Court Opinion

ID: 9632184
Source: CourtListenerOpinion
Date Created: 2023-08-22 11:06:11.236803+00
Date Added: 2024-06-11T18:08:10.693986
License: Public Domain

On Rehearing
LUSK, J.
This action arose out of the sale in February, 1948, by the defendant, C. Arntson, through his sales agent Kjome, to the plaintiff of a chemical manufactured by Shell Oil Company bearing the trade name “Shell Weed Killer No. 20”. Plaintiff sued for damages for breach of warranty alleged to have been given by the salesman. The second amended complaint on which the case was tried alleged that the defendant “specifically represented to plaintiff herein that said weed *115killer would destroy the weeds in the plaintiff’s bulb farm, but would not in any way damage or injure the plaintiff’s bulblets.” In a trial by jury plaintiff recovered a judgment from which Arntson, hereinafter referred to as the defendant, has appealed. Shell Oil Company was also a party defendant, but plaintiff took a voluntary nonsuit as to it. By our former opinion we reversed the judgment for plaintiff. We held that the Circuit Court erred in denying defendant’s motion for a directed verdict for the reason that the salesman was without authority to give the warranty which constitutes the basis of the action.
Plaintiff grows Regal lily bulbs for commercial purposes on a farm near Canby, Oregon. He desired to obtain and use on his farm a so-called pre-emergence spray for destroying weeds, that is, a spray which is applied to the field after the crop has been planted, but before it has emerged, and after the weeds have appeared upon the surface. Plaintiff discussed the matter with Kjome, who had called on him in his capacity as a salesman of Shell Weed Killer No. 20 for defendant, and, according to the plaintiff’s testimony, Kjome recommended Shell Weed Killer No. 20 as suitable for the plaintiff’s purpose. Plaintiff’s testimony as to the warranty is as follows:
“* *' * I asked Mr. Kjome at that time for a pre-emergence spray, what spray should I use, there were several that I had heard of but didn’t know anything about and I asked Mr. Kjome what weed killer to use, and he says No. 20. So I then asked Mr. Kjome if using that material on the soil above the bulbs which were sprouting below the soil if there were any possibility of a toxic condition developing that might injure the crop, and Mr. Kjome replied in these words, and I quote his *116exact words, I quote: ‘There can be no toxicity because it is nothing but oil’, unquote; and I repeat that those were Mr. Kjome’s exact words. * * * ??
Relying, as he testified, upon Kjome’s representation, plaintiff purchased a large quantity of the ■weed killer and applied it to the ground above the sprouting bulbs. The evidence justifies a finding that as a result a taxie condition of the soil was created and the bulb crop thereby ruined. By his motion for a directed verdict, the denial of which is assigned as error, defendant raised the question now to be considered, namely, whether there is substantial evidence in the record that the salesman, Kjome, had either express or implied authority to make the representation to which the plaintiff testified.
It is conceded that there is no evidence of express authority. Upon the question of implied authority the rule applicable to the facts of this case is thus stated in A.L.I. Restatement, Agency § 63 (2):
“Unless otherwise agreed, authority to sell includes authority to make such, and only such, representations as the agent reasonably believes to be true and as are usual with reference to such a subject matter or, in the absence of usage, representations concerning qualities of the subject matter which, at the time, are not open to inspection and as to which the principal has reason to hnow the buyer will desire to be informed.” (Italics added.)
Cases applying the principle stated in the language which we have italicized are Distillers Distributing Corp v. Sherwood Distilling Co., (CA 4th) 180 F 2d 800 (opinion by Parker, Chief Judge); Miller v. Economy Hog & Cattle Powder Co., 228 Ia 626, 293 NW 4; Conkling v. Standard Oil Co., 138 Ia 596, 116 NW 822; *117Park v. Moorman Mfg. Co., (Utah) 241 P2d 914. There is no evidence of usage in this case, and there could have been none, because, as is said in defendant’s brief, “insufficient time had elapsed in the history of Weed Killer No. 20 for any type of customary warranty to be developed.” Under the evidence, however, the jury could have found that the defendant had reason to know that a buyer in the plaintiff’s situation would be likely to inquire whether a pre-emergence spray, applied to the soil for the purpose of killing the weeds on his lily farm, would also destroy the growing crop under the soil, and therefore that the agent had the authority to give plaintiff the assurances to which plaintiff testified and without which, in all probability, no sale would have been made. We think that a reasonable man might say that it would not be unusual or extraordinary for a buyer to evince curiosity as to that subject.
