Case ID: ad_92/html/0252-01.html
Source: Caselaw Access Project
Author: {"author": "McLaughlin, J.:", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

Thomas K. Egbert and George W. Case, Respondents, v. The Hanford Produce Company, Appellant.
    
      Sale of merchandise — when representations of the vendor as. to its quality constitute' a wa/rranty —r- effect of ordering further installments after the first has been found to he unsatisfactory.
    
    Where, at the time of a sale of merchandise, its quality is known to the vendor, but not to the vendee, and the latter is unable to inspect it, the representations made by the vendor as to the quality of the merchandise are to be regarded as a warranty.
    
      Consequently, where a corporation having in its storehouse at Sioux City, Iowa, á quantity of eggs, sells five carloads of such eggs in the city of New York to persons who had no representative at Sioux City, and were, therefore, unable to inspect the eggs, a representation made by the corporation that the eggs are of a certain quality constitutes a warranty.
    In such a case the vendees may order the entire five carloads of eggs, and, if there has befen a breach of the warranty as to quality, recover from the vendor the difference between the amount which they realized on the sale of the eggs and the amount which they would have realized had the quality thereof been as represented.
    The fact, therefore, that when the first carload of eggs was delivered, the vendees found that'they were not of the quality represented, and that notwithstanding this knowledge they subsequently ordered the shipment of the other carloads, which also proved to be unsatisfactory, does not deprive the vendees of their right to recover damages for the breach of the warranty.
    The fact that the quality of the first carload was not as represented would not justify the vendees in refusing to receive the other .carloads, it appearing that the eggs were composed of five separate lots, which were separately insured, and were represented by five distinct warehouse receipts.
    Appeal by the defendant, The Hanford Produce Company, from a judgment of the Supreme Court in favor of the plaintiffs, entered in the office of the clerk of the county of Hew York on the 11th day of May, 1903, upon the verdict of a jury, and also from an order entered in said clerk’s office on the 13th day of May, 1903, denying the defendant’s motion for a new trial made upon the minutes.
    
      George C. De Lacy, for the appellant.
    
      Charles L. McBurney, for the respondents.
   McLaughlin, J.:

This action was brought to recover damages for an alleged breach of warranty in" the sale and delivery by defendant to the plaintiffs of a quantity of eggs. <

The material allegations of the complaint upon which a recovery was sought were that the. defendant, an Iowa corporation, on or about the 20th of April, 1899, offered to sell to the plaintiffs for $9,000 five carloads of eggs,' which it warranted to be selected storage eggs, a quality known to the trade as storage firsts; that the plaintiffs, relying upon this, warranty and believing the same to be true, purchased five carloads consisting of 60,000 dozen, for which they paid the price asked by defendant; that the same did not come into plaintiffs’ possession at the time of the purchase nor when payment was made, but were held by defendant as warehouseman of these plaintiffs, at Sioux City, Iowa; that thereafter plaintiffs directed defendant to ship the same to their place of business in the city of New York, which it did, and upon inspection it was ascertained that the eggs were not selected storage eggs of the quality warranted and known to the trade as storage firsts, but were of a much inferior quality, of which fact defendant was immediately notified, and at the same time plaintiffs offered to return the eggs to the defendant or dispose of them as. it might direct; that the defendant refused to receive the eggs or give any directions as to their disposition, and they were thereupon sold in the open market, previous notice of such sale'having been given to the defendant; and judgment was demanded for the difference between what they brought on such sale and what they would have brought had they been of the quality represented.

The answer admitted the sale; payment of the purchase price; that the eggs were stored, after the purchase, by defendant in its cold storage warehouse at Sioux City, Iowa, and warehouse receipts issued therefor; and denied the other material allegations of the complaint; as a separate defense alleged that at the time stated in the complaint the defendant sold to the plaintiffs, at the price stated therein, 60,000 dozen of “ fancy selected eggs in storage,” and at plaintiffs’ request the same were placed in cold storage to await the orders and disposition, of the plaintiffs concerning the same; ” that the eggs having been put in cold storage the defendant issued . its warehouse receipts covering the same; that said eggs were at the time of the sale and deposit of the kind, character and quality called for by the contract of sale; that.they remained in ■defendant’s cold storage warehouse until the 25th day of November, 1899, at which time and at sundry dates thereafter prior to the 8th day of January, 1900, defendant, at plaintiffs’ request, shipped all of said eggs in five separate carloads to plaintiffs in the city of New York,, and that if at the time of the receipt by plaintiffs said eggs, did not grade as fancy selected eggs it was through no fault of defendant, but was due entirely to the length of time during which plaintiffs had kept said eggs in storage.

