Missouri Bag Co. v. Chem. Delinting Co.

Full title: MISSOURI BAG CO. v. CHEMICAL DELINTING CO

Court: Supreme Court of Mississippi

Date published: Apr 14, 1952

214 Miss. 13 (Miss. 1952)

58 So. 2d 71

Opinion

No. 38321.

April 14, 1952.

1. Sales — implied warranty — manufacturer.

The seller of bags, who is also the manufacturer, impliedly warrants that the bags are free from any latent defects growing out of the manufacture and that they will reasonably perform the services for which they are manufactured and sold.

2. Sales — implied warranty — particular purpose.

Where an article to be manufactured by the seller is ordered for a particular purpose disclosed to him, there is an implied warranty that the article is free from defects arising out of defective material selected by him as well as defective workmanship which will render the article unfit for the purpose intended.

3. Sales — implied warranty — remedy for breach.

When in the manufacture and sale of bags there has been a breach of the implied warranties mentioned in the foregoing headnotes, two remedies were open to the purchaser after he had received the bags: He might return them to the seller and rescind the contract, or he might accept the bags and thereby affirm the contract and recover of the seller damages for breach of warranty or recoup the same in an action for the purchase price.

4. Sales — waiver of right to claim damages for breach of warranty.

The purchaser of the bags, impliedly warranted as stated in the preceding headnotes, did not waive its right to assert its claim for damages by accepting and using them after discovering their defects.

5. Sales — recoupment — deliveries under one contract.

Where all the bags were delivered under the same contract although at successive periods, and the action was brought for the last delivery in the series, recoupment could be had therein for breaches of warranty in an earlier delivery, and the contention that each delivery constituted a different transaction is not maintainable.

6. Sales — breach of implied warranty — damages.

In an action for damages for breach of contract where the breach consists in the delivery of an article not complying with the contract, such as an article of inferior quality, the damages are ordinarily the difference between the value of the article delivered and what it would have been worth had it complied with the contract, but there are exceptional cases in which special damages may be recovered in addition to the general damages.

7. Sales — breach of warranty — special damages — proximate result.

Special damages are not recoverable for a breach of warranty in a sales contract unless they are the direct, natural and proximate result of the breach, nor may the purchaser recover damages which were proximately caused by his own negligence in using the defective articles.

8. Sales — breach of warranty — damages — avoidable results.

A person seeking to recover damages caused by the purchase of defective articles to be used by him can recover only such damages as he could not have avoided by the exercise of reasonable diligence, and he must make reasonable effort to protect himself; so that where property is sold with a warranty of fitness for a particular purpose, and its defects are of such nature that they can be readily, and are in fact, ascertained, yet the purchaser persists in using it, whereby losses and expenses are incurred, they come of his own wrong and he cannot recover consequential damages since such damages were not proximately due to the breach of the warranty.

9. Sales — breach of warranty — damages — proof and burden thereof.

In an action by the seller for the purchase price of bags covered by an implied warranty of fitness, and the purchaser seeks to recoup for breach of the warranty in previous deliveries, the burden of proof of the damages in recoupment rested on the purchaser to show with reasonable certainty the amount of his damages and that they were the direct, natural and proximate result of the breach of warranty in the sale, and he is not entitled to recoup damages that were the result of his own negligence in using the defective bags after discovery of the defects therein.

10. Sales — damages for breach of warranty — recoupment — instructions.

In the action mentioned in the foregoing headnote an instruction granted at the request of the defendant that if the jury believe from the preponderance of the evidence that the bags in the previous delivery were defective and not suitable for the purpose made and purchased and that the defendant sustained losses and damages as a result of the defective condition of said bags and that such damages equal the amount of the indebtedness sued for, the verdict should be for the defendant was erroneous because, (1) it did not limit the recoupment damages to those which were the direct, natural and proximate result of the breach of the implied warranty of quality of the bags; (2) it did not take into account the negligence of the defendant in using the bags after it had discovered that they were defective; (3) it furnished no guide for the assessment of the damages which the defendant might have been entitled to recoup, and (4) the proof of the alleged damage was so indefinite and uncertain that the jury could not have made an intelligent finding upon the issues presented.

11. Sales — breach of warranty — instructions.

In the action mentioned in the foregoing headnotes instructions requested by the seller, predicated upon the theory that the purchaser was required to rescind the contract and return the bags to the seller and had failed to do so, were properly refused, for the reason that the buyer was not so required in order to recover on the breach of warranty, if recovery was otherwise proper.

Headnotes as revised by Kyle, J.

APPEAL from the circuit court of Lowndes County; JNO. D. GREENE, JR., Judge.

