Reed v. Randall

Full title: PETER R. REED and others v . ISAAC RANDALL

Court: Court of Appeals of the State of New York

Date published: Mar 1, 1864

29 N.Y. 358 (N.Y. 1864)

Opinion

March Term, 1864

WRIGHT, J.

The action was for the breach of a contract to sell and deliver a crop of tobacco growing on the land of the defendant. In September, 1856, the parties contracted for the sale of the crop. The plaintiffs agreed to pay ten cents per pound on the delivery thereof, well cured and boxed and in good condition, and the defendant agreed to sell and make such delivery, in the early part of May, 1857, at such place in the city of Syracuse as the plaintiffs should thereafter designate. The contract, therefore, was executory. In the early part of April, 1857, the plaintiffs notified the defendant to deliver the tobacco at the storehouse of Greenman Co., in Syracuse. On the 20th April, 1857, the defendant delivered the same at the place designated, and it was received and accepted by the plaintiffs. The breach alleged relates to the quality and condition of the tobacco at the time it was delivered, and the contract of sale executed. It is averred to have been in bad condition, not having been properly cured, and being wet, sweaty and rotten. The tobacco was accepted in execution of the contract, and retained without notifying the defendant of its defects, after discovering them, or returning, or offering to return it, or making any request to take it back. The plaintiffs converted the property, and some seventeen months after delivery and acceptance bring their action to recover damages resulting from its being improperly cured and being in bad condition when delivered. The question is, whether the action is maintainable. The learned judge, at the trial, thought it was not, and non-suited the plaintiffs; and the supreme court, on appeal, concurred with him in opinion.

This conclusion, I think, was right. It is not claimed to be otherwise, unless there was a warranty that the tobacco, when delivered, should be well cured and in good condition. But the stipulation in respect to the quality and condition of the article, when delivered, constituted no express warranty. The contract was executory, for the sale of a growing crop of tobacco, to be delivered the spring following, well cured and in good condition. The article bargained for, and to be furnished in the future, was a merchantable crop of tobacco. This was what the vendor agreed to sell and the vendee to purchase. It was the sale of a particular thing by its proper description merely; and the descriptive words used for defining the thing agreed to be sold were of the substance of the contract, not collateral to the main object of it. The breach alleged was that the tobacco was not, when delivered, well cured and in good condition, but on the contrary was in bad condition and was wet, sweaty and rotten; that is, it was an inferior, unmerchantable commodity. In an executory contract for the sale of personal property, the law implies that the article, when furnished, shall be of merchantable quality. ( Hargous v. Stone, 1 Selden, 73, and cases cited.) And if the tobacco, when delivered, was not well cured and in good condition, but was wet, sweaty and rotten, it was not merchantable. ( Hamilton v. Ganyard, 34 Barbour, 204.) In legal effect, therefore, the agreement as to which the breach was alleged was the same as the law would imply, in the absence of words of express contract. It would be established upon proof of a contract to sell and deliver the tobacco at a future time, and without proof of express words between the parties, and if express words were used between the parties, yet superadding to the terms of a contract, words expressing an obligation which the law implies, does not change the nature or extent of the obligation or the remedy upon it. ( Sprague v. Blake, 20 Wend. 64.)

A warranty, then, cannot be predicated upon the contract alleged in the complaint; and the rules of law by which the rights of the parties in respect to warranties are regulated, are inapplicable. A breach of the contract was not a breach of warranty, but a mere non-compliance with the contract that the defendant had agreed to fulfill.

In cases of executory contracts for the sale and delivery of personal property, the remedy of the vendee to recover damages, on the ground that the article furnished does not correspond with the contract, does not survive the acceptance of the property by the vendee after opportunity to ascertain the defect, unless notice has been given to the vendor, or the vendee offers to return the property. The retention of the property by the vendee is an assent, on his part, that the contract has been performed. The delivery of property corresponding with the contract is a condition precedent to the vesting of the title in the vendee. The parties understand that the vendee is not bound to accept the property tendered, except upon this condition. This the vendee is to determine upon the receipt of the property There is no intention that a defective article should be accepted, and that the vendee should rely upon the covenant for his indemnity. The latter is not bound to receive and pay for a thing that he has not agreed to purchase; but if the thing purchased is found on examination to be unsound, or not to answer the order given for it, he must immediately return it to the vendor, or give him notice to take it back, and thereby rescind the contract, or he will be presumed to have acquiesced in its quality. He cannot accept the delivery of the property under the contract, retain it after an opportunity of ascertaining its quality, and recover damages, if it be not of the quality or description called for by such contract. It is understood of every contract for the future sale and delivery of an article of merchandize, even without express terms, that it shall be of merchantable quality; and I am not aware that it has ever been doubted, that upon the delivery of property pursuant to such a contract, the vendee, by retaining the property without notice to the vendor, waives all remedy upon the contract for any breach of an obligation implied by law.

