Hampton Guano Co. v. Hill Live-Stock Co.

84 S.E. 774, 168 N.C. 442, 1915 N.C. LEXIS 80

• Court: Supreme Court of North Carolina
• Decided: March 24, 1915
• Status: Published

Opinion

Walker, J.,

after stating the case: When a person buys an article of personal property, he can require an express warranty as to its quality, or he may rely upon the warranty which the law implies in certain sales; but it has been well said that, “when he takes an express warranty, it will exclude an implied warranty on the same or a closely related subject. Thus an express warranty of quality will exclude an implied warranty of fitness for .the purpose intended; but an express warranty on One subject does not exclude an implied warranty on an entirely different subject,” an illustration of the latter being,'that an express warranty of title will not exclude an implied warranty of soundness or merchantability. 35 Cyc., 392. It was held in the early case of Lanier v. Auld, 5 N. C., 138, “that the law will not imply what is not expressed, where there is a formal contract (Evans’ Essay, 32; 1 Fonbl., 364; 6 Term, 606; Doug., 654), and an express warranty as to soundness and age ex- eludes any implied warranty as to other qualities.” What was said by Justice Brown in Piano Co. v. Kennedy, 152 N. C., 196, is very pertinent here: “We have recognized the principle that there can be no implied warranty of quality in the sale of personal property where there is an express warranty, and that where a party sets up and relies upon a written warranty he is bound by its terms and must comply with them (30 A. and E., p. 199; Main v. Griffin, 141 N. C., 43), and 'the further principle, applied by us in that case, that a failure by the purchaser to comply with the conditions of the warranty is fatal to a recovery for breach of the warranty in an action on it, or where, as in this case, damages for the breach are pleaded as a counterclaim in an action by the seller for the purchase money.” “There are numerous well considered eases that an express warranty of quality will exclude an implied warranty that the articles sold were merchantable or fit for their intended use.” DeWitt v. Berry, 134 U. S., 306. See, also, Main v. Griffin, 141 N. C., 43; Robinson v. Huffstetler, 165 N. C., 459; Lumber Co. v. Machine Co., 72 S. E., 40. It has been held that an implied warranty cannot be set up, even under a code provision, where the parties, by their contract, have expressly agreed upon a different warranty, whether it be more or less extensive or limited. Jackson v. Langston, 61 Ga., 392; Farmer v. Andrews, 69 Ala., 96, and also that if a specific kind of fertilizer, or other article of a certain description or name, is ordered, there is no implied warranty of fitness, but only one that it is the kind designated. 35 Cyc., 409; Raisin v. Conley, 58 Md., 59; Ober v. Blalock, 40 S. C., 31; Mason v. Chappell, 15 Gratt. (Va.), 572; Walker v. Pou, 57 Md., 155; Wilcox v. Owens, 64 Ga., 601. A party who relies upon a written contract of warranty as to quality or description of the property he has purchased is bound by the terms of the warranty. Machine Co. v. McKay, 161 N. C., 586. He is not only held to the terms of the contract into which he has deliberately entered, but he is not permitted to contradict or vary its terms by parol evidence, as “the written word must abide” and be considered as the only standard by which to measure the obligations of the respective parties to the agreement, in the absence of fraud or mistake, or other equitable element. 35 Cyc., 379. There are numerous cases decided by this Court illustrative of this elementary rule in the law as to written contracts. Moffitt v. Maness, 102 N. C., 457; Cobb v. Clegg, 137 N. C., 153; Basnight v. Jobbing Co., 148 N. C., 356; Walker v. Venters, 148 N. C., 389; Medicine Co. v. Mizzell, ibid., 384; Walker v. Cooper, 150 N. C., 128; Woodson v. Beck, 151 N. C., 144; Machinery Co. v. McClamrock, 152 N. C., 405, and especially Fertilizer Works v. McLawhorn, 158 N. C., 275. There are authorities which hold that there is no implied warranty of quality in the sale of goods, but some of these are reviewed by this Court in the late case of Ashford v. Shrader, 167 N. C., 45, and a warranty was said to be implied in certain excepted instances; but they all relate to contracts which do not contain any express warranty of quality. The subject is fully considered in that case, and further comment, therefore, is not required.

