New York State Monitor Milk Pan Co. v. Remington

48 N.Y. Sup. Ct. 218, 4 N.Y. St. Rep. 181

• Court: New York Supreme Court
• Decided: July 15, 1886
• Status: Published

Opinions

Hardin, P. J.: •

In Cary v. Gruman (4 Hill, 625) it was held that “ a warranty on the sale of a chattel is in legal effect a promise that the subject of sale corresponds with the warranty in title, soundness or other quality to which it relates. * * * It naturally follows that if the subject prove defective within the meaning of the warranty the stipulation can be satisfied in no other way than by making it good. That cannot be done except by paying to the vendee such sum as together with the cash value of the defective article shall amount to what it would have been worth if the defect had not existed.”

That case was approved and followed in Muller v. Eno (14 N. Y., 605), where Judge Comstock said that, in accordance with the doctrine of Cary v. Gruman, “ the rule of compensation is now well settled, and this compensation, it should be added, is due immediately. I mean it is due immediately where the warranty relates to the soundness or quality of the article sold. The promise is not one of' indemnity against loss on a resale of the thing warranted by the purchaser. The promise is broken as soon as made, although the defect may not then be known, and its effect is to subject the vendor at once to a legal liability to make good in money the difference between the article as sound and its actual value. This liability stands upon the same footing as any other pecuniary obligation or 'debt.”

Again, at page 206 of 14 New York, Judge Comstock says: “ It has been already stated the measure of damages on a breach of warranty in the sale of goods is the difference between the value of the goods if they had corresponded with the warranty and their actual value. This rule rests upon a sound principle and it must be regarded as settled by the two carefully considered cases of Voorhees v. Earl (2 Hill, 288); and Cary v. Gruman (4 id., 625).” To the same effect is Comstock v. Hutchinson (10 Barb., 211). To the same effect also is Richardson v. Mason (53 Barb., 601). To the same effect is Milburn v. Belloni (34 Barb., 607), where the warranty was that the coal dust was free from soft coal, and that it was ft for use in making brick, and it was held that the recovery should have been “ the difference between the value of the article sold him (plaintiff) as it was, and its value as it would have been if it had been such as it was represented ” to be.

In Brigg v. Hilton (99 N. Y., 519) the rule was laid down to be “ the difference between the value of the goods if they had been as warranted, and the actual value of the goods in their defective condition.”

It appears by the testimony of Ross, the superintendent of the defendants, that none of the parts of the coolers were enameled except the pans, and no complaint was made of any of the parts of the coolers except as to the pans, and the defect complained of in respect to the pans was confined to the quality of the enamel on the pans. The witness added “ the proportion of cost, that is the proportion of price which we received for the manufacture of this whole complete arrangement, including a pan with its enamel, a vat and its legs and braces, would be fifty-five per cent for the pan and enamel, and about forty-five for the balance; that is, fifty-five for the pan with its enamel, and forty-five for the vat, legs and braces.”

The witness further added, viz.: “Assuming that the enamel is’ soft and that the pans are useless for the purpose for which they were manufactured, the pan only, assuming that they were too soft for the purpose of holding milk, yet they are not entirely valueless for other purposes. They might be used for water vats. We have used some of them for that purpose. In other words, where the element of lactic acid does not come into consideration, and its effect upon the enamel, these pans would be as serviceable with the enamel they have on them as any other enamel so far as I' know. So far as we have used them they answer the purpose.”

Plaintiff’s witness, Wright, who had negotiations leading up to the contract in behalf of the plaintiff, testified: “ If the pan was properly enameled it would make it good; I don’t know that I ever called on the defendants to furnish other pans in case of defective enameling; if from any cause a pan was worthless, another pan could be placed in that set; a proper pan would remedy the defect.”

It appears by the referee’s opinion that he took the price paid for the coolers, including all of their four several parts, “ as the market value of the articles contracted for, and that he reached the conclusion ” that the pans, as made, had no market value; and he also said in his opinion that the defendants had “ given no evidence tending to establish the same, ” that is, the market value of the pan as a separate and independent article.

