American Fertilizing Co. v. Thomas

181 N.C. 274

• Court: Supreme Court of North Carolina
• Decided: April 27, 1921
• Status: Published

Opinion

"Walker, J.,

after stating the material facts: It will be observed that the contract provides that “The certificate of analysis by the State Chemist, or his oral evidence, shall be the best and only competent evidence of the contents of the goods, and shall be conclusive.” The certificate shows affirmatively that the contents of the goods are phosphoric acid 8.80, nitrogen 1.65, and potash 1.96, and that they do not contain borax. The parties have agreed that the analysis by the State Chemist should be the best and only competent evidence of the contents of the goods, and conclusive; and it would seem that the evidence which the defendant proposed to offer to show that the goods contained-borax or, in. other words, the contents of the goods were different from that shown by the analysis, was clearly incompetent.

A chemical analysis by a disinterested competent expert, such as the State Chemist, is the best method of ascertaining the contents of fertilizers, and infinitely better than the method proposed by the defendant. “Tbe best evidence is tbe analysis by tbe Agricultural Department,” said Clark, C. J., in Fertilizer Works v. McLawhorn, 158 N. C., 274. In Carter v. McGill, 168 N. C., 507, tbe Court said: “Tbe seller and tbe buyer of fertilizers can protect themselves by a proper warranty at tbe time of purchase if they see fit to do so. Tbe seller may restrict it, while tbe buyer may require that it be enlarged, according as their interest may dictate. Unless they do so, they must abide by tbe contract as made by them.” This was said in a case where tbe seller bad not protected himself, as in tbe case at bar.

When Carter v. McGill, supra, was before the Court on a rehearing, reported in 171 N. C., 775, the Court said: “It is proper, in this connection, to suggest that tbe plaintiff, and others in tbe fertilizer trade similarly situated, can protect themselves against too great a hazard in respect to tbe loss of crops by a provision in their contracts to tbe effect that they are not to be liable for any results from tbe use of tbe fertilizer, or for any loss of crops, as was done in tbe case of the contract which was tbe subject of tbe controversy between tHe parties in Guano Co. v. Livestock Co., 168 N. C., 442, where we held such a stipulation to be valid.”

Our attention has been called to a case recently decided in South Carolina, Germofert v. Cathcart, 88 S. E., 535, in which, upon careful examination, we find tbe Court construed a contract almost identical in language with tbe one which was under consideration in Guano Co. v. Livestock Co., 168 N. C., 442, and it held, as we did in tbe latter case, that tbe express warranty, and tbe restrictive clause therein as to non-liability for results, excluded tbe evidence as to failure of crops. See, also, Allen v. Young, 62 Ga., 617, which was cited for that position in Guano Co. v. Livestock Co., supra, at p. 448. In tbe Germofert case, supra, tbe Court said that “tbe defendant cannot be allowed to avail himself of a method of defense that be has agreed not to use.” And again, “tbe defendant bad agreed not to Told payee responsible for practical results of said fertilizer on crops.’ Tbe evidence and tbe charge responding to it was in direct violation of tbe agreement.” And so we said-substantially in Guano Co. v. Livestock Co., supra, tbe rule of damages having been fixed by tbe terms of tbe contract itself.

While cases must be decided according to tbe rules of law, as well stated by Justice Hoke in Tomlinson v. Morgan, 166 N. C., 557, tbe strict enforcement of tbe rule may in some cases bear harshly upon a litigant, and it might do so in this class of cases. It is therefore expedient and proper that tbe dealer should be allowed to shield himself against possible injustice by adequate provision in tbe contract of sale. If be acts in good faith, be should not be unfairly dealt with; and it is not unusual, as tbe cases will show, to insert such a clause in contracts of this kind. In Guano Co. v. Livestock Co., 168 N. C., 442, the contract provided that “the fertilizer is furnished with the guarantee of analysis printed on the sack, but not of results from its use,” and the Court held this was a valid stipulation and that the guano company could not be held liable for any results from the use of the fertilizer, and the jury could consider the evidence as to the effect of the fertilizer on the crops only for the purpose of showing the absence of the guaranteed ingredients or the represented quantities of each, and not at all for the purpose of assessing damages either directly or indirectly, because of any loss or diminution of the crops, as the measure of damages depends upon quite a different principle. The extent of the recovery must'be restricted to the difference, not necessarily between the price and the value of the article purchased, but to the difference between the article delivered under the contract of warranty and its value or market price if it had been such as it was warranted to be. The Court then said: “We have mentioned this subject for the purpose of showing that no part of the recovery, under this contract, should be assessed for the failure of crops, as there is an express stipulation that plaintiff should not be held liable for any results from the use of the fertilizer.” Guano Co. v. Livestock Co., supra, at pp. 450-1. This was said in a case where the stipulation was that the fertilizer company only guaranteed the analysis on the bags, and was not liable for results from use, but there was no stipulation, as in the case at bar, that the analysis should be the best, only, and conclusive evidence as to the contents of the goods. Nor was there a provision that when the goods were analyzed the State Chemist should determine the relative value of the guaranteed ingredients and those found on analysis, as in this case. The State Chemist did analyze the goods and found that those delivered exceeded in value' the guaranteed goods sol'd by $1.15 per ton.