The principle that when the contract of sale is executory, the remedy of the purchaser to recover damages on the ground that the article furnished does not correspond with the contract, will not survive an acceptance and retention of the property, after opportunity to ascertain the defect, without notifying the vendor, is well supported by authority. In Fisher v. Samuda (1 Camp. R. 190), the declaration stated that in consideration that the plaintiff had undertaken to buy of the defendants a certain quantity of beer, to be shipped to Gibraltar, they undertook to furnish and deliver to him good and sufficient beer for that purpose. The breach alleged was that the beer furnished and delivered was bad, and unfit to be shipped to Gibraltar, c. The proof was that the beer was delivered in May to be shipped to Gibraltar the following autumn, and in July it was discovered to be of bad quality, and unfit for the purpose intended. The earliest notice given to the defendants was in December. Lord ELLENBOROUGH held that, "under these circumstances (retaining the beer so long without notice), the plaintiff must be presumed to have assented to its being of good quality, and to have acquiesced in the due performance of the contract on the part of the defendants." In Grimaldi v. White (4 Esp. R. 95), the defendant contracted with the plaintiff for pictures at certain prices, pursuant to specimens exhibited. The pictures had been sent to the defendants, who, at the time of delivery, had objected to the execution as being inferior to the specimens exhibited; but he did not return them. In assumpsit to recover the contract price of the paintings, the defence intended to be relied on was the inferiority of the execution, and, of course, of value; and the defendant was proceeding to call witnesses to ascertain what was the real value, but, on objection, the evidence was excluded. LAWRENCE, J., said: "The defendant relies on the circumstances that they (the pictures) are of an execution very inferior to the specimens exhibited, and which the plaintiff undertook to paint conformable thereto. When an artist exhibits specimens of his art and skill as a painter, and affixes a certain price to them, if a person is induced to order a picture from an approbation of such specimens, and the execution of it, when delivered, is inferior to the specimen exhibited, he has a right to refuse to receive it, or return it, as not being conformable to that performance which the painter undertook to execute; but if he means to avail himself of that objection, he must return the picture — he must rescind the contract totally. Having received it under a specific contract, he must either abide by it or rescind it in toto, by returning the thing sold; but he cannot keep the article received under such a specific contract, and for a certain price, and pay for it at a less price than that charged by the contract." In Milnor v. Tucker (1 Car. Payne, 15), a person contracted to supply a chandelier sufficient to light a certain room. The purchaser kept the chandelier six months, and then returned it. He was held liable to pay for it, although it was not according to the contract. In Sprague v. Blake (20 Wend. 61), the action was assumpsit for wheat sold and delivered. The proof was that the defendant had agreed to purchase the whole of a crop of wheat belonging to the plaintiff, estimated to amount to between three hundred and four hundred bushels, to be delivered at a place on Seneca lake, for which the defendant agreed to pay one dollar per bushel. By the terms of the agreement the wheat was to be merchantable. Subsequently a part of the wheat was delivered at the place specified, and received by the defendant; and an arrangement was then made between the parties that the residue of the crop should be delivered at the storehouse of one Morgan. in Penn Yan. In pursuance of this arrangement, the plaintiff delivered at Morgan's storehouse about twenty-eight bushels of the wheat, and for the delivery of this parcel the action was brought, the defendant refusing to pay for the same. It was proved that Morgan was the agent of the defendant in receiving wheat, and that the wheat in question, together with other wheat, was taken away from his storehouse by the defendant's boatmen. The defendant attempted to set up the inferior quality of the wheat, and offered to prove its real value, with the view of recouping damages for a breach of the contract, but the evidence was rejected. The court charged the jury that if they were satisfied the wheat was received by the defendant or his agent, they would find for the full contract price. The plaintiff had a verdict for the whole contract price, and on error to the supreme court the judgment was affirmed. The supreme court cite approvingly the case of Fisher v. Samuda ( supra), and lay down the doctrine that although by the terms of a contract an article agreed to be delivered is to be of a merchantable quality, still if an inferior article be delivered and accepted, the purchaser, when called upon for payment, is not entitled to a reduction from the contract price on the ground of the inferior quality of the article. He must refuse to accept it, or if its inferiority be subsequently discovered he must return it or require the purchaser to take it back In Hargous v. Stone (1 Selden, 73), it was held that if the contract was an executory one, to furnish goods of a particular description, the purchaser was bound to examine them when received and opened, and to have returned them if the quality was not such as was promised. Not having done so, he waived all objections on account of defects of quality. In Shields v. Pettee (2 Sand. S.C.R. 262), it was held that on a sale of goods, if the buyer, on receiving a part of the quantity sold, finds they are not of the kind or quality which his contract entitles him to, he is not at liberty to retain such part, and claim damages for the non-delivery of the entire quantity. Nor can he require the delivery of the residue, retaining a claim for damages. He must either receive the article as it is, or he must return the portion delivered, and then enforce his claim for damages. He can recover no damages if he refuse to return the part delivered. (See also Howard v. Hoey, 23 Wend. 350; Hopkins v. Appleby, 1 Stark. 477; 2 Kent's Com. 480; Parsons on Contracts, 475.)