The defendant relies on Reid v. Alaska Packing Co., 47 Or 215, 83 P 139, where we held that an agent for the sale of salmon packed in Alaska had no authority to represent that “the fish would be exactly like that of Puget Sound Fancy Sockeye.” We said:
“They [the agents] had nothing-but a power to sell fish packed by the defendant company, and had no authority to warrant that such fish should be of a quality not found in Alaskan waters or packed or handled by the defendant. A mere selling agent, without express power to warrant, cannot give a warranty which will bind his principal, unless the sale is of a class which is ordinarily accompanied by a warranty”.
A mere statement of the facts of that case reveals clearly a distinction from the present case. Selling salmon was certainly not a new enterprise, and if there *118had been any custom to give warranties of the kind which the agents gave, testimony to that effect could have been introduced. Beyond that, it would be unreasonable to argue that the principal in the Beid case had any reason to know or to assume that the buyer would desire information of the kind contained in the warranty.
We cannot say as matter of law that the warranty sued upon in this case was either unusual or extraordinary or could not be found by the jury to be within the authority of the defendant’s agent. Moreover, as will be shown later in this opinion, an equivalent warranty under the facts of this case would arise by operation of law, and “a selling agent has power incidental to his main authority to give an express warranty which is identical in purport and substance therewith.” 2 CJS 1334, Agency §115.
Other grounds assigned in support of the motion for a directed verdict are without merit. The question whether plaintiff relied on the knowledge, skill or special information of the salesman was clearly for the jury to decide. One ground of the motion was that the evidence was not sufficient to prove the amount of plaintiff’s damages. The brief of the defendant does not urge this contention. Instead, it argues that the evidence that the weed killer, and not the negligent or improper use thereof by plaintiff, caused the damage, is speculative and conjectural and therefore insufficient. This is a question of proximate cause not raised by the motion for a directed verdict, and consequently one which cannot be raised on appeal. The same thing is true of the contention in the brief that the plaintiff failed to give timely notice of the breach of warranty as required by OBS 75.490. This objection is not included among the grounds of the motion for *119a directed verdict. .Aside, however, from these procedural obstacles, our examination of the record convinces ns that all the contentions raised in this court by the defendant in support of the motion for a directed verdict relate to questions concerning which there is conflict in the testimony and which, therefore, were properly submitted to the jury.
Defendant’s Assignment of Error No. IV is directed to a ruling of the court which withdrew from the consideration of the jury a mimeographed circular regarding Shell Weed Killer Nos. 12 and 20 and which had theretofore been admitted in evidence over the objection of counsel for plaintiff. The information contained in the circular, if brought home to plaintiff before the sale, was material as tending to negative plaintiff’s claim of reliance on the alleged warranty. Plaintiff, on his cross-examination, had denied that he had knowledge of the contents of the circular until July, 1948, which was several months after he had purchased and used Shell Weed Killer No. 20. The correctness of the ruling depends on whether there is substantial evidence that plaintiff received the circular in the summer of 1947.
On June 9, 1947, plaintiff wrote to Mr. Robert Reider, an agricultural technologist in the employ of Shell Oil Company, Inc. at Portland, Oregon, asking for information and literature about Shell soil disinfectants for the destruction of bulb pests. Mr. Reider answered him by letter dated June 17,1947, which was devoted for the most part to a discussion of a Shell product called D-D for the elimination of pests. The concluding paragraph of the letter is as follows:
“I am enclosing several printed circulars and mimeographed reports concerning the usage of D-D for soil pests. Thought you might possibly be *120interested in new weed killers which we are now marketing, Shell Weed Killers Nos. 10 and 20, and have enclosed a mimeograph letter giving some information about them.” (Italics added.)
