November 25, 1916 



Pertinent Legal Findings 



Queries on questions arising on any points involving the law as it is applied to lumhering and allied industries mil fie given pmpcr expert 

 attention through this department if submitted to Hardwood Record. There uill he no charge for such service, but Hardwood Record 

 reserves the right to publish questions and answers without designating names or location of inquiries unless specifically requested not to do so. 



Who Furnishes Cars for F. O. B. Shipments? 



Some time ago attention was drawn in tlie columns of Hardwood 

 Eecoed to tlie somewhat surprising fact that the appellate courts of 

 the country are not agreed on the question whether a contract to sell 

 lumber or other commodities f. o. b. place of shipping binds the seller 

 to furnish the cars, or whether he may require the buyer to supply 

 them. In this connection it is noteworthy that the New Mexico 

 supreme court has added its views on the point in an interesting opin- 

 ion which sums up the holdings of tlie courts of other states. The 

 court falls in line with the rule adopted in the larger number of 

 states where the question has been litigated, by holding that a contract 

 to sell f. o. b. impliedly obligates the seller to provide the necessary 

 cars. This rule, which appears to accord with the understanding of 

 business men in general, has been declared in Alabama, Kansas, 

 Washington and Wisconsin. The decisions of the supreme court of 

 Illinois leave it an open question in that state as to who must furnish 

 the cars under such a contract. The rule in Pennsylvania, as fixed 

 by the supreme court of that commonwealth, is that the buyer has the 

 burden of supplying the cars, when the sale is for delivery f. o. b. the 

 shipping point. In states not named above, the point does not seem 

 to have been decided by the highest courts. 



The New Mexico court intimates, however, that where a contract 

 of sale does not fix the destination, the seller may wait until the buyer 

 indicates the destination, when under some rule or custom, it is neces- 

 sary to know the destination before the seller can load. 



The question as to who must furnish cars usually arises when the 

 seller under a contract for delivery f. o. b. place of shipment seeks 

 to excuse failure to make delivery by showing that the buyer never 

 furnished the necessary cars for loading. The New Mexico court 

 seems to sound the more reasonable rule when it says: 



In view of the known methods of conducting business and the further 

 fact that dally transactions take place between buyer and seller for the pur- 

 chase and sale of goods to bo shipped to the seller, where the purchase is 

 made f. o. b. cars at the point of shipment, which may be many thousands 

 of miles removed from the point of destination, It would be unreasonable 

 to say that the seller can excuse his default in the shipment of the goods 

 according to the terms of his contract because the buyer has failed to 

 specify or furnish the means of transportation. 



Scope of Fire Insurance Policy 



An insurance company issued a fire policy insuring a lumber com- 

 pany to the amount of $8,000 ' ' on lumber, staves and timber products 

 of every description now owned or which may be hereafter manu- 

 factured, or held in trust or on commission, or sold but not delivered 

 or removed, or * * * on which advances are made under contract of 

 purchase, while stacked or piled or piled at various mill sets or yards, 

 or at shipping points." Loss occurred, and in a suit to recover on the 

 policy, question was raised as to the right of the lumber company to 

 recover on account of profits lost through the burning of lumber. 

 Trial resulted in favor of the lumber company, but the judgment has 

 been reversed by the Virginia supreme court of appeals, which holds 

 that the policy did not cover profits which might result from tlie in- 

 sured company handling the lumber. It is further decided that, under 

 the general rule of law that the terms of a written contract cannot 

 be contradicted or extended by showing a contemporanepus verbal 

 agreement, the lumber company was not entitled to rely upon a verbal 

 statement by the insurance company at the time the policy was issued 

 that it should be understood as covering profits lost (Connecticut Fire 

 Insurance Company vs. W. H. Eoberts Lumber Company, 89 South- 

 eastern Reporter, 945). 



Responsibility of Related Corporation 



Although, ordinarily, a lumber corporation which owns or controls 

 another company, operating tlie latter 's plant and conducting its 

 tiusinesB as a de))artment of the former's own business, is responsible 

 for obligations incurred by the subsidiary corporation under such 



control, the mere fact that one company takes an interest in another 

 for the purpose of securing its own interests as a creditor of the latter 

 does not make the former liable for the latter 's debts (United States 

 circuit court of appeals, eighth circuit ; Chicago MUl & Lumber Com- 

 pany vs. Boatmen's Bank; 234 Federal Reporter, 41). 



Contributory Negligence in Mill 



A teamster employed to haul lumber from a mill was guilty of con- 

 tributory negligence, barring recovery for injury sustained through 

 falling of a plank from a conveyor to a receiving platform, where he 

 saw that the plank was about to be thrown down, and did nothing to 

 avoid being struck by it, although there may have been negligence in 

 the circumstances in which the piece of lumber was handled by the 

 mOl employes. (Oregon supreme court, Young vs. Prouty, 159 Pacific 

 Reporter, 565.) 



Discrimination in Water Service 



All contracts being subject to modification under subsequent exercise 

 by the legislature of tlie state 's police pow er, the right of a lumber 

 company to water service at a special rate given by a water company 

 to induce the location of the lumber company 's sawmill was terminated 

 when the state Public Service Commission was afterwards created 

 with power to establish uniform water rates, and when the special 

 rate was found to be discriminatory against other consumers. (Wash- 

 ington supreme court, Raymond Lumber Company vs. Raymond Light 

 & Water Company, 159 Pacific Reporter, 133.) 



Michigan Compensation Act Applied 



The fact that a man engaged by a lumber company for an indefinite 

 period to haul logs with his own team was paid at a specified rate per 

 thousand feet did not deprive him of his status as an employee, and 

 make him an independent contractor; he being subject to the orders 

 of the company in doing the work. Hence, on his being killed in the 

 course of the employment, his widow became entitled to an award 

 under the Workmen's Compensation Act. (Michigan supreme court, 

 Tuttle vs. Embury-Martin Lumber Company, 158 Northwestern Re- 

 porter, 875.) 



Validity of Promise to Pay Another's Debt 



The statutes of the several states which provide tliat a promise to 

 pay a third person's debt is not valid unless reduced to writing and 

 signed by the promisor are subject to the qualification that where the 

 promisor derives some advantage from his promise there is sufficient 

 consideration to support it as an independent verbal agreement. 

 Applying this principle, the Michigan supreme court holds in the 

 recent case of Monroe Lumber Company vs. Bezeau, 158 Northwestern 

 Reporter, 880, that where lumber has been sold to a building eon- 

 tractor and he has absconded without paying therefor, the subsequent 

 verbal promise of the owner of the building to pay the debt is suffi- 

 ciently supported by the selling lumber company's agreement to 

 forego its right to file a mechanic's lien against the property. • 



Water Shipments of Lumber 



Under a bill of lading covering a water shipment and exempting 

 the vessel from liability for loss of or injury to the freight from perils 

 of the sea, liability for goods washed overboard in an unusually severe 

 storm cannot be based on the fact that they were stowed on deck in- 

 stead of in tlie hold, if the stowage was in accordance with general 

 custom, the hold being full. (United States district court, northern 

 district of California; The Del Norte; 234 Federal Reporter, 667.) 

 The provisions of the federal statutes to the effect that an owner of a 

 vessel who has used due diligence to make it seaworthy and to prop- 

 erly man and equip it shall not be liable for errors in navigation, do 

 not exempt from liability the interest of the master of a vessel 

 through whose negligence the boat was stranded, resulting in loss to 

 a lumber cargo, where he is a part owner of the vessel. (United 

 States district court, southern district of Georgia; The Humarock; 

 234 Federal Reporter, 716.) 



—32 



