#### VAN GELDER YARN COMPANY, INC., v. D. C. MAUNEY et al.

(Filed 29 October, 1947.)

1. Trial § 31b—

Tbe trial court is required to charge the law upon all substantial features of the case arising on the evidence even though there is no request for special instructions. G. S., 1-180.

3. Sales § 27—

Plaintiff ordered and defendants shipped cotton yarn “subject to provisions of the Cotton Yam Rule of 1938.” Plaintiff rejected the yarn for alleged breach of warranty. One of the rules stipulated that rejection had to be made within ten days after the buyer knew' or should have known of defect. Defendants contended upon 'supporting evidence that the right of rejection was either barred or waived by this mié. *Held:*An instruction to the effect that if the jury should find that there was a breach of warranty and reach the issue of damages to answer that issue in the amount contended by plaintiff, is erroneous as being peremptory in form and as withdrawing from the consideration of the jury defendants’ evidence relating to the waiver of the right of rejection.

3. Same—

In a suit by the buyer to recover for breach of warranty the burden is upon the buyer both on the issue of liability and on the extent of recovery.

Appeal by defendants, D. 0. Manney and Haywood E. Lyncb, t/a Betty Tarn Mill, from *Alley, J.,*at August Term, 1947, of OlevelaND.

Civil action for breach of warranty in tbe sale óf cotton yarns.

Tbe record discloses tbat during tbe months of May, August, September and October, 1946, tbe plaintiff, a New York commission merchant, *100purchased from the defendants, cotton yarn manufacturers, 28,512 pounds of No. 4 single-ply yarn and 25,173 pounds of No. 2 single-ply yarn at OPA ceiling prices, less 2% 10-day cash discount, as and when ordered— shipments to be made to the Southern Jersey Warehouse, Trenton, N. J., a public warehouse, subject to the Rules of the Southern Cotton Yarn Association, in respect of cancellations, rejections and claims.

The No. 4 single-ply yarn was shipped on the following dates: May 20th (9,778 pounds, price $4,454.87), October 2nd, 8th and 12th (10,435 pounds, price $8,474.39).

The No. 2 single-ply yarn was shipped on the following dates : August 23rd, September 4th and 23rd, October 2nd and 8th (25,173 pounds, price $18,917.81).

(The above figures are taken from the agreed statement of case on appeal. They are not entirely consistent with those used by the Judge in his charge, or with the figures given in the testimony of some of the witnesses. However, the exact amounts are not now capitally important.)

The jury found that the yarn, as and when ordered, was to be “white stock warp twist 6x5 tubes and cones,” and that the yarn shipped was not of this quality.

Plaintiffs notified defendants on November 6 and 7, 1946, of rejections “due to softness with almost no twist” and mailed invoice for the rejected yarns, informing the defendants that the rejected yarns were being held subject to their orders.

The defendants denied that the yarns were defective in any way; that they were not to be “warp twist” since the defendants only manufactured “filling twist”; that no complaint was heard from the plaintiff until the market for “any other twist but a full warp twist,” according to plaintiff’s letter of October 4, 1946, had practically dried up, or was dying a natural death; that any claim for rejections had been waived because not filed within the time specified by the Rules of the Southern Cotton Yarn Association, the pertinent part of the applicable Rule, No. 19, being as follows :

■ “19. Goods shall be deemed to have been accepted and buyer’s rights to reject, cancel or replace because of defect, shall expire:

“(a) When ten days have elapsed after buyer knows or should have known of such defect;

“(b) . . . (not presently applicable)

“(c) In any event, when three months have elapsed after passing of title.”

At the conclusion of the evidence, counsel for plaintiff stated that in view of the plea of the Cotton Yarn Rules of 1938, plaintiff would withdraw any claim arising out of the shipment of May 20, 1946, as more than 90 days had elapsed since passing of title.

