Syme-Eagle & Co. v. Joplin Grocer Co.

229 S.W. 246, 206 Mo. App. 357, 1921 Mo. App. LEXIS 23

• Court: Missouri Court of Appeals
• Decided: March 25, 1921
• Status: Published

Opinions

BRADLEY, J.

This cause is in equity to rescind a contract and to recover the amount paid thereunder for a shipment of canned corn. Plaintiff prevailed and defendant appealed.

Plaintiff, a wholesale grocer of Chicago, alleges that on July 29, 1916, defendant, a wholesale grocer of Joplin, Missouri, entered into a contract with the Forest City Canning Company of Forest City, Iowa, whereby the Canning company sold and defendant purchased 2000 cases of canned corn, each case containing 2 dozen cans. The price was 624 cents per dozen cans, f. o. b. factory at Forest City. This contract is set out in plaintiff’s petition, and is as follows:

“Future Delivery Contract.

Forest City, Iowa, July 29, 1916.

The Forest City Canning Company of Forest City, Iowa, hereby sells, and the Joplin Grocer Company of Joplin, Mo., hereby purchases 2000 cases (of 2 doz. each) No. 2 cans Standard Corn at 62-4 cent per dozen f. o. b. factory.

Terms — Sixtey clays acceptance, or less 1-4 per cent if paid within ten days from date of invoice.

Shipment — As soon as goods can be made ready during or after the packing season of 1916,

Delivery — In case of fire, strikes, short crops or other conditions beyond the control of seller preventing the packing of sufficient goods to fill all orders in full, the pro rata, distribution of all goods packed with all orders entered, shall be accepted by the buyer in full settlement of this contract, without claim for damages for short delivery.

Should the buyer not make demand for delivery by November 1, 1916, seller may at its option and without liability cancel this contract by giving five days written notice mailed to buyer.

Guarantee — All goods packed by The Forest City Canning Company are guaranteed to comply with the national Pure Food Law (June 80, 1906) and not to be misbranded when sold under its own labels. All responsibility for misbranding is assumed by the buyer if labels furnished by him are used. Swells and leaks guaranteed to July 1, 1917.

Routing — Seller reserves the initial routing of this shipment, but buyer may name the terminal or delivery railroad on which shipment shall be made.

Remarks — In case of short pack we consent to the cutting down of this order, pro rata Avith all orders taken of twenty-five per cent without liability for claim for damages and to accept cash payment of 10 cents per case for cutting down additional 25%.”

Plaintiff further alleges that on September 6, 1916, it entered into a contract with defendant by which defendant sold and plaintiff purchased at 75 cents per dozen the 2000 cases of corn that defendant had purchased from the canning company. This last mentioned contract is set out in full, and is as follows:

“Kansas City, Mo., Sept. 6,1916. .

Seller

Joplin Grocer Go.,

Joplin, Mo.

Terms 1% 10 days.

Syme-Eagle & Co.,

Chicago, Ill.

We confirm purchase for your account, as brokers, from above named seller of following goods:

Shipment when packed.

2000 c/g #2 Std. Iowa Corn......................75$

F. O. B. Iowa factory — Pack of 1916.

Subject Joplin Gro. Co.’s contract with Forest City Canning Co.”

Plaintiff alleges that the reference, in the contract between it and defendant, “Subject Joplin Gro. Co.’s Contract,” etc., had the effect of incorporating into the contract between plaintiff and defendant all consistent provisions of the canning company contract, and especially that the seller guaranteed that the corn would meet the requirements of the pure food. law. Plaintiff further alleges that defendant knew the corn was purchased for resale, and that there was an implied warranty that the corn would be reasonably fit for human food and merchantable as such. Plaintiff then alleges that the corn was not fit for human food, was not ■ merchantable, and did not comply with the pure food law, but was filthy, decomposed and putrid, and in a condition commonly known as “flat sour,” that this “flat sour” condition could not be ascertained except by opening the cans, and for that reason the whole lot was worthless; that after learning that a substantial portion of the corn was not fit for human food and was not merchantable if offered to return said corn to defendant, and demanded the amount paid therefor.

The answer on file when the evidence was taken admitted the contracts were made as alleged, and that the Forest City Canning Company under the contract between plaintiff and defendant, shipped plaintiff certain cases of corn, and that plaintiff had an opportunity to inspect same, and that plaintiff received, accepted and disposed of this corn. Then follows a general denial. Further answering defendant avers time the sentence, “Subject Joplin Gro. Co.’s contract with Forest City Canning-Company” has a meaning peculiar and special to the canned goods trade, and that said sentence means that plaintiff stepped into defendant’s shoes, and thereafter defendant was under no obligation to plaintiff to do more than use its good offices to induce the canning company to adjust any complaint that plaintiff might make,