Action by Missouri Bag Company against the Chemical Delinting Company to recover a balance alleged to be due to plaintiff for the purchase price of bags, and defendant sought recoupment and offset. Judgment for defendant and plaintiff appealed. Reversed and remanded.

Sams Jolly, for appellant.

I. Appellant was entitled to a directed verdict.

A. There was no conflict in the material evidence or in the controlling facts, but the undisputed evidence shows that the merchandise in question was not defective. Board of Miss. Levee Com'rs. v. Montgomery, et al., (Miss.), 110 So. 845; Carrere v. Johnson, (Miss.), 115 So. 196; Smith v. G.M. N.R. Co., (Miss.), 129 So. 599; 55 C.J., "Sales", Sec. 442.

(1) Even if appellee had stood on a scintilla of evidence, appellant would have been entitled to a directed verdict. Equitable Life Assurance Society of U.S. v. Mitchell, (Miss.), 29 So.2d 88.

B. Appellee's evidence is so unreasonable and contradictory that it cannot reasonably be accepted as true. Newton v. Homochitto Lbr. Co. (Miss.), 138 So. 564.

C. Appellant's evidence is so overwhelming as to leave no room for doubt as to the facts. Teche Lines, Inc. v. Bounds, (Miss.), 179 So. 747.

D. Only one reasonable conclusion could have been drawn from the evidence. Sovereign Camp, W.O.W. v. Banks, (Miss.), 170 So. 634.

E. Appellant's evidence is of so conclusive a character that a verdict in opposition to it would be set aside and not allowed to stand. Clark v. J.L. Mayse Bro., (Miss.), 48 So. 721; McFadden v. Buckley, (Miss.), 53 So. 351; Elliott v. G.M. N.R. Co., (Miss.), 111 So. 146.

II. Appellee cannot assert as a counterclaim alleged defects in merchandise which he bought from appellant.

A. Appellee continued using the merchandise, which the record clearly shows was sold without any express warranty, with full knowledge of its condition, which constituted acceptance of the merchandise, Lumberman's Supply Co. v. Poplarville Sawmill Co., (Miss.), 78 So. 157; McDaniel v. Smith, (Miss.), 48 So.2d 638, and waived any defense as to condition of the merchandise. Brewer v. Automobile Sales Co., (Miss.), 111 So. 578; American Steel Hoop Co. v. Searles Bros., (Miss.), 46 So. 411; Carver Gin Machine Co. v. Caddy, 62 Miss. 201; 55 C.J., "Sales", Sec. 429.

B. Appellee voluntarily paid for the merchandise with full knowledge of its condition. J.H. Menge Sons v. Gulf S.I.R. Co., (Miss.), 53 So. 424; Graham McNeil Co. v. Scarborough, (Miss.), 99 So. 502; Rowe v. Union Central Life Ins. Co., (Miss.), 12 So.2d 431; McLean, et al. v. Love, et al., (Miss.), 157 So. 361; 55 C.J., "Sales", Sec. 431.

(1) If, instead of making payment as he did, appellee had only signed a renewal note — J.B. Colt Co. v. Kelly, et al., (Miss.), 107 So. 757; J.B. Colt Co. v. Speight, (Miss.), 120 So. 216 — or signed a sales contract — Memphis Automatic Music Co. v. Chadwick, (Miss.), 146 So. 137 — or had only given unpaid check and promised to pay, with his knowledge of the condition of the merchandise, such action would have waived his right to allege the defense of breach of warranty — Cherokee Mills v. Conner, (Miss.), 145 So. 735.

C. Appellee did not within a reasonable time inspect and reject the merchandise. W.L. Watkins Co. v. Guthrie Co., (Miss.), 38 So. 370; Anderson v. First Securities Co. of Longview, Tex., (Miss.), 188 So. 548; 55 C.J., "Sales", Secs. 410, 416.

(1) A reasonable opportunity to inspect is equivalent to an inspection. W.L. Watkins v. Guthrie Co., (Miss.), 38 So. 370; Anderson v. First Securities Co. of Longview, Tex., (Miss.), 188 So. 548, 55 C.J., "Sales", Secs. 427, 429.

(2) What constitutes a reasonable time for inspection, since the facts are undisputed, is a question of law for the courts. 55 C.J., "Sales", Secs. 410, 429.

(3) A mere complaint or protest is insufficient. Chattanooga Bakery Co. v. S. Hamilton Co., (Ala.), 128 So. 116; 55 C.J., "Sales", Sec. 429.

(4) The burden of proof is on appellee to prove inspection and rejection of the bags within a reasonable time, and that the bags were not of agreed quality at the time of sale, which burden appellee utterly failed to meet. 55 C.J., "Sales", Sec. 434.

