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CHAPTER IV.

GENERAL PROVISIONS.

ARTICLE I.

$ 3266. Definitions and meaning of terms.
$ 3266a. Person primarily liable on instrument.

3266b. Reasonable time, what constitutes.
$ 3266c. Time, how computed, when last day falls on holiday.
$ 3266d. Application of act.

3266. DEFINITIONS AND MEANING OF TERMS. In this title, unless the context otherwise requires

"Acceptance” means an acceptance completed by delivery or notification. "Action" includes counterclaim and set-off.

"Bank” includes any person or association of persons carrying on the business of banking, whether incorporated or not.

“Bearer" means the person in possession of a bill or note which is payable to bearer. "Bill” means bill of exchange, and "note" means negotiable promissory note.

"Delivery” means transfer of possession, actual or constructive, from one person to another.

“Holder" means the payee or indorsee of a bill or note, who is in possession of it, or the bearer thereof.

"Indorsement" means an indorsement completed by delivery. “Instrument" means negotiable instrument.

“Issue" means the first delivery of the instrument complete in form, to a person who takes it as a holder.

“Person" includes a body of persons, whether incorporated or not.
"Value" means valuable consideration.
"Written” includes printed, and "writing" includes print.

History: Enactment approved June 1, 1917, Stats. and Amdts. 1917, p. 1559. In effect July 31, 1917.

8 3266a. PERSON PRIMARILY LIABLE ON INSTRUMENT. The person "primarily" liable on an instrument is the person who by the terms of the instrument is absolutely required to pay the same. All other parties are "secondarily" liable.

History: Enactment approved June 1, 1917, Stats. and Amdts. 1917, p. 1560. In effect July 31, 1917.

8 3266b. REASONABLE TIME, WHAT CONSTITUTES. In determining what is a "reasonable time" or an "unreasonable time,” regard is to be had to the nature of the instrument, the usage of trade or business (if any) with respect to such instruments, and the facts of the particular case.

History: Enactment approved June 1, 1917, Stats, and Amdts. 1917, p. 1560. In effect July 31, 1917.

8 3266c. TIME, HOW COMPUTED, WHEN LAST DAY FALLS ON HOLIDAY Where the day, or the last day, for doing any act herein required or permitted to be done falls on Sunday or on a holiday, the act may be done on the next succeeding secular or business day.

History: Enactment approved June 1, 1917, Stats. and Amdts. 1917, p. 1560. In effect July 31, 1917.

p. 1560.

8 3266d. APPLICATION OF ACT. The provisions of this title do not apply to negotiable instruments made and delivered prior to the taking effect hereof. In any case not provided for in this title the rules of law and equity including the law merchant shall govern.

History: Enactment approved June 1, 1917, Stats. and Amdts. 1917,

In effect July 31, 1917. $ 3281.

recover the agreed value of the stock.

Gillin v. Hopkins, 28 Cal. App. 579, 153 Pac. 1. Who may recover damages.-Where it

724. is agreed between the owner of a tract

8 3283. of land and an agent to whom the exclusive

1. sale thereof had been given for a period

Future damages.—Compensation may of years, that the agent might for the pur

be awarded for pain suffered or to be

necessarily suffered from the injury. The pose of raising money for the building of

damages must be limited to such as are cerhouses upon the lots into which he had

tain to result.-Pouchan v. Godeau, 167 Cal. subdivided the tract, execute a mortgage on 692, 140 Pac. 952. the property to run for not less than two 2. The plaintiff is entitled only to such years, and that the owner would convey damages as by the evidence it is reasonably the property to the agent, or his nominee, certain that he will suffer in the future. for the purpose of making the loan, and

Damages determined by conjecture are not that after the execution of the mortgage

damages which are "reasonably certain to

result in the future."-Rouse v. Pacific Elec. the property should be immediately recon

R. Co., 27 Cal. App. 772, 151 Pac. 164. veyed to the owner, the agent, after the obtaining of the loan and the execution 3287. of the mortgage, has no authority to extend

1. Interest on damages-Action based on the time of payment thereof, so far as the

contract.--Where the liability of the defenowner is concerned, and an agreement be

dant in an action is based upon contract tween the agent and the mortgagee for such

for goods sold at certain prices or at curan extension is not binding on the owner,

rent market value, interest is properly who may, upon the failure of the agent to

allowable on the amounts found due under pay as agreed, recover damages against

section 3287 of the Civil Code.—Brazil v. him in the amount of the full indebtedness

Azevedo, 32 Cal. App. 364, 162 Pac. 1049. without first paying the mortgage debt.