It appears from his report, as well as from his opinion, that he has allowed the plaintiff to recover the whole price paid for the combined article called the coolers, embracing the four separate parts. If it be assumed upon the evidence that the plaintiff had satisfactorily shown that the pans were so defective as to be of no value, and that, therefore, the plaintiff might have a recovery of a sum equal to the price paid for the pans, it does not follow that because the pans were defective to such an extent as to be of no value, except, perhaps, for old iron, or for vats to hold other liquids, that the plaintiff was entitled to recover as damages that sum of money which it had paid for the other three parts of the cooler. It would seem, therefore, that the referee has fallen into an error in respect to the rule of damages.

Second. The written contract entered into by the parties provided for the inspection of the manufactured articles by the plaintiff. In pursuance of that contract it designated a party to inspect the manufactured articles. Defendants allowed him ample opportunity to make such inspection. He visited the works of the defendant and from time to time examined, inspected, approved, rejected or accepted the manufactured articles as in the exercise of his discretion and judgment'he deemed proper.

According to the evidence, in many instances, articles were rejected or disapproved of until remedied, and in some instances the rejection was entire. It is not pretended, in any aspect of the case, that there was any fraud or collusion practiced in respect to the inspection, 'examination or acceptance of the manufactured articles. It is manifest from the evidence taken upon the trial that the inspector, by the use of lactic acid, could readily have determined the character and quality of the enamel at the time he inspected the manufactured articles. It is inferable that had he made the proper tests and examinations, and carried his inspection to the extent that the spirit of the contract warranted, he would have discovered the existence of the defects that are complained of in respect to the enamel. Upon a discovery of that defect and a rejection, the process of manufacturing in that regard would have been arrested, or the defect remedied.

In the contract between the parties, as well as in the evidence in respect to their execution of it in the selection of an inspector, it appears that the plaintiff had it in its power, and it was its privilege to make the selection of any person it might choose, to examine the manufactured articles and exercise the power of inspection given to the plaintiff in the contract.

The language of Davis, P. J"., in McParlin v. Boynton (8 Hun, 453), is pertinent at this point. He there said of a party situated in respect to the right of inspection, as were the plaintiffs in the case now before us, that he “ had the privilege of selecting any person he chose. It was both his interest and duty to select an entirely competent and skillful man. If he failed to do that it was his misfortune or neglect. There can be no doubt that the defendant was not bound to take any of the saws rejected by the person he employed for not coming up to the requirements of the contract in any respect. It is more than probable that the defendant selected an incompetent man, but as all the saws, as they were made, were delivered into his hands, and passed upon by him, and subsequently delivered to the defendant, no remedy remained for lack of compliance with the contract, unless on some ground of fraud which is not alleged.”

It is also said in the opinion from which we have quoted that it is within the power of parties to make such an arrangement for an inspection, as we find in the one before us, and the learned judge adds: “ Where parties stipulate that articles to be manufactured shall be of a particular kind and quality, and at the same time stipulate that they shall be tested by some person selected by the purchaser, before delivery, to ascertain whether they are of a specified kind and quality, and such test is in fact made by him, and the goods are thereupon delivered and accepted, no remedy by action can be had, upon the contract, although the goods, or some portion of them, are subsequently ascertained not to be equal to the warranty. In the absence of fraud and of collusion between the manufacturer and the person selected, his decision, upon the test that the articles are such as the contract requires, is conclusive against the purchaser who subsequently receives them.”

It appears the case, from which the above quotation is made, was taken to the Court of Appeals and the judgment affirmed (71 N. Y., 604), the affirmance receiving four affirmative votes. Under such circumstances it seems to be the duty of this court to accept the doctrine of McParlin v. Boynton, as laid down by the General Term of the First Department, in the opinion of Davis, P. J., from which quotations have been made.

Brigg v. Hilton (99 N. Y., 520) lays down the principle which enables a vendee who has received goods under a warranty, notwithstanding he has retained them and used them, to recover for damages arising out of the breach of warranty. In that case the goods were represented as sound and merchantable goods, represented for and “ known as cloakings,” and which the plaintiffs agreed “ should in all respects be equal to the samples,” and it was alleged that the vendee, “relying upon the plaintiffs agreement and guaranty, accepted and paid,” and that he subsequently discovered that none of the goods “ corresponded with the samples, but were imperfect, unmerchantable,” etc. In that case there was no express stipulation for an inspection by a party to be named by the vendee, nor in fact was there an inspection in pursuance of the tenor and spirit of the contract.