D. The fact that the parties by their acts and declarations indicated an intention to treat a written contract as continuing after the time prescribed in it for its termination did not have the effect of continuing such contract, but showed a subsequent oral agreement on the same terms. 13 C.J., "Contracts", Sec. 692.

(1) Appellee's alleged, unliquidated damages arising out of different contract cannot be set off. McCune v. Commercial Pub. Co., (Miss.), 114 So. 268.

(2) A recoupment for an unliquidated amount must spring from the same transaction which is the subject matter of the suit. Lancaster v. Jordan Auto Co., (Miss.), 187 So. 535.

III. Appellee's alleged damages cannot be recovered.

A. Appellee's alleged damages are speculative and uncertain and the nature and cause of the alleged damages are not shown with any reasonable certainty. McCain v. Wade, (Miss.), 180 So. 748; Yazoo M.V.R. Co. v. Skaggs, (Miss.), 179 So. 274, 278; S.H. Kress Co. v. Sharp, (Miss.), 126 So. 650.

B. Appellee's alleged loss of profits from alleged breach of contract are not so definite that they may be reasonably ascertained by calculation and the appellant had no notice that such alleged damages would result. Crystal Oil Co. v. Holliday, (Miss.), 64 So. 658; Yazoo M.V.R. v. Consumer's Ice Power Co., (Miss.), 67 So. 657.

C. Appellee made no effort to reduce or mitigate his alleged damages. Mars v. Hendon, (Miss.), 171 So. 880, sugg. of error overruled, 173 So. 286.

D. If appellee was entitled to any damages, instruction granted him relative to this were improper. Alig v. Lackey, (Miss.), 75 So. 139.

(1) If appellee desired to rescind the contract, he did not within a reasonable time return or offer to return the merchandise. J.B. Colt Co. v. Odom, (Miss.), 101 So. 853; Alig v. Lackey, (Miss.), 75 So. 139; Vol. 55 C.J., "Sales", Sec. 429.

(2) Certain instructions refused the appellant prevented an accurate statement of the law to be given. (Same citations as in (1) immediately above).

IV. Certain instructions granted to appellee and/or refused appellant were error, in that

A. The instructions erroneously given appellee:

(1) Were not applicable to the issues and proof, Hunt v. Sherill, (Miss.), 15 So.2d 426, and did not confine the case to the precise issues therein in submitting it to the jury, Yazoo Mississippi Valley R. Co. v. Aultman, (Miss.), 173 So. 280, and were not supported by the evidence. Poteete v. City of Water Valley, (Miss.), 42 So.2d 112; Cockran v. Peeler, (Miss.), 47 So.2d 806; Williams v. City of Gulfport, (Miss.), 141 So. 288; Solomon v. City Compress Co., (Miss.), 10 So. 446, 12 So. 339.

(a) An instruction must not only be clear, when considered as an abstract proposition of law, but it must expound the law correctly as applicable to the evidence in the cause, without danger of misleading the jury. Lombard v. Martin, 39 Miss. 147.

(2) Ignored issues, defenses and evidence. Anderson v. First Securities Co. of Longview, Tex., (Miss.), 59 So. 97; Life Casualty Ins. Co. v. Wallers, (Miss.), 177 So. 47; Stonewall Life Ins. Co. v. Cooke, (Miss.), 144 So. 217.

(3) Did not accurately state the law applicable to the case. Alig v. Lackey, (Miss.), 75 So. 139.

B. The instructions erroneously refused appellant:

(1) Mislead the jury by preventing an accurate statement of law based on the evidence in the case. Alig v. Lackey, (Miss.), 75 So. 139; Lumbermen's Supply Co. v. Poplarville Sawmill Co., (Miss.), 78 So. 157; McDaniel v. Smith, (Miss.), 48 So.2d 638; Brewer v. Automobile Sales Co., (Miss.), 111 So. 578; J.H. Menge Sons v. Gulf S.I.R. Co., (Miss.), 53 So. 424; J.B. Colt Co. v. Odom, (Miss.), 101 So. 853.

V. Appellant was entitled to a new trial.

A. The verdict is against the weight of the evidence. Universal Truck Loading Co. v. Taylor, et al., (Miss.), 164 So. 3, 172 So. 756; Wayne County Mfg. Co. v. Shirley, (Miss.), 15 So.2d 624; Newton v. Homochitto Lbr. Co., (Miss.), 138 So. 564.

(1) The burden of proof is on appellee to prove that alleged defects existed at the time of sale and not later and were not caused by appellee's negligence, which burdens appellee utterly failed to meet. Mississippi Butane Gas Systems v. Welch, (Miss.), 45 So.2d 262; 55 C.J., "Sales", Sec. 434.

