Court Opinion

ID: 6664040
Source: CourtListenerOpinion
Date Created: 2022-07-20 21:04:49.334754+00
Date Added: 2024-06-11T16:00:16.894411
License: Public Domain

DUFOUR, J.
In order that the issues presented may be properly understood, it is advisable to make a short statement of the lengthy pleadings in this case.
The plaintiff, a corporation domiciled at Friars Point, Miss., alleges that the defendants’ company, a local firm, are indebted to them in the sum of $1436.90/100 with interest for the following reasons:
That on Februray 19th, 1902, for value received, defendants assigned to plaintiffs all their claims to certain lumber purchased by defendants from PI. C. Buck, Jr., & Co., in consideration of the sum of $2249,35/100, being $2500 less certain agreed > deductions, which was paid by plaintiff.
That on the same day, for value received, defendants assigned to plaintiffs all their rights, title and interest in and to all the cypress timber on a certain tract of land, with privileges and rights of way, known as the “Faison Brake” purchased by Buck & Co., from Faison and by the former transferred to the defendants on November 1st, 1901.
That, in consideration of this assignment, plaintiff delivered to defendants a promisory note held by it, dated November 5th, 1901, and drawn by Williams and Co., to the order of H. C. Buck, Jr., or bearer for the sum of $2000.00, on which $563.05 had been paid, leaving a balance due thereon of $1436.95.
That, on or about July 30th, 1902, when petitioner attempted to move the timber out of the brake, they were prevented by an attachment levied against Buck & Co., by one of their *244creditors on Jany. ist, 1902, and ascertained that Williams & Co., had not recorded their deed until January 17th, 1902, that the timber was subsequently sold under the attachment, and hence there was no consideration for the note because defendants through their own fault found themselves unable to deliver the timber.
The answer admits the execution of the assignment, but avers that they constituted a single transaction that, to the knowledge of the bank, the cypress timber was transferred as collateral security against loss on the issuance of said note, and that Buck & Co., failed to comply with their contract.
That defendants negotiated the sale of said lumber to Cran-dall & Richardson in Chicago, which would have resulted in a profit of $632.72 had not Buck & Co. wrongfully prevented them from getting car facilities for the transportation of the same, and that said Bank improperly and for its own purposes influenced defendants to make the transfers.
That the real purpose of the assignments to the Bank was to effect a settlement with Buck & Co., for whom the Bank was acting and that the real consideration for said transfers was the lumber and defendants contract with Buck, and that the timber was assigned as part therof as collateral to the same, and no separate consideration was given therefor.
The record is most voluminous and contains much correspondence and a mass of testimony, more or less relevant, from which we shall take only the salient facts and such as are pertinent to the decision of the cause.
H. C. Buck, Jr., doing business under the name of H. C. Buck, Jr., & Co., was in September, 1901, operating a saw mill at Boyle, Miss., which he had purchased from the Exchange Bank, of Friars Point, but for which he had not paid.
On September 28th, 1901, Buck entered into a-written contract with Williams & Co., to deliver them in specified grades and dimensions five hundred thousand feet of cypress lumber, half by December ist, 1901, and half by February ist, 1902.
The contract1 contained a provision that “Buck & Co. will furnish satisfactory guarantee as to clear title to cypress stump-age purchased and a satisfactory showing as to the quality and amount of the said cypress stumpage.”
Williams & Co. also agreed to issue “their four months note *245for $2000 against which Buck & Co. agree to furnish bill of sale in proper form of a certain lot of cypress timber estimated by them at 1,500,000 feet merchantable timber. Buck & Co. agree that on the purchase price of said lumber there shall be four dollars per M. deducted from the price to be paid by Williams & Co. for the above lumber which will be applied on the above $2000 note.”
On October 5th, Lamkin, cashier of the Bank, at Buck’s request wrote to defendants that from information received he believed the brake was well worth the price which Buck was to pay with the money to be furnished by Williams & Co.
On October 7th the defendants wrote to Lamkin as follows :
“We have a contract with Mr. Buck and it was understood that you, as cashier, were to guarantee to us that there were no incumbrances on the cypress brake in question, and that there was at a least one and one-half million feet ’merchantable standing timber on same, all accessible to the mill at which Mr. Buck proposes to saw it up into lumber.”
To which Lamkin replied: “The information was collected by me and given to you as received by me and is, I believe correct. But I do not undertake to guarantee anything or to assume any responsibility zvhatcvar in the matter.”