Under date of June 26, 1947, the plaintiff wrote Mr. Beider a letter which, so far as material, reads:
“Will yon kindly send me about thirty sets of literature on Shell DD including same items that I received last week.
‘ ‘ One green garden pamphlet, yellow booklet and mimeographed data. These are intended for distribution to growers at a forthcoming meeting.” (Italics added.)
Beider’s office copy of his letter of June 17, 1947, was received in evidence without objection. As a witness for the defendant Beider testified that a circular consisting of four mimeographed sheets on the subject of Shell Weed Killer Nos. 10 and 20 was enclosed with his letter, and he identified a circular shown to him as a copy of that enclosure. Counsel for plaintiff objected to the admission in evidence of the circular, stating that such a circular had not been received by the plaintiff and that he had no such circular in his possession. The court overruled the objection.
On cross-examination Beider testified that he dictated his letter of June 17,1947, to his stenographer; that he had the circulars in the file and gave them to her when he finished the dictation; that after the stenographer typed the letter he signed it and gave it back to her to mail; that the circular on the subject of Shell weed killers was the only one ever gotten out by the company; that he did not watch his stenographer enclose the circulars with the letter and had no personal knowledge that they were enclosed though “he had never known her to fail yet.” The plaintiff *121admitted on rebuttal that he received Beider’s letter of June 17,1947; that he received a “big heavy envelope full of bright orange and green pamphlets”; but, in answer to the question whether he received the mimeographed circular relating to weed killers, he answered, “I don’t think I ever did”, and he also could not recall ever having read the circular. He further testified that on the previous day he had made a search of his files and could not find Beider’s letter of June 17, 1947.
After plaintiff’s testimony on this subject the court, on motion of counsel for plaintiff, struck the circular relating to Shell weed killers from the evidence and instructed the jury to disregard it.
It is contended by the defendant that plaintiff’s letter of June 26, 1947, is an acknowledgment of the receipt of the circular on weed killers. We do not think that it can be fairly so construed. By that letter plaintiff requested thirty sets of literature “on Shell DD” which were to include the “same items that I received last week”, that is, with Beider’s letter of June 17, 1947. He then specified as the items “one green garden pamphlet, yellow booklet and mimeographed data. ” It is undisputed that the green garden pamphlet and the yellow booklet related to D-D and not to weed killer. In this context the only reasonable interpretation is that by “mimeographed data” the plaintiff meant “mimeographed reports concerning the use of D-D” referred to and enclosed with Beider’s letter and not “a mimeographed letter giving some information” about Shell Weed Killer Nos. 10 and 20, to which Beider’s letter referred and which he wrote he also enclosed.
It remains to consider whether the other evidence on the question was sufficient to constitute a prima *122facie showing of receipt of the Shell weed killer by plaintiff. The testimony of Mr. Eeider, while not as explicit as it might have been, nevertheless was evidence of the practice that he pursued in such matters. After stating what he did in the particular instance, he said on cross-examination that he did not watch his stenographer put the circulars in the envelope, and, in answer to the question, “Do you have any personal knowledge that anything was ever enclosed in the letter?” he answered, “I have never known her [the steongrapher] to fail yet. ’ ’ This can mean nothing else than that he had followed his customary practice of instructing the stenographer to enclose material with letters which he dictated to her and which referred to such enclosures, and that she had always followed his instructions. He also testified to the practice about mailing letters. When questioned about that he said, “I don’t mail letters”, and that the stenographer mailed the letter in question. His testimony was given three and one-half years after the event, and it may be safely assumed that he had no more personal knowledge as to whether the stenographer mailed this letter than he had about the fact of her enclosing the circulars. He must have testified that she mailed the letter because that was one of her duties. We know that she discharged that duty, that the letter was mailed, and that some of the material that she was instructed to enclose was enclosed and was received by the plaintiff. On this record we think it a reasonable inference that the stenographer, in addition to mailing the letter and enclosing the material which related to D-D, discharged the remainder of her duty and enclosed the circular on Shell Weed Killer Nos. 10 and 20. If she did then plaintiff received it.
Under our law there is a disputable presump*123tion that ‘ ‘ The ordinary course of business has been followed.” OES 41.360 (20).