B. The verdict of the jury was rendered upon instructions which presupposed the existence of facts not shown in evidence, Barker v. Justice, 41 Miss. 240; and instructions which did not accurately state law applicable to case. Alig v. Lackey, (Miss.), 75 So. 139.

W.J. Threadgill, H.T. Carter, and John H. Holloman, for appellee.

As to the various points of argument contained in appellant's brief, we will make the following comments:

Point No. 1. Appellant claims that it was entitled to a directed verdict. As to this we say that a casual reading of the record will show them to be in error. A great portion of the appellee's evidence is uncontradicted, and as to the areas where there is some dispute the jury resolved the conflict against the appellant, and in favor of the appellee.

Point No. 2. Appellant says here that the appellee cannot assert a counterclaim, and in support thereof counsel cites the law applicable to rescission of contracts. There was no rescission in the case at bar — appellee kept the goods and now asserts the breach of warranty in this action for the purchase price, as it has a right under the law to do. It is also interesting to note that counsel states that the goods were sold without any express warranty. Appellant doesn't say so, but, of course, there was an implied warranty that the goods were fit for the purpose for which they were sold.

Point No. 3. Appellant's contention here is that the damages proved by the appellee were speculative. We submit that damages are speculative when the cause is uncertain, not when the amount is uncertain — as will be discussed more fully hereinafter.

Point No. 4. Appellant complains of certain instructions, some given, some not given. It is, of course, quite familiar law that all instructions must be considered as a whole, each limiting, modifying and supplementing all others, Hattiesburg v. Beverly, 153 Miss. 759, 86 So. 590, it being impractical under our system of jurisprudence to incorporate all the law of a case into a single instruction.

If a fair and just result has been reached by the jury in the lower court, as we submit has been reached upon amply sufficient evidence as reflected by the record, then the verdict of the jury and the judgment of the lower court should be affirmed. Neely, et al. v. City of Charleston, (Miss.) 37 So.2d 495.

It must be assumed that the jury was composed of reasonable men and that they considered not one, but all the instructions together, and having done so were governed thereby in their deliberations. Purely for the sake of argument, we mention that this court has held on a number of occasions that instructions do not have to be technically accurate in all respects, for, generally speaking, the jurymen are laymen who attach no special significance to legal terms. They are men of ordinary and good common sense. As this Court said in Neely, et al. v. City of Charleston, supra, "Substantial accuracy is all that is required in an instruction, and unless the Court can see that the jury may have been misled, it will not reverse". "Citing Meridian Sanatorium v. Scruggs, 121 Miss. 330, 83 So. 532. The fact that an instruction is technically inaccurate will not alone cause a reversal of a judgment; but when the case on appeal is examined as a completed trial, and substantial error has not been committed and a fair and just result has been reached, the judgment will be affirmed, notwithstanding error in an instruction. Citing City of Jackson v. Wright, 151 Miss. 829, 119 So. 315; Nelms Blum Co. v. Fink, 159 Miss. 372, 131 So. 817."

Point 5. Appellant asserts that it was entitled to a new trial and bases its claim thereto primarily upon the verdict being contrary to the weight of the evidence. Again, our reply is that the record contains ample and substantial evidence to support the jury's verdict for the appellee.

I. Recoupment of damages sustained by breach of an implied warranty is a proper defensive plea in an action by the seller for the purchase price of the goods. Myers v. Estell, 47 Miss. 4; Williams v. Neely, 134 Fed. 1, 4, 67 C.C.A. 171, 69 L.R.A. 232; Flynn v. Barry, 221 Mich. 422, 191 N.W. 215; Mills Novelty Co. v. Transeau, (Del.), 196 A. 187, 190; Caples v. Morgan, 81 Or. 692, 160 P. 1154, 1157, L.R.A. 1917B, 760; Fricke v. W.E. Fuetterer Battery Supplies Co., 220 Mo. App. 623, 288 S.W. 1000; State v. Lovett-Carnahan Co., 179 Ark. 43, 14 S.W.2d 233, 235; Biloxi Canning Co. v. Stillwell-Bierce Smith-Vaile Co., 76 Miss. 545, 25 So. 366; J.B. Colt Co. v. Harris, 177 Miss. 536, 171 So. 695; Viking Refrigerators v. Farrell, 180 Miss. 181, 176 So. 910; Magee Laundry Cleaners v. Hawell Appliance Co., 184 Miss. 435, 185 So. 571; Anderson v. First Securities Co. of Longview, Texas, 185 Miss. 500, 188 So. 548; Boehm v. Friedman, 190 Miss. 664, 1 So.2d 508; Bowers v. Southern Automatic Music Co., 114 Miss. 25, 74 So. 774.

