U.S. Supreme Court
Masters v. Barreda & Brother, 59 U.S. 18 How. 489 489 (1855)
Masters v. Barreda and Brother
59 U.S. (18 How.) 489
When there is a dealing between merchants for successive cargoes of merchandise upon time for which notes of hand were to be given, payable from the date of the ascertainment of the quantity of each cargo, and an arrangement is afterwards made for the substitution of an interest account for the notes which were to be given, and in that arrangement the seller stipulates that the allowance of the interest account should depend upon the continuance of the original time of credit, and that the buyer's balance on account should always be under a certain sum, and the buyer exceeds that amount and refuses to make a remittance or payment upon the call of the seller to bring the account within that sum, the seller may arrest the further delivery of any cargo or cargoes, though the same was in the course of being delivered to the buyer upon the seller's endorsement of the invoices and bills of lading of such cargoes.
In the absence of all understanding between the buyer and seller that any cargo chanroblesvirtualawlibrary
which had been delivered and not actually paid for, though notes of hand had been given for the same, was not to be considered within the new arrangement, such cargo must be taken into the computation in ascertaining whether the balance due by the buyer exceeds the amount of credit allowed to him.
In this case, the true construction of the new arrangement is that the existing notes of hand are to be counted as making a part of the limit which the buyer was not to exceed.
The facts of the case are stated in the opinion of the Court.
Upon the trial in the circuit court, the counsel for the plaintiffs (the Barredas) and defendants offered several prayers to the court as instructions to the jury which the court declined to grant, and instructed the jury as follows:
"1. Under the contract made by the letters of the 9th, 10th, and 11th of March, the amount for the cargo of The Lucy Elizabeth, and for which notes had been given, must be taken into the calculation and charged against the defendants in determining whether the balance against them amounted to $40,000."
"2. If, in this mode of computation, the balance against the defendants for guano previously sold and delivered amounted to $40,000 at the time when the further delivery of the cargoes of The Beatrice and The Ailsa was refused by the plaintiffs, the refusal was justifiable under the contract. They were not bound, in such a state of the account, to deliver these cargoes on credit. And if they offered to deliver them on the payment of the money or satisfactory security and the defendants refused to comply with these terms, the plaintiffs had a right to stop the delivery notwithstanding the previous endorsement and delivery of the bill of lading to the defendants, and the refusal as stated in the testimony is no breach of contract on the part of the plaintiffs and is not a bar to the recovery in this action of the amount due for the guano actually received by the defendants."
To which instructions the counsel for the defendants excepted, and the jury found a verdict for the plaintiffs for $74,636.13, with interest from 12th of September, 1854, till paid.