amount of the - claim against the estate for which an executor should require - vouchers and an affidavit. The statutory provision is as - follows: “The executor or administrator may require satisfactory - vouchers in support of any claim presented, and the affidavit of - the claimant that the claim is justly due, that no payments have - been made thereon, and that there are no offsets against the - same to the knowledge of the claimant,” see Code of Civil - Procedure, Section 2718. If an executor should pay a claim of - any considerable size, without this precaution, and the claim - should afterwards turn out to be unjust, he could be, or - probably would be, required to repay the amount to the estate. - - 2. The laws of this State do not fix any definite time as the - limit within which an executor must make his final accounting. - Whenever a year has expired since the grant of his letters, the - surrogate may compel the executor to make an accounting of all - that has been done up to that time. If the estate is then in a - condition to be definitely settled this may be done. If there - has been any remissness on the part of the executor this may - properly be dealt with by the surrogate. If the executor has - used due diligence, and still is not ready to make a final - accounting, he may have further time, always, of course, under - the supervision of the court. - -=Opinion No. 23.= - - - - - A SELLER MAY CONTRACT AGAINST LIABILITY FOR DELAY IN SHIPPING. - - -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. - -=Opinion No. 20.= - - - - - PRIVILEGE OF STOPPING LUMBER IN TRANSIT WHEN BUYERS BECOME INSOLVENT. - - -Question—When lumber has been sold and shipped, and the seller -afterwards directs the carrier not to deliver it to the buyer but to -return it to him, is the carrier under any obligation to return it, or -must he go ahead and deliver it to the buyer, or may he exercise his own -will in matter? What are the legal rights of all parties in such a case? - - Reply: If one who has sold lumber on credit learns, after it has - been delivered to the carrier, that the buyer is insolvent it is - his right to demand that the lumber be not delivered to the - buyer, but be returned to him. This is known as the right of - stoppage in transit, and it is founded upon the theory that one - who buys on credit is bound by an implied contract to keep his - credit good until the date of payment arrives. In order that the - seller may be entitled to exercise this right the buyer must be - actually insolvent, that is, unable to meet his just obligations - as they fall due; the lumber must be still in the hands of the - carrier, and not yet delivered into the actual or constructive - possession of the buyer. If the lumber is represented by a bill - of lading making it deliverable to the buyer or his order that - must be still under the buyer’s control; if he has transferred - it to a third person, who has taken it for value and in good - faith, the seller’s right of stoppage is gone. If a seller who - has a right to stop the lumber attempts to exercise the right by - directing the carrier not to deliver it the carrier is bound to - obey the direction. The carrier, however, acts at his peril in - any case. If he obeys the instruction and refuses to deliver the - lumber to the buyer, and the buyer is solvent, he may bring an - action of trover against the carrier immediately. On the other - hand, if the carrier disobeys the instruction, and delivers up - the lumber, he makes himself liable to the seller, at least to - the extent of the buyer’s indebtedness for the lumber, if it is - a case in which the seller is justified in exercising his right - of stoppage in transit. Because of these difficulties of his - situation, the carrier is entitled to a reasonable time in which - to investigate the financial condition of the buyer; but if he - finally delivers the lumber to the buyer in any case in which - the seller had a right to countermand the order for their - delivery, and had done so, the carrier must answer for it. - -=Opinion No. 27.= - - - - - SALES FOR FUTURE DELIVERY. - - -Frequently the question of credit arises after a contract for future -delivery has been made, and the following may be helpful: - -Question—Will you kindly give us your opinion in the following matter: A -makes a sale to B of a certain quantity of lumber for future delivery, -payments to be made on a credit of sixty days’ time. Before the delivery -of lumber begins, A has reason to believe that the responsibility of B -is not satisfactory to him and refuses to ship the lumber except for -cash with discount for the difference in time. What redress has B in -this matter, if he is not in a position to pay cash? - - Reply: The refusal of A to ship the lumber to B under - these circumstances constitutes a breach of contract, for - B has an action against A for damages. Something more than - dissatisfaction with B’s financial responsibility is - necessary to furnish A with a valid excuse for his refusal - to ship except for cash. - -=Opinion No. 30.= - - - - - IN MOST STATES A CONSIGNEE MUST BE NOTIFIED OF THE ARRIVAL OF HIS - LUMBER. - - -Question—Is a railroad company obliged to notify the consignee of the -arrival of lumber when it is billed and the bill of lading reads: “Order -of shipper, notify consignee,” and if the carriers fail to notify the -consignee, have they the right to charge demurrage or storage for the -lumber so held? Would it make any difference if the lumber were billed -direct to the consignee and were not an “Order notify shipment?” Have -the courts made any rulings of this matter, and where can we find them? - - Reply: A railroad company is, of course, bound to comply with - the undertaking set forth in its own bill of lading. If it - accepts goods to be carried and delivered under a bill which - expressly directs it to “notify the consignee” there is no - ground upon which it can escape its obligation actually to - notify the consignee except the impossibility of finding him by - the ordinary means. If the consignee can readily be found the - carrier has not fulfilled the task which it has expressly and in - definite terms undertaken to fulfill until it has found him and - notified him. It has no right to charge demurrage or storage - until such notification has been duly given. If the consignee - cannot be found by the exercise of reasonable diligence then the - attempt to find him will serve the carrier as well as an actual - notification. If the bill of lading does not, in express terms, - direct the carrier to notify the consignee this duty still rests - upon the carrier by common law as it is interpreted in this - State. In some States (Massachusetts, for example) the carrier - is not bound to notify the consignee of the arrival of his goods - unless the contract of carriage expressly so directs. But in New - York the courts hold that this is one of the carrier’s duties, - as carrier, without any special stipulation regarding it. This - is the rule, as the courts of New York have announced it. “The - rules as to the delivery of goods at their place of destination - by a carrier that prevail in this State are as follows: If the - consignee be present upon the arrival of the goods, he must take - them without unreasonable delay. If he be not present, but live - at or in the vicinity of the place of delivery, the carrier must - notify him of the arrival of the goods, and then he has a - reasonable time to remove them. If he be absent, unknown, or - cannot be found, then the carrier can place the goods in its - freight house, and if the consignee does not call for them in a - reasonable time, its liability as a common carrier ceases.” - -=Opinion No. 25.= - - - - -OBTAINING CERTIFICATES PERMITTING FOREIGN CORPORATIONS TO DO BUSINESS IN - NEW YORK. - - -A previous opinion contained some information regarding foreign -corporations obtaining certificates to do business in New York. The -following additional information, from our attorney in New York, Mr. -Eustace Conway, 15 William Street, regarding amendments effective -November 1st, will be interesting: - - There went into effect on November 1st, 1906, various important - amendments to the corporation Tax Law. The annual franchise tax is - placed on a different basis from what it has been heretofore for - foreign corporations, and the license tax which foreign corporations - have to pay for doing business in this State is also changed as to its - method of determination. Under the new law the measure of amount of - capital stock employed in this State (on which the tax of ⅛ of 1 per - cent. is to be paid for this corporation license to do business here) - is to be such a proportion of the issued capital stock as the gross - assets employed in any business within this State bear to the gross - assets wherever employed in business. As no action shall be maintained - in any of the courts of this State by such foreign corporation without - obtaining a receipt for this license fee, it is important to foreign - corporations expecting to do business here to comply with the statute - and take out the certificate. This tax, of course, is only to be paid - once for the license, unless later an increased amount of capital stock - is employed in the State, but this is not likely to occur. The annual - franchise tax is, of course, a different tax, but it is based on the - same proportion, except that the amount of dividends is also to be - considered. - -=Opinion No. 26.= - - - - - THE NEW JERSEY LIEN LAW PROTECTS MATERIAL MEN. - - -Question—Please state whether or not, under the laws of the State of New -Jersey, a seller of building materials comes in under the mechanics’ -lien law the same as the man selling his labor. - - Reply: Persons furnishing materials for the erection of a - building are called “material men” in the Mechanics’ Lien Law of - New Jersey, and they have a lien which is protected like that of - a laborer. The first section of the law provides that “every - building hereafter erected or built within this State shall be - liable for the payment of any debt contracted and owing to any - person for labor performed or materials furnished for the - erection and construction thereof, which debt shall be a lien on - such building, and on the land whereon it stands.” It is further - provided, in a later section, that “whenever any master-workman - or contractor shall, upon demand, refuse to pay any person who - may have furnished materials used in the erection of any such - house or other building—it shall be the duty of such—material - man to give notice in writing,” etc. As a result of this notice - his lien attaches and his claim is protected. - -=Opinion No. 21.= - - - - - OBLIGATION OF CARRIERS AS TO NOTICE OF ARRIVAL TO CONSIGNEE. - - -Question—Is a railroad company, which has accepted lumber for -transportation to a certain point, legally obligated to notify the -consignee at the respective point of the arrival of lumber? - - Reply: The law relating to the obligation of a railroad company - to notify the consignee of the arrival of the lumber at the - point of destination is not uniform in all the States. The rule - adopted in New York and in most of the States is that the - carrier must give notice of arrival to the consignee, and that - until notice is given, or a reasonable effort to give notice is - made, the carrier’s liability as carrier continues in force. - -=Opinion No. 28.= - - - - - BUYERS’ POSITION WHERE, ON ARRIVAL, LUMBER IS NOT IN ACCORDANCE WITH - CONTRACT. - - -Question—A has sold to B a carload of lumber to be delivered on or -before November 24, payment cash promptly after arrival and examination. -The lumber arrives on the 24th, and A gives on that day to B an -examination order for the lumber, which examination order B accepts. B -uses proper diligence in trying to examine, but, owing to congestion of -cars at the depot the lumber is not unloaded for several days, and he -can only examine it on the 28th. He finds it to be of a quality inferior -to the grade contracted for and rejects it, and his rejection is -sustained by arbitration. B claims the right to go into the market on -the 28th, buy a carload of lumber of the grade contracted for and demand -from A the difference between the contract price and the price paid by -him on the 28th. A maintains that he can only be held responsible for -the difference between the contract price and the ruling market value on -November 24, the last date stipulated in the contract. Who is right? - - Reply: This lumber was sold for delivery at the buyer’s end of - the route, the purchase price was to be paid only after arrival - and examination. The carrier was an agent of the seller, and he - did not give the buyer an opportunity to make examination until - November 28. No valid delivery was made, or could have been - made, before November 28, inasmuch as an examination by the - buyer was to precede such delivery. When delivery was tendered - on November 28 the lumber was found to be such as the buyer was - at liberty to reject. He was, accordingly, authorized to go into - the market on that day and buy at the price then prevailing in - order to place himself in as good a position as he would have - been in if the seller had done his duty and had not been guilty - of a breach of contract. The buyer has a right to demand that - the seller shall place him in this position. - -=Opinion No. 37.= - - - - - LIABILITY OF TRANSPORTATION COMPANY IN DELIVERING WITHOUT SURRENDER OF - BILL OF LADING. - - -Question—Can a transportation company be held responsible for delivering -a shipment of lumber to a consignee without surrender on the part of the -consignee of signed bill of lading, originally issued when shipment was -made? - - Reply: Until lumber shipped has been completely delivered to the - person entitled to receive it, the bill of lading represents the - lumber, but no longer. The transfer of a bill of lading passes - the title of the transferor to the transferee. If, therefore, a - transportation company delivers the shipment to consignee - without a surrender of the bill of lading it is liable to a - person who has obtained a valid title to the shipment by - transfer of the bill of lading from the consignee. - -=Opinion No. 29.= - - - - - IF NO SPECIFIC TIME OF SHIPMENT IS NAMED A REASONABLE TIME IS - UNDERSTOOD. - - -Question—On October 25th we bought of a manufacturer a carload of lumber -through their agent. On the 30th we received confirmation of the order. -Nothing was said about the time of shipment, except that in sending the -sizes on October 26th, we told them to “ship at once.” On November 1st -they wrote that they would ship it “the coming week.” No part of it has -been shipped yet. We could have disposed of the carload during this time -at a very good profit. During all this time we have been completely out -of this kind of lumber. Have we a just claim for damages? - - Reply: It does not appear whether the confirmation received by - the buyers on October 30 was sent by the sellers before or after - their receipt of the instruction to “ship at once.” The only - importance of this point is this: If the sellers confirmed the - order after receiving the instruction to “ship at once,” they - were bound to ship at once. If they confirmed the order before - receiving this instruction, then the instruction formed no part - of the contract, and is not to be taken into account; in that - case the sellers were bound simply to ship the lumber within a - reasonable time—within the time within which these sizes - commonly are shipped. If they have not done so, they are guilty - of a breach of contract and the buyers may recover any damages - the breach has caused them. They are entitled to be placed by - the sellers in as good a position as they would be in if the - sellers had carried out their contract according to its terms. - The letter of the sellers of November 1, saying they would ship - the goods “the coming week,” forms no part of the contract. The - agreement was made before that letter was written, and it is - binding as originally made. The letter is of importance, - however, as showing an estimate of the sellers themselves as to - what was a reasonable date of shipment. The letter is not - binding upon the buyers, if they can prove that an earlier date - would have been reasonable; but it is binding upon the sellers, - who wrote it. - -=Opinion No. 36.= - - - - - ONE WHO BUYS LUMBER IS LIABLE THOUGH HE TRANSFERS IT BEFORE DELIVERY. - - -Question—An individual buys a carload of lumber for future delivery and -before it is delivered he forms a partnership with two other persons and -turns the order over to the firm. Delivery of the lumber is made to this -firm. Please say whether the individual is liable, or only the -partnership. It is a limited partnership and the buyer has only a -certain definite amount at stake with it. - - Reply: This is simply the case of an individual who has - purchased goods and then has sold or transferred them before - they have come into his actual possession. Such cases, that is, - of a second sale before delivery to the first purchaser, are - very common, and the original purchaser remains liable precisely - as if delivery has been made to him and he had afterward - disposed of the goods as he saw fit. In the case our - correspondent puts the seller may look to the first buyer unless - he has agreed to release him and look to the firm. - -=Opinion No. 38.