II. The appellee was entitled to recoup damages naturally following under circumstances known to both parties when the contract was made. Yazoo M.V.R. Co. v. Fisher Bros., 102 Miss. 702, 59 So. 877, 878.

III. In fixing appellee's damage the jury had a right to consider 1) the facts as to the injury, (2) the nature and appearance of the property, (3) the estimated amount of damages based upon the experience and judgment of the witnesses, and (4) its own experience, and fix the value of the property and the damage therefrom. Westerfield Meeks v. Catlett, 153 Miss. 228, 120 So. 458; Shell Petroleum Corp. v. Yandell, 172 Miss. 55, 158 So. 787, 790; Hawkins Hardware Co. v. Crews, 176 Miss. 434, 169 So. 767, 769.

Kyle, J.

The Missouri Bag Company, a nonresident corporation as plaintiff, sued the Chemical Delinting Company, defendant, in the Circuit Court of Lowndes County for a balance of $2,712.13 alleged to be due and owing to the plaintiff by the defendant on the purchase price of 17,000 Osnaburg bags sold and delivered by the plaintiff to the defendant during the month of December 1949. The defendant, in its answer to the plaintiff's declaration, admitted liability for the amount alleged to be due for the four shipments of bags referred to in the plaintiff's declaration, but alleged by way of recoupment and offset against the plaintiff's claim, that the defendant was entitled to a credit of an amount equal to the balance alleged to be due in the plaintiff's declaration as damages for a breach of warranty of quality on account of the shipment to the plaintiff of 19,000 bags during the preceding February, which were found to be defective in quality and in part unfit for use. The case was tried before a jury and a verdict was returned for the defendant and judgment entered thereon. From that judgment the plaintiff prosecutes this appeal.

The Sales Contract, under which the bags were delivered, was dated August 13, 1948, and provided for the sale by the plaintiff to the defendant of 50,000 bleached and filled Osnaburg bags to be shipped from September through December 1948 from the plaintiff's warehouse at St. Louis, Missouri. The price to be paid for the merchandise was $252.75 per thousand. The contract provided that certain printing should be done on the bags in three colors, subject to quantity differentials; shipments were made under the contract from time to time over a period extending through December 1949 and payments were made for all bags delivered prior to the dates of delivery of the 17,000 bags mentioned in the plaintiff's declaration. The total invoice price of the 17,000 bags delivered in December 1949 was $4,902.31. The amount attached to the declaration showed a memorandum credit of $190 and a payment on the account of $2,000 leaving a balance due of $2,712.31.

J.H. Pollyea, the vice president of the Missouri Bag Company, plaintiff, testified as the only witness for the plaintiff. Pollyea testified that the plaintiff received shipping instructions from the defendant during the month of December 1949 for the shipment of the 17,000 bags and that the bags were immediately manufactured and shipped to the defendant; that the last shipment under the December 1949 order was made on December 17, 1949; that the account became due on December 27, 1949; that one payment in the amount of $2,000 had been made on the account on May 31, 1950; and that the additional credit of $190 had been allowed in an effort to make an adjustment of the controversy involved in the claim for recoupment set out in the defendant's answer.

Pollyea testified that the only complaint that he had received concerning the defective condition of the bags shipped to the defendant during the month of February 1949, was a verbal complaint which had been relayed to him by one Milton Yawitz, who was interested in the Chemical Delinting Company, and who told him that Mr. Edgington, the president of the company, was dissatisfied with some of the bags that had been shipped to the defendant; that he had finally talked to Mr. Edgington on the telephone, and had agreed to make an allowance in settlement of the claim, and that pursuant to that agreement he had entered a credit of $190 on the account for the bags shipped to the defendant in December 1949. The bags which defendant claimed were defective had been shipped during the month of February 1949, and had been paid for on March 10, 1949.

Earl M. Edgington, president of the Chemical Delinting Company, testified that 17,000 bags shipped to the Chemical Delinting Company during the month of December 1949 were received by the Chemical Delinting Company pursuant to the contract entered into on August 13, 1948, and that the 17,000 bags received during the month of December were entirely satisfactory. The complaint of the Chemical Delinting Company related entirely to the defective condition of the 19,000 bags which had been shipped to the Chemical Delinting Company during the month of February 1949. The bags were shipped in bales of approximately 1,000 bags each; and the 19,000 bags received during the month of February were paid for without any inspection being made of the bags at that time. Edgington stated that one bale was opened during the month of April 1949, and that he found that the bags had holes in them; that while he was in St. Louis during the early part of June he told Mr. Pollyea that he had discovered holes in the bags; and that Pollyea expressed the opinion that the other bags which had been included in the February shipments would be found to be satisfactory. Edgington stated that the remaining 18,000 bags contained in the February shipment were not opened or examined until the following December or January; and that he then discovered that the bags were mixed in the bales, and that the bags had holes in them.