Let us now examine the facts of this case in the light of the foregoing principles. The main inquiry is as to the nature and scope of the special warranty and the rights and obligations of the parties springing therefrom. The warranty is made up of three elements: (1) That the fertilizer shall contain the ingredients in a specified proportion, as stated in the analysis printed on each bag. (2) That the seller should not be held responsible for results in its actual use. (3) That the whole contract is therein expressed, and all other terms are unauthorized. No language could be more explicit and no contractual obligation and right more definitely fixed. The warranty was drawn for the very purpose of preventing the recovery of such damages as are, in their nature, very speculative, if not imaginary, and out of all proportion to the amount of money or price received by the seller for the fertilizer. If fertilizer companies can be mulcted in damages for the failure of the crop of every farmer who may buy from them, they would very soon be driven into insolvency or be compelled to withdraw from the State, as the aggregate damages, if the supposed doctrine be carried to its logical conclusion, would be ruinous, and the farmers in the end would suffer incalculable harm. In view, then, of the probable results flowing from such a construction of the contract, we should hesitate very long before adopting it, with its disastrous consequences to both parties, which we cannot suppose they contemplated. The court, therefore, erred in charging the jury that if the fertilizer did not contain the ingredients, and in the quantities, as warranted, or if it was not suited to the purpose for which it was sold, they should answer the third issue in the negative, for the special warranty and the provisions against any liability for results excluded any implied warranty as to its suitableness for use in fertilizing crops. In Allen v. Young, 62 Ga., 617, where the contract and statute of the State were much like ours, it was said: “The notes given to the company for the price of the fertilizer having upon their face a stipulation that the fertilizer was purchased ‘entirely upon the basis of the analytical standard guaranteed by the company, and that the buyer will in no event hold it responsible beyond such standard, nor in any wise for practical results,’ the precise right of the purchaser was to receive an article containing the chemical and fertilizing properties enumerated in the guaranty, and these in the proportions and up to the degree of strength held out as a standard.” The same Court, in that and other cases, discusses the competency and probative force of evidence as to the effect of the particular fertilizer, when used upon land, in producing crops, and strongly intimates that such evidence is not admissible where the contract contains a provision that the seller is not to be liable for results,'and that if it is competent, it should be received with caution and in connection with more direct evidence that the fertilizer did not contain the ingredients guaranteed by the analysis, or as much of them as the analysis and certificate required. Hamlin v. Rogers, 78 Ga., 631; Scott v. McDonald, 83 Ga., 28; Jones v. Cordele Guano Co., 94 Ga., 14. The Court said in Hamlin v. Rogers, supra: “All the seller is required by law to do is to guarantee that the fertilizer contains the ingredients it is represented to contain. He may or may not guarantee its effect upon crops. Parties have a right to make their own contracts. Under the limited guaranty contained in the contract and that imposed by law, the defendant could have shown that the fertilizer did not contain the ingredients indicated by the analysis made by the State chemist.” Our statute, Revisal, secs. 3445 to 3957, provides for an analysis by the Department of Agriculture of all fertilizers sold in the State, and makes the certificate of the State chemist prima facie evidence of their contents. We are of the opinion that, notwithstanding the stipulation as to nonliability for results, evidence of the effect of any particular fertilizer upon crops is competent, under certain conditions, to prove that it did not contain the^guaranteed ingredients or in the proportion specified in the label put on the bag. The Court, in J ones v. Cordele Guano Co., supra, referring to a contract similar to the one in question, said: “While it is. true that the note sued on in the present ease contained an express stipulation that the makers purchased on their own judgment and waived any guarantee as to the effects of the fertilizer on their crops, we think they were nevertheless entitled to show that their crops derived no benefit from the use of the fertilizer in question. It was competent for them to do. this, not for the purpose of repudiating or varying the terms of their written contract, or of holding the guano company to a guarantee it had expressly declined to make, but to show that in point of fact the guano did not come up to the guaranteed analysis branded on the sacks, as required by law. In other words, it was the right of the defendants to show that this guano did not contain the chemical ingredients set forth in that analysis. If the guano failed to produce any beneficial effect on the crops under favorable auspices, this fact would at least tend to show it did not contain the fertilizing elements in the proportions specified in the analysis branded on the sacks.” But when there is an offer of such evidence, the kind of soil, manner of cultivation, accidents of season, and other pertinent facts should be first shown, so that a foundation may be laid for admitting testimony of actual production, with a view of disparaging, the fertilizers, and the jury should be carefully instructed that they can consider the evidence only for the purpose of showing the absence of the guaranteed ingredients or tbe 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. Mfg. Co. v. Oil Co., 150 N. C., 150, citing Parker v. Fenwick, 138 N. C., 209; Marsh v. McPherson, 105 U. S., 709, and Mfg. Co. v. Gray, 129 N. C., 438. The principle is thus stated in 35 Cyc., p. 468: “The general rule as to the measure of damages on a breach of warranty is that the buyer is entitled to recover the difference between the actual value of the goods and what the value' would have been if the goods had been as warranted, and in the application of the rule it is held that the fact that the goods were -actually worth the price which was paid for them is immaterial. The difference between the purchase price and the actual value cannot be regarded as the measure of damages, as in such case the purchaser-recovers too small a sum if he has made a bad bargain and paid m.ore than the goods were worth, and too great a sum if he has made a good bargain, paying less than the goods were worth. It is true that in some cases the rule has been stated that the measure of damages is the difference between the purchase price and the actual value of - the goods, but in nearly all of these eases the theory undoubtedly is that, in accordance with the general rule, if there is no other evidence of the. actual value of the goods, the purchase price will be regarded as such value.” The elementary rule as above stated is the best rule, leaving the price to be considered, when necessary, in the final adjustment between the parties to ascertain what is due by one to the other on account of the transaction, when there has been a breach of the warranty. 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, and the charge in this respect was erroneous. This Court said in Fertilizer Works v. McLawhorn, 158 N. C., 274, 276: “The deficiency in value was allowed him in abatement of price. The claim of consequential damages resulting in the alleged shortage in his crop was properly disallowed by the court. Carson v. Bunting, 154 N. C., 532, where the Court holds that the measure of damages is in the abatement of the price, as is also provided by Revisal, 3949.”