*101Tbe court instructed tbe jury on tbe issue of damages as follows :

“Tbe next issue, No. 6, is: ‘What damage is tbe plaintiff entitled to recover of tbe defendants.’ As I bave instructed you tbe plaintiff abandoned its claim to $4,070.50 under tbe contract of May 20tb, 1946, so deducting tbat from tbe amount originally sued for and adding together tbe other shipments without including tbat, under tbe contract price, and if deducting from tbat 2% discount tbe plaintiff'is now contending tbat tbe amount it is entitled to recover of tbe defendants is $26,180.72; and if you reach tbat issue your answer should be tbe amount which tbe shipments aggregate at tbe contract price without including tbe $4,070.50 with respect to tbe contract of May 20, 1946.” Exception by defendants.

From verdict and judgment in favor of tbe plaintiff for tbe amount mentioned in tbe court’s charge, tbe defendants appeal, assigning errors.

*McDougle, Ervin, Fairley & HoracTc for plaintiff, appellee.*

*D. Z. Newton and J. B. Davis for defendants, appellants.*

Stacy, C. J.

We think the court’s charge on tbe issue of damages must be held for error. In tbe first place, it is peremptory or directory in character; and, secondly, it takes from tbe defendants their plea in bar, or of waiver, under subsection (a), Eule 19, of tbe Southern Cotton Tarn Association. Tbe trial court seems to bave overlooked, for tbe moment, tbe defendants’ contentions in respect of tbe amount, even if tbe issue of liability should be answered against them.

Tbe orders were given and tbe shipment made, “subject to tbe provisions of tbe Cotton Yarn Eule of 1938.” Under these, tbe merchandise purchased is deemed to bave been accepted when received, and tbe buyer’s right to reject or cancel an order, “because of defect,” expires ten days after tbe buyer “knows or should bave known of such defect.” It is tbe position of tbe defendants tbat all tbe shipments, here involved, were barred from rejection under this provision. Certainly, they say, not more than tbe last three shipments could survive its effect, and as to these, they contend, tbe issue was at least one for tbe jury. Tbe plaintiff takes tbe opposite view. We think tbe court was in error in resolving these mooted points against tbe defendants and in directing the amount of damages, should tbe jury reach tbat issue.

It is required of tbe trial judge that he “state in a plain and correct manner tbe evidence given in tbe case and declare and explain tbe law arising thereon,” and this without expressing any opinion on tbe facts. G-. S., 1-180. Tbe manner in which tbe trial court shall state tbe evidence and declare and explain tbe law arising thereon must necessarily be left in large measure to bis sound discretion and good judgment, “but be must charge on tbe different aspects presented by tbe evidence, and *102give the law applicable thereto.” *Blake v. Smith,*163 N. C., 274, 93 S. E., 596. “On the substantive features of the case arising on the evidence, the judge is required to give correct charge concerning it.” *S. v. Merrick,*171 N. C., 788, 88 S. E., 501. “The failure of the court to instruct the jury on substantive features of the case arising on the evidence is prejudicial. This is true even though there is no request for special instructions to that effect.” *Spencer v. Brown,*214 N. C., 114, 198 S. E., 630. The pertinent decisions are to the effect that the statute “confers upon litigants a substantial legal right and calls for instructions as to the law upon all substantial features of the case”;.and further, that the requirements of the enactment “are not met by a general statement of legal principles which bear more or less directly, but not with absolute directness, upon the issues made by the evidence.” *Williams v. Coach Co.,*197 N. C., 12, 147 S. E., 435.

In charging on the issue of damages, the court appears to have been unmindful of the position of the defendants in respect of the delay of the plaintiff in rejecting or canceling orders “because of defect.” They not only invoked the three-months provision in subsection (c) of Rule 19, Cotton Yarn Rule of 1938, but also the 10-days provision in subsection (a) of this Rule. As the plaintiff had the laboring oar in respect of the issues of liability and extent of recovery, both being controverted, it was error for the court to determine the amount and instruct the jury to answer the issue of damages accordingly. *Haywood v. Ins. Co.,*218 N. C., 736, 12 S. E. (2d), 221, and cases cited.

There are other exceptions appearing on the record which would require attention, if the charge on the issue of damages were upheld, but as these may not arise on the further hearing, we omit any present rulings thereon.

For error in the charge, as indicated, the defendants are entitled to another day in court. It is so ordered.

New'trial.