Professor Wigmore discusses a particular application of this presumption under the caption “Habit or Custom” and has the following to say about the course of the mail and telegram:
“The fixed methods and systematic operation of the Government’s postal service have been long conceded to be evidence of the due delivery to the addressee of mail matter placed for that purpose in the custody of the authorities. The conditions are that the mail matter shall appear to have conformed to the chief regulations of the service, namely, that it shall have been sufficiently prepaid in stamps, correctly addressed, and placed in the appropriate receptacle.
“The habit of a commercial house, maintaining systematically a mailing or other transmission service, is equally relevant. The principle has been applied to an express company’s delivery of packages and to a telegraph company’s transmission of telegrams. The same application of the principle would admit any person’s usual course of business practice to evidence any act of delivery or transmission, such as the sending of a notice, or the placing of letters in the mailbox; the only differences are, first, that the fact of the governmental system will be judicially noticed without further evidence * * * and secondly, that the course of business of an individual may under the circumstances not appear sufficiently fixed to be of probative value. A consequence of the combination of these two applications of the principle is that, upon proper evidence of the habit of an individual commercial house as to addressing and mailing, the ed) 524 § 95.
mere execution of a letter in the usual course of by the addressee. 1 Wigmore on Evidence (3d business may be evidence of its subsequent receipt
*124Numerous eases are cited in the notes, some supporting and some contrary to the text. The strict exclusionary rule adhered to by some courts is disapproved by the eminent author, who says of such a ruling in Federal Asbestos Co. v. Zimmermann, 171 Wis 594, 177 NW 881:
“* * * this type of ruling is finical and unpractical; it brings the law into distrust ainong business men, who not only rely upon such evidence but know that it often represents the most that is honestly obtainable; standards of probative value in court must have some fair relation to standards accepted outside.” (Op. cit. p. 527, note.)
We will refer to some of the cases which apply what we conceive to be the more useful and enlightened rule. In Dana v. Kemble, 36 Mass 112, the question was whether the defendant, a guest at the Tremont house in Boston, received letters addressed to him there. The letters were left at the bar of the hotel. The barkeeper testified that it was the invariable usage of the house to deposit all letters left at the bar in an urn kept for that purpose since they were distributed almost every fifteen minutes throughout the day to the rooms of the guest to whom they were directed; that a great number of letters were left there every day for the boarders of the house; and that he had never known any case in which a letter so deposited had not reached the person to whom it was addressed. The court, speaking through Chief Justice Shaw, stated:
“* * * In this case we are satisfied, that there was evidence amply sufficient, of original letters having been delivered, to let in secondary evidence. The evidence, that a letter left at the Tremont house and addressed to Kemble actually reached him, is of the same nature as a similar *125presumption arising from putting a letter so addressed into the post office, and may even be considered as considerably stronger, inasmuch as there would be less probability of a failure.”
•In Weinstein v. Miller, 249 Mass 516, 144 NE 387, the court seems to have assumed, though it did not actually decide, that the testimony of the author of a letter that “We have a box on the desk and all letters going today is put there; and my bookkeeper mails them before she goes home” was sufficient proof of mailing. In Prudential Trust Company v. Hayes, 247 Mass 311, 142 NE 73, a witness testified that he dictated a letter, that he signed it in accordance with his invariable practice, and that, while he did not know if it was actually mailed, he gave it to a clerk to mail, she being the “mailing clerk”. The court held that copies of the letter in question and of others as to which similar, testimony was given were properly received.
The court said:
“The case at bar is a close one. But in large banks and business houses, it must often be practically impossible to honestly obtain more definite evidence as to mailing than the delivery of letters to the mailing clerk, whose duty it is to deposit them in the post office in the usual course of his employment. A mere statement by such clerk that he invariably posted all letters entrusted to him would probably be an inference on his part, rather than a matter of memory, and in any event would be cumulative. See Wigmore on Ev (2d ed.) 330, 331. Norway Plains Co. v. Boston & Maine Railroad, 1 Gray, 263, 267, 268. See also Green v. Crapo, 181 Mass. 55, 63. On the facts shown in this record, including the admitted receipt by the defendant of two letters, and the proof that all letters were delivered to the clerk who in the ordinary course of the bank’s business mailed them, in the opinion of a majority of the court it was not reversible *126error to admit the copies in evidence, after due notice had been served on the defendant to produce all correspondence in relation to the subject matter.”