Here the parties carefully provided'for the mode and manner of ascertaining the character and quality of the articles offered to and delivered to plaintiffs under the contract. The undertaking of the defendants, found in the contract, was to make for the plaintiff, at the works of the defendant at Ilion, “ in a good, workmanlike manner,” the coolers named in the contract, which were to be shipped as the plaintiff should direct, and it was provided that the articles so manufactured were to be in sets of ten “ subject to the inspection of the party of the second part, within five days after the notice of completion; ” and it was further provided in the contract, viz.: “ Fayments to 'be made one-half cash on inspection, and remainder at expiration of four months, with interest for two months.”

By the acts of the parties in the execution of the contract, it is evident they understood, and, therefore, so proceeded in the execution of the contract, that it was the duty of the plaintiff, on receiving notice or request, to select and furnish an inspector. It did select and furnish such inspector in accordance with such understanding of the contract, and in accordance with its terms. "

The referee found, as a fact, that plaintiff paid for the articles manufactured before the defect in the enamel was discovered. He also found, viz.: “ Such defect was latent and was not ascertained or ascertainable by any process that could be reasonably employed, until the pans had been used for some weeks for storing milk. It is not easy to approve of the finding that the defect was not ascertainable “ by any process that could be reasonably employed until the pans had been used for some weeks for storing milk.”

It may be that the parties to this action, and certain witnesses that were called to the stand in the progress of the trial, did not understand the chemical effects of lactic acid, or understand the proper and correct mode of ascertaining the character and sufficiency of enamel when placed upon articles of the kind referred to in the contract. But it by no means follows that it was not the duty of the plaintiff to select a competent, capable person to sufficiently and suitably inspect the goods which they were to accept upon the inspection being made in their behalf, and for which they had expressly stipulated to pay “ on inspection.”

The referee found, as a matter of fact, “ that the quality and fitness of the enamel was ascertainable by applying lactic acid.” It was the neglect of the plaintiff that that test was not made. It had the opportunity to select a party capable of making such a test. If it failed to make the proper selection, that failure was because of its inattention to its privileges and rights. That neglect may not be •excused by the findings of the referee, to the effect that that test •“ was not known by either party,” nor by the finding that “ there is •no evidence that it was known except to scientists,” nor by the finding that the test was not in practical use.

Diligence on the part of the plaintiff in ascertaining the proper ¡test for the durability of the enamel, doubtless would have revealed the fact to “ scientists,” or other persons familiar with the nature and character of the component parts of milk, or its action upon .substances when kept for a long period of time in contact with them, and that such action was the same in effect as is produced upon substances by bringing them in contact with lactic acid, one of .the properties of milk. To test the enameling does not necessarily involve its use for a long period of time.

In Gautier v. Douglass Manufacturing Company (13 Hun, 524) it was admitted that the quality of the steel could not be ascertained without working it up, and “ that an inspection and examination of it would not reveal its defects.” At page 525, the judge who delivered the opinion in that case said, viz.: “ The test of the steel involved its use and it could not be rejected or returned.” That •case is, therefore, unlike the one before us.

In Gurney v. Atlantic and Great Western Railway Company (58 N. Y., 358) it was held that “ if a defect exists which could not be determined by examination upon the receipt of the articles, ■but only upon use, it is not the duty of the vendee to rescind the •contract and return or offer to return the property upon discovery, but he may retain them and recover or recoup his damages.” In that case the referee found the frogs “ were defective and brittle, but that this could not be discovered by examination, and could only be ascertained by use, and that the failure of one created no presumption that others were defective,” and in that case Churoh, Ch. J., said, viz.: “ The general rule is, when articles are sold upon an executory contract like the one in question, that the delivery and acceptance of the articles after examination, or an opportunity to examine them, is a consent or agreement that the articles correspond with the contract, and precludes a recovery for any defects which may exist.” (53 N. Y., 515.)

It was further observed by the court, viz.: “ The vendee must have an opportunity to examine, and when, from the terms of the contract or the nature of the article this can only be done by use, and such was, therefore, the mode of examination contemplated, the vendee is not foreclosed until the test is made. But when made and the defects discovered, is it not the duty of the vendee then to take his ground and rescind the contract and return or offer to return the property, or be held to a waiver and acceptance ? Upon principle I can see no difference in this respect on account of the time or mode of examination.”