2. -Administrator violating trust.-The Turner v. Howze, 28 Cal. App. 167, 151 Pac.

rule that in damages for tort or breach of 751.

contract interest can not be allowed where 2. Where one person agrees to give an- the amount of damages is unliquidated and other a certain number of shares of stock incapable of being made certain has no to compensate him for making a sale of application in the case of an administrator stock, the remedy of the latter, in case of a who has violated his trust by using estate breach of the agreement, is an action for property for his personal benefit.-Estate of damages; he has

cause of action to Piercy, 168 Cal. 755, 145 Pac. 91.

no

DIVISION FOURTH.

PART I.

RELIEF.

TITLE II.

COMPENSATORY RELIEF.

CHAPTER II.

MEASURE OF DAMAGES.

ARTICLE I.

DAMAGES FOR BREACH OF CONTRACT.

$ 3320. Liability for nonpayment of check [new].

8 3300.

2.

damages is that provided in this section

and not that of section 3311.-Griffith V. MEASURE OF DAMAGES FOR BREACH

Welbanks & Co., 29 Cal. App. 238, 155 Pac. OF CONTRACT.

120. 1. As to generally,

5. Contract to buy automobiles.-A com2. Abandonment of building contract.

plaint in an action for damages for breach 3, 4. Contract to buy apples.

of an agreement to purchase from the plain5, 6. Contract to buy automobiles.

tiff at least twenty-five automobiles, which 7,8. Contract to manufacture.

alleges that the defendant ordered, pur9. Contract to put in street-work, side

chased and paid for only four of the cars, walks, curbs.

and that if he had purchased the remaining, 10, 11. Contract to supply oil.

twenty-one cars as agreed the plaintiff's 1. As to generally.-Courts will not, ex- profit on each car would have been $100, cept where exemplary damages are given, sufficiently states, in the absence of a speallow a party to a contract to recover on cial demurrer, the plaintiff's damage either its breach more than he would have received under the rule fixed by section 3300 of the by its due performance.—Johnson v. Hinkel, Civil Code or by section 3311, as such alle29 Cal. App. 78, 154 Pac. 487.

gation is equivalent to a statement that Abandopment of building contract.

the price which defendant agreed to pay The measure of damages for breach of a for each car was at least $100 more than building contract by abandonment is the the value of the car to the plaintiff.difference between the contract price and Thompson v. Hamilton Motor Co., 170 Cal. the cost of the building and the loss follow- 737, Ann. Cas. 1917 A 677, 151 Pac. 122.

The right of the plaintiff to recover vestment Co. v. Empire State Surety Co., damages in such a case is not affected by the 27 Cal. App. 208, 150 Pac. 405.

6. ing the delay in its completion.-Dunne In

fact that he did not have the cars on hand, 3. Contract to buy apples.--In an action

where it is shown that he could have profor breach of a contract to purchase all the cured them in a reasonable time if they apples growing on the leasehold of the had been ordered.--Thompson v. Hamilton plaintiff, it is error to award the plaintiff, Motor Co., 170 Cal. 737, Ann, Cas. 1917 A 677, as damages, the full contract price, without 151 Pac. 122. taking into account the cost of packing, 7. Contract to manufacture.-The measnailing the shook, and hauling the apples ure of the plaintiff's damage for the defento the designated point of shipment and dants' wilful and wrongful violation of a putting them on board the cars, which the contract for the manufacture of soap acplaintiff was obligated to do, notwithstand- cording to a secret formula furnished by ing the apples were destroyed by the ele- the former, where it is shown that the ments before harvesting, through the alleged defendants had knowledge that the purpose fault of the buyer in not furnishing the nec- of the plaintiff was' to permanently estabessary materials for packing. Griffith v. lish a market for a soap of superior merit Welbanks & Co., 29 Cal. App. 238, 155 Pac. and value to be manufactured for him in 120.

exact accord with such formula, is the 4. Where the property consists of a grow- difference between the plaintiff's actual exing crop which was destroyed by the ele- penditures in creating a market for the ments before it was harvested and was soap, including the value of his own sernever in a condition to be delivered to the vices, and the sum received by him from buyer, the just and equitable measure of the sales made of the soap delivered up to

the time that the market which he had cre- against the just and lawful claims and ated had been destroyed in consequence of demands of all persons whomsoever, can the breach of the contract; and, where it is not be construed as a contract whereby the also shown that such defendants had con- grantor agreed to acquire and convey, or verted the secret ingredient to their own cause the owner thereof to convey, an outuse, the value thereof is to be added to the standing paramount title to the grantee, damage.—Grosse v. Petersen, 30 Cal. App. but is merely a promise to make compensa482, 158 Pac. 511.