Some time elapsed before the transaction was consummated, owing to errors and imperfections in the papers forwarded between the parties, but the note was signed on November 5th.
Complete refutation of defendants claim that they acted on the Bank’s assurances is to be found ni the following letter to Buck:
“We have asked our Mr. Simpson to look into the matter of timber and, though he claims there is much less timber than you represented, at the same time he is satisfied there will be sufficient to get our contract of 500 M. feet.”
The Exchange Bank discounted the note in question and placed the proceeds to the credit of Buck & Co, who checked out the amount. At the same time the note was surrendered to defendants by the Bank there had been payments on account thereof to the extent of $563.05.
About the middle of January, 1902, Buck’s affairs appear to have become embarrassed to such an extent that Lamkin to *246p ' tect the Oank’s interests, made a trip to Boyle to investigate ir Titters.
in a letter of January 18th, to defendants he says:
“I have been at Boyle for several days at mill of Buck, Jr., & Co., and find matters in very bad shape. We are interested to a considerable extent down there and Buck is heavily involved with local parties. I have been endeavoring to hold matters in check and have time to adjust his affairs without resort to litigation. We wish to get everything there under our own control and save what we can. I wish to make you this proposition :•
“We will refund you the amount advanced to Mr. Buck on cypress and the amoimt you hava paid on the $2000 note and let you out without loss. You to assign to us bill of sale on Shaw brake, and make bill of sale to us for the cypress lumber you have advanced on at Boyle, and assign lease to ground on which it is piled, in case you have lease. Your refusal to accept this proposition will leave the matter in this shape: A large amount of logs which have been sawed into cypress have not been paid for, and these parties will cause you trouble if not settled with. We will force collection of balance due on the $2,000 note of yours that we hold and you will be involved in expensive and vexatious litigation. Mr. Buck cannot operate the mill under present conditions; and unless you are willing to take zvhat you ,have put in there and get out we cannot control situation and he (Buck) will be forced into- bankruptcy. Wire us whether or not you will be willing to do this. If you accept, draw on us for advance made on cypress and zvhat you have paid on $2000 note with papers referred to and have attached an inventory of cypress lumber as per your inspector’s reports.”
It is immaterial to inquire whether there was a single transaction or two distinct ones.
It is clear that the purpose of the agreement resulting from the acceptance of the foregoing proposition was, on the one hand, to allow the plaintiff for its own protection, to control the situation in reference to Buck’s affairs, and, on the other, to allow the defendants to withdraw from their engagements without loss to themselves.
The Bank kept faith and carried out its obligations to the letter, it paid the sum agreed upon, returned the note in question *247and obtained from Crandall & Richardson a release from their contract with Williams. To bring about that result, it surrendered to Crandall & Richardson some of its own oak timber, over and above the timber included in the original contract with Williams & Co.
The latter’s claim that they have not been made whole, as they lost their profit's on the Crandall & Richardson contract is an evident after-thought, apparently provoked by the exigencies of this suit, Buck’s default, if not remedied by the Bank, would have made it impossible for them to comply with their obligations, and-they admit that “while we are losing the profits, we are satisfied to be relieved of any damage claim on the part of Crandall & Richardson for non-delivery according to the contract.”
The fundamental error of defendants’ theory is the unwarranted assumption that the Bank was, in any manner and at any time, acting for Buck; it acted for itself, in the protection of its own interest and it was an absolute stranger to the contract between Buck and Williams & Co. The charge is groundless that the Bank assisted or instigated Buck in his actions or had anything to do with causing the refusal of car facilities.
The sole cause of the injury herein is found in the failure of defendants to seasonably record the deed to the brake and timber and in thus allowing a subsequent creditor of Buck to secure a priority thereon by attachment, under the law of Mississippi.
It was their plain duty, under their agreement, to turn over to the Bank the security in the same unimpaired and unincum-bered condition as when they received it from Buck.
Had they done so, no injury would have occurred.
Although defendants have come out without loss, so far as plaintiffs’ conduct is concerned, their negligence, in the discharge of their contractual obligation has entailed a loss on the latter which they must repair.
There is no force in the contention that plaintiff should have made an effort to minimize the loss by buying out or paying off the attaching creditor, when it appears, that’ defendants, v, ith full knowledge of al lthe circumstances declined to take steps in the like direction.
The defences urged are not in accord with the judicial con*248ception of fair dealing and cannot be sustained.
November 5. 1906.
Judgment affirmed.