International Agricultural Corp. v. Stadler

212 F. 378, 129 C.C.A. 54, 1914 U.S. App. LEXIS 2087
Court of Appeals for the Sixth Circuit·Decided April 7, 1914·No. No. 2438·Published·Cited by 7 cases

Opinion

DENISON, Circuit Judge

(after stating the facts as above). [1-3] 1. This contract was not the ordinary contract of warranty, a breach of which in some jurisdictions does, and in other jurisdictions does-1 not, require prompt notice from the purchaser in order to preserve his right of complaint. It is true the contract incidentally refers to its “guaranty,” but the contract was informally drawn by brokers, and its true character cannot be determined by the casual use of a term; indeed “guaranty” is not always synonymous with “warranty,” nor is-it inapt in this situation. We think the contract plainly contemplates that the exact proportions of the tankage may not always be the same, that the percentages may vary from a specified standard, and that, in such case, the purchaser has no right of rescission-, but should receive-the tankage and claim the contract deduction.. Of course, we do not mean that the discrepancy might not be so extreme as to render the material unsuitable for its intended use, .and so justify rescission; but that is not the condition foreseen and covered by the words chosen. It is now the argument of the buyer’s counsel that the contract should, be characterized as one for the purchase of units of ammonia and bone phosphate. This is a proper characterization, with two exceptions:. First. Other material of value may have been contained in the tank-age; as to that, the present record is not clear. Second. Instead of being, on its face and primarily, a contract for the purchase of these units, it was primarily a contract for the purchase of tons of tankage, and only at the option of the buyer could it be transformed into one for units of ammonia and phosphate. The material was to be shipped as tankage, invoiced as tankage, and paid for as tankage. The analysis which was to resolve the tankage into its units of value was not certain to occur, but was contingent upon the exercise of the buyer’s option that there should be an analysis. Whether the words “buyer’s. option” refer to the analysis or to the alternative chemists is immaterial because the phrase “analysis, if any,” of itself sufficiently imports that there should be one only if the buyer wished, for he was the sole party who could possibly be benefited thereby. When we thus construe the contract as one which did not automatically apply the stated test and measurement before fixing a final purchase price,, but which rather adopted a quantity measurement as the price criterion which should be followed until and unless one of the parties demanded the alternative method, it necessarily follows that the contract right to this option, which right carried no fixed time limit, must be exercised within a reasonable time. The determinative question, therefore, is whether the buyer, within a reasonable time, exercised this contract option.

[4] 2. It is said that the question of reasonable time is, when the facts are undisputed, a question of law, and language to that effect is cited from Supreme Court opinions. Paine v. Central R. R. Co., 118 U. S. 152, 160, 6 Sup. Ct. 1019, 30 L. Ed. 193; Earnshaw v. U. S., 146 U. S. 60, 67, 13 Sup. Ct. 14, 36 L. Ed. 887. The statement is entirely accurate, if by “facts” we mean ultimate facts; but we think it inaccurate, if applied to evidential or probative facts from-which reasonable men may draw differing inferences; and the very [382] question as to how long a man may reasonably wait must often be one upon which mincjs may fairly differ. As applied to a situation of the general character here involved, there must be a minimum, delay within which the court can clearly say was, as matter of law, not unreasonable, and there must be a maximum, delay beyond which becomes unreasonable as matter of law; but between these limits, there is a field where the unreasonableness of the delay is either a question of fact or a mixed question of law and fact, so that its determination falls within the province of the jury. We take this statement of the rule to be a proper summary of the authorities (Long Bell Co. v. Stump [C. C. A. 8] 86 Fed. 574, 30 C. C. A. 260; Druse v. Wheeler, 26 Mich. 189, 200; note V, p. 341, 29 L. R. A., [N. S.]; note, p. 142, 4 L. R. A. [N. S.]); and for a discussion of the difference between ultimate facts and evidential facts see Kentucky Co. v. Hamilton (C. C. A. 6) 63 Fed. 93, 97, 11 C. C. A. 42.

[5] 3. Upon the record now presented, we can safely say that the contract did not require analysis before paying the draft. Such inference cannot be drawn from the face of the contract, nor from the construction which the parties, in their course of business, put upon the contract, according to the pleadings and the offered proofs. The normal inferences are that a sight draft is to be paid on presentation, and that a draft and bill of lading sent by mail would reach Wilkes-barre and be presented and paid at least as soon as samples would reach Baltimore, and before samples sent to Baltimore could be analyzed and the results returned to Wilkesbarre. The second recited inference might not be safe, if the purchaser’s only protection had been by rejection, but the right to reclaim for the deficiency was expressly preserved, and this right may well apply to a subsequent reclamation rather than to a mere reduction from the payment to be made for the current shipment.

Further, the careful provision that the buyer should not get possession except by paying the full invoice price, contrasted with the affirmative promise of a compensatory allowance, is persuasively inconsistent with the idea that paying the draft waived any reclamation. We do not think the parties intended that a draft should go dishonored and a car accumulate demurrage for days or weeks while they negotiated about a claimed deficiency. If it should appear that, owing to the nature of the material or some custom of trade familiar to the parties, rights would be prejudiced by allowing the option for analysis to survive the payment of the draft, the subject-matter of this paragraph might require further consideration; but upon this record we see no such prejudice.

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International Agricultural Corp. v. Stadler, 212 F. 378, 129 C.C.A. 54, 1914 U.S. App. LEXIS 2087 (6th Cir. 1914).

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