It must not be understood that we are dealing with a case where a farmer is suing his merchant for a breach of contract in the sale of fer tilizers, alleging that they were deficient in quality and thereby be has sustained a loss or diminution of his crop in the cultivation of which it was used. The sale in such a case may have been made upon an express or an implied warranty as to the quality of the fertilizer, and does not fall within the principles we have discussed. With reference to such a case, Justice Hoke said in Tomlinson v. Morgan, 166 N. C., 551: “The Court does not understand that plaintiff seriously contends that a warranty has not been established by the verdict, but it is chiefly urged for error that there is no proper evidence tending to show a breach of the warranty, i. e., that the guano sold was off-grade, and, second, that under our decisions a loss claimed in diminution of the crop is too remote and uneertain.to be made the basis for-an award of d'amages. Undoubtedly, a counterclaim of this character presents such an inviting field for litigation and is so liable to abuse that it should not be entertained unless it is clearly established that there has been a definite breach of the warranty and satisfactory evidence is offered that the loss claimed is directly • attributable to the breach, and the amount can he ascertained with a reasonable degree of certainty. While the court should always be careful to see that these rules are not transgressed to the injury of a litigant, when the facts in evidence clearly meet the requirements, authority in this State is to the effect that the loss suffered in diminution of a given crop, when it is clearly attributable to a definite breach of warranty as to the quality of a fertilizer, and is within the contemplation of the parties and capable of being ascertained with a reasonable degree of certainty, may be made the basis for an award of damages,” citing Herring v. Armwood, 130 N. C., 177; Spencer v. Hamilton, 113 N. C., 49.

The Tomlinson case, it has been suggested,- is somewhat in conflict with our views, hut we think it clearly is not, but entirely consistent therewith. In that case it appeared that there was an express warranty “that the fertilizer was suitable for tobacco,” which meant, if properly construed, that if it was used in the cultivation of tobacco it would produce good results and increase the yield. Besides, there was no limited warranty, as in our case, and no restriction of liability for resiüts, and it apj)eared, that a member of the plaintiff’s firm had said that he had seen as much as he had wanted to see, and he thought there must have been a mistake made in the factory by putting in acid instead of phosphate. These facts show a radical difference between the two cases. If the merchant who buys from the fertilizer company chooses to sell to the farmer with a warranty different from that which has been given to him, and broader in its scope, he may do so, hut he cannot thereby increase the liability of the fertilizer company upon its warranty to him. That will remain as fixed by the terms of the contract, and will not be altered by any future conduct or action of the merchant in his dealings with others.

Tbe effect of the judge’s instruction upon the third issue, which, by the way, is not in proper form, was to add a term to the contract not inserted therein by the parties, and to charge the defendant upon a warranty, for the performance of which he was not bound and for any breach of which he was, therefore, not liable.

It has been suggested that the Court, in Jones v. Cordele Guano Co., supra, decided that evidence as to the use of the fertilizer upon lands and its effect upon crops was admissible only as corroborative or discrediting testimony, after there had been evidence of any analysis of the fertilizer, but we think it is substantive evidence, and for the reason given by the Court in that case for admitting it as corroborative. It has been held to be substantive evidence in Tomlinson v. Morgan, 166 N. C., 557. Cervantes wisely said, in his Don Quixote, that “the proof of the pudding is the eating,” and so by analogy the proof of the fertilizer is the using of it. It is practical instead of scientific proof, but the evidence should be admitted cautiously and with proper and full safeguards, so as, by eliminating the speculative elements, to show clearly the causal connection between the fertilizer used and the loss or diminution of the crop. Unless the foundation for such proof is well laid, it lacks in probative force, as it has not been removed from the realm of speculation and is only conjectural and, of course, unreliable.

We direct that there must be a new trial because of the errors indicated.

New trial'.