MacIntyre FJ:

The appellants, the Kabatasan Timber Extraction Company, sued the respondent, a sawmiller, for a sum of $40,129.31 being the alleged balance of the price of 41,069 cubic feet of timber sold and delivered under an agreement dated 6 December 1963. In his defence, the respondent admitted liability to the extent of $2,044.81, but subject to a counterclaim for $37,967.20 for damages arising from a breach of contract by the appellants. The learned trial Judge found that the appellants delivered some 19,173 cubic feet of timber valued at $25,913.80 and that the respondent had paid to account of some sums amounting to $16,041.37, inclusive of an advance deposit of $5,000. Accordingly, he entered judgment for the appellants for the outstanding balance of $9,872.41 and costs. With regard to the counter-claim, the learned Judge awarded damages in the sum of $13,192.40 of which a sum of $12,992.40 was for loss of profit arising out of the failure to supply 10,827 cubic feet of timber being the difference between the quantity agreed to be delivered and the quantity actually delivered; and a sum of $200 for extra cost incurred by the respondent in hiring a tractor to haul logs which had been placed, contrary to the terms of the contract, at some distance from the site of the sawmill.

The facts of the case are as follows. The appellants having obtained a concession to cut and remove timber from Pitas Estate at Kabatasan, contracted under the aforesaid agreement to supply to the respondent such timber they themselves did not require for export, namely, camphor, serayah, oba sulu and selangan batu, to the extent of not less than 30,000 cubic feet, based on the measurements made by the Forest Department for the purpose of collecting royalty. It was agreed that the logs were to be delivered at the site of the sawmill to be erected by the respondent in Pitas Estate on a licence to be obtained by the appellants from the Forest Department. It was further agreed that, on delivery and acceptance of any quantity of timber, the respondent should pay 300f the price at the agreed rates within three days of delivery and the balance within three calendar months from date thereof.

Subsequently, the appellants applied for and obtained a licence in their name to build and operate a sawmill and the respondent built the sawmill at a site mutually chosen by the Parties. The site chosen was near the confluence of the Kabatasan River and a tributory and close to the "Penkalan" or place from which the appellants floated their exportable timber to the sea. Consequently, the space for dumping the logs close to the sawmill was available on one side of the sawmill only, the other three being too close to the waterfront. Because of this problem, the question arose at the trial as to what was a reasonable distance from the sawmill for the logs to be deposited in order to constitute delivery "at the site" as stipulated in cl 3 of the agreement. The learned trial Judge held that a distance of 500 feet from the sawmill was the limit within which the logs should have been delivered to constitute delivery at the site.

Hong Kee Sui, the managing partner of the appellant firm, deposed at the trial that his company had delivered 41,069 cubic feet of timber to the respondent in three lots, namely, the first lot consisting of 207 logs measuring 17,303 cubic feet in March 1964, the second lot consisting of 198 logs measuring 20,793 cubic feet at the end of May 1964, and the third lot consisting of 22 logs measuring 2,973 cubic feet in June 1964. In regard to the first and the third lots, Hong Kee Sui produced debit notes signed by the respondent acknowledging receipt of the same but, in regard to the second lot, he produced a debit note which was not signed by the respondent. The witness averred, however, that the respondent had accepted delivery of the second lot of logs because they were measured by an official of the Forest Department only after he had