In Ennis-Baynard Petroleum Co. v. Plainville Mill and Elevator Co., 118 Kan 202, 235 P 119, the testimony of the president and bookkeeper of a corporation that a letter containing a check was handled as the defendant’s mail was usually handled, that is, it was put in the general bunch of mail ready to go to the post office, was held to be sufficient. The court said:
“* * * when the defendant’s usual course of mailing its correspondence was shown and when the letter of transmittal with the cheek inclosed was shown to have been thus handled in the usual course of business, the affixing of adequate postage was implied (Estes Mills Co. v. Stewart A. Shannon Co., 81 Pa Sup. Ct. 536), and there was sufficient evidence to justify a jury’s finding that the letter had been received in due course of mail.”
These cases, of course, relate to the mailing of letters. The question here is whether a circular consisting of four mimeographed pages and containing information about a product of the Shell Oil Company, which the author of the letter, in the course of his duties as an employee of that company, desired to bring to the attention of a prospective customer, which he said in his dictated letter he had enclosed and which, in accordance with his usual custom he handed to his stenographer and instructed her to enclose, was received by the addressee of the letter, who concededly received the letter and other material therein referred to. The analogy to the cases cited is fairly complete; the inference fully as strong. It is no objection that the evidence of practice was not more explicit and detailed, for a court might almost take judicial notice *127that it is the common practice in every large commercial house. The evidence that the practice was uniformly followed is substantial. The showing was sufficient to permit admission in evidence of a copy of the circular. The jury should have been permitted to consider it along with the plaintiff’s denial that he had received the circular and to determine the fact. Allowance of the plaintiff’s motion to strike the evidence from the record constituted reversible error.
The court instructed the jury on implied warranty and the defendant excepted on the following grounds: that implied warranty was not pleaded or proved, the complaint being based on express warranty, and that the product was sold under a trade name and that the instruction ignored that fact.
Defendant assigns error to the giving of the instruction and argues at length that the complaint does not charge breach of an implied warranty. The record discloses that when the pleadings were being made up before another judge than the judge who presided at the trial, the court, on motion of defendant, struck from the complaint the allegation that defendant “breached the warranty of fitness for a particular purpose”. This was in addition to the allegation that the defendant breached the express warranty pleaded. The ground of the ruling does not appear. Whatever it may have been, the plaintiff, in compliance with the order, filed an amended complaint which omitted the stricken allegation, thus leaving him with a pleading which, in terms at least, charged defendant with breach of an express warranty only. Thus, the way was left open for a claim that the second amended complaint on which the case was tried fails to show even that plaintiff intended to charge breach of implied warranty. The question whether this complaint alleges *128sufficient facts to raise the issue of implied warranty is a close one. We need'not decide it, however. There is evidence that the plaintiff made known to the defendant’s agent the particular purpose for which Shell Weed Killer No. 20 was required, and that he relied on the agent’s skill or judgment. Therefore the jury could have found an implied warranty that the product was reasonably fit for such purpose. In view of this state of the record, and, since the case must be retried, the plaintiff should be permitted to amend his complaint so as to conform to the evidence and the requirements of the statute, thus removing any doubts that there may be about the sufficiency of the present pleading.
OES 75.150 (1) provides:
“Where the buyer, expressly or by implication, makes known to the seller that particular purpose for which the goods are required, and it appears that the buyer relies on the seller’s skill or judgment (whether he be the grower or manufacturer or not), there is an implied warranty that the goods shall be reasonably fit for such purpose.”
But defendant urges that, since the product was sold under a trade name the case is controlled by ORS 75.150 (4), which reads:
“In the case of a contract to sell or a sale of a specified article under its patent or other trade name, there is no implied warranty as to its fitness for any particular purpose.”
