121 Misc. 474 | N.Y. Sup. Ct. | 1923
In 1920 the plaintiff agreed to purchase from the defendant 3,000 bags of fine granulated sugar. The defendant purchased sugar from the Federal Sugar Refining Company to comply with its contracts with the plaintiff. In August, 1920, the Federal Sugar Refining Company shipped to the plaintiff 2,991 bags of sugar and the shipments arrived at Green Bay, Wis., the place where plaintiff was doing business, on August twenty-eighth, August twenty-ninth, August thirtieth and September seventh. On October 26, 1920, the plaintiff gave notice to the defendant that it rescinded the contract on the ground that the sugar was defective and it now brings this action to recover the money paid for the sugar and expenses incurred upon a rescission of the contract. The case presents a question of fact — whether the sugar delivered was in fact fine granulated sugar; and a question of law or at least of mixed fact and law — whether the plaintiff notified the defendant
Upon the receipt of the sugar the plaintiff stored it in its warehouse. Only about October fifth, after some of the sugar had been sold by the plaintiff, shipped and returned by the purchaser with a complaint that the sugar was not up to standard, did the plaintiff make any examination and upon such examination discover the alleged defects in the sugar. The sugar which was produced at the trial was undoubtedly not merchantable as fine granulated sugar, but the defendant has complied with its contract, if it shipped sugar which was merchantable, and it is possible that the present condition of the sugar is due to deterioration in transit or while in the warehouse of the plaintiff, either before or after the examination. If the plaintiff’s testimony is true the sugar was in substantially the same condition when it was examined in October, 1920, as when produced at the trial, and I have no hesitation in finding this testimony to be true, but there is no direct testimony as to the condition of the sugar at any time prior thereto. The question of fact in the case must, therefore, be resolved on circumstantial evidence. It is urged by the plaintiff that there is a presumption that the condition in which the sugar was found to be on October fifth was the same as when shipped in August and it relies for authority for this proposition upon the cases of Platt v. Gross, 92 N. Y. Supp. 249, and Crowell Bros. v. Panhandle Grain & Elevator Co., 271 Fed. Rep. 129. There are expressions in the opinions in those cases which standing alone might give force to the plaintiff’s contention, but I am convinced that the courts in those cases did not assume or decide that the rule, that a condition once shown to exist is presumed in the absence of evidence to the contrary to continue, may also be applied to create a presumption backwards. The rule that such a presumption does not work backwards is too well established in both reason and authority to require any careful consideration now. A condition which naturally remains unchanged unless new forces operate upon it may logically be presumed to remain unchanged until some evidence is produced to show that these forces did come into operation, but there can be no presumption that any of the forces which must have operated to produce a given condition came into play at a particular time. There can logically be no general presumption that a condition now existent also existed at any particular previous time, but circumstances may exist in any case which themselves may negative the possibility or probability that these forces came into existence after a particular time, and in my opinion when the courts in the cases relied upon used the term “ presumption ” they referred to
The defendant has shown that the Federal Sugar Refining Company used a system of inspection during the process of refining which, so far as human ingenuity could provide against human error, insured the shipment of sugar of the proper grade. Like all human systems it may prove fallible, but in my opinion the probability is against its proving fallible in any given case, yet a careful consideration of the evidence has led me to believe that the improbable has occurred in this case. The evidence is undisputed that the plaintiff stored the sugar after its receipt in a properly constructed warehouse in a proper manner, and it would seem that if the deterioration had occurred in handling the sugar after its receipt by improper handling, the defendant could have controverted this evidence. I have, therefore, without much hesitation arrived at the conclusion that the sugar arrived in Green Bay in a defective condition. If that is the case the sugar must have been shipped in poor condition unless it deteriorated while in the control of the carrier.