Suit was filed August 29, 1917. Tlie first petition was for damages for breach of contract. To this petition defendant answered by general denial. The cause was pending on this petition and answer until the April term, 1919 when plaintiff, on April 15th, filed its first amended petition in two counts, the first for damages for breach of contract as in the original, and the second to rescind. On the 24th of April defendant again answered by a general denial. The cause in this situation went over till the September term, 1919. On September 16,1919, defendant, with leave, withdrew its answer to the first amended petition and filed a motion to require plaintiff to elect upon which, count it would proceed, alleging in the motion that the two counts were inconsistent. On October 25th the motion to elect was sustained, and plaintiff elected to stand on the second count. On October 30th plaintiff recast its second count and filed it as a second amended petition. On same day defendant filed answer the substance of which is stated supra, and on this date, October 30, 1919, the evidence was taken. The cause Avas then passed until the April term, 1920, and on May 19, 1920, Avas submitted and argued on the evidence theretofore taken. After the argument and on same day defendant filed amended ansAver which answer contained the same averments as in its ansAver of October 30th, and in addition a paragraph pleading Avaiver based on the fact that plaintiff filed in the first instance its petition for damages for breach of contract. Defendant charges in effect that after making its election to sue for damages for breach by first filing its petition for damages that plaintiff Avaived its right if any it had to thereafter rescind.

Both parties treated this cause as in equity, and Ave Avill accept the situation as it is presented. By direction of defendant the canning company shipped as directed by plaintiff. Plaintiff directed the canning company to ship 1500 cases to Reid, Murdoch & Company of Chicago, and 300 cases to the Neosho Wholesale Grocer Company of Neosho, Missouri. There Avas no complaint about the shipment, to the Neosho Wholesale Grocer Company. Reid, Murdoch & Company sold to their customers in different parts of the country, and a great many cases were rejected because not fit for human food. Reid, Murdoch & Company Avent back on plaintiff for adjustment and. plaintiff settled AA'itli that company for the rejected corn. The canning company became a bankrupt soon after packing this corn, because it had so much “flat sour” in its output in 1916, according to its superintendent. The corn that Avas rejected by the customers of Reid, Murdoch & Company, by direction of defendant was shipped back to the canning company. Plaintiff was threatening to ship the rejected corn to defendant at Joplin, and defendant Avrote plaintiff to haAe said corn shipped to the canning company. The corn purchased by Ried, Murdoch & Company Avas sold by them at different times along in the fall of 1916, hoAvever, it was in the late spring or early summer of 1917 before the customers of Reid, Murdoch & Company got their troubles Avith their seller adjusted. On June 2, 1917, plaintiff advised defendant that practically the entire shipment had been rejected and asked advice as to disposition. After this there was a spirited and lengthy correspondence betAveen plaintiff and defendant. Defendant Avas also writing the canning Company and a brokerage firm in Kansas City through whom defendant purchased. Defendant got no satisfaction as the canning company Avas then bankrupt. Plaintiff' dreAV on defendant on June 28, 1917, for $1860.97. The amount of this draft was based on freight, cartage, etc., paid out by plaintiff and on 900 cases of the corn.

Defendant makes several assignments, but these may be grouped into five questions. 1. Does the language, “Subject Joplin Grocer Co.’s contract with Forest City Canning Company” in the contract between plaintiff and defendant amount to an assignment of defendant’s contract with the canning company to plaintiff so that plaintiff’s cause of action is against the canning company and not defendant, or does this mean that plaintiff Avas to get from defendant in quanity and quality just what defendant got from the canning company — no more and no less? 2. Could plaintiff rescind in view of the fact that return of the entire shipment Avas impossible? 3. If plain tiff could rescind, did it waive its right to do so by filing its petition for damages for breach of contract and delaying to ask for rescission until it filed its amended petition on April 15, 1919? 4. Was there an implied warranty that the corn was fit for human food and was salable as such? 5. Is the judgment excessive?

As we view this case it is only necessary to consider but the first two of these assignments. The construction that defendant puts upon the language, “Subject, Joplin Grocer Co.’s contract” etc. is divided in two parts. First, defendant contends that this language in effect amounted to an assignment of the canning company contract so that thereafter plaintiff with respect to that contract stood in the shoes of defendant, and would have recourse only against the canning company. Second, that this language means that what defendant got from the canning company plaintiff would get — no more and no less. Defendant introduced evidence of persons experienced in trade contracts of the character here tending to show that defendant’s construction is the proper one according to custom, and that such is the usual construction, but just which of defendant’s construction is the proper one, these trade experts were not fully agreed. Plaintiff on the other hand introduced evidence of like experienced persons construing the language to mean that whatever delivery, and when, the packer made under its contract would govern as to same matters in the contract between plaintiff and defendant. Plaintiff’s experts claim that their construction was the custom, and defendant’s experts made similar claim. The court below found for plaintiff and therefore did not construe the contract according to defendant’s theory, but whether the court based its conclusion upon evidence of custom does not appear. We think that when the two contracts are considered together they speak for themselves independent of any outside interpretation. The only reasonable construction to place upon this language, “Subject Joplin Grocer Co.’s contract,” etc. is that defendant would not be held to delivery if delivery was not made to it. The two contracts were separate and distinct and between different contracting parties and are quite dissimilar in other features.

