W. L. Ellis & Co. v. Quanah Cotton Oil Co. , 1921 Tex. App. LEXIS 942 ( 1921 )

Appellee sued W. L. Ellis, trading in the name of W. L. Ellis Co., to recover damages arising out of an alleged breach of contract for the sale of certain cotton. The sale was of 100 bales of inferior grade of cotton, designated by the parties as type 9. The petition alleged that the cotton was finally accepted at Quanah, Tex., in two lots of 88 and 12 bales respectively, and that the acceptance was through I. E. Ellis, the duly authorized agent of appellant. It was further alleged that the cotton was shipped in the name of appellant as consignor to Houston, Tex., notify Anderson Clayton Co., and that demand drafts were drawn on the same day by appellant upon himself, payable at Brownwood, where appellant was doing business. It was averred that the cotton was rejected by appellant, and payment of the drafts refused, because it was claimed the cotton was not equal to type 9. A resale of the cotton at Houston for appellant's account was alleged, and damages claimed for the difference in market value and other elements of loss, incident to the sale.

Appellant denied acceptance of the cotton and the authority of I. E. Ellis to bind him, as well as pleading that the quality of the coton shipped was not up to the grade of the samples under which the sale was made There was an averment of legal fraud by appellee in misrepresenting the grade of the cotton and inducing I. E. Ellis to accept and order the cotton shipped. It was also urged that the resale was made on a holiday, and not with reasonable dispatch, after appellee was informed of the rejection of the cotton.

The trial court gave a peremptory instruction for appellee, and from the judgment entered on the verdict this appeal was taken.

There are a number of objections to the consideration of all the assignments, some of which are regarded as hypercritical. A careful examination of the criticisms has convinced us that they are all without merit, and invoke a too critical application of the rules, In the view of this court, the rules are intended to promote, and not to stifle, justice. It is enough that there has been a substantial compliance. Railway Co. v. Pemberton, 106 Tex. 406, 161 S.W. 2, 168 S.W. 126.

The assignments will be considered on their merits. It is doubtless true that some or them do not conform to the letter of the rules, especially as to the scope of the statements under propositions. However, they do not call for any great labor on our part, and are not such gross violations as would justify us in disregarding them, especially where there has been an instructed verdict.

A careful consideration of the evidence has convinced us that the trial court erred in giving the peremptory instruction, because there were material issues of fact for the jury to decide. The sale was admittedly one by sample. While the evidence might have been sufficient to sustain a finding that there was a waiver of the right of inspection, and a final acceptance by appellant, after inspection, and in reliance upon the honest judgment of Mr. Kelly, we do not think the evidence of such a conclusive character as to justify an instructed verdict.

It is unnecessary to set out the evidence in detail. The testimony of I. E. Ellis and W. L. Ellis, in reference to the limited authority of the former in this particular matter, and the positive testimony of I. E. Ellis that he told Mr. Kelly, the representative of appellee, that he knew nothing about such grades of cotton, especially type 9, and that they would expect Mr. Kelly to match up with the samples, while susceptible of another construction, might well have justified the inference that there was no intention to waive inspection or comparison of the samples, and no purpose to commit the question of quality and grade to Mr. Kelly's sound judgment. Indeed, Mr. Kelly's own testimony tends to support the latter view, since he testified that he made no effort or attempt to pass on type 9 cotton for I. E. Ellis. This is sufficient, we think, although there is other evidence, to make the question one for the jury.

We also entertain the view that the evidence raised the issue as to whether or not appellee exercised due diligence to sell the cotton to the best advantage and within proper time. The testimony tended to show that the seller retained such control over the cotton until payment of the drafts to which the bills of lading were attached as that it could have taken possession and have resold the cotton when advised by the buyer that he had rejected it. Whether this could or should have been done at Quanah and more promptly than was done are questions of fact. Appellee did exercise this right when the cotton arrived at Houston. Whether it was done promptly or properly are questions primarily for the decision of the jury. This conclusion also applies to the claim that the cotton should not have been sold on a holiday.

As to the question of fraud, the proper submission of any such issue upon another trial will depend upon the evidence. It does not seem to be seriously or specifically claimed that it was raised by the evidence in the record. It is thought proper to say, however, that if the issue should be presented, we agree with counsel for appellant that it is not necessary that a false representation should be willful. The trend of decisions by our Supreme Court has been steadily to the principle that it is as much fraud to misrepresent that which the party does not know to be true or false as to state it with absolute knowledge of its falsity. No person should be heard to say:

"It is true that I made a false statement of fact to another, upon which he acted, to his detriment, but I did not know it to be false." As to the 12 bales of cotton, which are now admitted to have been up to type 9, it is insisted that we should at least affirm the judgment. Appellant bought 100 bales of that grade to fill orders from others. He was entitled to that quantity, unless he waived the right. We cannot say, as a matter of law, that he did waive it simply because there were two shipments of the lot, one of which came up to sample. This, too, would seem to be a question of fact. The other questions raised will probably not arise upon another trial; hence we express no opinion upon them. For the reasons given, the judgment is reversed, and the cause remanded.

Reversed and remanded.

KEY, C.J., not sitting.

On Rehearing.