The sugar concededly could have deteriorated while in the control of the carrier only by becoming wet. All of the cars which contained the sugar were found on arrival to be in good order and properly closed and sealed and the bags of sugar were stowed and piled in said cars in a good and proper manner. The sugar was shipped on two separate days by two different routes and arrived on four separate days. Strange coincidences may at times occur, but it seems to me to be beyond the range of probability that shipments arriving on four different days by two different routes
The question still remains, however, whether the plaintiff exercised this right within a reasonable time. The notice of rescission was given on October twenty-sixth. The breach of warranty was discovered on October fifth and for four weeks prior thereto the plaintiff had opportunity to inspect the sugar but failed to make use of such right. It is clear that ordinarily a notice of rescission given three weeks after discovery of the defect would not be within a reasonable time and that the retention of the sugar without examination for four weeks after plaintiff had a reasonable opportunity to examine it would constitute an acceptance under section 128 of the Personal Property Law. The question of what constitutes a reasonable time depends, however, in each case upon the circumstances surrounding the transaction, and it is claimed by the plaintiff that under the peculiar circumstances of this case the notice was given within the proper time.
The plaintiff has established that there was a custom in Wisconsin where the contract was made that wholesalers and jobbers received refined sugar from reputable refiners in the original containers and resold the sugar in turn without inspecting and examining it. The same custom was shown to exist in New York city, and it is fair to assume that both the plaintiff and the defendant had knowledge of this custom, and the rights of the parties should be determined with due regard for such custom. Section 152 of’ the Personal Property Law provides that “ Where any right, duty or liability would arise under a contract to sell or a sale by implication of law, it may be negatived, or varied by express agreement or by the course of dealing between the parties, or by custom, if the custom be such as to bind both parties to the contract or the sale.” That section of the statute is in my opinion in nowise contrary to the classic opinions of Mr. Justice Story in Donnell v. Columbian Ins. Co., 2 Smnn. 366, Fed. Case No. 3987; and in The Beeside, 2 Sumn. 567, Fed. Case No. 11657, in which that learned jurist pointed out the danger involved when proof of usages and customs is permitted to outweigh the well-known and well-established principles of law. On the contrary, it seems to me to be a statutory recognition of the proper function of such usages and customs as laid down in the opinion in The Beeside, supra: “ The true and
I am unwilling on the present case to hold that the custom as proven was sufficient to prevent the retention and resale of the sugar from constituting an acceptance of the goods, but it seems to me that under the custom the acceptance was made without knowledge, actual or constructive, of the breach of warranty.
It is urged that the so-called custom means nothing more than that the dealer was accustomed to rely upon the reputation of the
The most serious doubt in my mind is whether the plaintiff did give such notice within a reasonable time. It concededly notified the defendant promptly of the defects in the sugar, but that' notice constituted no rescission though it might pave the way to an action for breach of warranty. No answer was received to this letter and nothing was done for two weeks when an officer of plaintiff corporation proceeded to New York to see the defendant. Discussions then ensued about the matter and at the end of the negotiations, three weeks after the discovery of the defect, the first actual notice of election to rescind was given. In the meanwhile the price of sugar had dropped. The question of whether a notice of election to rescind has been given within a reasonable time depends upon all the circumstances of the case and in determining that question the court must, so far as possible, look at the matter from the point of view of the parties and must require of each fair dealing towards the other. The buyer must not be permitted to speculate as to whether an election to rescind is more profitable than an election to accept the goods and, especially, where there has been a fall in the price of goods, the buyer should not be permitted to place this loss upon the seller through any failure to make the election earlier. On the other hand, the mere fact that the letter which the plaintiff sent to the defendant, in which it complained about the sugar as soon as the examination was made, contained no statement that the plaintiff elected to rescind, should not be held to bar the plaintiff if the plaintiff’s entire course of conduct was such as a business man would naturally and fairly pursue. Ordinarily a business man. discovering defects in goods supplied by a reputable dealer does not assume that he will be obliged to resort to legal proceedings to protect his rights nor does he consult his lawyer as.to the form of letter he will write, but merely sends the dealer a complaint and then waits a reasonable time to learn what the dealer will do to remedy the trouble. This in pay opinion is exactly what the plaintiff has done in the present case for, not hearing from the defendant within two weeks, he proceeded to New York to discuss the matter in person. When these discussions failed to result in
For these reasons I have determined that the plaintiff has rescinded the contract of sale and can recover the price paid thereon as well as the expenses to which the plaintiff has been put while holding the goods for the defendant. I have not, however, found any authority for the inclusion of expenses for storage where the buyer itself stored the goods nor for the expense of opening a letter of credit. Findings passed upon and signed. Submit complete decision and judgment.
Judgment accordingly.