In Zabriskie v. C.V.R.R. Co. (131 N.Y. 72) it was said: "In cases of the latter character (executory contracts for the manufacture and sale or delivery of goods of a particular description) where the quality of goods is capable of discovery upon inspection, and where, after full opportunity for such inspection, the goods are accepted and no warranty attends the sale, the vendee is precluded from recovering damages for any variation between the goods delivered and those described in the contract.Summary of this case from Ideal Wrench Co. v. Garvin Machine Co.
Argued December 2, 1891
Decided February 2, 1892
Hamilton Wallis for appellant.
Edward C. James for respondent.
After the argument of this case and consultation thereon, the judges concluded that the judgment should be affirmed, and Chief Judge RUGER was selected to write the opinion of the court. He entered upon that duty, and before he had fully completed his opinion he was stricken down with the disease which soon terminated in his death. He had written enough to justify the affirmance of the judgment, and we now adopt his opinion as the opinion of the court. That opinion and the able and elaborate opinions delivered by the referee and at the General Term fully answer the argument now made on behalf of the appellant, and it would be a useless task to write more. The opinion is as follows:
"RUGER, Ch. J. This action was brought by the plaintiff to recover the contract price of a certain quantity of coal sold and delivered by Robert Hare Powell Co. and their assignee, the Guarantee Trust and Safe Deposit Company, to the defendant after June, 1887, and which claim was assigned by the vendors to the plaintiff.
"This coal was furnished by the vendors to the defendant under a written contract made June 8, 1887, between Powell Co. and the defendant, whereby the said vendors agreed to sell and deliver to the defendant, during the year ending June 1, 1888, at Norwood, N.Y., 30,000 tons of `Powelton coal, of same quality and kind as furnished you during the past year,' at $3 per net ton.
"The same vendors had furnished the defendant a quantity of Powelton coal the previous year which had been approved as satisfactory by the defendant. Under the contract of 1887 Powell and Co. had, previous to August 29, 1887, delivered to the defendant on its contract, upwards of four thousand tons of coal, and on that day they assigned their contract to the Guarantee Trust and Safe Deposit Company, who continued delivering coal until they were stopped by the absolute refusal of the defendant to receive any more coal from them of the kind already delivered. The assignee of the contract had, up to this time, delivered about five hundred tons, leaving some twenty-five thousand tons yet undelivered to complete the performance of the contract.
"Immediately after the defendant had had an opportunity to test the first delivery of coal, and until it ceased altogether, it uniformly and constantly complained of the quality of the coal delivered to it, and objected that it did not correspond, either in quality or kind, with the coal delivered to the company in the year 1886. The defendant, however, was induced to continue to receive and to test the coal actually delivered by the representations and promises made by the plaintiff's assignors that the quality of the coal thereafter delivered should be improved, and that upon trial it would be found to work more satisfactorily. Various interviews took place between the agents of the defendant and the plaintiff's assignors, and several examinations were made by them after the coal was delivered and in possession of defendant, and the vendors uniformly promised to improve the quality of the coal delivered, and predicted that the future deliveries would, upon actual experiment, prove to conform to the quality of the coal described in the contract, and that compensation for the damages caused by the inferior quality of the coal already delivered, should be adjusted.
"It was found by the referee that practically all of the coal delivered under the contract was greatly inferior to that furnished in the year 1886. It is clearly inferable from the findings of the referee, as well as the evidence, that the great bulk of the coal was received by the defendant at the earnest solicitation of the vendors and for the purpose of testing its quality and determining whether the vendors would be able to make its quality conform to the obligations of their contract. It is also evident from the findings that this effort was an unqualified failure.
"It is contended by the plaintiff that there was no warranty of the quality of the coal sold, and that, by its acceptance, the defendant has precluded itself from claiming damages for a breach of contract.
"A satisfactory answer to this claim appears in the fact that it is not found or shown that the defects in the coal were visible on inspection; but, on the contrary, it negatively appears from the conduct of both the vendors and vendee that they were not discernable on inspection. A further answer to this point is found in the proposition that the evidence authorized the finding that there was a warranty as to the quality of the coal sold.