tion in money for loss due to an eviction.8. Where a contract is entered into by Tropico Land & Imp. Co. v. Lambourn, 170 the parties with reference to special circum- Cal. 33, 148 Pac. 206. stances known to them both, the damages 2. The covenant of warranty in a deed for a breach are not only those arising conveying land, or any interest in land, is an naturally therefrom and according to the undertaking by the warrantor that on the usual course of business, but also those failure of the title which the deed purports which under the special circumstances con- to convey, either for the whole estate or nected with the transaction flowed from the for part only, by setting up a superior title, breach.-Grosse v. Petersen, 30 Cal. App. he will make compensation in money for 482, 158 Pac. 511.

the loss sustained by such failure.--Tropico 9. Contract to put in street-work, side- Land & Imp. Co. v. Lambourn, 170 Cal. 33, walks, curbs.—The owner upon the breach 148 Pac. 206. of the provision in the original agreement 3. Price paid on portion thereof (subd. as to the putting in of street-work, side- 1).-The measure of damages established walks and curbs, is entitled to recover as

by the code was one generally, if not unidamages the reasonable cost of such work,

versally, prevailing prior to its enactment. notwithstanding the contract had not been -McCormick v. Marcy, 165 Cal. 386, 132 terminated and no forfeiture declared.- Pac. 449. Turner v. Howze, 28 Cal. App. 167, 151 Pac.

4. This remains the measure of damages 751.

despite the fact that the covenantee, prior 10. Contract to supply oil.-In an action

to the breach, had conveyed the land, with to recover damages for a breach of contract

a similar covenant, for a less consideration, to supply plaintiff with all the crude oil

and after the breach had settled with his required to keep its refinery running at

grantee for a corresponding lesser amount. full capacity at a fixed price, the measure

--McCormick v. Marcy, 165 Cal. 386, 132 of damages is that fixed by this section, and

Pac. 449. not measured under sections 3353 and 3354.

5. The measure of damages, where there -National oil Ref. & Mfg. Co. v. Producers'

has been an actual loss of the premises, Ref. Co., 169 Cal. 740, 147 Pac. 963.

is the purchase price and interest to date 11. In determining the amount of dam

of eviction.- Tropico Land & Imp. Co. V. ages sustained by the plaintiff from the

Lambourn, 170 Cal. 33, 148 Pac. 206. breach of a contract to furnish sufficient crude oil to run a refinery, which contract

$ 3306. also provided that the defendant was to

1. purchase from the plaintiff the products

Measure of damages-Breach of agreeof the refinery, it is proper to estimate

ment to convey realty.—Where the court the loss of profit to the plaintiff by reason

adopted the measure of damages contemof the failure of the defendant to furnish

plated herein instead of that contemplated oil at a fixed price and to repurchase the

by section 3304 it makes but little differproducts after refinement, also at a fixed

ence where the element of bad faith enters,

for that would clothe the court with the price.---National Oil Ref. & Mfg. Co. v. Producers' Ref. Co., 169 Cal. 740, 147 Pac. 963.

power to fix damages according to the detri

ment shown by the existing special circum§ 3302.

stances of the case.-Kline v. Guaranty Oil

Co., 167 Cal. 476, 140 Pac. 1.
Wrongful refusal of bank to pay

2. In an action to compel specific performcheck.—The measure of damages against a

ance of such a contract on the part of the bank for its mere negligence in wrongfully

vendors and to recover damages for the refusing to pay a check drawn upon it is

failure of title of the vendors as to twenty that provided in this section.-Hartford v.

acres of the land involved, the measure All Night and Day Bank, 170 Cal. 538,

of the plaintiff's damage is not the value L. R. A. 1916 A 1220, 150 Pac. 356.

of the twenty acres, but the proportionate value thereof to the value of the whole area described in

the contract. --Butte Creek

Consol. Dredging Co. v. Olney, 173 Cal. 697, MEASURE OF DAMAGES FOR BREACH

161 Pac. 260. OF COVENANT.

3. Where a court of equity finds itself 1, 2. As to generally.

unable to enforce conveyance of all the land 3-5. Price paid or portion thereof (subd. 1).

described in a contract of sale it will compel 1. As to generally. – A warranty in compliance with the agreement as far as deed that the real estate therein described possible at the rate agreed upon between is free from all incumbrances and that the the contracting parties; and the same measgrantor and her heirs, executors and admin- ure must be applied in estimating the proistrators will warrant and defend the same portion of the purchase price recoverable

1.

