Case Name: Luntz v. Berry, Appellant
Court: Superior Court of Pennsylvania
Jurisdiction: Pennsylvania
Decision Date: 1908-02-28
Citations: 35 Pa. Super. Ct. 204
Docket Number: Appeal, No. 3
Parties: Luntz v. Berry, Appellant.
Judges: Before Rice, P. J., Henderson, Morrison, Orlady, Head and Beaver, JJ.
Reporter: Pennsylvania Superior Court Reports
Volume: 35
Pages: 204–211

Head Matter:
Luntz v. Berry, Appellant.
Sale — Contract—Refusal to accept goods — Agreement to reship goods— Bailment.
Where a purchaser of goods refuses to accept them because they were not the goods ordered, and subsequently the seller offers them to the purchaser at a reduced price, which offer is rejected, and the purchaser then agrees to reship the goods, without notifying the seller of any charges for freight or storage, and the agreement to reship the goods is not carried out, and the goods are subsequently destroyed by fire while in the purchaser's possession, the seller has a right of action against the purchaser, and his measure of damages is not the reduced price at which the goods were offered to the purchaser, but the market value of the goods at the time the purchaser violated his agreement to reship them. In such a case the consideration for the agreement to reship was the obligation on the part of the purchaser as bailee to return the goods in compliance with the bailor's direction.
Argued Oct. 9, 1907.
Appeal, No. 3, Oct. T., 1907, by defendants, from judgment of C. P. No. 2, Phila. Co., June T., 1905, No. 479, on verdict for plaintiffs in case of Charles I. Luntz and H. Arenson, trading as Akron Junk & Metal Company, v. Edward Y. Berry and James C. Aikens, trading as Berry & Aikens.
Before Rice, P. J., Henderson, Morrison, Orlady, Head and Beaver, JJ.
Reversed.
Assumpsit for goods sold and delivered. Before Wilt-bank, J.
The facts appear by the opinion of the Superior Court.
Defendant presented the following points, all of which were refused:
1. The contract between the plaintiffs and defendants called for new kegs made up to contain liquids, such as cider, etc., and if the kegs shipped to the defendants were not new kegs, such as contracted for, defendants were not obliged to accept the same.
2. The fact that defendants paid the freight and removed the kegs from the car and hauled them to their yard does not of itself constitute an acceptance of the delivery of the kegs.
3. If upon examination and inspection of the kegs after they were brought to their establishment from the railroad car, the defendants found them not to be new kegs, but to be secondhand or old kegs, weather-beaten and worn, with rusty hoops and not suitable for cider and other liquids, there was no obligation on defendants’ part to reload the same on the oars and return them to the plaintiffs, but simply to notify them that the kegs were not according to their contract, and that defendants would hold them subject to their order and risk.
4. After giving such notice to the plaintiffs, the defendants held the kegs simply as bailees for the plaintiffs, and were only required to exercise ordinary and reasonable care to protect them from injury or loss.
5. The defendants being expressly authorized by the plaintiffs to return the kegs if unsold at a certain price, became bailees of the kegs only, and not purchasers thereof.
6. Even if there was an acceptance of delivery of the kegs by the defendants, the subsequent letters which passed between the plaintiffs and the defendants effected a rescission by mutual consent of the original contract of sale, and the kegs therefore remained in defendants’ possession as bailees only, and not as purchasers.
7. The defendants being bailees and not purchasers of the kegs shipped by plaintiffs, there can be no recovery by the plaintiffs in this action, except for the market value of such kegs as were used and disposed of by defendants as samples.
8. As bailees of the kegs for the plaintiffs, the defendants had a lien thereon for any expenses they were required to incur by reason of such possession, including the freight charges and the reasonable cost of hauling and labor expended thereon, etc.
9. This lien also included reasonable storage charges by defendants for such period of time as the plaintiffs permitted the kegs to remain in defendants’ establishment, after being notified by defendants they were held there subject to their order.
10. The law imposed no duty on the defendants to give up their possession of the kegs or reload them on the railroad cars, as requested by plaintiffs, until their reasonable expenses incurred as aforesaid were paid.
11. The fact that defendants continued to hold the kegs as a lien for said charges, in no way changed the defendants’ position from that of bailees to that of purchasers.
12. The fact that the kegs were destroyed by fire while in defendants’ establishment would not change the transaction from a bailment to a sale, and no liability is imposed upon the defendants merely from this fact.
13. The defendants’ disposal of some of the kegs as samples in their effort to find a market for the carload, as requested by the plaintiffs, does not constitute an acceptance of delivery of the whole shipment on the part of the defendants.