"The contract in this case calls for Powelton coal of the `same quality and kind as furnished' by the vendors to the defendant the preceding year. It calls for coal of a particular quality and kind, determinable by a standard which was equally well-known and understood, both by the vendors and the purchaser. While the term `Powelton coal' may be said to be a descriptive term, merely; when it is said that the coal was to be Powelton coal of the same quality and kind as that delivered in the previous year, it goes beyond mere words of description, and refers to the intrinsic value of the goods sold in language which cannot be misunderstood, and can be satisfied only by a consideration of its fitness to perform the work required of it in the defendant's business. That this was the theory of the vendors while the coal was being delivered, is quite evident from their request that it should not be prematurely judged by its appearance alone, but should be determined by positive trial and the results shown by actual use and experiment. It comes, therefore, with ill-grace from the vendors now to insist that the defects in the coal were so perceptible on inspection that the defendant should be barred by its acceptance, when they themselves had induced that acceptance only by the assurance that the working quality of the coal would show that the defects visible on inspection were apparent and not real.
"We are, however, of the opinion that, upon the evidence, the contract contained a warranty of quality which survived the acceptance of the goods. The principle is well established that, upon an executory sale of goods by sample, with warranty that the goods shall correspond with the sample, the vendee is not precluded from claiming and recovering damages for breach of warranty, although he has accepted the goods after an opportunity for inspection. ( Kent v. Friedman, 101 N.Y. 616; Brigg v. Hilton, 99 id. 517; Gurney v. Atlantic Great Western R. Co., 58 id. 358.)
"We are, also, of the opinion that the sale in question was, practically, a sale by sample. Although the standard selected for comparison was not present, or in existence, even, at the time of the sale, its qualities had been observed and demonstrated, and were capable of exact ascertainment by the evidence of those who had witnessed the results produced by the consumption of the coal. It was unnecessary for the purpose of effecting a comparison of the respective qualities of the two specimens of coal that they should be present and compared side by side, or tested at the same time. The capacity of coal for generating heat and steam determines its value, and it is only by the destruction of the subject that a standard can be created for comparison. The comparison does not depend upon considerations of external correspondence and appearance, and this was obviously the view which these parties took of the question while negotiating as to the continuance of the deliveries of coal under this contract.
"The standard selected for testing the quality of the goods sold was considered sufficiently definite and precise by the parties to the contract, and it does not appear that there was any difficulty in practice in applying it to the subject.
"A contract of sale which points out a known and ascertainable standard by which to judge the quality of goods sold, is, for all practical purposes, a sale by sample, and renders the vendor liable for damages upon a breach of warranty, although there has been an acceptance after opportunity to inspect the goods. The cases of Coplay Iron Co. v. Pope ( 108 N.Y. 232); Studer v. Bleistein (115 id. 316); Pierson v. Crooks (Id. 539), and other cases of like character are clearly distinguishable, inasmuch as one is a contract concerning a sale by sample and the others were executory contracts for the manufacture and sale or delivery of goods of a particular description. In cases of the latter character, where the quality of goods is capable of discovery upon inspection, and where, after full opportunity for such inspection, the goods are accepted and no warranty attends the sale, the vendee is precluded from recovering damages for any variation between the goods delivered and those described in the contract.
"It is also contended by the appellant that the defendant could not counter-claim the damages arising out of the inferior quality of the coal against the price of the coal delivered by Powell Co.'s assignee.
"There was no new contract made between the defendant and Powell Co.'s assignee, and the coal delivered by such assignee was evidently delivered in performance of Powell Co.'s contract. It was probably supposed by the assignee that through the performance of Powell Co.'s contract it might realize a larger sum from the assigned property than it otherwise could. It thus, without supposing any special arrangement necessary, continued supplying coal to the defendant. The coal, however, was of the same inferior quality as that previously delivered by Powell Co., and the defendant finally, after the delivery of an inconsiderable quantity by the assignee, refused absolutely to receive any more. The assignee, however, had an absolute right to perform Powell Co.'s contract, although under no legal obligation to do so. He chose to attempt its performance and the defendant had no power or right to prevent it. It, therefore, received all the coal delivered in performance of that contract, relying upon its contract for indemnity against loss on account of its inferior quality. While the defendant was under no legal obligation to receive inferior coal from the assignee, it yet had a right to receive it conditionally and apply it upon the obligations of the contract.
"It cannot be that either the assignee or the defendant had any other idea with reference to the delivery of coal by the assignee than to fulfill the contract which the assignee had secured by assignment from Powell Co."
The judgment should be affirmed, with costs.