Edgington admitted that he never wrote any letter to the Missouri Bag Company concerning the defects in the bags, until after the lapse of more than a year from the date of receipt of the bags, and that he never offered to return any of the bags. He was asked whether all of the bags were serviceable, and in answer to that question he said: "Well, we used them. * * * We used them to ship seed in." He stated that some seed were lost in the handling and transportation of the seed to their customers, but could not say what the loss amounted to. He stated that many complaints were received from their customers on account of the defects in the bags, and stated that 94,000 pounds of seed were returned to him during the 1950 delinting season, and he estimated that one-half of that total amount had been returned because of the defective condition of the bags. In a letter addressed to the Missouri Bag Company on June 12, 1950, which was introduced in evidence, Edgington said: "We have paid several small claims for weight shortages since these shipments, and never in the history of our business have we had such complaints before. Edgington was permitted to state to the jury that he felt that he had paid to the plaintiff everything that he owed the plaintiff.

The defendant's office manager testified that she discovered the latter part of February 1949 that the bags which they were receiving at that time had holes in them. She testified that numerous complaints were received by the defendant from its customers during the following winter after the bags had been used, and she estimated that approximately 100,000 pounds of seed were actually returned to the defendant by dissatisfied customers. On cross-examination she stated that when she discovered that seed was being shipped in bags that had holes in them she reported the matter to Mr. Edgington. The defendant's foreman testified that the bags which he observed had holes in them, and in the bags returned there had been a loss of five, ten or fifteen pounds of seed per bag. He stated that he had repaired some of the defective bags, but did not know how many. On cross-examination he stated that he had noticed that there were holes in the bags during the spring of 1949, and that he reported that fact to Mr. Edgington, but he continued to use the bags. He stated that he repaired the large holes, but not the small holes. Two of the defendant's salesmen testified that they had received numerous complaints from their customers in 1950 about the holes in the bags in which seed had been shipped.

The appellant's attorneys argue four main points on this appeal: (1) That the defendant was not entitled to recover damages on account of the defective quality of the 19,000 bags received during the month of February 1949, for the reason that the defendant had accepted the bags and paid for the same with full knowledge of their condition and had thereby waived its right to allege a breach of implied warranty of quality, and for the reason that the defendant had never offered to return the bags to the plaintiff after the defendant had discovered the alleged defects in the bags, but had continued to use the bags with full knowledge of their condition; (2) that the damages which the defendant sought to recoup were not proximately caused by the alleged defects in the bags, but by the defendant's own negligence in continuing to use the bags after the defendant had discovered that the bags had holes in them; and (3) that the damages sought to be recovered were so indefinite, uncertain and speculative that they could not be ascertained with any reasonable degree of certainty, and that the appellee made no effort to mitigate the damages. The appellant's attorneys also contend that there were reversible errors in the instructions, which will be referred to later.

(Hn 1) There was no express warranty in the written contract for the sale of the bags, but there was an implied warranty on the part of the appellant, the manufacturer, that the bags would reasonably perform the services for which they were manufactured and sold.

A manufacturer who sells goods of his own manufacture impliedly warrants that they are free from any latent defects growing out of the process of the manufacture. 46 Am. Jur. p. 542, Sales, Sec. 356.

(Hn 2) Where an article to be manufactured by the seller is ordered for a particular purpose disclosed to him, there is an implied warranty that the article is free from defects arising out of defective material selected by him as well as defective workmanship which will render the article unfit for the purpose intended. Rodgers v. Niles, 11 Ohio St. 48, 78 Am. Dec. 290. See also Annotations, 22 L.R.A. 192, 102 Am. St. Rep. 615.

Since there was an implied warranty on the part of the appellant that the bags to be delivered under the 1948 contract would be of sound quality, free from defects and suitable for the uses to which they were to be put by the purchaser, (Hn 3) if the bags delivered did not fulfill the warranty, two remedies were open to the purchaser after he had received the bags. He might return them to the seller and rescind the contract, or he might accept the bags, and thereby affirm the contract, and recover of the seller damages for breach of warranty, or recoup the same in an action for the purchase price. Stillwell, Bierce Smith Vaile Co. v. Biloxi Canning Co., 78 Miss. 779, 29 So. 513; J.B. Colt Co. v. Odom, 136 Miss. 651, 101 So. 853; Alig v. Lackey, 114 Miss. 392, 75 So. 139; Annotation 35 L.R.A., N.S., p. 501, 506, and cases cited; Noble v. Olympia Brewing Co., 64 Wn. 461, 117 P. 241, 36 L.R.A., N.S., 467.