The case of Hopkins v. Appleby (1 Starkie, 477), was this: The defendants, soapmakers in Bath, ordered of the plaintiffs in London eight sarrands of Spanish barilla and four sarrands of salt barilla, which the plaintiffs warranted to be of the best quality. The order was given in October, and the barilla reached its destination in December. The defendants proceeded to use it, when it was discovered that the Spanish barilla was of inferior quality. They continued, however, to use it without complaint, and made no remonstrance until it had been wholly consumed. In assumpsit to recover the price, the defence was interposed that the quality was not as contracted for, and that the defendants had paid into court as much as the barilla was worth. The plaintiffs had a verdict. Lord ELLENBOROUGH said: "When an objection is made to an article of sale, common justice and honesty require that it should be returned at the earliest period, and before the commodity has been so changed as to render it impossible to ascertain, by proper tests, whether it is of the quality contracted for. * * * It was incumbent on the defendants to give the seller an opportunity of establishing his case by the opinion of intelligent men on the subject, and not throw a veil of obscurity over it, and debar the party from the fair means of ascertaining the quality. * * * The party who extinguishes the light, and precludes the other party from ascertaining the truth, ought to bear the loss." These considerations apply with great force in the present case. The tobacco was delivered to the plaintiffs and accepted by them in April, 1857, and the first notice to the vendor of any defect was when the suit was commenced, in September, 1858. The plaintiffs deprived the defendant of all opportunity to ascertain or establish the actual condition of the tobacco at the time of delivery. Tobacco is an article ordinarily the subject of immediate sale and consumption, and no opportunity was given to the vendor to test the claim of the plaintiffs by examination. The defendant had a right to suppose, from the silence of the plaintiffs, that they assented to the quality of the tobacco, and that it corresponded with the contract. The judgment of the supreme court should be affirmed.

HOGEBOOM, J., (dissenting).

If this is to be regarded as an executed contract of sale, without sample or warranty, then the acceptance of the goods purchased — without objection to their quality or condition at the time of their delivery, or within such reasonable time afterwards as was sufficient to examine the same and ascertain their condition — would be regarded, I think, according to the weight of authority, as an assent on the part of the purchaser to the merchantable character of the goods, and a waiver of defects therein.

In such cases the title passes, and the purchaser is presumed to be satisfied with the goods because he makes no objection to them after opportunity for examination.

If, in the case of an executed contract, there be an express warranty or undertaking accompanying the sale and delivery of the goods, that they are of a certain quality or condition, this agreement is obligatory upon the parties, and is not merged in the act of delivery and acceptance, because it is simultaneous with it and independent of it; and the very object of it is to preclude the necessity of an instant examination, and to preserve to the purchaser his right to insist upon the performance of the agreement, and to compensation for its non-performance. ( Muller v. Eno, 14 N.Y. 597; Waring v. Mason, 18 Wend. 425.)