Upon the issue thus formed the parties went to trial, where substantially the only fact litigated was whether the eggs were of the quality represented at the time the purchase was made. There was no real dispute as to the terms of the contract. The eggs sold were 'five carloads of selected storage eggs. The contract was made in April, when the storage of eggs begins, and was for selected eggs, known as storage firsts. This was not only established by the witnesses on the part of the plaintiffs, but by the invoice, the warehouse receipts, and also by the defendant’s witness Hanford, the person who made the sale, who testified that they were' to be fancy selected eggs in storage; ” that they were to be the usual high quality of Hanford storage eggs; ” as well as by the testimony of the president and warehouseman of the defendant (which was taken by commission) to the effect that the eggs were to be fancy storage packed Aprils ” known as “ fancy selected storage eggs,” a quality considered by him second to none.” Nor was there any dispute between them as to the effect of storage upon eggs of the quality contracted for. The general manager of the defendant testified that selected storage eggs, stored the length of time that the eggs in question were, do not deteriorate in quality in storage except that there is a slight evaporation.

Upon the question of quality it appeared that the first carload, one-fifth of the total amount, was delivered about the 1st of December, 1899, and the other four carloads between that date and the eighth of January following; that immediately upon delivery of each carload the eggs were inspected by plaintiffs’ manager, the official egg inspector of the New York Mercantile Exchange, and others, all persons experienced in the business and competent to pass upon the quality of eggs, who substantially agreed that the eggs were storage seconds, a quality inferior to storage firsts, and were not of the grade known as selected April storage eggs. On the part of the defendant the witness Hanford testified that he saw the, first car and inspected the eggs; that they were of the usual high quality of Hanford packed and were of the quality sold; it appears, however, that he did not examine the other four cars, nor did the defendant have any one else examine them, although afforded an opportunity to do so. The president of the defendant testified that the eggs were “ fancy storage packed Aprils,” but in answer to a cross interrogatory, stated in substance that he had nothing personally to do with the selection of .the eggs, and defendant’s warehouseman, whose testimony' was taken by. commission, also stated that the eggs were selected storage packed April eggs, .but in answer to a cross interrogatory said he did not personally make' any selection of the eggs; that such selection was 'made by a forcev of from twenty to sixty hands under the direction of the superintendent.

This being the condition of the evidence at the close of the trial,, wé think the court could not do otherwise than submit the case to the jury to pass upon the question involved, viz., whether the eggs were of the quality contracted to be sold.

The jury rendered a verdict for $1,800, the difference between what the eggs brought .on the sale and what they would have brought ' had they been of the quality represented, and from the judgment entered thereon the defendant'has appealed.

I think the trial court correctly held upon the facts presented that under the terms of the contract there was a warranty on the part of the defendant as to the quality'Of the eggs. The,rule seems to be well settled that upon a sale of personal property where inspection. of it is not possible at the time and the seller knows the quality and the buyer does not, the. representations made by the seller as to the quality are to be regarded as a warranty. '■ •( White v. Miller, 71 N. Y. 118; Canleton v. Lombard, Ayres & Co., 149 id. 137; Kellogg Bridge Co. v. Hamilton, 110 U. S. 108.) Here .the sale was made ' in Hew York." The eggs were in defendant’s warehouse at Sioux City, Iowa. The defendant knew the quality, and represented them to be “ fanCv selected eggs in storage.” The defendant knew that the. plaintiffs were relying upon its representations, as to quality because they had no representative at Sioux City, and if they had it is difficult to see how an inspection—the eggs being then in storage — could have been made. ' The' evidence shows that eggs when placed in storage retain their quality except for a slight evaporation, and the evidence is sufficient to sustain the finding that the eggs, when delivered, were not of the quality purchased. But it is said that the plaintiffs ascertained the quality of the eggs when the first carload was received, and, therefore, they are not in a position to recover, inasr much as they thereafter ordered the other carloads sent forward., I am unable to see any force in this contention. It would hardly be claimed if the first carload had proved satisfactory and been accepted that the plaintiffs would thereby have been bound to accept the other four carloads, even though of an inferior quality. Nor do I think the plaintiffs would have been justified in rejecting all ■of the eggs because the first carload proved to be unsatisfactory. The eggs were composed of five separate lots, for which five distinct warehouse receipts were given, each having a separate number which indicated where stored, and each lot was separately insured. The plaintiffs did not have a right to assume under such circumstances that all of the eggs were inferior in quality because the first ■carload was. But whether this conclusion be correct or not, if there was a warranty, then the plaintiffs had a right to rely upon it, order all of the eggs delivered and look to the defendant for any damages which they might sustain for a breach of the warranty. ■(Pierson v. Crooks, 115 N. Y. 539.)

Other questions are raised by the appellant as to the admission of ■evidence. An examination of the record fails to disclose any errors in this respect. Nor was any error committed in the instructions given to the jury. All of defendant’s requests to charge, with one exception, were granted, and that was properly refused. It was: •■“The defendant is entitled to a verdict and the jury must decide ^accordingly.” From what has been said it is clear that instructions to this effect would have been error. It was for the jury to determine from all of the facts under the rule of law laid down by the trial ■court whether or not there was a breach of warranty. The measure of damages adopted was the correct one. It was the difference between what the eggs brought on the sale and what they would .have brought had the quality been as represented. This was less than the difference between the price paid and what was realized, the plaintiffs having to stand the loss by reason of the depreciation •of the market price.

It follows that the judgment and order appealed from must be affirmed, with costs.

Van Brunt, P. J., O’Brien, Ingraham and Hatch, JJ., concurred.

Judgment and order affirmed, with costs.