(Hn 4) We do not think that the appellee waived its right to assert its claim for damages by accepting the bags and using them after discovering the alleged defects. In 46 Am. Jur. p. 442, Sales, Sec. 258, the rule is stated as follows: "By the weight of authority, even where the buyer of goods by executory contract has sufficient opportunity to inspect the goods, or he does inspect the same and ascertains defects therein, rendering them unmerchantable, he may, nevertheless, accept the goods and rely upon a breach of the implied promise or warranty of merchantability as an offset to or counterclaim against the amount due for the purchase price. Acceptance of goods with knowledge of defects making goods unmerchantable is not as a matter of law an acceptance in full satisfaction or waiver of the seller's promise or warranty that the goods are merchantable." (Hn 5) The appellant's attorneys, however, argue that, under the rule laid down in the case of Lancaster v. Jordan Auto Co., 185 Miss. 530, 187 So. 535, recoupment should not have been allowed in this case for the reason that the defendant's claim for damages arose out of a different transaction from that mentioned in the plaintiff's declaration. But that argument is untenable for the reason that the bags delivered in February 1949 and the bags delivered in December 1949 were all delivered under the Sales Contract dated August 13, 1948, which provided for total deliveries of 50,000 bags, and the rule laid down in Lancaster v. Jordan Auto Co., supra, has no application to the facts presented in this case.

The judgment of the lower court must be reversed, however, for the reason that the damages sought to be recouped were not proved with such reasonable certainty as to enable the jury to make an intelligent finding as to the amount of the damages, and for the reason that the damages were for the most part caused by the defendant's own negligence in using the defective bags with full knowledge of the defects.

In 46 Am. Jur., p. 865, Sales, Sec. 738, it is said that, (Hn 6) "In an action for damages for alleged breach of contract where the alleged breach consists in the delivery of an article not complying with the contract, such as an article of inferior quality, the damages are ordinarily the difference between the value of the article delivered and what it would have been worth if it had complied with the contract." There are exceptional cases in which special damages may be recovered in addition to the general damages. (Hn 7) But such special damages are not recoverable unless they are the direct, natural and proximate result of the breach of warranty. And the law is well settled that a person seeking to recover damages caused by the breach of implied warranty of merchandise purchased cannot recover damages which are proximately caused by his own negligence in using the defective articles. Sutherland on Damages, 4th Ed., Vol. 1, p. 317. (Hn 8) A person seeking to recover damages caused by the purchase of defective articles to be used by him can only recover such damages as he could not have avoided by the exercise of reasonable diligence; and he is required to make reasonable effort to protect himself from loss.

In Sutherland on Damages, 4th Ed., Vol. 1, p. 317, Sec. 89, it is said that, "where property is sold with a warranty of fitness for a particular purpose, if it be of such a nature that its defects can be readily, and in fact are, ascertained, yet the purchaser persists in using it, whereby losses and expenses are incurred, they come of his own wrong and he cannot recover damages for them as consequences of the breach of warranty."

If the buyer's own fault or negligence contributed to the injury, as by using the goods with knowledge of their defects, he cannot recover consequential damages, since such damages were under the circumstances not proximately due to the breach of warranty. Williston on Sales, Rev. Ed., Vol. 3, p. 379, Sec. 614b., and cases cited.

A case in point is Hitchcock v. Hunt, 28 Conn. 343, where barrels sold with pork were warranted not to leak, and the purchaser, after having ascertained that the barrels were so defective that the pork could not be preserved in them, suffered the pork to remain in them without any effort to procure others in their stead, as he might have done, and it was spoilt from that cause; and it was held that the loss should be attributed to the carelessness of the purchaser, and that he could sustain no claim against the seller on the warranty for the value of the pork lost by reason of the defects in the barrels, and that his damages were limited to the expense which the evidence showed he would have had to incur in repacking the pork.

In the case of Vicksburg Meridian R.R. Co. v. Ragsdale, 46 Miss. 458, this Court held that the party subject to injury from a breach of contract is under obligation to make reasonable exertion to reduce his damages as much as practicable; and if through negligence or willfulness he allows the damages to be unnecessarily enhanced, the increased loss should justly fall on him.