The recent case of Fertilizer Works v. Aiken, 175 N. C., 398, seems to be decisive of this case. There the earlier cases are reviewed, and the Court held that where an express warranty guaranteeing a specified analysis, but not as to results on the crops, will protect the manufacturer of vendor from damages claimed for loss or diminution of crops, because the goods were not fitted for the purposes for which they were bought, this being a warranty ordinarily implied in such contracts, citing Carter v. McGill, 168 N. C., 507 (S. c., 171 N. C., 775); Guano Co. v. Livestock Co., 168 N. C., 443; Germofert v. Cathcart, 104 S. C., 125; Allen v. Young, 62 Ga., 617.

In the Aiken case, the fertilizer company sued for the fertilizers sold under a contract in- the following terms: “I hereby acknowledge I have received and used the above fertilizers, without any guarantee on the part of Armour Fertilizer Works or its agents as to results from its use, and which have been inspected, tagged and branded under and in accordance with the laws of this State; and I hereby waive all claims, damages, and penalties in case of deficiency, except claim for the actual commercial value of deficiency when, and only when, ascertained and determined by the State Chemist from samples taken in the presence of seller or seller’s authorized representative, from fertilizers for which this note is given.” The defendant alleged in his answer that the fertilizer was utterly worthless. In referring to the contract, this Court said: “In this contract it will be noted that the stipulations in protection of the vendor go much beyond those appearing in the case just referred to. (168 N. C., 443.) In its terms and purpose it is broad enough to exclude, and does exclude, any and all evidence as to the effect of the fertilizer on the crops, the agreement being as shown, that the purchaser waives all claims except those for the ‘commercial value of the deficiency’ from the stipulated standard, and this only when ascertained and determined by the State Chemist from samples taken from the fertilizers sold and in the presence of the seller or his authorized agent. We are of opinion that such a stipulation is in every way a reasonable one, well calculated to promote and insure fair and safe dealing with this important matter, and not only not opposed to any public policy prevailing with us, but the same is in accord with direct suggestion of this Court in Carter v. McGill, supra, and fully recognized and approved in our latest legislation on the subject, Laws 1917, ch. 143.”

The contract in this case is, in its terms, very similar to the one in the Aiken case. It provides, among other things: “If any claim shall be made for inferiority or deficient analysis, the certificate of analysis by the State Chemist shall be the best and only competent evidence of the contents of the goods, and shall be conclusive. If it shall appear from the said certificate that the goods do not come up to the guaranteed analysis, then the customer shall be entitled to receive the difference between the contract price and the actual value of the goods as shown by the analysis, which difference shall be ascertained by the State Chemist, and no other damage shall be recoverable for deficient analysis or inferiority.”

The Court, referring to the statute which had just Been passed, Laws 1917, ch. 143 (now C. S., 4690 to 4703, as amended in 1919, as to method of sampling), said: “The statute in question, repealing sections 3945 to 3956 of Revisal, inclusive, makes elaborate and minute provision with the view of insuring a correct analysis of these important commodities and in protection both of the manufacturer and vendor and of the purchaser and consumer; directs the employment of sufficient chemists and assistants; provides for an analysis at the instance of the purchaser, or by its own agents when necessary; provides further, that samples for the purpose shall be taken always in the presence of the agent, seller, or dealer, or some representative of the manufacturers, or if none of these can be present, or if they refuse to act, then in the presence of two disinterested witnesses, etc. That no suit for damages shall be brought for results in use except after chemical analysis showing deficiency of ingredients unless the dealer has been selling goods that are outlawed by the statute, or had offered for sale during the season dishonest or fraudulent goods. Having thus dealt very fully with the subject, recognizing as sound the principle of selecting the samples in the presence of the manufacturer or dealer, section 7 of the act concludes with the proviso that ‘nothing in said act shall impair the right of contract,’ showing the clear intent and purpose of the Legislature to allow to either party the privilege of making further stipulations in. reasonable protection of their interests and in accord with established principles of law. In Fertilizer Works v. McLawhorn, 158 N. C., 274, decided intimation is given that this is the true public policy and the correct interpretation .of our former statute on the subject, and undoubtedly it should prevail under the present law.” The Court further said, with reference to that language, that it was much stronger for the protection of the manufacturer than is that used in the case, of Guano C. v. Livestock Co., supra,, and we now say that the language of the contract in this case is, if anything, much more restrictive of the customer’s right to question the truth and accuracy of the statements contained in the official (and also in this case contractual) analysis of the State Chemist. The parties were free to enter into a contract with regard to .the matter, and to bind, and even conclude, themselves, and each one of them, by its stipulations. They made for themselves in their dealings a contractual rule of evidence, each being at arms-length with the other, there was nothing in it contrary to public policy, and therefore they must be held as subject to its terms, and their rights and obligations must be determined accordingly.

