MacRae v. Heath

212 P. 228, 60 Cal. App. 64, 1922 Cal. App. LEXIS 49
California Court of Appeal·Decided December 5, 1922·No. Civ. No. 3857.·Published·Cited by 19 cases

Opinion

WOOD, J., pro tem.

On October 7, 1918, plaintiff as “seller” and defendant Heath "as “buyer” executed the following contract:

“For and in consideration of an advance payment of two thousand dollars ($2,000.00), receipt of which is hereby acknowledged, the buyer buys and the seller sells the entire crop of citrus fruit, except lemons, on his several properties at Rialto, San Bernardino County, California, for three cents (3c) per pound for all varieties, delivered at a packing-house to be designated by the buyer, at Rialto, California, at such times and in such quantities as buyer may direct.
“It is understood that the advance will be deducted from the last deliveries made, and that in the event such deliveries do not amount to two thousand dollars ($2,000.00), any balance due will be paid by seller on demand.
“It is also agreed that buyer will pay for each sixty thousand (60,000) pounds of fruit as soon as delivered.
*67 “Seller agrees to take proper care of the orchards, to see that all fruit is carefully clipped, and handled in every respect with a view to avoiding unnecessary mechanical injury.
“Buyer agrees to call for the delivery of all Washington Navels by May 20th, all Med. Sweets and Mikes by June 15th, all Valencias by August 15th, and all grapefruit by October 1st. ’ ’

Defendant Angeles Brokerage Company guaranteed the faithful performance of the contract by Heath. Defendant Pann is president and holder of ninety per cent of the stock of the Brokerage Company. Defendants acted. together in making the contract and in all that transpired thereafter and will be spoken of herein without distinction as defendants or buyers.

About January 1, 1919, cold weather set in and a large part of the fruit in plaintiff’s orchard was frozen. Plaintiff had taken proper care of the orchards and the injury from frost was not contributed to by any negligence of Ms. In early March defendants directed plaintiff to pick and to deliver the fruit at a packing-house agreed upon, the proprietor thereof becoming under the contract the agent of defendants for the purpose of receiving deliveries. All the oranges, except those in one orchard, the delivery of which was waived by defendants, were duly delivered. When delivered, forty-two per cent of the navels, eighteen per cent of the Mikes, thirty-three per cent of the Valencias, and sixty-two per cent of the Mediterranean sweets were so frozen as to" be utterly worthless. There was no delay in delivery not acquiesced in by defendants. There is no complaint of lack of care in picking or handling. Three deliveries, made between March 27th and May 20th, aggregating 198,270 pounds, frozen and unfrozen, were paid for at the contract rate. ' Defendants refused to pay for the rest of the oranges. Plaintiff sold the grapefruit to third parties at its market price. This, in substance, the trial court finds, and the finding is supported by evidence. The court made other findings to wMch reference will be made. Judgment was rendered at the contract rate for the oranges delivered and not paid for, and for the difference between the contract price of the grapefruit and the amount for which plaintiff sold them. It was rendered against Heath and the Broker *68 age Company for the whole amount, and against Pann for ninety per cent thereof. Defendants appeal.

(a) The first question that confronts us is, Was the contract a sale, sometimes though tautologically spoken of as a “present sale,” or was it an executory contract—a contract to sell? If the former, the property in the fruit passed immediately, and the loss by freeze was upon the buyer, regardless of other considerations. If the latter, other serious questions must be examined.

Whether there is a sale depends upon the intent of the parties.. This must be gathered from the language of their contract, read, in case of uncertainty, in the light of the circumstances surrounding its making. The use of the words “the buyer buys” or “the seller sells,” which, standing alone, would import a present passing of title (Civ. Code, secs. 1721, 1722; Johnson v. Dixon Farms Co., 29 Cal. App. 54 [155 Pac. 134, 136]), is not conclusive. The whole instrument must be examined.

When this contract was made most, if not all, of the fruit was not in condition in which the buyer could be called upon to accept it. The seller was to care for it until delivery. He was to clip the fruit carefully and handle it so as to avoid unnecessary mechanical injury. He might or might not do this. The buyer within broad limits was to fix the times and quantities of delivery. There was neither immediate delivery nor payment of the purchase price. The terms were, in effect, cash on delivery. There are no provisions of the contract or circumstances surrounding its making that negative the inference from these facts that title was not intended immediately to pass. Significantly, the contract words “the buyer buys and the seller sells the entire crop of citrus fruit” are modified by the words <(delivered at a packing-house to be designated by the buyer.” Under the rule in this state, clearly announced by our supreme court, following the supreme court of the United States, and in the main the English rule, and applied by this court, it is clear that this contract is not one of sale but is _a contract for future delivery and sale. (Blackwood v. Cutting Packing Co., 76 Cal. 212 [9 Am. St. Rep. 199, 18 Pac. 248]; Walti v. Gaba, 160 Cal. 325 [116 Pac. 963]; Algee Cotton Cases, 22 Wall. 180 [22 L. Ed. 863, see, also, Rose’s U. S. Notes]; Benjamin on Sales, 7th ed., sec. 318 *69 et seq.; Kenney v. Grogan, 17 Cal. App. 527 [120 Pac. 433]; Pfoh v. Porter, 23 Cal. App. 59 [137 Pac. 44].)

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MacRae v. Heath, 212 P. 228, 60 Cal. App. 64, 1922 Cal. App. LEXIS 49 (Cal. Ct. App. 1922).

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