The parties agree that this is not an executed contract. Although a portion of the price was paid at the time, and the crop was then growing and susceptible of sale, yet there were additional things to be done on both sides before the title would become perfect or the delivery complete. The residue of the purchase money was to be paid on the part of the vendee; and the tobacco was to be harvested, properly cured and boxed, and delivered, on the part of the vendor. These were acts to be done on the part of the vendor, absolutely within his power to perform — acts to be done in the future — of the performance or non-performance of which he would have perfect knowledge, but of which the purchaser would be wholly or comparatively ignorant, even at the time of delivery, and in regard to which it was both natural and reasonable that he should desire to protect himself by the express covenant of the vendor.

The important question is, was there a warranty or express undertaking, on the part of the vendor, that these acts should be performed by him, and that the tobacco should be of a certain quality, and in a certain condition, at the future period of delivery; and was this contract broken or its execution waived. The averments in the complaint are, in effect, that there was such express warranty and undertaking, and such was the offer of proof. We cannot, therefore, assume that the evidence would have come short of it.

It is said, indeed, that the express warranty thus made is no more in effect than a warranty that the article was merchantable, and that the merchantable quality of the article is implied in every executory contract for the sale of personal property. If this were conceded, it would not obliterate the distinction between the effect of an express warranty and that of a mere legal presumption as to the condition or description of the article. The legal presumption being that the parties intended a sale of an article of a merchantable character, the purchaser would not be bound to accept any other; but if he chose, deliberately, to accept an inferior article as a substantial compliance with the contract, or as satisfactory to him, such acceptance would be binding upon him, and would be regarded in law as a waiver of strict performance. Not so, however, with an express warranty. This is an express undertaking that the article sold possesses certain qualities or characteristics, and this undertaking must be made good. It is something more than a mere description of the article — it is a guaranty of what shall be its future condition at the time of delivery. It is something independent of, and not indispensable to, the mere act of sale and delivery, and is not merged in the latter. It is an express undertaking that the property sold shall have certain qualities and conditions; and the design of the parties, and the object of the agreement, is that the purchaser may by action enforce a compliance with such an agreement or obtain damages for its violation. It may be that for perfectly patent defects, obvious to the senses — as in the case of warranty on the sale of a horse — the warranty would not cover them, upon the ground that where there is opportunity for examination, especially prior to the completion of the contract of sale manifest and conspicuous defects would not be regarded as within the protection of the agreement, upon the ground that they cannot be presumed to have been intended by the parties to have been embraced within its spirit and operation. I think, also, the case is stronger for the plaintiff in that it is an agreement by the defendant that he will himself perform certain acts in regard to the property, making it more valuable, on which the plaintiff has a right to rely, and for the performance of which he may well be supposed to have reposed implicit confidence in the promise of the defendant.

It is said, also, that when goods of a certain quality are ordered, and when offered for delivery they are not of such quality, they must then be rejected or the purchaser will be remediless. This, as a general proposition, is correct, where there has been an opportunity for examination; but it is upon the ground that it is rather the execution of an order than the making of an independent contract with mutual stipulations and obligations; that the articles when thus tendered are tendered as a compliance with the order, and as being of the quality ordered, and an acceptance of them without qualification or objection is a presumed assent on the part of the purchaser that they are of the quality ordered or declared; that if they were otherwise, the party having an opportunity for inspection would not have accepted them, and by his silence or non-objection implied his concurrence with the implied representation of his agent or the vendor that they were of the quality ordered. In such cases, the order for and the tender of the goods, taken together, amount to a description of them merely — of the truth of which each party must satisfy himself at the time of delivery and acceptance, and not to a positive and express engagement, on the part of the seller, that they do and shall possess the required qualities.

The rights and remedies heretofore alluded to, as incident to and connected with an express warranty, apply equally, so far as I can discover, according to the course of adjudication or the reason of the thing to executed and executory contracts. They arise out of the fact that the warranty is a distinct and independent thing from the mere contract of sale — is not a necessary accompaniment of the latter, nor essential to its validity or existence, and was designed by the parties to confer distinct and independent rights. It is not, therefore, to be confounded with the contract of sale, nor with the act of delivery; nor is it, nor was it intended to be, merged in either. Its very object was to survive the act of delivery and to be independent of it, and to confer rights which might be subsequently enforced or established. Its essence consisted, not in a mere description of qualities existing in or attached to the article sold, the presence of which was a condition precedent to the obligation to accept, which condition was waived by an unqualified act of acceptance, but in the personal responsibility of the vendor for the truth of his undertakings, which was designed to be equivalent in force and duration to other engagements of a like description — to outlive the mere act of acceptance or passing of the title, and the breach of which would not only furnish just occasion for a refusal to accept, but a cause of action for a breach of contract if the purchaser chose to receive the article sold, and rely on the personal engagement of the vendor.