= - - - - - A LUMBER SALESMAN GENERALLY HAS NO POWER TO BIND HIS PRINCIPAL. - - -Question—One of our traveling salesmen has just sent in a larger order -than we feel safe in filling for that particular customer on the liberal -terms of credit allowed him in the same contract. Are we compelled to -fill the order, or may we reject it without incurring any legal -liability? - - Reply: Ordinarily a traveling salesman is authorized merely to - take orders and submit them to his principal for acceptance or - rejection. He has no power to bind his employer irrevocably by a - contract of sale. Our correspondents are justified in refusing - to fill an order sent in by their salesman unless the latter was - expressly authorized to make a valid and binding sale upon his - employers’ behalf, or unless traveling salesmen are usually - clothed with this power. In the latter case each salesman will - be presumed to have the powers usually possessed by men of this - class, unless the buyer had notice of a limitation upon this - general and usual power in the case of the salesman with whom he - was dealing. - -=Opinion No. 35.= - - - - - USING LUMBER WITHOUT CONSENT OF SHIPPER WHERE QUALITY IS DISPUTED. - - -Question—We shipped a carload of lumber to a party and they complained -of the quality and refused to settle in full. We insisted upon a -settlement in accordance with invoice, or re-inspection of the entire -carload by an inspector that would be satisfactory to both parties. We -sent a man to look at the lumber and found that it was put in a dry kiln -without our consent, and this, of course, prevented an inspection of the -lumber in its original condition. Are we correct now in insisting upon a -settlement in full as invoiced, and can we maintain our action in a -lawsuit? - - Reply: If your lumber was received by the company and, without - authorization from you they put it in the dry kiln, so as to - prevent your examining it or taking it back, they would be - liable to you for the invoice price. They cannot accept the - lumber, use it and then refuse to pay. By their acceptance they - waive any defects in quality or quantity, which can be - ascertained upon an inspection of the lumber upon arrival. They - do not waive any defects that are what we call “latent,” that - is, that are not readily ascertainable upon an examination of - the lumber on arrival, but only show after the lumber may be put - in use. As we take it, such complaints as have been made relate - to alleged defects which they ascertained as soon as they - received the lumber. In that case they had no legal right to use - it, and if they used it, they are liable for the invoice price. - -=Opinion No. 34.= - - - - - IN AN F. O. B. SALE, SHIPPING POINT, THE CARRIER IS THE BUYER’S AGENT. - - -Question—If I buy goods f. o. b. point of shipment and part of the goods -invoiced are lost in transit can the consignor enforce payment for the -goods not received? - - Reply: When goods are bought f. o. b. place of shipment they are - delivered to the buyer at the place of shipment. Title to the - goods passes to the buyer as soon as delivery is made to the - carrier and the carrier is an agent of the buyer to bring his - goods to him. If the goods are lost on the way the buyer must - pay for them, just as if they had reached him; they have reached - his agent and have been delivered to him, and that is all the - buyer can ask. When goods are sold the presumption always is - that the buyer is to take charge of them in the place in which - they are at the time of the sale. There is no presumption that - the seller is to carry the goods to any place the buyer may - select and deliver them to the buyer there. The seller may do - this, of course, and he frequently does do it; but he is never - bound to do it unless he has expressly so agreed. If the buyer, - in any case, declared that the goods were to be brought to him - by the seller he must show some clause in the contract that has - this meaning; in the absence of such a clause the buyer, either - in person or through an agent, is to take possession of the - goods in the place they occupy at the time of the sale. The - words, “free on board,” are sufficient to prevent the seller - from making a good delivery while the goods are in his own - warehouse, as he otherwise might do. These words place upon him - the duty of taking the goods to the boat or cars and meeting the - expenses necessary actually to start them on their way; but when - this much is done the seller’s whole duty is done. The goods - then belong to the buyer and have been delivered to him; that is - all that is necessary to raise an obligation on his part to pay - for them. - -=Opinion No. 33.= - - - - - BUYERS CAN INSIST THAT LUMBER, PURCHASED ON CREDIT, BE DELIVERED. - - -A retailer says: “Lumber was sold to us by a special written contract on -a six months’ credit, the lumber to be ordered out as fast as we saw -fit. We have taken a little more than half and only about two of the six -months have expired. We order another small shipment to be made. The -seller replies that he will send this car, but that he can make no more -deliveries unless we are ready to discount part, at least, of our bill. -He says that he has already extended credit to us as far as he feels -justified in doing. He seems to pay no attention to the contract, under -which we were entitled to order out all of the lumber at once, or in -such shipments as suited us, and were to have a credit upon the whole -bill of six months. Will he be sustained in the stand he has taken? If -we have a remedy please say what it is?” - - Reply: When lumber has been sold and part of it delivered, it is - too late for either the buyer or the seller to alter the - contract without the consent of the other. If the sale is upon - credit, as in this case, the terms of credit are such as have - been agreed upon in the beginning. Either the buyer or the - seller may ask, of course, to have the terms changed before all - of the deliveries have been made, but if the other does not - agree to the change the contract must be performed as it was - made. It would be as reasonable for the buyer to refuse to - accept the remainder of the lumber unless the terms of credit - were made more favorable to him, as for the seller to refuse to - continue his deliveries as agreed unless his new proposal as to - credits were accepted. If the seller, in the case our - correspondents put, refuses to go on with the contract in its - original form, the buyers will have the same remedy they would - have had if no deliveries at all had been made. They may go into - the open market, when the time for delivery arrives, buy lumber - enough to finish out the contract, and then hold the seller for - such amount as they are compelled to pay over and above that - named in the contract. Or, if they do not choose to do that, - they may establish the amount of the loss arising from the - seller’s breach of contract in any way in which it can be shown - to the satisfaction of a jury and collect the damages so - established. Or the buyers may cancel the remainder of the - contract if they prefer that course. There is only one exception - to this rule. Any one who has bought goods on credit is bound by - an implied agreement to keep his credit good, and if he fails to - do so he cannot require the seller to deliver the goods. - Accordingly, if a buyer, before all of the lumber is delivered, - shows an inability to pay any just claim in the ordinary course - of business, when it falls due, those who have sold him on - credit may lawfully refuse to go on with the deliveries and the - buyer will have no remedy. - -=Opinion No. 39.= - - - - - ONE CUSTOMER CANNOT DEMAND THAT CREDIT BE EXTENDED TO ANOTHER. - - -Question—Lumber corporation No. 1 bought from lumber corporation No. 2 -several carloads of lumber for future delivery. Corporation No. 1, -before the agreed time of delivery, commenced proceedings of -dissolution. Out of corporation No. 1, however, a new corporation, No. -3, was formed. Corporation No. 3 now demands of corporation No. 2 that -they deliver this lumber. No. 2 declines on the ground that the -personal, as well as the financial, standing of the new corporation is -entirely changed. Do you think that corporation No. 2 has a legal right -to do this? Where the word corporation is used we mean that one company -is incorporated under the laws of one State, while the other two -companies are existing under charters from different States. - - Reply: If any person or corporation has been willing to extend - credit to corporation No. 1 that same person or corporation - cannot for this reason be compelled to extend credit to - corporation No. 3, or to any other person or corporation. If a - corporation has bought goods and paid for them it may assign its - right under that contract, which is simply a right to demand - delivery of the goods to another corporation; but if it has - bought goods on credit, and has then gone into dissolution, it - cannot demand that the credit of any other corporation be - substituted for its own. - -=Opinion No. 40.= - - - - - GIVING A BAD CHECK DOES NOT PREVENT DISCHARGE IN BANKRUPTCY. - - -Giving a worthless check for goods and disposing of them immediately is -not a ground for refusing a discharge from bankruptcy. Judge Hough of -the United States District Court has recently granted a discharge to a -party who filed a petition in bankruptcy on October 24, 1906, with -liabilities of $11,577 and no assets. His discharge was opposed by a -creditor, who said that on June 6, 1892, the debtor bought $1,964 worth -of goods, giving a check in payment, which was deposited in bank and -came back marked “no funds.” The creditor went at once to debtor’s place -of business and found that he had sold out and left the city. When -debtor’s application for a discharge came up for a hearing he excepted -to the specifications of objections, and Judge Hough sustained the -exception on the ground that the objections are not within the statutory -list. - -=Opinion No. 41.= - - - - - WHAT IS CONVEYANCE ON F. O. B. SHIPMENT? - - -Question—What is the meaning of f. o. b. Philadelphia, Pa.? What is the -meaning of f. o. b. cars Philadelphia, Pa.? Is there any difference -between the two above? If so, what is it? - -2.—In selling goods f. o. b. New Orleans, and same are delivered -alongside of steamer, does the shipper or consignee have to pay cost of -handling charges in transferring from cars to steamer; that is, on goods -shipped from New York to New Orleans. - - Reply: (1) When goods are sold f. o. b. place of shipment the - meaning is that the seller, for the amount named in the - contract, will supply the goods and will bear the expense of - delivering them on board that conveyance which is to carry them - to their destination. The only difference between the two - phrases set down above is that the latter binds the seller to - deliver the goods on the cars at Philadelphia without any - expense to the buyer; while the former binds him to deliver them - at his own expense on some conveyance not yet specified, which - will carry them to the buyer. - - (2) If goods are sold f. o. b. New Orleans, and they are to be - carried to the buyer at some other place in a steamer, all - expenses necessary to deliver them aboard the steamer are to be - borne by the seller. The conveyance on board which the goods are - to be delivered is that which is to take them to their - destination. If goods are to be carried to a buyer on a steamer - there is no reason why he should bind the seller to load them on - freight cars and make a tender of them there. - -=Opinion No. 42.= - - - - - FAILURE TO DELIVER ONE INSTALLMENT CAUSE FOR CANCELLING ORDER. - - -Question—We purchased a quantity of lumber to be shipped in February, -March and April in equal monthly shipments. The first shipment has not -been made in February and we would like to know whether this entitles us -legally to cancel the entire contract or only the February lot. In other -words, does the breaking of a contract in one instance cancel the entire -contract? - - Reply: When goods are to be delivered in instalments the courts - of this State hold that the seller’s failure to deliver one - instalment justified the buyer in refusing to accept that tender - and also in rescinding so much of the contract as is yet - unfulfilled. It is one contract, not several, and the seller - cannot insist on a right to deliver only such instalments as he - finds it convenient to deliver and to have them accepted. The - buyer has not agreed to pay anything at all for part of the - goods. His contract is that he will pay a certain amount for all - of them. If he is not to have all of them, it is quite - conceivable, and is often a fact that any part less than all is - of very much less than proportionate value to him; it may have - practically no value to him at all. In any event, the seller has - agreed to do a certain service and the buyer has agreed to pay a - certain sum of money. The court will not infer from that an - obligation to pay half the money for half the service or to - accept half the service on any condition, if the other half is - to be, or has been, withheld. - -=Opinion No. 43.= - - -Question—A customer places an order with the mill for November, -December, January and February, proportionate shipments. The mills are -unavoidably delayed in executing the order, but are finally able to make -shipment of practically the whole order in February. The customer -refuses to pay invoices for all the goods shipped in February, but -claims dating on proportionate amounts in April, May and June. Is he -justly or legally entitled to the dating and could he hold the goods -subject to sellers’ order? - - Reply: There seems to have been no clause in this contract - releasing the mill in case of such a delay as has occurred. In - the absence of such a clause the buyer was justified in refusing - to accept the goods when all of them were shipped in February. - He is entitled to hold the goods subject to the seller’s order, - or to return them. He cannot, however, force another contract - upon the seller than that which was actually made. The mill may - take back its goods or allow the buyer to accept them upon such - new terms as may be agreed upon. The buyer is justified in - receiving the original contract. This is upon the supposition - that the buyer has not during the past four months said or done - anything to lead the seller to suppose that he was satisfied - with the delay, that he would accept all of the goods as readily - in February as if shipment had been made in strict accordance - with the terms of sale. If he has done that he is estopped now - from making any objection to the tender. - -=Opinion No. 44.= - - - - - AMOUNT OF CLAIM FOR DAMAGE AGAINST CARRIER. - - -Question—We made a shipment via two connecting railroads. When it -reached a junction prior to delivery at destination, i. e., a point on -the second road, was badly or entirely damaged in a wreck, and our -customer asked that we immediately replace the shipment, which we did, -and made another shipment of the same kind of lumber four days later, -but in the interim between the time of the first shipment and the time -we received the replacing order from the customer, the price advanced, -and in our second invoice we naturally charged the customer for the -advance. The claim department of the railroad now offers to settle with -us at the original invoice price of the first shipment and declines to -entertain a settlement at the advanced price. We claim that our position -is entirely legal in the matter, and that we are entitled to the -advanced price for the shipment that was lost, the same representing the -value of the goods at the time the goods were destroyed. - - 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.= - - - - -LUMBER ON A CONSIGNEE’S SIDE-TRACK IS IN CUSTODY AND AT THE RISK OF THE - CONSIGNEE. - - -Question—When does the railway’s liability end and the consignee’s begin -on lumber delivered in cars on the consignee’s side-tracks; i. e., if a -carload was burned in forty-eight hours after being placed for the -consignee, would the loss fall on the transportation company or the -consignee? - - Reply: When a carload of merchandise is delivered upon the - consignee’s own side-track and the consignee has notice, express - or implied, of that fact, then all liability of the railroad - company for the safety of the merchandise ceases at once. The - goods are still in the company’s cars, but that is not - sufficient to make the company liable, for the cars themselves - are in the custody of the consignee and upon his premises. The - goods have been delivered to the consignee, and that is the last - of the duties the carrier undertook to perform. A railroad - company cannot be expected, and in some cases would not be - allowed, to place its watchmen in private freight yards and to - extend over and through those yards its system of protection - against fire. When cars containing goods have been delivered - upon the consignee’s premises the goods themselves have been - delivered there. The carrier is no longer liable, either as - carrier or as warehouseman and the courts have so decided. - -=Opinion No. 48.= - - - - - WHERE A SELLER REFUSES TO MAKE DELIVERIES, BUYER CAN PROTECT HIMSELF. - - -Question—A places a contract with B for future delivery of lumber -beginning in October; B, for certain reasons, does not care to deliver -this contract. A has the opportunity to buy the identical goods for the -same delivery from competitors at the same price, after being notified -by B that he does not care to deliver this contract. Does the fact that -A has the opportunity to cover himself on the same conditions release B -of damages arising from non-delivery of the contract, or can A wait -until the time of delivery before buying goods in the open market -against the contract of B which the latter refuses to deliver? - - Reply: If B is under contract to deliver goods to A in October, - and if, before October, he notifies A that he does not intend to - fulfill his contract obligation, A may accept that statement as - final and protect himself at once. He may make other - arrangements for an October delivery and compel B to pay the - loss, if any, or he may sue at once for breach of contract. The - buyer is not bound to pursue this course, however. He may act - upon the supposition that, upon further consideration of the - matter, the seller will conclude to do his duty after all; and - so the buyer, A in this case, may wait till the time arrives for - the October delivery, and may then buy goods to replace those - that the seller ought to have delivered, holding the seller - liable for the loss, if any, or he may then sue for breach of - the contract. If this costs the seller more than the other plan - might have cost him, the fault is his own. He will not be heard - to complain because the buyer has taken it for granted that he - really would perform his contract obligation when the time - arrived, in spite of his previous statement that he did not - intend to do so. - -=Opinion No. 49.