It will be noted that the terms and the price in' the two contracts are different. If defendant’s contract with plaintiff amounted to a mere assignment of the contract with the canning company then plaintiff would be limited in an action against the canning company to 62% cents per dozen, or else the canning company would be compelled to pay more than its contract price. The canning company protected itself against liability in the event of failure to deliver from causes which it could not control, and that is all that defendant did by providing that its contract with plaintiff was subject to the canning company contract. Evidence of custom is not admissible to oppose or alter a general principle or rule so as to make the rights and liabilities of parties other than they are at law. [Southwestern Freight & Cotton Press Co. v. Stannard, 44 Mo. 71, l. c. 83; Martin v. Milling Co., 49 Mo. App. 23.] A custom cannot be invoked to justify an unreasonable course. [Bank v. Bank, 151 Mo. 320, 52 S. W. 265.] If a contract like the one between plaintiff and defendant be construed according to defendant’s evidence of custom then the most absurd and unreasonable consequences might follow. Parties might be compelled to respond where they had not contracted. No one should be required to answer for another’s contract to which he is an absolute stranger both in law and fact. On the other hand no one should be permitted to escape the consequences of his own contract upon such a sophistry of reason as it would require to adopt either of defendant’s constructions.

Could plaintiff rescind since it was impossible to return the entire shipment? Plaintiff gives some attention in its brief to the subject of tender. We think that the questions of tender and receipt, so far as concerns the rejected corn, are settled by the fact that defendant directed plaintiff to ship the rejected corn to the canning company and plaintiff did as directed. The second assignment is based on the theory that having disposed of a substantial part of the corn rescission could not be made.

The evidence shows (hat the defectm». condition of the corn could not he ascertained without opening ihe can, and that the expense of recanning the good that might be found would be greater than its value. A great number of cans were examined and found defective. The superintendent of the canning company testified that there was no question about something being wrong with the pack of 1916. The whole shipment to Reid, Murdock & Company was not worthless, and defendant contends that in such case, and where the purchaser retains a part he cannot in any event rescind as to the remainder. In 2 Black on Rescission and Cancellation, section 586, it is said: “A party entering into a contract for the purpose of goods to be delivered in installments, cannot accept pay for, and use the first installment and refuse the second, and rescind the contract, without the consent of the seller, except in cases where-there is a breach of Avarranty or a deficiency in quantity or quality. In such cases the acceptance of a portion or installment of the goods which ansAver the Avarranty will not oblige the purchaser to accept the subsequent installments which are deficient or defective. But it has been ruled that a vender of goods to be delivered in installments may on refusal of the vendee to accept certain installments cancel the contract as to them and yet hold it in force as to the other installments.”

Concerning the same principle as we take it our Supreme Court in Sigerson v. Harker, 15 Mo. 76, said: “We are aware that there may be sales Avith Avarranty Avhen the articles sold are to be delivered, not at once, but continuously, from time to time. In such cases the receiving of a portion of the articles Avhich corresponded Avith the description, would not compel the vendee to accept others Avhich were deficient in quality, especially in cases where the portion received has been in any way appropriated, or placed in a condition which rendered a return of it inconvenient.”

But in this case it was held that the rescission of a contract for the sale of a lot of goods with a Avarranty must be entire, and that the vendee cannot select such as will answer the Avarranty and return the remainder. The shipment out of which the case at bar arose ivas one single shipment. It did not go in installments, hence the rule laid down in Black on Rescission and Cancellation, and the other authorities cited and relied upon by plaintiff, are not in point. The rule in Missouri is that where the shipment is not in installments, but in one single shipment, the purchaser cannot accept such as meet the warranty or the conditions of the contract and rescind as to the remainder. [Sigerson v. Harker, supra; Taylor v. Short, 107 Mo. 384, 17 S. W. 970; Wessel v. Walker & Co., 196 Mo. App. 593, 190 S. W. 628; Rigler v. Reid, 186 Mo. App. 111, 171 S. W. 952.] There are many other cases to the same effect, but it is not necessary to burden the opinion with citations. We hold, that under the facts here that plaintiff could not rescind, and the court could not decree rescission in a suit for that purpose. It is not necessary to discuss and determine other questions raised. We have disposed of such assignments as are necessary in the case in hand. We will state however that we know of no reason why plaintiff may not pursue his cause for breach of warranty. But that is riot the case here. As to there being an implied warranty of the fitness of the corn for human food see note in L. R. A. 1917, F, 472; also St. Louis Brewing Association v. McEnroe, 80 Mo. App. 83.

The judgment below should be reversed and it is so ordered.

Gox, P. J., concurs, in a separate opinion. Farrington, J., dissents in a separate opinion.