(Hn 9) The appellee admitted that the bags received in December 1949 were entirely satisfactory, and that only $2,000 had been paid on the purchase price of $4,902.31. The appellee sought to recoup damages on account of the defects in the bags received during the preceding February in an amount equal to the unpaid balance of the purchase price of the bags received in December. The burden of proof as to the damages claimed rested upon the appellee. The appellee was entitled to recoup only such damages as were the natural and proximate result of the appellant's failure to deliver bags of the quality contracted for. The appellee, as stated above, was not entitled to recoup damages that were the natural and proximate result of its own negligence, and the negligence of its officers and employees, in using the defective bags after they had discovered that the bags were defective. And the appellee was under a duty to take reasonable steps to prevent loss on account of the defective condition of the bags, after the defects had been discovered.

The defects testified to by Edgington and his foreman were patent defects. The holes were one-half inch to two and one-half inches in length. There is no proof in the record to show how many of the bags were unfit for use. Most of the bags were apparently in usable condition. Edgington testified that the appellee used them. Some of the bags were repaired, but there is no proof to show the number of bags that were repaired or the cost of making the repairs. The damages which the appellee sought to recoup were in the main damages alleged to have been sustained on account of the loss of good will, prestige and reputation. Such damages could not be recovered under the facts disclosed by the record in this case.

The appellee offered no clear proof to show the difference between the value of the bags received and the value which they would have had if they had been free from defects. Edgington was asked the question, "Were all the bags serviceable to any extent?" And in answer to that question he said: "Well, we used them * * * We used them to ship seed in. * * * We used every one we could." Edgington testified as to complaints of customers, who were dissatisfied with seed shipped to them in defective bags. He testified that he had refunded to one customer the sum of $900 on account of seed which had been returned because of the defective condition of the bags. But there is no proof in the record as to the actual loss which the appellee sustained on account of the seed thus returned. He testified that he had 94,000 pounds of seed returned by other customers, and he estimated that half of these were returned because of the defective condition of the bags. There is nothing in this testimony, however, to indicate the loss sustained on account of the shipments referred to.

In the case of S.H. Kress Co. v. Sharp, 156 Miss. 693, 126 So. 650, 68 A.L.R. 167, this Court held that the damages recovered in any case must be shown with reasonable certainty, both as to their nature and in respect to cause from which they proceed. In the case of Ammons v. Wilson Co., 176 Miss. 645, 170 So. 227, 229, which was a suit brought by the appellant against the appellee to recover damages claimed by the appellant and alleged to have been caused by the appellee's breach of contract to ship the appellant 942 cases of shortening, the Court held that, "If there were actual damages, it devolves on appellant to trace them directly to the breach of the contract and make them definite enough to comply with the governing rules of law."

In a case of this kind, the purchaser who seeks to recoup damages alleged to have been sustained as the result of a breach of warranty of quality of the articles purchased, must not only show with fair and reasonable certainty that the damages sought to be recouped are the direct, natural and proximate result of the breach of warranty, but the purchaser must also prove his damages with reasonable certainty.

(Hn 10) The Court granted the following instruction to the defendant, which the appellant vigorously criticizes on several grounds: "The Court instructs the jury for the defendant that if you believe from the preponderance of the evidence in this case that 19,000 of the bags received by the defendant from the plaintiff under a contract for same were defective and not suitable for the purpose made and purchased, and that the defendant has sustained losses or damages as a result of the defective condition of said bags shipped it by the plaintiff, and that such damages, if any, equals the amount of the indebtedness sued for, then it will be your duty to return a verdict for the defendant."

The above mentioned instruction was erroneous in that it did not limit the damages which the defendant might recover to the damages which were the direct, natural and proximate result of the breach of the implied warranty of quality of the bags; and in that it did not take into account the negligence of the defendant in using the bags after the defendant had discovered that the bags were defective. The instruction was erroneous for the additional reason that it furnished the jury no guide for the assessment of the damages which the defendant might have been entitled to recoup; and the proof of the alleged damages was so indefinite and uncertain that the jury could not have made an intelligent finding upon the issue presented if the instruction itself had been free from error.

(Hn 11) The appellant in his brief also complains of the refusal of the Court to grant certain instructions requested by the appellant, which the court refused to grant. We do not think that it is necessary to discuss these instructions in detail, for the reason that most of these instructions were predicated upon the theory that the appellee was required to rescind the contract and return the merchandise to the appellant, and had failed to do so. For the reasons already stated, the appellee was not required to rescind the contract and return the merchandise to the appellant, and the instructions requested by the appellant were properly refused by the Court.

For the errors pointed out above the judgment of the lower court is reversed and the cause remanded for a new trial.

Reversed and remanded.

Roberds, P.J. and Alexander, Holmes and Ethridge, JJ., concur.