= - - - - -ALL CONDITIONS OF A CONTRACT MUST ACTUALLY BE EMBODIED IN THE CONTRACT. - - -Question.—The following is a general form that is frequently printed -across the top of the letter heads of manufacturers: “All agreements are -contingent upon fires, strikes, delays of carriers, accident and other -contingencies beyond our control.” What effect does this have on a -contract when such letter heads are used when quoting prices and when -accepting the order? - - Reply: Any provision that is intending to form part of a - contract ought to be introduced into it in express terms or else - referred to so that there can be no mistake regarding it. In the - particular case under consideration the clause should be - incorporated in the contract or acceptance, or the contract - should state that the sale is made subject to the terms and - conditions printed across the top of the paper. Either one of - these would be a simple, easy procedure and would remove all - doubt. A contract usually begins with the name of the place and - a date, or with the names of the parties; and it ends with one - or more signatures. Both parties are bound by all that lies - within these limits and by everything beyond that is referred to - as forming part of the agreement; but neither party is, as a - rule, expected to look anywhere else—even around the margins of - the same paper—to ascertain his rights and liabilities. It may - be possible, in some cases, to make a provision printed on the - margin of the paper containing the contract part of the contract - itself, but there is always more or less doubt upon this point, - and no doubt should be left where it is so easy to make the - meaning plain. If the marginal printing is to be useful at all - it will be mainly in connection with a statement that the - contract was made subject to a certain usage of the business, or - a certain custom of that particular house, and that this custom - was well known to the buyer; as proof of this fact the words - across the top of the paper would be useful. - -=Opinion No. 50.= - - - - - A CARRIER IS LIABLE FOR ANY LOSS CAUSED BY HIS DELAY IN DELIVERING - GOODS. - - -Question.—Inform us what recourse we would have against a railroad for a -shipment of lumber from Buffalo to New York, which has already been on -the road eighteen days, as shown by the shipping documents, and has not -arrived yet. In the meantime the market dropped some 10 per cent. in -price. This lumber was bought f. o. b. Buffalo. - - Reply: A carrier is bound, not only to deliver the lumber - entrusted to him for carriage, but to deliver it with reasonable - promptness. The courts recognize the fact that promptness of - delivery has an importance second only to the fact of delivery - itself. What is to be held as constituting reasonably prompt - delivery is to be decided in accordance with nature of the goods - and all the circumstances of the particular case; it is such - delivery as carriers of the kind in question, carriers by rail - or vessel, as the case may be, ordinarily make in handling goods - of the same kind as those in question. When the time arrives for - delivery to be made, under this rule, and the goods are not - delivered the consignee is entitled to sue for their value at - destination on the day on which delivery ought to have been - made. If the carrier is able to deliver the goods, and offers to - do so, at any time before he has been required to pay for them - as goods lost, the consignee cannot refuse to accept them and - still recover their full value. He is bound to accept the goods - whenever they are tendered, no matter how great the delay may - have been; but in such a case he still has a valid claim for any - loss he may have sustained as a result of the delay. His damages - are at least as great as that amount by which the market value - of the goods on the day of delivery is below their market value - on the day on which delivery ought to have been made; to this is - to be added any other loss or expense brought upon him as a - direct result of the carrier’s delay. - -=Opinion No. 13.= - - - - - THERE IS NO REMEDY AFTER ACCEPTING LUMBER. - - -Question.—I purchased some lumber from a party in New York State at a -given figure f. o. b. shipping point, and had it forwarded by the -railroad company according to my instructions. Upon arrival my customer -reported to me a shortage of several hundred feet, of which I in turn -notified the party from whom I bought. He stated that he hardly thought -such a shortage was possible and asked me to retally the lumber. I -communicated with my customer, who told me that the shortage reported -was correct, and that he had used up the lumber as he was in need of the -lumber, although I requested him to hold it intact. My customer in -settling with me deducted for the full amount of the shortage, whereas -the party who sold to me refuses to accept settlement on this basis, -offering me an affidavit from his shipper that the quantity alleged to -have been shipped by him was correct. Am I compelled according to the -New York court rulings to remunerate the party who sold to me as per his -invoice? He claims that the lumber ceased to belong to him when he -placed it at the railway company’s depot subject to my instructions. For -this reason he demands full payment. I am in a position to furnish an -affidavit from the party to whom I sold the lumber to the effect that -the shortage actually occurred at destination, although the lumber was -received in good condition. - - Reply: This lumber was sold f. o. b. shipping point and it is - true, as the seller says, that title passed to the buyer at that - point. This fact, however, does not excuse the seller for - delivering short count or tally, if he made such delivery. He - undertook to deliver a certain quantity of goods at the shipping - point, and his contract obligation was not fulfilled unless he - delivered that quantity. It does not appear, however, that the - contract was such as to allow the buyer to accept less than the - quantity sold at a pro rata price. As the contract is described - to us, it was a sale of a definite quantity for a stipulated - price, with no other provision. That being the case, the buyer, - when tender was made to him had no choice other than to accept - the tender as satisfactory, or else to reject it and claim - damages for breach of contract. He did accept the goods and he - used them. It is too late now for him to say that the tender was - in any respect unsatisfactory. The buyer might have rejected the - goods on account of short tally, and then he could either have - claimed damages for breach of contract, as we have suggested, or - he could have communicated with the seller, offering to take the - shipment at less than the contract price—could have made a new - contract, in short. He did neither. He accepted the goods. He - will not be heard now to say that they were, in any respect, not - such goods as the contract called for. Our correspondent can be - compelled to pay for these goods the full contract price, and - the person to whom he sold them can be compelled to do the same. - -=Opinion No. 31.= - - - - - PROPOSED FREIGHT RATE ADVANCE. - - -In view of the agitation regarding the proposed advance in freight rates -it is suggested that our members protect themselves as fully as possible -in making quotations. It is believed advisable to use a clause either -printed or stamped on the letter-head or quotation stating substantially -the following: - - “All quotations made and orders accepted are based on present - freight rates.” - -Where this clause is used it should be printed or stamped in such a way -that it becomes a part of the quotation or correspondence. Stamping the -clause on the margin of a letter-head is considered inadvisable. - -=Opinion No. 110.= - - - - - ACCEPTANCE OF AN AMOUNT OFFERED AS “PAYMENT IN FULL” MAY OR MAY NOT - CANCEL THE DEBT. - - -Question—A customer sends me a check for a certain amount and inserts -the following on the face of his check: “In full to June 1.” Does my -indorsement give my receipt in full to this date or not? Can I indorse -his check and write him a letter advising him that I am using the check -only to apply on the account? - - Reply: Suppose A owes B a certain sum of money and there is no - doubt or dispute as to the amount actually due. Then if A pays - to B less than the amount, in cash or by check, saying at the - time, “this I tender as payment in full,” B may keep the money - or cash the check without losing the right he previously had to - demand what was still due and unpaid. No man, without the - consent of his creditor, can discharge the whole of his debt by - paying part of it, if the amount is liquidated and certain. - Suppose, however, that there has been no agreement as to the - amount due or that there is an honest and well-founded dispute - concerning the matter. Then when the debtor sends any reasonable - amount, with a statement that it is tendered and is to be - accepted, if at all, as payment in full, that is his estimate of - the sum due. The creditor cannot accept the tender without - accepting the estimate; if he does accept the tender the amount - due is thereby agreed upon and fully paid. If the creditor is - not willing to accept the tender as payment in full he must - return it. Then an agreement may be reached as to the amount - actually due, or if the two cannot agree the matter may be left - to the courts. The debtor has this privilege, in a case of this - kind, because it would be unfair to him to allow the creditor to - keep what the debtor honestly believed to be the whole sum due, - and still allow him to sue for more, when, if he had brought his - suit in the first place it is possible he might not have been - able to recover even as much as the debtor has already paid him. - -=Opinion No. 51.= - - - - - PROTEST IS NOT NECESSARY TO HOLD PARTIES PRIMARILY LIABLE. - - -Question—Is it necessary, or is it in any way helpful to have a note or -an accepted draft protested, regard being had only to the maker of the -note or the acceptor of the draft? - - Reply: The object of a protest is to inform a person who is - secondarily liable upon a bill or note that the person primarily - liable has been properly called upon and has refused to pay the - amount. There could be no object in conveying formal information - of this kind to the parties primarily liable, because they know - what the facts are, they know, that is, that demand has been - duly made of them and that they have failed to comply with it. - Accordingly it is held that protest and notice are not necessary - to charge the maker of a promissory note or the acceptor of a - bill of exchange. We believe this to be the sound rule in all - cases. - -=Opinion No. 52.= - - - - - F. O. B. SHIPMENTS. - - -Question.—Please advise us, what the position of a shipper is who takes -an order for a full carload of material at a price including freight to -destination, but where the shipper takes out a bill of lading in the -name of the buyer. The shipper claims he simply guarantees freight to -destination, and having the bill of lading issued in the name of the -buyer places the risk of loss or damage in transit on the buyer. - - Reply: A buyer of goods takes title to them wherever they may be - at the time of the sale unless the contract provides otherwise - or unless the seller by some act of his own reserves the title - to himself during transportation. A mere agreement on the part - of the seller to pay the freight is not sufficient to rebut the - presumption that title was to pass on delivery to the carrier. - When goods are sold f. o. b. destination the seller undertakes - to carry them to their destination and there deliver them. They - are his goods, and the risk is his, until he has tendered - delivery at that place; this is true because the buyer cannot be - compelled to accept a tender made at any other place; but a mere - agreement that, for a given price, the seller will furnish the - goods and pay freight upon to a given place, does not make him - liable for their delivery in that place. If he was bound to - deliver them at destination the contract would say nothing about - freight; an obligation on the seller’s part to deliver the goods - at destination is, in itself, an obligation to pay freight upon - them or to carry them himself, and it is not for the buyer to - choose which he shall do. If the agreement to pay freight did - place the risk on the seller during transportation he could not - escape that obligation by his own act in taking out a bill of - lading in a particular form. If he was at liberty, under the - contract, to deliver the goods at the shipping point, however, - he could increase his obligation by his own act, and taking the - bill of lading to his own order would, if not otherwise - explained be sufficient for this purpose. In this case the bill - of lading was taken in the name of the buyer, and that is - consistent with the seller’s claim that a valid delivery could - be and was made at the shipping point and the carrier was an - agent of the buyer. - -=Opinion No. 53.= - - - - - PAYMENT OF FREIGHT NOT ALWAYS TRANSFER OF TITLE. - - -Question.—Please advise us if in selling lumber freight paid to -destination we are liable for damage in transit. As we understand it, -when we sell lumber delivered at destination we are liable, but when we -sell it freight paid the buyer is liable. - - Reply: The person who owns goods while they are in transit must - bear the expense of damage or loss if they are not insured. If - the goods have been sold the title during transit may be either - in the seller or the buyer. It is sometimes perfectly clear that - title is in one or the other, while in some cases it is a very - difficult question. Payment of freight is one item to be taken - into consideration, but it is generally not alone absolutely - conclusive of the question one way or the other. Our - correspondent is correct in saying: “When we sell goods - delivered at destination we are liable.” It is equally correct - to say: “When we sell them, otherwise than for delivery at - destination the buyer is liable.” It is not always true, - however, that the buyer is liable when the seller pays the - freight. Goods that had not been ordered, for example, or goods - slightly different from those ordered might be sent in the - expectation that the buyer would accept them. In such a case the - seller would probably prepay the freight but title would remain - in him, and the risk would be his, until the buyer had received - the goods and accepted them. If the contract requires the seller - to pay freight that is good evidence, if there is nothing on the - other side to offset it, that title and risk are to be in the - buyer during transit; this is so because if the seller was bound - to deliver the goods at the buyer’s end of the route he would be - bound to pay the freight, as a part of this obligation, and - would not separately agree to pay the freight. If the contract - is silent on that subject the mere fact that the seller pays the - freight is not sufficient to show that he reserves title. All - the facts of the case are to be taken into consideration, the - presumption being that title passes when the goods are - delivered, properly directed, to the carrier. If the buyer - claims that title did not pass to him at that instant the burden - of proof is on him, and the mere fact that the seller paid the - freight is not alone sufficient to overcome the presumption. - -=Opinion No. 54.= - - - - - FILING CERTIFICATES IN MARYLAND. - - -Some of our members have recently received communications from the -Secretary of State of Maryland calling their attention to a law which -went into effect in Maryland June 1st, 1908, regarding filing -certificates permitting foreign corporations to transact business. The -Secretary of State’s letter reads in part as follows: - - “The name of your company appears on the records of this office as a - Foreign Corporation doing business in Maryland. As the recently enacted - Act of the Legislature repeals the law under which you are authorized - to transact business in this State, it will be necessary for you to - comply with the provisions of the new law, a copy of which I enclose - herewith, together with a blank form, convenient for use in connection - therewith.” - -Our attorney at Baltimore writes as follows regarding the necessity of -complying with the provisions of the law above referred to: - - “It is not necessary for a foreign corporation who maintains no office - or agency, or has no assets in this State, to file a certified copy of - its charter, the required certificate under the act and the franchise - tax. A foreign corporation under the facts above stated may send any - number of salesmen for the purpose of making sales in this jurisdiction - without having to comply with the foreign corporation law.” - -=Opinion No. 55.= - - - - - RAILROADS CAN INSIST ON ACCEPTANCE OF DELAYED SHIPMENTS. - - -Question.