But the defendant contends that there was fraud, in that the plaintiff had mixed borax with the other ingredients of the fertilizer, and his crops were damaged thereby, as it was the opinion of his expert witness, who was a botanist, that borax was injurious to the crops, and their appearance indicated symptoms showing that they had been poisoned by borax. But the full and complete answer to all of this contention is that it has been shown by the analysis of the State Chemist (the party to whom the law, and the parties by their contract, referred the matter for a final decision, which should bind them “conclusively”) that there was no borax in the fertilizer. There is. no allegation or suggestion that there was any fraud practiced by the chemist in making Ms decision or award, or even by tbe plaintiff in preventing an bonest report, but, on tbe contrary, and as far as appears, tbe certificate of tbe analysis was fairly and honestly made, without even any bint at fraud or collusion. We do not say that fraud would not be sufficient to set aside a false certificate of tbe facts as to tbe value and potency of tbe fertilizer, but it has not been shown in this case, or attempted to be shown. Tbe defendant-himself requested tbe State Chemist to make tbe analysis, and, besides, be solemnly agreed that it should bind and conclude him. If be bad any doubt of its correctness, or even if be did not have such doubt, and wished to be assured of its correctness, be could then have retained another chemist of bis own choice and possessing greater skill and expertness, if be thus appraised him. In tbe absence of such a showing of fraud, tbe certificate must stand as conclusive evidence that tbe analysis is correct. It certainly cannot be impeached by tbe opinion even of an expert botanist that tbe appearance of tbe crop indicated symptoms of borax poisoning. If we should bold otherwise, it would impair very seriously tbe efficacy of tbe statute, and annul tbe contract of tbe parties, tbe execution of which is not assailed for fraud.

There is no sufficient evidence of fraud for tbe jury. Tbe most that can be said in behalf of defendant’s position is that tbe opinion of tbe botanist formed by a mere inspection of tbe crop as to tbe presence of borax in tbe fertilizer is too uncertain, conjectural, and unreliable to be received as proof, and can hardly be of tbe least probative force if admitted, when considered in tbe light of tbe statute and tbe stipulations of tbe parties, by which it has been excluded, as unfit for tbe purpose of establishing' tbe alleged fact of fraud. • It has been agreed, and tbe law so declares, that tbe only evidence shall be tbe certificate of tbe analysis as made by tbe State Chemist, and that shows “conclusively” that there was no borax in tbe formula by which tbe fertilizer was made. Tbe report of tbe analysis by tbe chemist, both impliedly and expressly, declares that there was no borax or other deleterious substance in tbe fertilizer- and, as we have said, there is nothing to impeach that finding for fraud or other reason, therefore tbe opinion of tbe botanist must be discarded. If we should admit such evidence, instead of tbe certificate being an absolute protection, for tbe manufacturer or dealer in fertilizers, as we have said it was intended to be by tbe law and tbe contract, it would be little more than a delusion and a snare.

In tbe case of Germofert Mfg. Co. v. Cathcart, 88 S. E. (S. C.), 535, tbe Court passes upon this very question in tbe following language:“There was no attempt made to analyze tbe fertilizer. Ample provision is made by law to secure a reliable analysis. Tbe defendant bad agreed that tbe test of value should be made by analysis. No man can look at a crop (dead or alive) and tell wbat per cent of ammonia or potash or other substance it contained. They did not pretend to do so. The defendant had agreed not to 'hold payees responsible for practical results of said fertilizer on crops.’ This evidence, and the charge responding to it, was in direct violation of the agreement. It cannot be said that test of value by analysis is an unlawful contract, because the statutes recognize a test by analysis. The defendant signed a perfectly lawful contract, with ample protection afforded by law. The defendant cannot refuse to adopt the protection approved by law and offered by his contract and be allowed to avail himself of a method of defense that he has agreed not to use: Some substances may kill because they are true to analysis.” There was a dissenting opinion in the case, but we most respectfully think that it completely missed the real question in that case, and is based entirely upon a misconception of the point involved. The majority opinion stated, the point and the pertinent principle correctly, placing the decision upon the clause discharging the seller from all responsibility for “results upon the crops.”

We must hold, therefore, that there is no reason shown why the judgment of the Superior Court should be disturbed.

No error.