$ 3304.

a

by one who has mistakenly paid for more land than the vendor is able to convey.-Butte Creek Consol. Dredging Co. v. Olney, 173 Cal. 697, 161 Pac. 260.

of

§ 3308.

1. Measure of damages for breach of contract of sale of personal property.The measure of damages for the failure of the seller of timber to deliver an agreed quantity, is that laid down in this section as "the excess, if any, of the value of the property to the buyer over the amount which would have been due to the seller under the contract, had it been fulfilled," and this value to the buyer is fixed by section 3354 of the Civil Code as the price at which he might have bought an equivalent thing in the nearest market.—California Sugar & White Pine Agency v. Penoyar, 167 Cal. 274, 139 Pac. 671.

2. The measure of damages, where sellers of chalk did not make delivery at the agreed time, is the difference between the market value of the chalk when it should have been delivered and its market value when it was delivered. If there has been no change in the market value, the sellers are not liable for damages to the buyer, notwithstanding the agreed price may have been less than the market price and the buyer was conducting a business which required chalk at the time specified for delivery and was compelled to pay the market price therefor.-West Coast Kalsomine Co. v. Lund, 230 Fed. 855.

& P. Co. v. Town of Sausalito, 168 Cal. 587, 143 Pac. 767.

2. Where the property consists a growing crop which was destroyed by the elements before it was harvested and was never in a condition to be delivered to the buyer this section does not furnish the true measure of damages, but the measure is that provided in section 3300.-Griffith v. Welbanks & Co., 29 Cal. App. 238, 155 Pac. 120.

3. The law seeks to give the complaining party the value of his bargain-to prevent a loss which the fulfillment of the contract would have prevented-to put the injured party, so far as money can do it, in the same position as if the contract had been performed.—Griffith v. Wel nks & Co., 29 Cal. App. 238, 155 Pac. 120.

In an action by a seller of hops for damages for the purchaser's breach of contract, the measure of recovery is the difference between the contract price and the market price at the time and place of delivery, where there is no allegation in the complaint that the hops were resold or as to the price at which they were resold. Pabst Brewing Co. v. Clemens Horst Co., 229 Fed. 913.

8 3313

1. Measure of damages for breach of warranty of personal property.In an action for damages for the breach of an express warranty of coffee bags where the bags were intended to be shipped to a foreign port and

the defendants had knowledge thereof, the damages are properly fixed with reference to the market value of the bags at the port to which they were to be shipped.--W. R. Grace & Co. v. Levy, 30 Cal. App. 231, 156 Pac. 626.

3 3311.

1. Measure of damages for breach of contract to buy personal property.-A contract between a municipality and water company for the purchase of a bulk supply of water for a period of years is not the usual agreement to accept and pay for personal property. The measure of damages is not that laid down herein. The minimum rate is the true measure of recovery, the promise to pay such sum being a part of the direct obligation of the contract and not a covenant for liquidated damages.—Marin Water

8 3316.

§ 3320. LIABILITY FOR NONPAYMENT OF CHECK. No bank shall be liable to a depositor because of the nonpayment through mistake or error, and without malice, of a check which should have been paid unless the depositor shall allege and prove actual damage by reason of such nonpayment and in such event the liability shall not exceed the amount of damage so proved.

History: Enactment approved May 17, 1917, Stats, and Amdts. 1917,

1. Measure of damages for breach of carrier's obligation to deliver-The measure of damages for the loss of goods in an action brought against a carrier at the point of destination is the value of the goods there.-Canadian Pac. R. Co. v. Wieland, 226 Fed. 670.

p. 622. In effect July 27, 1917. 8 3333

1. Construction of section—To what apMEASURE OF DAMAGES FOR WRONGS plicable.--This section deals with property OTHER THAN BREACH OF CONTRACT. having no market value.-Willard v. Valley 1. Construction of section---To what appli

Gas & Fuel Co., 171 Cal. 9, 151 Pac. 286. cable.

2. Action for libel. - The rule for the 2. Action for libel.

measure of damages in a libel case, where 3-5. Damages to property.

there is no charge of fraud or malice or 6. Wrongful removal of property.

claim for vindictive or exemplary damages

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