—I shipped a carload of lumber to a customer consigned to -myself and it was apparently lost in transit. The delay caused my -customer to cancel this order with me, whereupon I notified the railroad -that I would not accept delivery and would hold it responsible for not -only the value of the car, but any damages resulting to me. The car has -just turned up and the railroad insists that I must take it and put in -claim for loss. Am I compelled to accept the car? - - Reply: If the road offers to deliver the lumber now the - consignee should accept it. A carrier is not a dealer, and goods - tendered by it cannot be refused, however late the tender may - be, or however seriously the goods may be damaged, provided they - are recognizable as the goods actually shipped and have any - value at all. The consignee cannot leave them in the hands of - the carrier and demand full value for them. He must accept them - and do the best he can with them. His acceptance of them does - not relieve the carrier of its liability, and the consignee is - entitled to recover all loss caused by delay, or by damage to - the goods, as soon as the loss has been ascertained. If the - market price has declined since the day on which delivery should - have been made that difference in value is to be included in the - damages; usually that is the principal part of the loss, and - frequently it is the whole of it. - -=Opinion No. 56.= - - - - - QUESTION OF DISCOUNT. - - -Question.—I take an order from my customer, the terms of payment being -stated 2 per cent. 10 days. The buyer makes settlement in 20 days and -claims that he is entitled to the discount by paying interest for the -extra time which he has taken over and above the ten days. On the other -hand, I claim that the bill not having been paid within the discount -period becomes net, and that face amount of the bill therefore becomes -due on the eleventh day Which is right? - - Reply: If a contract of sale gives the buyer no right to a - discount he has no such right. If the contract does give him a - right to a discount, upon certain terms, he must comply - absolutely with those terms in order to entitle himself to the - discount. The situation is just this: A seller who is entitled - to demand the full face of his bill, says to the buyer, “I will - deduct part of the amount if you will do a certain thing at a - certain time in a certain way.” The buyer cannot fail to do the - thing so specified at the time and in the manner named, and - still claim a discount as if he had done it. The buyer is - entitled to no discount at all in the case here put. - -=Opinion No. 57.= - - - - -LUMBER MAY BE RETURNED TO THE CONSIGNOR IF THE CONSIGNEE WILL NOT ACCEPT - IT. - - -Question.—We ordered a carload of lumber from a shipper in the South and -advanced $200 on account before the shipment arrived at its destination. -This shipper received from the railroad company a bill of lading in his -name marked “non-negotiable,” which he indorses to us and mails to us -and notifies the railroad by letter that the shipment is for us. On -arrival we find that the lumber is not in accordance with our order and -we refuse to accept it, whereupon the railroad stores it for account of -the owner. We notified the railroad that we would release the car to the -shipper upon the latter paying to us the $200 advanced. The railroad has -since delivered the car back to the shipper on the latter’s instructions -by their giving the railroad the usual bond, which the railroad insisted -upon having, and we still retain the original bill of lading indorsed to -our order. We put in a claim against the railroad company for the $200 -advanced, taking the position that they had no right to deliver the car -to the shipper without the bill of lading or an order from us. The -railroad refuses to pay our claim, saying that the bill of lading was a -non-negotiable one, and inasmuch as the shipper took it out in his own -name he had a right to regain possession of the car, and that we waived -our rights, although retaining the bill of lading, by refusing to accept -the lumber on arrival. We did not pay the freight. What course can we -pursue to recover the $200 advanced? - - Reply: If a consignee refuses to accept goods shipped under a - non-negotiable bill of lading they may be returned to the - consignor. The carrier is not bound to act as agent or - intermediary for the settlement of any differences between the - two. Here our correspondents have simply extended a credit of - $200 to the shipper. If he does not voluntarily meet the - obligation the amount may be recovered by suit. - -=Opinion No. 58.= - - - - - RAILROADS MUST PAY VALUE AT DESTINATION FOR DAMAGES ON LOST LUMBER. - - -Question.—Should the railroad in settling claims for shortage of lumber -pay for it at our cost price or at the current market price? - - Reply: Unless the contract between the shipper and carrier - provides for some other measure of damages, the principal amount - to be paid by the carrier when the lumber is lost or destroyed - is the market value at destination. If the freight has not been - paid in advance it is to be deducted from market value. There is - to be added, on the other hand, interest at the legal rate from - the day on which delivery should have been made to the day of - settlement; and there is to be added also any incidental expense - to which the consignee may have been put as a direct result of - the carrier’s failure to do his duty. This is the only way in - which the consignee can be placed in as favorable a position as - he would have occupied if the carrier had done his duty, the - only way in which the whole of the loss can be placed upon the - carrier, who has caused it; and this is what the law aims to do - in every case. - -=Opinion No. 59.= - - - - - SUIT CAN BE INSTITUTED IN NEW JERSEY ON JUDGMENT OBTAINED IN ANOTHER - STATE. - - -Question.—Some time ago I secured a judgment in Pennsylvania against a -party who now lives in New Jersey, and has some property there. Can I -make collection in New Jersey? - - Reply: A judgment of a Pennsylvania court can be enforced by a - levy on property in New Jersey, without regard to the place of - residence of either the plaintiff or defendant. If this judgment - was secured in Pennsylvania it is without force in New Jersey. - In that case, however, another suit can be started in New - Jersey, and the proceedings will be brief and inexpensive; he - will have to prove merely that suit was previously brought in - Pennsylvania, in a court of competent jurisdiction, and judgment - rendered in his favor. Judgment in New Jersey will follow - immediately and as a matter of course; under that judgment he - can levy on property in New Jersey. - -=Opinion No. 60.= - - - - - NOT ALWAYS NECESSARY FOR CARRIER TO NOTIFY CONSIGNOR THAT SHIPMENT IS - REJECTED BY CONSIGNEE. - - -Question.—Have we a claim on the transportation company for the invoice -value of the shipment under the following conditions: We made a shipment -of a car of lumber, and when it arrived at destination the railroad -offered it to consignee and he refused it. Some time later the railroad -sold the lumber for what it would bring, which, it appears, was only -about 50 per cent. of our invoice. Is the transportation company under -obligation, in a case of this kind, to notify the shipper that the -lumber is at destination refused and thereby give the shipper an -opportunity to dispose of the lumber without loss? - - Reply: If a carrier has no notice to the contrary, he is - entitled to assume that the consignee is owner of the lumber and - that any delivery or disposition of it of which the consignee - cannot complain will be satisfactory to all persons. If the - goods are sent C. O. D. or if the carrier is instructed not to - deliver them to the consignee until they are paid for, or if he - receives any instructions from which he may infer that the - consignor retains title to the goods, in any such case, it - becomes the carrier’s duty to inform the consignor of the - consignee’s refusal to accept the goods. The same result follows - if the carrier is expressly directed to give such notice and if - he accepts the goods under these directions. In any other case - the carrier is not bound to assume that the goods have been sold - and that the consignor is retaining title to them to secure - payment of the purchase price, or that the consignor has any - interest in them at all. He may assume that the consignee has - already paid for them, or that they were the property of the - consignee before shipment. The consignor has put it in the power - of the consignee to take the goods and do as he pleases with - them, and the carrier is bound merely to act in such manner that - the consignee may have no valid ground of complaint. In the - absence of special instructions to the carrier, or of knowledge - on his part that the goods belong to the consignor, the rule is - simply this: That the carrier is not to be expected to deal with - two different persons with reference to a single shipment or the - disposition to be made of it; that he may safely assume such an - understanding between consignor and consignee that they will - keep each other informed, if necessary, and that anything that - satisfies the consignee will satisfy the consignor. There is - nothing in the question asked to show that it was the carrier’s - duty to notify the consignor in this case. - -=Opinion No. 61.= - - - - - LUMBER IS ACCEPTED UNLESS REJECTED PROMPTLY. - - -Question.—A retailer goes away leaving his son in charge of the -business. The son asks us to ship a car of lumber and we sell it to him, -acting for his father, invoicing the car and mailing the bill of lading. -The car arrives, the son surrenders the bill of lading to the railroad -and orders the car placed on his father’s siding for unloading. For some -reason the son decides not to unload the car before the arrival of the -father, which will be in about a week. When the father arrives he claims -the lumber is not up to grade and refuses to accept same, unless we make -an allowance. Does not the acceptance of the bill of lading and its -surrender to the railroad constitute a delivery of the lumber and -entitle us to our money without question whether we are right or wrong -about the quality of the lumber? It is possible, of course, that a very -small proportion of this lumber may be a little off, but the difference -is very slight, and would show only the difference that any two -inspectors would make in going over the car of lumber. - - Reply: A buyer of goods is bound to inspect them with reasonable - promptness, after he has an opportunity to do so, and then - accept or reject them at once. Reasonable promptness is greater - promptness than was shown in this case, unless there were some - unusual facts in connection with it of which we are not - informed. A buyer is seldom justified in delaying his inspection - beyond the next day after arrival of the goods. If he does not - reject the goods with reasonable promptness, whether he sees fit - to inspect them or not, then he is held to an implied - acceptance. They are placed in his hands. He may do as he likes - about examining them, but he must reject them promptly, if he is - to reject them at all. If he does not reject them promptly any - remedy he may have had is gone unless the goods were sold to him - under a warranty of quality. - -=Opinion No. 62.= - - - - - NEW YORK INCORPORATION LAW. - - -In view of a recent decision regarding the corporation law of New York -State and its probable effect upon foreign corporations doing business -in this State, we have asked our attorney in New York for information, -and the following is submitted: - - “At the end of January last there was handed down a decision in the - Court of Appeals, which was later printed in 190 N. Y., settling the - disputes which had arisen as to the necessity for obtaining - certificates of license to do business in this State as a condition - precedent to suing here. - - “It holds that in compliance with the General Corporation Law it must - be alleged and proved by a foreign corporation in order to establish a - cause of action in the courts of this State. The cases holding - otherwise, should be regarded as overruled and the conflict of - authority ended. - - “And it is further held that an objection to a complaint on this ground - is not waived by the failure to raise it in the defendant’s pleadings, - but can be raised at any time. - - “A little later the court also held that this rule applied just as much - as to the assignee of a foreign corporation’s claim, except as to - negotiable paper taken in good faith from the corporation before - maturity. - - “It follows that any foreign corporation desiring to do business in New - York, whether on a large or small scale, must comply with the statute - and take out a license and pay the franchise at the end of the first - year, and I suggest that this should be brought to the attention of - your foreign lumber corporations.” - - (If further information is wanted by any members whose business is - incorporated under a State law other than New York, we shall be pleased - to hear from them.) - -=Opinion No. 63.= - - - - - NEW JERSEY INCORPORATION LAW. - - -Question.—Under New Jersey laws a New York corporation doing business in -New Jersey must register in Trenton. We did a large amount of business -before we were aware of this, but ultimately registered. In suing one of -our customers we were nonsuited because we were not registered at the -time the goods were sold, but this was in an inferior court. Does the -fact that we were not registered in Trenton at the time the goods were -sold completely shut us off from recovering in the State of New Jersey? - - Reply: We believe that our correspondents will not be allowed to - maintain this suit; they are prevented from maintaining it as - much by the laws of their own State of New York as by those of - New Jersey. The law of the case stands thus: The New Jersey - statute requires all foreign corporations to file certain - documents with the Secretary of State and to take out a - certificate authorizing them to do business in New Jersey. It is - further provided that “until such corporation so transacting - business in this State shall have obtained said certificate of - the Secretary of State, it shall not maintain any action in this - State, upon any contract made by it in this State.” If this were - all our correspondents could take out a certificate any time and - then sue; this section only forbids them to sue before taking - out a certificate. It is further provided, however, that when - another State imposes any greater penalties on New Jersey - corporations than the laws of New Jersey impose upon - corporations of that State, the same penalties shall be imposed - on corporations of such other State doing business in New - Jersey. Now, it is provided by the General Corporation law of - this State (Sec. 16) that foreign corporations must take out - certificates as in New Jersey, and that “no foreign stock - corporation doing business in this State shall maintain any - action in this State upon any contract made by it in this State - unless prior to the making of such contract it shall have - procured such certificates”; that is the reason a New York - corporation doing business in New Jersey is not allowed to sue - in the courts of that State on a contract made therein unless it - had taken out its certificate before the contract was made. - -=Opinion No. 64.= - - - - - A LARGE CONTRACT SHOULD BE IN WRITING. - - -Question.—In the summer one of our salesmen sold a car of lumber for -September delivery, the salesman handing the buyer copy of the order at -the time of purchase. On previous purchases made by this same customer -he has been in the habit of sending in a confirmation of the order on -which appear the words “No order valid unless signed by one of the -members of the firm.” No such confirmation was received by us for the -last order placed, the same having been overlooked by us, and we shipped -the goods to them upon the agreed delivery date. And they write us now -that as no confirmation was given they cannot accept the goods and hold -them subject to our order. They write further that their former buyer -brought up the memorandum order for these goods, but that they declined -to confirm; but of this latter act we had no knowledge. Please inform us -where we stand in this matter. - - Reply: In nearly every State there is a statute declaring that - the purchaser of goods to the value of $50 or more shall not be - legally liable unless he signs a written contract or part of the - price is paid or part of the goods are accepted. The wording of - the statute in New York State is as follows: “Every agreement, - promise or undertaking is void, unless some note or memorandum - thereof be in writing, and subscribed by the party to be charged - therewith, or by his lawful agent, if such agreement, promise or - undertaking—is a contract for the sale of any goods, chattels or - things in action for the price of $50 or more, and the buyer - does not accept and receive part of such goods, or the - evidences, or some of them, of such things in action, nor at the - time pay any part of the purchase money.” - -=Opinion No. 65.= - - - - - USING CHECKS MARKED “IN FULL SETTLEMENT.” - - -In connection with several claims recently handled by our Collection -Department in Pennsylvania and the question of using checks marked “in -full settlement” or “in settlement of all demands to date,” we have the -following communication from a prominent attorney in Pennsylvania: - - “I desire to state that it is elementary law that if pending the - adjustment of a disputed claim, the debtor sends the money to his - creditor in full payment of the demand, the latter cannot receive and - retain it as a credit upon a larger sum claimed by him, without - discharging the debtor as to the whole. - - “123 Pa., p. 576. 