14. The kegs received by the defendants being of a different and inferior kind than the contract of sale called for, even if they accepted the kegs, or any of them, defendants would only be liable for the market value of the kegs so used, and not for the contract price.
15. Against the amount of the market value of the kegs used by them as samples or otherwise, the defendants are entitled to set off the items of freight charges and other reasonable expenses necessarily incurred by them in hauling the kegs, storing same and endeavoring to fit them for sale.
16. If the jury finds that the amount of such reasonable charges and expenses incurred by the defendants exceeds the market value of the kegs used by the defendants as samples or otherwise, they should render a verdict for defendants with a certificate in their favor for such excess or difference.
17. Under all the evidence in this ease, the verdict should be for the defendants.
Verdict and judgment for plaintiff for $252. Defendants appealed.
Errors assigned among others were (6-22) above instructions, quoting them.
Fred Taylor Pusey, for appellants.
— As soon as defendants inspected the goods they promptly notified the plaintiffs they could not accept them, and would hold them “subject to their order.” This was all that was necessary: Dailey v. Green, 15 Pa. 118; Leechburg F. & M. Co. v. Jennings, 145 Pa. 559; Holt v. Pie, 120 Pa. 425.
On March 22, plaintiffs still exercising their authority and direction over the goods, advised defendants if they were unwilling to buy them at fifty cents to load them for shipment elsewhere. The bailment still existed: McCullough v. Porter,. 4 W. & S. 177; Becker v. Smith, 59 Pa. 469; Brown Bros. v. Billington, 163 Pa. 76.
A bailee who incurs expenses in connection with the thing bailed has a lien on the property for these expenses, even in the absence of a contract with the owner: Meyers v. Bratespiece, 174 Pa. 119; Hoover v. Epler, 52 Pa. 522; Mathias v. Sellers, 86 Pa. 486; Brown v. Dempsey, 95 Pa. 243.
February 28, 1908:
Allen C. Middleton, with him C. Wilfred Conard, for appellee,
cited: Cooper v. Altimus, 62 Pa. 486; Hoffman v. Bloomsburg, etc., R. R. Co., 157 Pa. 174; King v. International Pub. Co., 3 Pa. Superior Ct. 329; White v. Metropolitan Life Ins. Co., 22 Pa. Superior Ct. 501; Flegal v. Hoover, 156 Pa. 276.

Opinion:
Opinion by
Head, J.,
It is not denied that in December, 1904, the plaintiffs and defendants entered into a contract, by the terms of which the former undertook to sell and deliver, f. o. b. cars Philadelphia, a carload of "new kegs" at the price of sixty-five cents per keg, and the latter in turn agreed to receive and pay for them. Nor that, in pursuance of that contract, a carload of kegs arrived in Philadelphia about January 26, the freight, however, not having been prepaid. Nor that the defendants paid the freight, unloaded the car and had the kegs hauled to their yards, where they were counted and inspected. By their letter of January 27 the defendants gave to the plaintiffs a detailed account of the results of this inspection; advised them that the kegs were not "new kegs" and could not be used as such, and that they would be held subject to plaintiffs' orders. Of course this attitude, on the part of the defendants, could be justified only by their ability to establish, as a fact, that the kegs shipped were not the kegs bought, that is to say, "new kegs." The plaintiffs then had two courses open to them, either one of which they could lawfully and logically pursue. If they chose to stand in affirmance of the proposition that the contract had been fully and fairly performed on their part, then the only thing remaining for them to do was to enforce the payment of the contract price, because on this theory the title to the kegs had passed to the defendants and the plaintiffs had no further interest in or right of control over their future disposition. Or if they did not choose to assume the burden that would thus be cast on them, the plaintiffs could acquiesce in the attitude of rescission adopted by the defendants, in which event the title to and right of control over the property would remain in them; the contract, as to that carload of kegs, would be at an end, and the defendants would owe no part of the contract price. It would seem as if the plaintiffs, in effect at least, adopted the latter course, for a considerable correspondence ensued which apparently had for its object the ascertainment of the best price at which the kegs could be sold by the plaintiffs, either to the defendants or to some other party. This culminated in the letter from plaintiffs of March 22, in which they offer the kegs to defendants at fifty cents each, and in which they direct, in case that offer be refused, that the kegs be loaded on a car of the Pennsylvania Railroad Company, to whose agent shipping instructions would be furnished. To this defendants replied on March 24 declining to purchase, but agreeing they would ship, as directed, on Wednesday, March 29, unless meantime they received further instructions. They received no further orders, but did not ship the kegs as they had been directed and had agreed to do.