It would seem that the case from which the quotation has just been made warrants the conclusion that when the contract in terms prescribes an examination or inspection or a test, and an opportunity has been afforded for the exercise of that option and privilege on the part of the vendee to examine, inspect and test, and it has been exercised, and it appears there has been no fraud or collusion in the test, examination or inspection contemplated by the contract between the parties, it is to be deemed final and binding upon them. In the case in hand the plaintiff’s agent, by it selected for the express purpose of making suitable and proper inspection, examined all the pans and the enameling thereof, and approved of the same. If he was incompetent, if he was negligent, if he was inattentive, the responsibility for such neglect, inattention or want of capacity, according to McParlin v. Boynton (supra), should fall upon the plaintiff.

The foregoing views, together with those expressed in the opinion of Churchill, J., lead me to concur in the result reached by him in bis opinion, in favor of a reversal and a new trial before another referee, with costs to abide the event.

Churchill, J. :

By the written contract of the parties the defendants were to make for the plaintiff, at the works of the former in Ilion, “in a good, workmanlike manner, two hundred sets of c milk coolers,’ patented June 25, 1875, to consist of four coolers or pans complete to each set.” The plaintiff was assignee of the patent for the State of New York and had the exclusive right to manufacture the coolers within the State. The contract further provided that each ten sets should be subject to the inspection of the plaintiff within five days after notice of completion, and that payment should be made one-half cash, on inspection, and the remainder at the expiration of four months, with interest after two months. The sets were all made, inspected, accepted and paid for. Subsequently it was discovered that the enameling of two hundred and fifty-three pans of the sets last made and known as the Crowley pans would not resist the action of the acid of milk, and that the pans for that reason were worthless.. The pans were separate from the other parts of the coolers and cost about fifty-five per cent of the whole expense, and when the pan was worthless, supplying a proper pan would remedy the defect.

The fact that the enameling of the defective pans wopld not resist the action of the milk was not discoverable by ordinary inspection, but could have been discovered by testing with milk if continued for a sufficient length of time, or by the use of lactic acid. No offer to return the defective sets was made by the plaintiff, and they yet remain in its possession. The referee gave as damages the entire price paid by the plaintiff for the defective sets. The words “ in a good, workmanlike manner ” are not surplusage and do not import into the contract an obligation which the law would imply without them. Taken in connection with the specifications accompanying the letters patent, the defendants thereby agreed to enamel the iron pans forming part of each set in such manner as “to protect the iron from the effect of the acids contained in the milk or cream when sour.” The Crowley pans were defective in this respect for which the plaintiff is entitled to damages unless the provision with respect to inspection prevents.

If it be true, as found by the referee, that the inspection made was not conclusive except as to patent defects and such as were discoverable by observation, and that the plaintiff was in no wise concluded by sucia inspection and subsequent acceptance as to latent defects, the provision for such inspection was surplusage, since such defects wonld have been waived by acceptance without any provision therefor in the agreement. This provision for inspection should be construed to mean something equally with the words “ in a good,workmanlike manner.” If not limited to patent defects it must extend to and include latent defects, and in the absence of collusion or fraud bar any recovery therefor. (McParlin v. Boynton, 8 Hun, 449; affirmed, 71 N. Y., 604; Wyckoff v. Meyers, 44 id., 143.)

Glacius v. Black (50 N. Y., 145) distinguishes Wyckoff v. Meyers as a case where payment was to be made upon the certificate of the architect. But in the present case payment was to be made “ on inspection.”

The pans were worthless to store milk unless enameled in such manner as to protect the iron of the pan from the effect of the acids of milk and cream when sour. The specifications forming part of the letters patent, of which the plaintiff was an assignee, showed this fact and also stated that the manner of preparing and applying the enamel was well-known to those skilled in the art. The defendants had a right to presume that the plaintiff had tests by which they could determine whether or not the pans were fit for the purpose for which they were made, and that the inspection provided for by the contract would at least extend to and determine whether or not in this essential particular they were of the kind required by the contract. The inspection by plaintiff’s agents of the pans complained of and their subsequent acceptance are a bar to any recovei’y in this action.

An improper rule of damages was adopted by the referee. The only part of the “milk cooler” which was defective was the pan, which cost about fifty-five per cent of the whole. “ If from any cause a pan was worthless, another pan could be placed in that set; a proper pan would remedy the defect.”

From this it would seem that by an expenditure of a little more than half the original cost of manufacture, the plaintiff could make perfect, the articles complained of. This being so, an award of the entire cost as damages was unauthorized.

The judgment should be reversed and a new trial ordered before another referee, costs to abide event.