147 Pa., p. 607. 70 Pa., p. 315. - - “These cases have been decided by the Supreme Court of Pennsylvania, - the court of the last resort. Therefore it does not lie in the province - of your members to cancel the words ‘in full settlement’ without - destroying their right in respect to prevailing for the balance. - - “I might further state that in the absence of any dispute in respect to - any claim, the payment of a smaller amount will not operate to - discharge the whole, because there is no accord and satisfaction; the - absence of any dispute in respect to the amount being the material - circumstances in this regard.” - -=Opinion No. 66.= - - - - - A CUSTOMER BUYING ON CREDIT MUST KEEP HIS CREDIT GOOD. - - -Question.—If a bill of lumber is sold on credit and before delivery to -the customer the seller considers he has good reason to question the -purchaser’s ability to settle when the bill is due, can the seller -withhold the delivery and demand either better terms or cash without -making him liable for the non-fulfillment of the contract? - - Reply: A man who has bought goods on credit is bound, as the - courts phrase it, “to keep his credit good.” If he does not do - that the seller need not ship the goods; if he has shipped them - and then finds that the buyer has not kept his credit good, he - may stop the goods and take them back into his own possession at - any time before they have actually been delivered to the buyer - or his agent. In making his decision the seller must, of course, - take his own risks. He has entered into a contract and he must - fulfill it or pay the resulting damages unless he has a legal - excuse for refusing to go on with it. It is not sufficient that, - as the question says, “the seller considers he has good reason - to question the purchaser’s ability to settle”; nor that the - seller has good grounds for believing that the buyer’s credit is - impaired. It is not a question of any man’s belief, but a - question of fact. The goods must be shipped unless the buyer is - actually insolvent. This does not mean that he must have made an - assignment or gone into bankruptcy or made any other public - acknowledgment of the fact that he is insolvent. It means he has - become unable to pay his debts as they fall due. The seller must - be able to show that at least one debt has fallen due against - the buyer and that he has not paid it promptly. Of course, it - must be a debt the validity of which the buyer himself does not - dispute upon any tenable ground. If he has paid his debts as - they fell due he has “kept his credit good,” no matter what any - one may suspect as to the future; if he has failed to pay any - just debt promptly he has not kept his credit good. If the - seller has no right to refuse delivery of the goods altogether - he has no right to demand better terms than his contract gives - him. - -=Opinion No. 67.= - - - - - DISCOUNT MUST BE IN ACCORDANCE WITH THE CONTRACT. - - -Question.—We sold to a concern and the terms of sale were “2 per cent. -discount for cash in ten days or sixty days net.” The buyer in his -settlements has taken fifteen to twenty days’ time and has deducted 2 -per cent. discount and has added 6 per cent. per annum for the extra -days beyond ten. We claim that this settlement is entirely wrong, and if -he wishes the discount in full he must send a check within ten days -after the date of the bill. - - Reply: No debtor is to be excused from paying the full amount of - his debt except in strict accordance with some provision to that - effect in his contract. Here is a debtor who would have been - bound to pay the full amount immediately if there had been no - special provision to the contrary. Any such provision as there - may be is a kind of grace to him and it is not to be extended - beyond the strict terms in which it is expressed. He may take 2 - per cent. off if he pays at any time within ten days. When the - ten days are passed the contract stands precisely as if it had - said nothing at all about discount for payment within ten days. - This debtor had no right to deduct the 2 per cent. He is trying - to take an advantage which his contract does not give him. If he - were asked to point out a clause in the contract giving him a - right to take off the discount later than the tenth day, of - course, he could not do it. - -=Opinion No. 69.= - - - - - A BILL OF LADING TO ORDER RETAINS TITLE TO THE GOODS. - - -Question.—If a shipper sells a carload of lumber f. o. b. shipping point -with draft attached to bill of lading and bills the car to his own -order, notify the purchaser, and if the car should be wrecked in transit -or should never reach its proper destination, would the buyer who bought -the car f. o. b. be compelled to pay the draft and take up the bill of -lading and seek recourse against the carriers? Should the shipper bill a -car to the order of a bank, notify the f. o. b. purchaser and sell the -draft and bill of lading to the bank outright, would the purchaser be -compelled to pay for same? - - Reply: When a sale is made f. o. b. shipping point the seller - can make a valid delivery at that point. If he delivers the - goods to a carrier there, takes a bill of lading making them - deliverable to the buyer and forwards it to the latter, his full - duty is done and the goods are at that moment, in legal effect, - delivered to the buyer; they are actually delivered to the - buyer’s agent, the carrier, and that is equivalent to a delivery - to the buyer himself. This is the kind of delivery the seller is - at liberty to make, under the contract, but he may not do so. He - might, conceivably, carry the goods in his own arms to the - buyer, or he may deliver them to one who is unquestionably his - own agent. In either of these cases delivery to the buyer does - not occur until the goods reach their destination. If A ships - goods to the place in which B resides and takes the bill of - lading to his own order the goods are not in any sense delivered - to B or to his agent. They are A’s goods. He can stop them where - he will and take them back into his own possession. When they - reach their destination he can take charge of them or have them - delivered to anyone he may choose to name. Those goods could be - seized by a creditor of the seller and they could not be seized - by a creditor of the buyer. If they are lost in transit it is - the seller’s loss. A seller must either deliver the goods or - retain them. He cannot do both. He cannot deliver them so as to - make the buyer liable in case of loss and still retain them so - that they will be his, to do with as he will if there is no - loss. The same result follows if the bill of lading is sold to a - bank. A bill of lading represents goods in transit and transfer - of the bill transfers the goods. The direction to the carrier to - “notify” one person or another is of no importance. Goods may be - consigned to B and the carrier, for one reason or another or for - no reason at all, may be directed to “notify” X or Y or Z of the - fact that they have arrived. Notification is not to be - substituted for delivery. - -=Opinion No. 70.= - - - - - ONE WHO BUYS ON CREDIT MUST KEEP HIS CREDIT GOOD. - - -Question.—A, in New York, has with B, a manufacturer, three separate -contracts made in December, February and March, respectively, each -contract specifying the grade and price of material, date of delivery -and terms of payment. The deliveries called for in the December contract -have been completed by A; the date for the first delivery of the -February contract is due this month; but B is overdue 30 days on his -payment on the first delivery of the December contract and payment on -the delivery of balance of the December contract is now due. Because B -has failed to comply on his part with the conditions of the first -contract, must A deliver the material according to the terms of the -second and third contracts, thereby unduly increasing the amount of -credit extended to B beyond his general credit limit? From information -obtained which would lead A to question the credit of B, such as his -taking a contract at a loss (this occurring since the contracts were -made) can A demand payment before delivery of the goods, although the -contract specifies 30 days from certain dates? Can A cancel the two -uncompleted contracts for any of the above reasons, viz., -non-fulfillment of the condition of the first contract by B or doubt as -to B’s credit? If cancelled by A would B have any legal redress such as -buying the quantity and grade of material stipulated by the contracts in -the open market and compelling A to pay the difference in price should -the present market price be higher than the prices stipulated in the -contracts? - - Reply: When a man buys goods on credit it is always an implied - condition of the contract that he shall “keep his credit good,” - as the courts phrase it, till the time of delivery arrives. If - he becomes insolvent before that time he cannot demand that the - seller shall ship the goods. If the seller does ship them, and - then learns of the insolvency, he may stop the goods before they - reach the buyer and take them back into his own possession. A - buyer on credit has no right to demand that the goods shall be - delivered to him at a time when he is insolvent and when there - is reason to believe, accordingly, that the goods may have to be - sold to pay his other debts. That is the situation in the case - our correspondent puts, and the seller is certainly not bound to - deliver the merchandise. By insolvency, in a case of this kind, - is not meant an actual assignment for creditors; neither does it - mean that the buyer has gone into bankruptcy or made any other - public acknowledgment of the fact that he is insolvent. It means - that he has become unable to pay his debts as they fall due. The - seller must be able to show that at least one debt has fallen - due against the buyer and that he has not paid it promptly. Of - course, it must be a debt the validity of which the buyer - himself does not dispute upon any tenable or reasonable ground. - The buyer in this case has failed to pay such a debt. The seller - has ample proof of the fact because the debt was owing to him. - The buyer has not “kept his credit good,” and he has no right to - demand that goods sold to him on credit shall be delivered. If - they are not delivered he will have no legal ground of complaint - or cause of action against the seller. It is not the seller who - is guilty of a breach of contract, but the buyer; he is guilty - of a breach of the implied condition which enters into all such - contracts—the condition that the buyer shall “keep his credit - good.” - -=Opinion No. 71.= - - - - - A SELLER IS BOUND BY HIS OWN MISTAKE UNLESS IT IS OBVIOUS. - - -Question.—We sent an inquiry for certain sizes of lumber to a mill -asking for quotations. Our inquiry was delayed in the mails, and, as it -did not reach the mill in time enough to quote we placed the order with -the mill, but did not specify prices. The mill acknowledged our order, -saying, “We have entered your order as per enclosed carbon,” and after -each item they named a price. The lumber was shipped and an invoice sent -us, but on two of the items a larger amount is charged than specified in -the communication from the mill, saying our order had been entered. In -remitting we deducted the difference between the prices mentioned in -reply from the mill and the invoice, but the mill claims they made a -clerical error and that we are bound to pay the invoice price. What is -our position in the matter? - - Reply: When a seller puts a price on his goods and the buyer - accepts them at that price it is then too late for the seller to - demand more except in the following case: If the buyer knew that - a mistake had been made, or if the mistake was so gross and - palpable that he ought to have known it to be a mistake, then it - may be corrected. If a seller were to quote $1.25 when all - buyers knew that $12.50 was about the market price, the buyer - would not be allowed to claim the goods at the quotation without - making special inquiry as to its accuracy; if the quotation was - only slightly under the market, so that no suspicion attached to - it, and if there was nothing else to show that a mistake had - been made, and if the buyer had no actual knowledge of the fact, - the seller is bound. Taking the whole class of sellers together, - it would not be a safe rule to allow them to come around and - collect more after a sale had been made and concluded upon the - plea that they had not asked as much as they intended to ask. - -=Opinion No. 72.= - - - - - A CARRIER SHOULD PAY VALUE AT DESTINATION FOR LUMBER LOST. - - -Question.—On what basis must a railroad company settle a claim by a -consignee on lumber damaged or lost? Must the consignee supply the -original invoices, or is he entitled to the selling price in his market? - - Reply: If the contract does not provide otherwise, a carrier who - fails to deliver goods must, as a rule, pay to the consignee the - value of the goods at the time and place at which delivery - should have been made. The carrier is to retain his freight - charges out of this amount, of course, if freight has not been - paid in advance. This is the only rule by which the whole of the - loss can be placed upon the carrier, where it belongs. If he had - done his duty and delivered the goods the consignee could have - sold them at the prices there and then prevailing. If the - carrier pays the consignee less than this amount the consignee - himself must bear part of the burden of the carrier’s - negligence. Of course, if the contract provides that settlement - shall be upon some other basis, original cost, for example, the - contract will be enforced. The only other exception to the rule - is that which arises when the goods have already been sold for - an amount which is not so great as the market price at the place - and time at which delivery ought to have been made. If delivery - had been duly made, in such a case the owner of the goods could - not have taken advantage of ruling market prices; he had already - bound himself to deliver the goods at a price which proves to be - less than the market on the day fixed for delivery, and this - selling price is all that he can claim. The object in every - case, except where there has been a special contract of - carriage, is to place the owner of the goods as nearly as - possible in the same position he would have occupied if the - carrier had done his duty and to put upon the carrier, where it - belongs, the whole burden of his negligence and breach of - contract. - -=Opinion No. 73.= - - - - - LIABILITY OF SHIPPER WHERE PART OF SHIPMENT IS ADMITTED BELOW GRADE. - - -Question.—I received from a customer an order for a carload of lumber of -a certain grade. A fair sized car would be 14,000 feet. The car arrives -and 2,000 feet of the lumber is admitted by me to be of a grade lower -than the order called for. Can I compel my customer to accept the -balance of 12,000 feet, which is up to the requirements of the order? He -claims that inasmuch as the car I have offered is not all up to grade, I -cannot compel him to accept even so large a proportion as 12,000 feet, -notwithstanding the fact that 12,000 feet will still be a pretty fair -sized car of lumber. - - Reply: According to this statement the shipper undertook to - carry out an order and deliver a carload of lumber. According to - the admission 2,000 feet of the carload were contrary to the - terms of the contract. Under the circumstances a carload of - lumber has not been delivered and we doubt very much if you can - find a way to compel acceptance of a carload of lumber that is - admitted on the face of it as not being strictly according to - the terms of the contract. - -=Opinion No. 76.= - - - - - NECESSITY OF FOREIGN CORPORATIONS FILING CERTIFICATES. - - -The Association has made some inquiry regarding the necessity of -so-called foreign corporations filing certificates in States other than -those under whose laws the corporation was organized. If any corporate -members are interested and desire information along these lines we shall -be pleased to render such assistance as we can. - -In some States the requirements are strict, and recently some Western -States, particularly Oklahoma, have enacted legislation of much -importance to foreign corporations shipping into those States. - -=Opinion No. 77.= - - - - - COURSE TO PURSUE WHEN LUMBER IS REFUSED ON ARRIVAL. - - -Question.—We took an order from a customer for a carload of lumber to be -shipped not later than September 15th. The car was shipped within the -specified time but did not reach destination as promptly as it should, -and our customer claims that he has been damaged to such an extent that -he refuses to take in the car, saying it arrived too late for his use. -The lumber is exactly in accordance with the order and is a special -worked car. We will be put to some expense in disposing of this -elsewhere and will probably have to sell it at a lower price. What -method should we pursue? - - Reply: There are three courses: - - First: The shipper may store the lumber for the buyer and sue - him for the invoice price. - - Second: He may retain the property as his own and recover the - difference between the market price at the time and place of - delivery and the contract price. - - Third: He may sell the lumber, acting as the agent for the - purchaser and recover the difference between the contract and - the price of resale. - - This last course is usually considered best because it gives the - seller the use of the money realized on the resale. Of course in - reselling the lumber care must be taken to obtain the best - possible price, and in the event of the resale the seller is - entitled to recovery from the purchaser of all the costs which - he was obliged to lay out in bringing to pass a sale of the - property in question. - -=Opinion No. 78.