Meantime defendants prepared a statement of account charging plaintiffs with freight paid, haulage, storage, etc., and crediting them with the amount received from " 100 kegs sent out as samples at 35c." and showing a balance due defendants of $47.84. For this they drew a sight draft on plaintiffs and sent it, with statement attached, to a bank in Akron, Ohio, where the plaintiffs had their home office. Payment was refused and the draft was returned. No further communication passed between the parties and no change in the status occurred until April 26, 1905, when, as the result of a fire at defendants' yards, the kegs were destroyed.
As this action was brought the plaintiffs rested their claim on the original contract and declared for the price of 544 kegs at 65c. each "sold and delivered pursuant to said contract and relying thereon." At the trial, after the completion of the case in chief, the defendants moved for a compulsory nonsuit. Pending this motion, plaintiffs asked and obtained leave of the court to so amend their pleadings as to make their claim rest on the breach of the alleged contract created by their proposition of March 22, accepted in defendants' letter of March 24. No question as to the propriety of allowing the amendment is raised by this record and we need not discuss it. The trial proceeded under the amended pleadings, and at its conclusion the learned court below declared, as matter of law, that defendants were liable for their breach of their undertaking to reship the kegs as directed, and that the measure of damages (as we learn not from the charge itself, but from the uncontradicted statements in the appellants' paper-book) would be the price demanded by plaintiffs in their proposition of March 22, viz.: fifty cents per keg. This conclusion was probably reached on the theory that the subsequent refusal of the defendants to carry out the proposition which they did accept, was tantamount, in law, to an acceptance of the alternative proposition which they had expressly rejected.
We are unable to assent to the soundness of the conclusion as to the measure of damages. The plaintiffs' action sounds in contract. If they recover at all, under the present state of the pleadings, it must be for the breach of an obligation voluntarily undertaken, as a matter of contract, by the defendants. Their claim must rest on a failure to perform something the defendants had undertaken to do. Now the plaintiffs' letter of March 22 advanced a specific offer to sell the kegs at fifty cents per keg. This offer was just as definitely rejected. There was then no contract, assented to by both parties, for a sale and purchase of the kegs. That offer then became as if never made. But the letter contained a second and alternative offer, to be considered after the rejection of the first. It was accepted and a contract was thus created. Performance of that contract imposed upon the defendants the single obligation to reship the kegs as directed. They failed to perform as' they agreed to do, and later exact performance became impossible by the destruction of the property. Had the plaintiffs received their kegs, they would have no cause to complain — the requirements of the contract, mutually assented to, would have been fully met. Under such circumstances, the nfarket value of the property, at the time it should have been shipped, would be compensation, and hence the measure of their recovery. This might be more or less than fifty cents per keg. The unaccepted offer to sell at that price did not conclude either party.
But, it is argued, the. defendants' promise to ship was but voluntary, without consideration and, therefore, not binding. We cannot think so. Even regarding them as bailees, the law imposed upon them the obligation' to dispose of the bailed property according to the instructions of the bailor, and this obligation was a sufficient consideration for the promise to perform it. Again, it is urged the bailee had a right of lien on the property for moneys expended on it at the instance or for the benefit of the bailor, and could rightfully retain possession until such moneys were paid. We may grant the existence of the principle as to' labor or money expended "at the request of the owner or under circumstances from which his assent can be reasonably implied:" Meyers & Bro. v. Bratespiece, 174 Pa. 119. It would follow from this that the bailed property could not be adversely taken from the bailee without paying, or offering to pay, such a claim, if he insisted on holding possession to secure his claim. But we can see nothing in the principle that would prevent a bailee from voluntarily surrendering the property, waiving his right to lien, and accepting the personal security of the bailor for his debt.
In the present case the defendants expressly agreed to ship the kegs as directed. They did not do so. They never notified plaintiffs they would not do so, or that they would continue to hold the property until their claim was paid. True, they drew a draft on plaintiffs which was returned unpaid. But it was not drawn until the very day the kegs should have been shipped. It was not accompanied with any notice that a lien on the kegs was claimed to secure payment and that possession would be retained until payment was made. Under these circumstances the defendants were not in a position to ask the court to say, as matter of law, that their default, in refusing to ship the kegs as they agreed to do, was condoned by the fact that there was some money due them, for freight, etc., for which, as bailees, they might have claimed a lien on the bailed property. The judgment must therefore be reversed so that the cause may be tried according to the principles herein indicated.
Judgment reversed and a venire facias de novo awarded.