American Hardwood Lumber Co. v. Milliken-James Hardwood Lumber Co.

216 S.W. 23, 140 Ark. 544, 1919 Ark. LEXIS 173

Opinion

HART, J.,

(after stating the facts). (1) It is earnestly. insisted by counsel for appellant that the court should have given a peremptory instruction for it. The court submitted to the jury under proper instructions the question of whether or not the lumber shipped came up to the grade specified in the contract and the jury decided that question in favor of appellee. Counsel for appellant concede that there was sufficient testimony to support the verdict in this respect, but claim that appellant was entitled to a directed verdict because the correspondence between the parties resulted in a contract rescinding the original agreement under which the lumber was sold. They rely on the letter written by appellee to appellant on June 10, 1918. In that letter appellee stated that it was surprised at appellant unloading the car if it looked bad to it. It further stated that appellee had the lumber sold and that if appellant did not want the car, to rebill it. On the same day appellee sent to appellant a telegram as follows:

“Without waiving any of our rights, if you do not want car of lumber will ask that you reload same and consign to J. W. Black Lumber Company, Minneapolis, Minn. ’ ’

This telegram must be read in connection with the letter of the same date. When this is done, the jury might have found that the appellee did not offer to rescind the contract unless appellant reloaded the lumber and rebilled it as directed and that appellant did not court properly submitted to the jury the question of comply with the offer so made by appellee. Hence the court properly submitted to the jury the question whether or not there was a rescission of the contract and there was testimony sufficient to support the finding of the jury that there was no rescission of the contract.

(2-3) It is next insisted that the court erred in giving instruction No. 3 for appellee and in modifying instruction No. 4 asked by appellant. These assignments of error relate to the same thing and may be considered together.

Instruction No. 3 reads as follows:

“You are instructed that if you find from the evidence that the defendant when it first opened the car saw and knew that it did not come up to the contract that defendant had no right to unload the car, and if it did unload the car thereafter it amounted to an acceptance, and you will find for the plaintiff.”

Instruction No. 4 as modified reads as follows:

“The court further instructs you that when the car of lumber reached the defendant, the defendant had the right to inspect same and to unload the car, and the court instructs you that by paying the freight on the car and unloading same and inspecting same the defendant will not be held to have accepted the car, unless you further find that defendant, before unloading the car, knew that the lumber was not of the kind and quality provided for in the contract.”

The modification consisted in adding the qualification at the end of the instruction so as to make it conform to instruction No. 3. As a general rule in case of an ex-ecutory contract of sale the buyer is entitled to a fair opportunity to inspect or to examine the goods tendered, to see if they conform to the contract, and if they do not do so, may reject them. Deutsch v. Dunham, 72 Ark. 141. In the case at bar the contract was made by telegrams and letters. On the 21st of May, 1918, appellee wrote to appellant that the car was being loaded for shipment and stated that appellee would be glad to have appellant look it over carefully when it was unloaded in its yard. This of itself gave appellant the right to inspect the lumber in the car and to unload it for the purpose of inspection if necessary to do so. Appellee had already inspected the lumber as it was loaded in the car. The inspection at appellant’s yards was therefore entirely for the benefit of appellant and it might accept the lumber with or without inspection or by maldng such inspection as it saw fit to make. In its letter of June 6,1918, appellant stated to appellee that when the -car was first opened its foreman reported back that the lumber was “kindling wood” and not even worth the freight. If appellant knew by the examination of the lumber in the ear that it did not conform to the contract, it was in a position to decide whether or not it would accept the lumber and the court properly instructed the jury that if it saw and knew that the lumber did not come up to the contract, it had no right’to unload the car, and if it did unload it, this amounted to an acceptance. Knowledge that the lumber did not conform to the contract was all that was necessary to enable appellant to exercise its right to refuse or accept the shipment on that account.

It is next insisted that instruction No. 3 is erroneous because the letter of May 21st, from appellant to appellee says, “In regard to the car now being loaded for you, we should be glad to have you look over it carefully when it is unloaded in your yards. ’ ’ As above indicated, this letter was a part of the contract between the parties and gave appellant the right to inspect the car of lumber before accepting it and to unload it for that purpose if necessary. However, as above stated, the appellant might accept the lumber without inspecting it at all, or after giving it such an inspection as it deemed necessary. If it knew after its foreman had inspected the lumber in the car that it did not conform to the contract it was in possession of all facts necessary for it to determine whether or not it would accept the car of lumber and the court was right in instructing the jury that if appellant, when it first opened the car saw and knew that the lumber did not come up to the contract, it had no right to unload the car and if it did unload the car thereafter, it amounted to an acceptance.

It is also suggested that appellant had a right to unload the -car for the purpose of inspecting the lumber because an inspector for appellee, Dave Hughes, testified that a man of his experience could not step in a car of loaded lumber and grade it without examining every piece of it, because you can not tell what is in a board by looking at a load of it; that it might be good at the end and rotten three feet from the end. It was not necessary for appellant to grade the lumber if it already knew that the lumber did not come up to specifications and that it was not going to accept it on that account. The lumber was in a box car and an examination of the lumber in the car showed the condition of the lumber on the top and from the bottom to the top on the side of the car when the doors were open. So while each piece of- lumber could not be graded without' unloading it, it was possible that the foreman of the appellant could tell by examining the lumber in the car that it did not conform to the contract. Appellant admitted in its letter to appellee that it knew the lumber did not conform to the contract before it unloaded the same, and this, together with the attendant circumstances, constituted evidence upon which to predicate the instruction. Appellant might have accepted the lumber without asserting its right of inspection, and have relied on its legal right to ask for a reduction of the price in case the lumber was of inferior quality. That is to say, it might have recovered such damages in a cross-action if it had already paid the purchase price, or it might have set such damages up by way of recoupment if suit was brought by appellee for the price of the lumber.

The court at the request of appellant gave instruction No. 2, which is as follows:

“The court instructs you that the defendant had the right'to unload the car to inspect it, and if you find that a material portion of the lumber was not in accordance with the order, the defendant would have the right to hold the lumber until the freight and unloading charges were paid the defendant.”

It is claimed that the instruction is inconsistent with instructions Nos. 3 and 4, above set out and'considered. “We do not think so. It is well settled in this State that the court can not be required to cover every phase of the case in one instruction. In instruction No. 2 the court was submitting to the jury appellant’s theory of the case. Under the contract appellant had the right to inspect the lumber before accepting it and to unload it for that purpose. Then if appellant found that the lumber did not come up to grade it would have the right to reject it, and it need not have returned the lumber, but might have held it until the freight advanced by it and the cost of unloading were paid.

(4) On the other hand, the right of inspection being to enable appellant to ascertain if the lumber conformed to the contract before accepting it, if it knew by examining the lumber while in the car that it was so defective that it did not conform to the contract, appellant was then put to its election and if it unloaded the lumber such act amounted to an acceptance of it. If appellant accepted the lumber it could not hold it for the freight and cost of unloading, but on the other hand it was its duty to have paid the purchase price. Of course, as explained above, it might have accepted the lumber, although of an inferior grade and have set off the damages in a suit for the purchase price. No such issue was made in this case. It was the claim of appellee that the lumber came up to grade and the jury was expressly told that appellee was not entitled to recover anything unless the lumber was of the kind and grade specified in the contract.

We find no prejudicial error in the record, and the judgment will be affirmed.