= - - - - - A CARRIER MUST STOP GOODS IN TRANSIT IF PROPERLY ORDERED TO DO SO. - - -Question.—A makes a shipment to a customer in another State and several -days after he receives information that leads him to believe it prudent -to hold up the shipment and have the goods reconsigned to himself. He -immediately takes the matter up with the initial carriers with the -request that they take immediate steps to stop the shipment in transit -and have same reconsigned to himself, all charges to follow. In the -event that the initial carrier fails to take prompt action and it -develops that the goods are delivered after the initial carrier has been -notified not to deliver them, thereby causing A the loss of the value of -the shipment, cannot A hold the initial carrier responsible for the -value of the shipment? - - Reply: When goods are sold on credit and the buyer becomes - insolvent or gives proof of insolvency, before the goods are - delivered to him, it is the right of the seller to take them - back into his own possession and refuse delivery altogether; - this is because one who buys on credit is bound by an implied - contract that he will keep his credit good and be able to pay - for the goods when the due date arrives. When the carrier is - called upon to return the goods to the seller he must act at his - own peril. If he does return them and the buyer was not - insolvent, the carrier must answer to the buyer for his damages. - On the other hand, if the carrier fails to return the goods and - the seller can show that the buyer was insolvent the carrier - must respond to the seller for the value of the goods or for - such part of it as the seller finally loses. The seller, in the - case under consideration, must first establish the fact that he - had a right, within these rules, to stop the goods. Then if he - can show also that this might have been done except for - negligence or delay on the part of the initial carrier, he can - hold that carrier liable for his loss. - -=Opinion No. 79.= - - - - - ACCORD AND SATISFACTION. - - -Frequently inquiries are sent us inquiring as to the advisability of -accepting checks marked “In full settlement of account to date,” etc. -The situation is not the same in all States but usually the questions -are covered in the doctrine of accord and satisfaction explained as -follows: - - If an account between two parties be actively and openly in dispute and - the debtor sends to his creditor a remittance for a specific sum and - states that such sum is offered in full settlement, and if such sum be - accepted by the creditor he is bound thereby and cannot thereafter - recover anything on the account from his debtor. The mere sending of a - remittance, however, for an amount less than the amount due, where - there is no dispute between the parties, does not affect the right of - the creditor to bring suit for the balance due even though it is stated - in the letter accompanying the remittance that said remittance is in - full settlement. - - The question as to whether a dispute is open or active can usually be - easily determined. If the seller and buyer have been in correspondence - regarding a dispute, that determines its activity, and if after such - correspondence a remittance is made marked “In full settlement,” etc., - the acceptance is binding. - -=Opinion No. 80.= - - - - - ACCEPTANCE IN NEW JERSEY MAY BE AFFECTED BY STATUTE. - - -Our attention has been called to a law passed by the New Jersey -Legislature in 1907, from which the following is quoted: - - “Where the seller delivers to the buyer the goods he contracted to sell - mixed with goods of a different description not included in the - contract, the buyer may accept the goods which are in accordance with - the contract and reject the rest, or he may reject the whole.” - - We are receiving inquiries as to the responsibility of a customer where - he had used part of a shipment of lumber of one description, the - customer claiming the statute above quoted permitted him to use such of - the shipment as was up to grade and reject the balance. Commenting on - the law above referred to where a shipment contains lumber under one - description it would seem to be the law that if the consignor delivers - to the consignee the goods contracted for of the same description - included in the contract, the debtor, with his right of inspection must - either reject or accept, and if the consignee does any act by which it - could be inferred that he is exercising the right of ownership of any - part of the merchandise so shipped and delivered, we believe he is - liable for the entire amount of lumber shipped and received. He cannot - take out what he wants of the order and reject the balance. - - The New Jersey law covers mixed shipments, for instance, in a shipment - of barn boards, siding and moulding, the buyer would have the right to - accept either of these items without prejudicing his claim, or waiving - his privilege of rejection on the other two, but where a straight car - of barn boards is ordered the buyer is not privileged to use a portion - of them and reject the balance as not being up to contract. - -=Opinion No. 81.= - - - - - CONDITIONAL CLAUSES REGARDING TERMS ON LETTERHEADS, INVOICES, ETC. - - -It seems again necessary to call the attention of our members to the -custom of printing a clause on the top of letter-heads used for -quotation to the effect that agreements or contracts are contingent upon -strikes, accident, other causes, etc. It frequently happens that this -clause is so printed on the letter-head or quotation form as not to make -it a part of the contract, and the following attorney’s opinion is -pertinent: - - When a man has a proposal to make to another in writing he begins, - usually and naturally, with the name of the place from which he writes - and the date. Then he makes his proposal and closes by signing his - name. The paper upon which he writes may have printed at the top or - somewhere in the margin the name and address of the firm; the telephone - number and the number of the firm’s post office box; the cable address; - a list of five or six cable codes used by the concern; names of the - various articles in which it deals; facsimiles of some of its - trade-marks; pictures of certain gold medals that have been awarded to - its goods at fairs of one sort or another. Frequently there is much - other matter. There may also be something to the effect that agreements - are contingent upon strikes. Of course, the person to whom the - proposition is addressed is not concerned with any of these things. - What he has to read and consider is the matter found between the - address and the signature, and nothing more. That is the reasonable - interpretation of the matter, and, is, very naturally, the view that - the courts have taken of it. In 153 Ill., 102, to quote only one case, - the Supreme Court of Illinois decided that “the words ‘all sales - subject to strikes and accidents,’ printed as part of the letter-head - of a reply, do not form any part of the contract.” No court could very - well reach any other conclusion, so far as we can ascertain, and no - court has done so. - - In the same manner a postscript on a letter or quotation blank is not - an actual part of the contract unless it is signed. - - Other members have also attempted to enforce terms printed on their - invoices where such terms were not referred to in the original order or - contract of sale. The following opinion will be helpful in such - matters: - - The question of the invoice may be settled with little difficulty. - Nothing upon the invoice is binding upon the buyer, whether it is - written or printed and whether it stands in the body of the document or - in the margin. A contract is made by two persons, and it is binding - only in so far as both have agreed to be bound by it. An invoice is - made, after all the terms of the contract have been irrevocably fixed, - and it is made by only one person. The seller would have things very - much his own way if he could go off alone, after a contract had been - made, and alter or amend or limit or explain it by his own act. He has - no such power, of course, and he cannot put anything upon his invoice - in writing or in print, that will bind the buyer. - -=Opinion No. 82.= - - - - - INTERPRETATION OF “REASONABLE TIME,” “DUE NOTICE,” ETC. - - -Frequently our members ask what constitutes shipment within a reasonable -time, or what is the meaning of “due notice,” etc. - - The courts are always careful not to give any general definition of - such words as “due,” “reasonable” and the like. What is due or - reasonable notice in one case might not be so in another; and each case - is made to stand on its own facts. “Due notice,” in one case or in any - other, is such notice as, all of the circumstances and conditions being - duly considered, would permit the person receiving the notice to do - that which was required of him. Evidence is to be presented, on the one - side, and on the other, to show whether due notice, within this - definition, was or was not given. Due notice is sufficient notice, and - that which is sufficient in one case may be too much or too little in - another. - -=Opinion No. 83.= - - - - - IF SHIPMENTS ARE NOT TENDERED IN TIME THE BUYER NEED NOT TAKE THEM. - - -Question.—In December, 1909, we placed an order for nine cars of lumber -to be delivered in March, 1910. Part of the shipment was made in -February and March, leaving about a third unshipped on the first of -April. We wrote the sellers to cancel the order. They object to this -cancellation, saying that the delay was caused by a breakdown of their -mill which was unavoidable and say for this reason the order is in -force, as they are ready to make delivery of the balance of the goods -to-day, April 7th, one week after the contract date expired. Have we a -legal right to cancel under these conditions? - - Reply: The man who runs a mill is entitled to all the profit he - can make from it; but if there is an interruption of the running - it is he who must stand the loss. He cannot ask a customer to - wait for goods, at his own expense and inconvenience, until it - may be found practicable and advisable to start up the works - again. The buyers may refuse to accept the belated delivery, in - the case our correspondent puts, and may demand damages for the - sellers’ breach of contract. If a breakdown of the mill is to - excuse the seller the contract of the sale must contain an - explicit stipulation to that effect. - -=Opinion No. 84.= - - - - - WHEN A BUYER ACCEPTS A SHIPMENT, A WRITTEN CONTRACT IS NOT NECESSARY. - - -Question.—A customer called at our yards and arranged to buy six cars of -lumber, asking that one car be shipped at once. He took this car, but -refuses to order the balance out as per agreement. He offers to pay for -what he has already had, but he says we cannot hold him for any more -because the contract was not in writing. Is he right? - - Reply: This buyer can be held for the value of the six cars. A - written contract or memorandum is not necessary where part of - the goods have been delivered and accepted. There are three ways - in which a sale of goods for $50 or more may be made valid and - binding: (1) By a written contract or memorandum; (2) by - delivery and acceptance of part of the goods; (3) by payment of - part of the purchase price. Thus a buyer sometimes pays a small - part of the price at the time of the agreement, “to bind the - bargain,” as he says, and it has that effect. - -=Opinion No. 86.= - - - - - IT IS TOO LATE TO CLAIM DAMAGE FOR DELAY IN SHIPMENT WHEN LUMBER IS - ACCEPTED. - - -Question.—We took an order from a customer for ten cars of lumber to be -shipped one car every two weeks. The first three cars were shipped on -time, but there was a lapse of four weeks before the fourth car got out -and weather at the mill delayed our getting the balance out as per -agreement, although we finally got off all the cars. When the delayed -shipments began to arrive our customer complained of the delay, and said -he would charge us back with any cost he had to allow his customer. We -objected, but our customer said we agreed to time deliveries, and would -hold us to same. He took in all the shipments, but now wants to charge -us with a loss he claimed he allowed his customer. - - Reply: If the lumber was offered to the buyer at a time later - than any date agreed upon at time of sale, the buyer could have - refused to accept it, and would have had a claim against the - seller for damages occasioned by the delay. On the other hand, - the buyer might accept the goods, notwithstanding the delay, if - he chose to do so. He had no option except one of these two, - accept the goods and pay for them, or reject them as not having - been sent in time to constitute a fulfillment of his order. He - could not accept the goods at any other than the contract price. - This is the situation in which the case would have stood if - there had been no correspondence between the ordering of the - goods and their shipment. It is barely possible that the - correspondence may contain some modification of the original - contract, introduced into it by mutual consent, which would give - the buyer the right he now claims. If the original contract was - allowed to stand as made then the buyer has mistaken his remedy - if he had any remedy at all. The goods were offered in - fulfillment of the contract. He could accept them as such, or - reject them. Having rejected them, it is possible that he would - have had a claim against the seller for failure to deliver the - goods in time. This much, however, is perfectly well settled. - The buyer had no right to the goods at all except in fulfillment - of his contract. If he accepts them, the contract is fulfilled - and he cannot turn about and demand damages because it is not - so. If he thinks the delivery is not a good one, because of - delay, let him refuse it and then say that the contract has not - been carried out. It has been or it has not been, and his - acceptance of the goods shows that it has been. - -=Opinion No. 87.= - - - - - NOTICE TO AN AGENT IS NOTICE TO THE PRINCIPAL - - -Question.—A, a shipper in the South, ships to B, in New York, a carload -of lumber at a price based on delivery f. o. b. New York City. The -material is offered to B on a lighter at the agreed upon point of -destination, and B, on inspecting it, comes to the conclusion that it is -not what he ordered, and refuses to accept it, simply telling the -railroad that the material is not what he ordered, and refuses to -unload. B does not notify the shipper, A, and the latter knows nothing -of B’s rejection or refusal to accept until about a month later, when he -receives a notice from the railroad that B has rejected the material. A -claims that B should have notified him immediately by mail or telegram -that the material was not what he ordered, but B claims that he was not -compelled to do so and that the fact that the railroad did not notify A -until a month after was no concern of his. Is he right? - - Reply: There is no rule of law known to us which would have - required the buyer to notify the seller of his determination not - to accept the goods in this case. If the buyer had taken the - goods from the carrier he would have been bound to notify the - seller of this subsequent rejection. If delivery had been made - at the shipping point instead of f. o. b. destination, so that - the carrier should have been agent of the buyer and not of the - seller, the buyer’s duty to give notice would have been the - same. As the case actually stands it is this: The seller himself - or his agent, which amounts to the same thing, tenders the goods - to the buyer and the buyer rejects them without having taken - them into his custody. The seller or his agent immediately knows - that they are rejected. How could notice add anything to that - knowledge? If it is the seller’s agent who knows, and if the - seller himself does not know, that is because the seller has not - given proper instructions to his agent or because the agent has - failed to follow them if they were given. In neither case is the - buyer to blame. He has notified the seller’s agent that the - goods are refused; that is all he can be required to do. If the - refusal is not justified the seller has his remedy, of course. - If it was justified the seller has sufficient notice of it. Our - correspondent says the seller complains because the buyer did - not notify him “immediately by mail or telegram that the - material was not what he ordered.” That is absurd in any case. - The seller knew as well as the buyer, and knew before the buyer - did whether the goods sent were such as the buyer had ordered or - not. Why should he be notified of a fact that he knew already. - -=Opinion No. 88.= - - - - - ASSESSMENT OF FOREIGN CORPORATIONS. - - -Inquiries are frequently made at this office as to the amount of tax -which a foreign corporation must pay in States where a certificate is -issued to such foreign corporations, authorizing them to do business -under the State statutes. In computing the assessment or tax the State -auditor gets his information from the reports which ought to be filed -annually. The amount of tax assessed is predicated upon the amount of -capital actually employed within the State, and if no capital is -employed, no tax can be legally levied. - -=Opinion No. 89.