The contention is foreclosed by Sperry Flour Co. v. De Moss, 141 Or 440, 443, 18 P2d 242, 90 ALR 406, and Campbell v. Corley, 140 Or 462, 474, 475, 3 P2d 776, 13 P2d 610, 14 P2d 455. The rule approved by these decisions is as follows:
“If the circumstances of the transaction show that the buyer made known to the vendor the pur*129poses for which he desired the article, relied upon the seller’s skill and judgment, and that the trade-name was inserted in the contract merely for the convenience of description, an implied warranty of fitness arises for the protection of the buyer, in the absence of a clause of disclaimer, even in jurisdictions where the Uniform Sales Act has been adopted.”
See, also, 90 ALB, 412; 59 ALB 1186, 1187.
While the orders specified “Shell Weed Killer No. 20”, Start’s testimony is in substance that he asked the salesman Kjome what he should use as a pre-emergence spray which would ldll the weeds before the cultivated crop came up through the ground, and that Kjome recommended Shell Weed Killer No. 20. From this and other evidence in the case the jury could have found that Start relied on the skill and judgment of the seller and not on the trade name. The evidence brings tMs case witMn the rule of our decisions above cited. If the facts are as the plaintiff claims, then the law would imply a warranty that, since the defendant knew the purpose for which the plaintiff was buying the weed killer, its use in the manner contemplated would not injure the plaintiff’s crop. Otherwise, the weed killer would not he reasonably fit for that purpose. 1 Williston on Sales (Bev ed) § 285.
The ground of the exception to the instruction on implied warranty, that it ignored the fact that the product was sold under a trade name, need he given no further notice than to state that the court did give a proper instruction upon this subject.
The court instructed the jury on agency by estoppel, and defendant excepted and assigns the giving of the instruction as error. That part of the instruction *130which, would have authorized the jury to find that defendant was estopped to deny that Kjome was his agent is abstract because the fact of agency was admitted ; the remainder was erroneous. It reads:
‘ ‘ Therefore, in this case if the defendant Arntson knowingly caused or permitted John Kjome to appear and act as his employee and agent to the detriment of plaintiff Start, or accepted the benefits of any contracts or dealings between Kjome, as his agent, and plaintiff Start, then and under such circumstances the defendant Arntson cannot be heard to deny that Kjome was his agent and is bound by such representations as you may find from the evidence that Kjome made in the course of such dealings.” (Italics added.)
Estoppel to deny Kjome’s authority to give the warranty sued on is not involved, for there is no evidence that defendant accepted the benefits of the contract with knowledge that the representation had been made. Even though there had been such evidence the instruction was faulty because it would have permitted the jury to find that defendant was estopped to deny that the agent had the disputed authority without finding that defendant knew of the representation at the time he accepted the benefits of the contract. This is not the law, since, if the acts of the agents are relied on, “there must also be evidence of the principal’s knowledge of and acquiescence in them.” 1 Mechem on Agency (2d ed) 513 § 725. On another trial no instruction on agency by estoppel should be given.
 The final assignment of error challenges a ruling of the court which excluded evidence relating to damages offered by defendant. The court’s instructions respecting the measure of damage are not criticized, but it is contended that the evidence excluded by the ruling is material on the question of market value of *131Eegal lily tralblets in the 1948-1949 season. Snch market value, it is agreed by the parties, is a factor entering into the measure of damages in a ease like this. See Walter v. Echanis, 163 Or 148, 95 P2d 979; Laur v. Walla Walla Irrigation Co., 118 Or 520, 529, 247 P 753; Hall v. Brown, 102 Or 389, 396, 202 P 719; annotation 175 ALR 159. A qualified witness for the plaintiff testified that the market value of Eegal lily bulblets in the 1948-1949 season was $15 a thousand, and a qualified witness for the defendant testified that it was $10 to $15 a thousand. The excluded proof, which the defendant proposed to make by his witness on market value, would have tended to impeach the very opinion which the witness himself had given in that regard and would have introduced an element of speculation into the case that could not have been other than a source of confusion to the jury in their deliberations upon the amount of the plaintiff’s damages. There was no error in the ruling.
Our former opinion is withdrawn, and the judgment is reversed and the cause remanded for further proceedings in conformity to this opinion.