There was, therefore, no necessity for a refusal to accept the tobacco when delivered or tendered, for two reasons; first, because it was probably impossible immediately to determine its condition, and second, because the parties had contracted for an independent remedy, notwithstanding the act of acceptance. Mere receipt or acceptance of articles purchased, though not answering the conditions of the contract, never destroys the obligations of an express warranty. All contracts of sale with warranty contain two express and independent stipulations: 1st. An agreement for the transfer of the title and ownership from the vendor to the vendee. 2d. An agreement that the article sold has certain qualities and conditions. These engagements are distinct and independent, and are not to be confounded. The one may be satisfied by the absolute delivery to the purchaser of the article sold. The other may, notwithstanding such delivery, be wholly unperformed. I am not aware of a single adjudicated case where the contract of warranty is held to have been merged in the act of delivery or acceptance. In some instances the act of acceptance may possibly be evidence for the consideration of the jury on the question of performance of the warranty, or rather of the interpretation of the contract. Thus, an acceptance of a horse warranted sound, who has certain defects, may, perhaps, if the defects are slight, be evidence that the parties did not regard them as amounting to unsoundness, or, if plainly visible and palpable, as not being intended to be warranted against, upon the ground that the parties could not have designed them to be covered by the warranty. Beyond this, I can not conceive that the act of acceptance can have any effect upon the contract of warranty.

Nor was the purchaser bound to return the goods or notify the vendor of the defects, for: 1st. The vendor is presumed to know them because he had the opportunity for examination before delivery, and in the case at bar must inevitably have known them. 2d. It is doubtful whether there is any right to return the goods, in any case, except where the right is specially reserved in the contract, except in the case of fraud which nullifies the contract itself. ( Voorhees v. Earl, 2 Hill, 288; Cary v. Gruman, 4 Hill, 625; Muller v. Eno, 4 Kernan, 601.) 3d. The very object of the warranty is to confer a right of action for its breach, and not to compel the parties to perform an act, to wit: the return of the goods, or a notification of defects, not stipulated in the contract. (See Beirne v. Dord, 1 Selden, 99.)

I think these propositions are substantially maintained in the case of Muller v. Eno ( 14 N.Y. 597), decided in this court, and do not require farther illustration.

These considerations seem to me conclusive as to the plaintiff's right to recover.

1. There was a contract for a present sale of the tobacco then growing and owned by the defendant, at a specified price, a part of which was paid at the time. It may be that the title did not then pass, for there were three acts to be done on the part of the defendant, but the defendant could not lawfully sell to another. The tobacco having thus become equitably the plaintiff's property, he had a right to receive it and rely on the covenant of warranty, if it did not answer the representations made of its quality and condition, or if the defendant did not perform upon it the labor which he had contracted to do.

2. There was an express warranty of its future qualities and condition. Work was to be done upon it by the defendant. It was to be properly harvested and properly cured and properly boxed. It was not to be wet, sweaty, or rotten; it was not to be deteriorated nor to shrink in quantity. All this was under the control of the defendant, and was dependent upon his future acts. He was obliged to perform the operation in a workman-like manner. He did not do so, and for this an action lay against him.

3. Notwithstanding the contract was executory and the title did not pass, an action lay against the defendant. The contract of warranty was independent of and not an essential constituent element of the contract of sale. They were separate and independent, and both could stand. The contract of sale was performed by a delivery of the property. The payment of the price was a performance on the part of the purchaser. But the contract of warranty remained open, and its performance or violation depended upon the condition and qualities of the property. The enforcement of this contract need not be made instanter. It was at the option of the party aggrieved to enforce it when he thought proper, within the period covered by the statute of limitations. It was the design of the parties to allow this part of the contract to survive the act of delivery of the article sold, and to authorise an action for the breach of the covenant, notwithstanding the delivery of the property.

In any reasonable view which can be taken of this contract as alleged, I think the plaintiffs had a good cause of action, and that the judgment should be reversed and a new trial granted, with costs to abide the event.

MULLIN, J., concurred with HOGEBOOM, J. All the other judges being for affirmance, judgment affirmed.