= - - - - - A PRIVATE CUSTOM MAY BE ESTABLISHED TO SUPERSEDE A GENERAL CUSTOM. - - - It seems to be a generally accepted custom in the lumber trade that - using a shipment of lumber, even though there be a dispute regarding - the grade, constitutes an acceptance of the shipment as invoiced unless - the shipper has authorized the purchaser to use a part or all of the - lumber in dispute. Our Legal Department has received some claims for - members on disputed shipments where, from an examination of the - correspondence, it appeared the member had a valid claim for the full - amount of the invoice. After negotiations with the buyers it developed - that in past transactions allowances were made on several shipments - where the grade was in dispute, after the lumber had been used. We have - had occasion to go into such matters with our attorneys and the latter - are of the opinion that where a sufficient number of adjustments have - been made on such a basis, practically acquiescing in the buyers using - a part of the lumber, would prejudice a claim on a subsequent shipment - where the shipper attempted to take advantage of his right of recovery. - Frequently disputed claims of this character are small and have to be - tried before a local jury and our attorneys have stated that the custom - of having made allowances in the past after lumber was used would have - some bearing with a jury on a subsequent deal, and possibly be - construed by the court as a private custom apart from the general trade - custom. - -=Opinion No. 90.= - - - - - AN ORDER MAY BE CANCELED ONLY WHEN BUYER BECOMES INSOLVENT. - - -Question.—A buyer places an order with a mill for five cars of lumber, -deliveries to be one car a month. At the time of the purchase the buyer -is in good financial standing and signed copies of the contract are -exchanged between the buyer and seller. After three deliveries have been -made information reaches the seller that the financial standing of the -buyer has changed for the worse; that is, he has committed no act of -bankruptcy, but a commercial agency has reduced his capital and credit -rating. The seller requests the buyer to anticipate the payment of some -of the previous shipments before he will agree to make further -shipments. The buyer refuses to comply with this request and asks for -the delivery of the balance. The seller thereupon makes no further -deliveries, but when the bills for the goods delivered become due, -demands payment. The buyer refuses on the ground that the seller has not -carried out his part of the contract. On these facts please tell us what -the law in this case would be. - - Reply: One who has sold goods on credit is not justified in - refusing delivery simply because the buyer’s financial standing - changes for the worse between the time of sale and the time of - delivery. In the case here put, for example, there is nothing to - show that the buyer is not now amply able to pay for the goods, - or that the contract would have been declined by the seller if - the buyer’s rating at the time had been what it is now. The - seller is entitled to refuse delivery only if the buyer, before - delivery is made, commits any act of insolvency. He need not - become a bankrupt or make an assignment for creditors. He is - insolvent, within the meaning of this rule, if he fails to pay - any just and admittedly proper debt promptly upon its due date. - As long as he is paying his bills whenever they fall due the - seller has no ground upon which to declare that he is not - “keeping his credit good,” if the buyer in this case is not - solvent, as the word is here defined, the seller need not - continue the deliveries. If the buyer is solvent the seller is - not justified in his position. In that case the buyer need not - pay for the goods already delivered until the time named in the - contract for payment arrives, and he has a valid claim for - damages arising out of the seller’s failure to make the other - deliveries in strict accordance with the contract. - -=Opinion No. 91.= - - - - - A BUYER HAS A CLAIM WHEN HE ACCEPTS A DRAFT ON INFERIOR LUMBER. - - -Question.—We bought a car of lumber through a broker. Terms were: Sight -draft with bill of lading attached for three-fourths of the amount of -the invoice, the balance to be paid on arrival and inspection. We -accepted the draft on presentation and when the car arrived we -instructed our truckmen to draw the lumber in. Upon examination we found -that it was all more or less below grade. We wired shippers accordingly -and asked for instructions. We also wrote them a letter to the above -effect and told them that we could not use the lumber and that we would -hold it for their instructions. Do we need to keep the shipment? Can we -compel sellers to return us the amount of the draft and freight charges? - - Reply: The buyers are not bound to accept any lumber not in - accordance with the order. They have a valid claim against the - sellers for the amount already paid towards the purchase of the - goods, for the amount expended for freight and for any other - useless expense to which the buyers were put as a result of the - sellers’ failure to do their contract duty. The buyers also have - a claim for damages, if any, caused by the breach of contract on - the part of the sellers. The latter were bound to supply lumber - regularly sold and accepted by the trade under the terms - covering the grade in question, and their failure so to do was - an actionable breach of contract. - -=Opinion No. 92.= - - - - - CONTRACT OF SALE. - - -Delivery by Installments—Successive Recoveries by the Vendee Not -Permissible. - -When a party contracts to deliver goods by installments, for -example—Several carloads of lumber to be shipped at different intervals -but fails to deliver one or more of such installments, the vendee may -repudiate the contract and sue for damages. If he brings the action -prior to the time for the delivery of the last installments, he can only -recover for such installments as are past due and such recovery bars him -from afterwards bringing an action and recovering thereon for the -remaining installments or deliveries. - -=Opinion No. 93.= - - - - - DUTY OF VENDOR TO MINIMIZE LOSS WHEN VENDEE REFUSES TO ACCEPT GOODS. - - -It occasionally happens that a purchaser of a car of lumber refuses to -accept same and leaves it at the mercy of the railroad company or common -carrier. In this way demurrage piles up and other loss may arise and the -shipper hesitating, for fear of compromising himself, refuses to do -anything with the lumber on his part. This is generally a mistake -because it is the duty of the shipper to make the loss, if any, as small -as possible and it is always safe to first notify the vendee, who has -refused to receive the goods that he, the shipper, will endeavor to -dispose of them in the best possible manner and hold the vendee -responsible for any loss or damage thereby. In this case he may have to -have the goods sold elsewhere or returned to him, and it is always -advisable to endeavor to have them inspected by two or three competent -parties in order to establish the market value and to ascertain that the -defects, if any, claimed by the vendee, do not exist. - -=Opinion No. 94.= - - - - - ACCORD AND SATISFACTION. - - -If a buyer of lumber, disputing the quantity or quality, sends a check -for an amount less than the invoice to the seller, does the seller in -accepting the same preclude himself from recovering the balance of the -account? This situation occurs, we believe, often in lumber circles and -very frequently the remittance is accompanied by a letter or some notice -written on the check to the effect that it is sent as a settlement in -full and some go so far as to add that if accepted by the creditor it -must be at his peril so far as the remainder of the invoice or account -is concerned. The law on this point is generally similar to that of the -State of New York wherein it is well settled that the acceptance or use -of such a remittance does not stop or prevent the creditor from -recovering the balance of the debt from its debtor unless there has been -an honest dispute as to the amount of indebtedness or the existence of -any indebtedness at all. This is what is termed an unliquidated account -or claim and in such a case, when one tenders an amount to be accepted -in full or rejected and the other accepts the remittance, it is a -complete accord and satisfaction. The rule is different when the amount -or debt is certain and there is only a dispute between the parties -concerning questions of shortage, quality, etc. This is what is termed a -liquidated claim and the acceptance of a remittance to be a full -settlement does not preclude the creditor from using the remittance, -crediting the same to the account of the debtor and suing for the -balance. - -=Opinion No. 95.= - - - - - CANCELLING AN ORDER BEFORE SHIPMENT—EFFECT OF SAME. - - -Many lumbermen take orders from their customers through traveling men or -other representatives. Usually the orders are written down in a manifold -book and often are signed by the buyer. The order is usually taken -subject to confirmation by the house or home office. This acceptance or -confirmation is customarily made by acknowledgement of the order in -writing to the purchaser. The question in point is whether or not, if an -agent has taken an order as above, can the purchaser cancel the order -and his obligation to accept the lumber? In a case in this State a -purchaser of merchandise placed the order with the traveling man and -later wrote to the house cancelling the same, as he found he could buy -similar goods for less money. The purchaser wrote before the seller had -communicated any acceptance or intention to fill the order which had -been given to the seller’s representative. Some correspondence ensued in -which the seller refused to cancel the order and later shipped the goods -to the purchaser, who refused to receive them. The action resulted in a -judgment in favor of the seller, which was reversed on appeal, in which -numerous authorities were cited by the Appellate Court holding -substantially as follows—“An order or request in writing, addressed to a -dealer or his agent to ship to the writer on or before a date named, -goods of a kind specified, for which the writer agreed to pay a price -named, does not constitute a contract until accepted or acted upon by -the vendor and may be withdrawn at any time before acceptance.” - -It is obvious that the result would be different were the vendor to have -signified his acceptance of the order prior to the cancelling or -withdrawal of same by the purchaser, as we would then have a valid -contract, which could not be cancelled without mutual agreement. - -In this connection it might be well to add that in business transacted -by mail, the general rule is that the time of the mailing or depositing -in the mail of a letter is the presumptive time of the communicating of -the facts therein to the party to whom the letter is addressed, hence -when an order is sent by mail, another letter withdrawing the order, if -mailed prior to the mailing of the acceptance by the other party, is a -complete cancellation of the order in the first letter. In other words, -the law does not take into account the periods elapsing by reason of the -means of communication but only the acts of the parties in so far as the -time of such acts is considered to have taken place. - -=Opinion No. 96.= - - - - - DISCHARGE IN BANKRUPTCY—WHAT WILL PREVENT. - - -Under the amendment to the National Bankruptcy Law as amended in -February, 1903, the rules relating to discharge of bankrupts, are -somewhat changed. Many parties are interested ofttimes in preventing the -discharge of a bankrupt for no other reason than that they are creditors -who believe that the bankrupt has not been honest in his dealings and -irrespective of motives of personal enmity feel that the welfare of the -business community is served by preventing the bankrupt from being -discharged and re-entering into business. Probably the act that will -prevent a discharge that most often appeals to the creditor is that the -bankrupt obtained goods on a false statement in writing. This, if shown, -will prevent the discharge, the law reading in this respect, as follows: -“Obtained property on credit from any person upon materially false -statement in writing made to such person for the purpose of obtaining -such property on credit.” It is obvious that the party who urges this -objection must be the one who has been injured thereby. - -Other debts not dischargeable in bankruptcy are taxes levied by the -United States, the State, county, district or municipality in which -bankrupt resides, and others of no practical interest to merchants. In -addition to the above are those debts which have not been duly scheduled -by the bankrupt in the proceeding in time for proof and allowance, with -the name of the creditor if known to the bankrupt, unless such creditor -had notice or actual knowledge of the proceedings in bankruptcy; or were -created by his fraud, embezzlement, misappropriation, or defalcation, -while acting as an officer or in any fiduciary capacity. - -=Opinion No. 97.= - - - - - SALES—OF AN INDEFINITE QUANTITY. - - -A purchaser of a quantity of merchandise ordered by letter two hundred -to three hundred tons of a certain article to be delivered within the -following six months as wanted. The vendor duly acknowledged receipt of -the order and accepted same, stating that they would deliver a certain -quantity in the immediate future and balance as ordered within the -following six months. Thereafter, the vendor delivered a certain portion -of the merchandise for which it was paid with the exception of one -installment, which the vendee refused to pay for alleging that the -vendor had refused to deliver further installments. The purchaser sued -the vendor for damages for breach of contract in failing to deliver the -balance of the contract. The Court held that by the terms of the order -the vendor could not insist on the purchaser taking more than the two -hundred tons but the purchaser on his part could insist within the six -months period upon the vendor delivering the remaining hundred tons, it -appearing that two hundred tons had been already delivered. In fact, it -was an option which the vendee could enforce but not the vendor. - -The above is a brief outline of an action decided in the Appellate Court -in New York and applies as well to an executory sale of lumber, many -similar orders being placed among lumbermen. - -=Opinion No. 98.= - - - - -LIABILITY OF BANK FOR FAILURE TO GIVE NOTICE OF PROTEST TO ENDORSER UPON - NOTE RECEIVED FOR COLLECTION. - - -That it is the legal obligation of a bank, which receives a note for -collection to use all diligence to give notice of its dishonor to all -endorsers is set forth in a decision of the Appellate Division of the -New York Supreme Court (Howard vs. Bank of Metropolis, 95 App. Div. -342). - -One H., who was the owner of a promissory note made by one S., and -indorsed by G., delivered the note to a bank for collection and left -with it a card giving G.’s full name and address, stating that he wished -the note carefully protested as he expected to hold the endorser, the -maker not being responsible, and that he would not be in the city when -the note fell due. The maker of the note having failed to pay it when -due, the bank sent it to its Notary for protest, but failed to deliver -to the Notary the card bearing the name and address of the endorser, and -informed the Notary that the endorser’s address was unknown. The Notary -made out two notices of protest, one directed to H. and the other to G. -Both notices were placed in an envelope and sent to H., who did not -receive them, being out of town. - -The Court held the bank responsible and in rendering its opinion -referred to a prior New York case entitled First National Bank vs. -Fourth National Bank (77 N. Y. 320) and quoted “it is the duty of an -agent who receives negotiable paper for collection, in case such paper -is not paid, so to act as to secure and preserve the liability thereon -of all the parties prior to his principal, and if he fails in this duty -and thereby causes loss to his principal, he becomes liable for such -loss.” - -=Opinion No. 99.= - - - - - ACCOUNTS STATED. - - -The Settlement of Accounts and Striking of a Balance Between -Parties—What It Consists Of. - -Upon merchandise accounts which embrace many items or cover transactions -running through a long period it is often wise to strike a balance or to -bring about an agreement between the creditor and debtor as to the exact -amount owing thereon. The value of such arrangement becomes of great -moment when at a later date attempt is made to enforce collection of the -account. It obviates the necessity proving various material matters such -as the delivery of the various items charged to the debtor; that they -were accepted by the debtor; that they were of the kind called for by -the contract of sale; that there was a full number or count; that the -agreed prices were as charged. The fixing of a balance upon a running -account is legally known as the _stating of an account_ and an account -so fixed is an “account stated.” - -A running account becomes an “account stated” by agreement either -express, or implied by acquiesence, between the parties, that a definite -amount or sum is owing from one to the other. No particular form of -words is essential and neither must it be in writing, although a written -expression is of more ready proof and, therefore, preferable. An express -admission, either verbally or by letter, of the correctness of an -account constitutes an account stated.—(Vernon v. Simmons, 7 N. Y. Supp. -649.) - -In the above case the debtor retained accounts received from his -creditor without objection or replying and subsequently acknowledged -orally the receipt of the letter containing them and promising to pay -later on, and it was held that the creditor could sue upon an account -stated. It is not necessary that the account should be signed by the -parties to make it an account stated. It is enough that it has been -examined and accepted by the party and this acceptance need not be -expressed; it may be implied from circumstances such as keeping it -without objection beyond a reasonable time. As to what is an -unreasonable time depends on circumstances largely and it has been held -that two months was sufficient, although generally a longer time would -be more conclusive. This acquiesence, however, may be explained by the -debtor, which would nullify the apparent acceptance, but without such -satisfactory explanation the situation is prima facie against him. Where -the indebtedness has been expressly denied, the retention of the account -does not bind the debtor.—(Austin v. Wilson, 11 N. Y. Supp. 565.) - -In bringing an action on an account stated if the plaintiff is defeated -through failure to prove the agreement as to the amount or the fact that -an “account was stated;” he would not be debarred from bringing another -action to recover for the various items comprising the account. - -=Opinion No. 101.= - - - - - ACCEPTANCE OF GOODS—WHEN SUFFICIENT TO BIND PURCHASER. - - - It is a daily occurrence in the lumber trade that a purchaser finds -some objection to the quality or quantity of lumber shipped to him on -order. Frequently in such case, without any communication with the -shipper a purchaser feels warranted in using such portion of the lumber -as suits him, relying on an assumed right to lay aside the balance for -the account of the shipper, with the idea that he may reject it entirely -or obtain some reduction in the price. The general rule laid down by the -courts in cases of this sort is as follows: Where the vendee of goods, -purchased without warranty, after full opportunity for an inspection, -accepts them without objection when delivered, he cannot, in an action -against him to recover the price defend upon the ground that they did -not conform to the contract of sale.—(Smith vs. Coe, 170 N. Y. 162.) - -If the purchaser, upon the receipt of the goods, makes objection to the -quality, but, without the express permission of the seller, uses a -portion, it is held that by so doing he tacitly waives his objection and -his acts amount to an acceptance of the entire lot.—(Coplay Iron Co. vs. -Pope, 108 N. Y. Appeals, 232.) - -In the above case, which involved a transaction in pig iron, the -purchaser complained of the shipment and upon being sued for the -purchase price set up a claim for damages by reason of the alleged -defective quality and it was held “where after discovery or opportunity -to discover any defect in goods delivered under an executory contract of -sale, the vendee neither returns or offers to return the property nor -gives the vendor notice or opportunity to take it back, in the absence -of a collateral warranty or agreement as to quality, he is conclusively -presumed to have acquiesced and may not thereafter complain of the -inferior quality.” - -When a car constitutes but a portion of the order, which was in the -nature of one contract for a number of cars, the purchaser cannot object -to the quality and retain the initial car and decline to receive the -balance of the shipment. The contract of sale being an indivisible one -in law, the purchaser by his acceptance of the initial shipment and -failure to return it, is conclusively presumed to have acquiesced in the -quality of the lumber offered him and waived any objection to the -remainder of the shipment order provided it is the same as the first -car. - -In the case of Weil vs. The Unique Electric Device Co., Reported in 39 -Misc. (New York 1902), page 527, a vendor sought to recover the -stipulated purchase price of certain merchandise sold to the defendant, -consisting of some 3,000 electric batteries, of which 1,000 were -delivered and paid for, but the purchaser refused to accept the balance -on the ground that the quality was not according to the agreement. The -court held that the contract of sale was an entire one and it was the -duty of the purchaser to receive balance of the order, provided they -were of similar quality to the lot already delivered. That when the -purchaser received the first lot and found them unsatisfactory, it was -its duty to rescind the sale and return, or offer to return the goods; -and its failure so to do was an acquiesence on its part of the quality -of the goods in question. - -The above discussion leaves for further consideration the question when -a purchaser though bound to take goods and chargeable with their full -price, may hold the seller liable for damages for breach of express or -implicit warranty. - -=Opinion No. 102.= - - - - - CONTRACT OF SALE—STATING ESTIMATES OF MAXIMUM AND MINIMUM AMOUNT. - - -It is the custom of many merchants, with a view doubtless of securing -the best possible terms and yet to leave a loophole, whereby they can -take only such an amount as they desire, to give the vendor a general -idea of their requirements. - -In Heisel vs. Volkman, reported in Volume 55, New York Appellate -Division, page 607, a dealer wrote to a manufacturer of certain kinds of -merchandise asking for “prices for supplying our requirements,” stating -“we estimate our yearly requirements at from five to ten million pieces. -Are confident that they will not be less than the smaller amount and -reasonably certain that they will come up to or exceed the larger one,” -to which the manufacturer replied, “I would be willing to make a yearly -contract with you from five to ten million pieces, etc.” The purchaser -did not take the minimum amount of five million pieces during the period -in question and the manufacturer sued to recover the purchase price of -the difference, having, of course, done what was necessary in respect to -making a tender of delivery. The court held that the purchaser was -obligated to take and pay for at least five million pieces, even if his -requirements for the year fell substantially short of that amount and -that the seller in making his price had a right to rely upon the minimum -amount stated by the buyer. - -Attention is called to this for the reason that the same rule would -apply to a transaction in lumber and because many of the trade are in -the habit of making contracts upon similar conditions and referring in -elastic terms to their probable requirements. - -=Opinion No. 103.= - - - - - CERTIFICATION OF CHECK—RELEASES THE MAKER. - - -Attention is called to the fact that under the law of New York State the -procuring of the certification of a check by the holder from the bank or -banker upon which it is drawn is equivalent to the acceptance of a bill -of exchange and releases the drawer.—(Meurer vs. Phœnix National Bank, -94 App. Div. (N. Y.) 331.) - -=Opinion No. 104.= - - - - - SALES—STOPPAGE IN TRANSIT. - - -The right to stop a shipment in transit is based on the existence of a -lien in favor of the seller, which continues until the goods have -reached the actual physical possession of the buyer. So long as the -goods are in the hands of a carrier the seller may, given the proper -conditions, reclaim the goods. This is so even if the carrier is one -designated or selected by the purchaser. A fraudulent sale of the goods -by the purchaser to third parties will not defeat the right of stoppage, -nor will seizure under attachment or execution issued against the -purchaser provided the right is exercised before the transit is at an -end. - -=Opinion No. 105.= - - - - - FOREIGN CORPORATION LAWS. - - -Necessity of Filing Certificates, Etc., in West Virginia, Indiana, -Tennessee, Mississippi, Kentucky, Ohio, Michigan, New York. - -One of our members recently had an attorney examine the corporation laws -of several States and give an opinion concerning the advisability of -filing corporate certificates, securing so-called licenses, etc., in the -various States wherever the member was making sales. The States referred -to are West Virginia, Indiana, Tennessee, Mississippi, Kentucky, Ohio, -Michigan and New York. This information may be helpful to other members, -and a copy of the opinion follows: - - WEST VIRGINIA.—Every corporation whose principal place of business is - located out of the State must pay an annual license tax as follows: If - the authorized capital is not more than $25,000, $20; not more than - $100,000, $50; not more than $1,000,000, $50; an additional forty cents - on each $1,000 in excess of $100,000. No other taxes are assessed - unless it has personal or real estate in West Virginia. Such foreign - corporations may be authorized to hold property and do business in the - State by certificate of the Secretary of the State that they have filed - with him a copy of their articles of association, which certificate - with a copy of the charter must be filed with and the certificate - recorded by, the Clerk of the County Court of such county in which - their business is conducted. A foreign corporation obtaining the above - mentioned certificate authorizing to hold property and do business in - West Virginia has the powers, rights and privileges and is subject to - the same regulations, restrictions and liabilities that are conferred - by statutes of West Virginia on domestic corporations. - - Every foreign corporation which shall do business in the State without - having obtained such certificate and having it filed and recorded - according to law shall be guilty of misdemeanor, and upon conviction - shall be fined not less than $50, nor more than $1,000 for each month - its failure so to comply shall continue. - - INDIANA.—Every foreign corporation, except railroad and telegraph - companies, built before March 15, 1901, and insurance companies must - maintain a public business office in Indiana and must designate a - representative in Indiana on whom service of process may be had. Such - foreign corporations are subject to the liabilities, restrictions and - duties imposed upon domestic corporations. They must before being - permitted to do business in Indiana file in the office of the Secretary - of State certified copy of its articles of incorporation, and a - statement sworn to by the principal or agent in Indiana of the - proportion of the capital stock of such corporation represented by its - property located and business transacted in Indiana, and must pay in - the office of the Secretary of State upon such proportion incorporation - fees equal to those required of domestic corporations. The Secretary of - State shall then issue a certificate authorizing such corporation to do - business. Until this law is complied with, demands of a foreign - corporation, whether arising out of contract or tort, cannot be - enforced in the courts of Indiana, and such corporation is subject to a - fine of not less than $1,000. Fee for filing articles of incorporation - of a corporation with capital stock of $10,000 or under is $10, over - $10,000, one-tenth of one per cent. upon authorized capital. No annual - State tax on corporation as such. - - TENNESSEE.—Foreign corporations must file in the office of the - Secretary of State a copy of its charter and cause an abstract of same - to be recorded in the office of the Register of each county in which - such corporation purposes to carry on its business or to acquire and - own property. Penalty for failure to do so shall subject the offender - to a fine of not less than $100 nor more than $500. They must pay in - the office of the Secretary of State a tax or license of $100 to - exercise such privilege. - - MISSISSIPPI.—Foreign corporations may sue and be sued and are liable to - be proceeded against by attachment or otherwise, as individual - non-residents are liable. The acts of their agents shall have the same - force as the acts of agents of private persons within the scope of - their power. They cannot recover on any contract made in the State or - cause action originating therein which is in violation of laws or - policies of States. No general statutes about taxation of foreign - corporations. Subject governed in main by common rule as to taxes, but - they are required to file with the Secretary of State certified copy of - their charter for record, for which a graduated fee is fixed. - - KENTUCKY.—If the corporation be organized under the laws of another - State a board shall fix the value of the capital stock determined from - the amount of the gross receipts of the corporation in Kentucky and - elsewhere the proportion which the gross receipts in Kentucky bear to - the entire gross receipts. The same proportion of the value of the - entire capital stock, less the assessed value of tangible property in - the State, shall be the correct value of the corporation franchise for - taxation. Reports must be made and failure is a misdemeanor punishable - by a fine of $1,000 and $50 for each day. - - OHIO.—Foreign corporations are forbidden to do business until they have - procured from the Secretary of State certificate that they have - complied with the requirements of law which authorize them to do - business in the State, and until said companies shall have caused the - proportion of their capital stock employed within the State to be - determined by the Secretary of the State, and shall have paid to him a - fee of one-tenth of one per cent. upon such amount and obtained his - certificate of such payment. No foreign corporation doing business in - the State can maintain any action upon any contract made by it in the - State until it has procured such certificate. The corporation must file - with the Secretary of State due copy of its charter and statement under - seal of the amount of its stock, the nature of its business and state - which is to be its principal place of business, designating a person - upon whom process against such corporation may be served. The person so - designated must have an office where the corporation is to have its - principal place of business within the State. Corporations complying - with these requirements are exempt from attachment on the ground that - they are foreign corporations. - - MICHIGAN.—Foreign corporations filing in the office of the Secretary of - State certified copy of articles of incorporation and an appointment of - an agent in this State for service of processes may carry on their - business in Michigan. Foreign corporations may bring suits on - furnishing security for costs. - - NEW YORK.—No foreign corporation shall do business without first - procuring from the Secretary of State certificate that it has complied - with requirements of law. License fee shall be paid. No foreign - corporation can do business in New York or sue on contract made there - unless it has procured such certificate prior to the making of the - contract. Selling goods through a factor within the State is not - covered by this prohibitive clause. Before granting such certificate - foreign corporation must file with Secretary of State copy of its - charter and a statement setting forth its business, its principal place - of business within the State and designating the person upon whom - processes may be served. Such person must have an office within the - State, where the principal place of business of such corporation is - located. Foreign corporations must pay to State Treasurer a license fee - of one-eighth of one per cent. for privilege of exercising its - corporate franchise in New York, to be computed upon the amount of - capital stock employed within the State during its first year of - business. - -=Opinion No. 106.= - - - - - CONTRACTS FOR CARLOADS SEPARABLE. - - -Where a contract was made for three carloads of a company’s No. 1 white -cedar shingles and the purchaser accepted and paid for two carloads, but -refused to accept the third because of alleged inferior grade and -quality, and because the shingles were not made by said company, the -Supreme Court of Minnesota holds that the contract as to the three -carloads was separable, so that the purchaser’s payment and the seller’s -acceptance of payment for two carloads did not prevent the seller from -beginning an action to recover the purchase price of the third carload -nor the purchaser from defending therein. The court also holds that a -buyer, seeking to reject an article as not in accordance with the -contract of sale, must do nothing after he discovers the true condition -inconsistent with the seller’s ownership of the property.—Duluth Log. -Co. vs. John C. Hill Co., 124 N. W., 967. - -=Opinion No. 107.= - - - - - WARRANTY SURVIVES ACCEPTANCE. - - -Where one attempting to sell shingles stated in a letter that “They are -mighty good shingles, they are as good as you could get anywhere,” it -was a warranty of their quality. Where a buyer of shingles accepts -shingles which he knows are of a grade inferior to what the seller -warranted, the buyer does not waive the warranty, and he can defend -against an action for the price on that ground. (Texas Court of Civil -Appeals.) Harroll vs. McDuffie, 128 S. W. Rep., 1149. - -=Opinion No. 108.= - - - - - ACCEPTANCE OF LESS THAN INVOICE PRICE. - - -On arrival of a carload of shingles, the buyer complained of their -quality, and for the purpose of securing an immediate settlement and -avoiding further negotiations the seller agreed to accept a less amount -for them than the full price if payment was made before a specified -time. The buyer failed to make payment within such specified time and in -a suit to recover for the full amount of the invoice it was held by the -court that the seller could require payment under the circumstances of -the full price. (Texas Court of Civil Appeals.) Harroll vs. McDuffie, -128 S. W. Rep., 1149. - -=Opinion No. 109.= - - - - - PRESS OF - JOHN A. PHILLIPS - NEW YORK - ------------------------------------------------------------------------- - - - - - TRANSCRIBER’S NOTES - - - 1. Silently corrected typographical errors and variations in spelling. - 2. Retained anachronistic, non-standard, and uncertain spellings as - printed. - 3. Enclosed italics font in _underscores_. - 4. 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