Katz v. Delohery Hat Co.

It will simplify the consideration of this case to deal first with the question whether the defendant's motion to set aside the verdict as against the evidence was properly denied.

A review of the evidence discloses that there are certain undisputed facts in evidence, among them the following: The plaintiff was engaged in the business of manufacturing and selling fur for use in manufacturing hats. The defendant was a manufacturer of hats. The plaintiff made and sold one kind of fur which was designated by him as Y. C. Superior B. C. B. unpulled fur. This fur was cut from skins of rabbits imported from Australia.

On the 22d day of July, 1918, the plaintiff sold to the defendant 1,500 pounds of Y. C. Superior B. C. B. unpulled fur, at the price of $6.50 per pound. A memorandum of the contract and sale was made and signed by the parties, which reads as follows: —

Newark, N.J. July 22/18.
To The Delohery Hat Co.
Danbury, Conn.

Dear Sir: We hereby confirm your purchase of Five (5) cases of Y. C. Superior B. C. B. Unpulled @ $6.50 per 1b. (Deliveries against this contract are liable to variation or cancellation on the part of the seller in case of strikes, breakdown, fires or delay or hindrance by reason of conditions occasioned by war or other circumstances beyond seller's control.) on the following terms and conditions.

Bills to be payable 8% the 10th of the following month, less 1% for each month thereafter.

Delivery Oct. 22 or sooner if called. Unless otherwise instructed will ship by

Very respectfully yours, J. W. Katz.

Accepted by THE DELOHERY HAT CO., M. Delohery, Pres.

This fur was shipped by rail to the defendant at Danbury, with its consent, about September 27th, 1918. The defendant received the fur, tried it late in October, 1918, and thought it was not the kind and quality contracted for, and on October 31st wrote to the plaintiff to that effect, and on November 1st the plaintiff replied that the fur was of the kind and quality contracted for; thereupon the defendant, on November 5th, reshipped the fur to the plaintiff at Newark, N.J. On or about November 13th, the plaintiff found the fur at his place of business. He immediately reshipped the fur to the defendant and notified it by letter that he refused to accept the fur and had reshipped it to the defendant, and that if not paid at once he would begin suit for the contract price. On December 5th the plaintiff was notified by the railway company that the defendant refused to receive the fur.

The plaintiff thereupon served a notice upon the defendant by letter of December 5th, a copy of which is printed in the footnote.^*

The plaintiff ordered the railway company to return the fur to him at Newark, N.J. This was done and the fur was received by him on December 20th.

The plaintiff thereupon, after this notice to the defendant, undertook to sell the fur on the defendant's account, and sold it in the month of May, 1919, at $3 per pound.

This action was brought after the contract time for payment had passed. The action set up in the complaint is an action for damages for nonpayment of the price, to wit, for the purchase price less the amount received on the sale of the fur by the plaintiff in behalf of the defendant.

The evidence shows that after November 11th the price of fur began to fall, and that late in December there was practically no market for the fur.

Upon the trial, among the contested issues, were (1) whether the fur shipped to the defendant was of the character and quality called for by the contract; and (2) whether the price, for which the plaintiff sold the fur, and which he credited on the purchase price, was such a price as he was justified in selling it for in the exercise of reasonable diligence, in view of the falling market conditions arising from the armistice on November 11th.

The defendant does not question that under the evidence the jury could have reasonably found, as it did, that the fur was of the character and quality called for by the contract. It claims that under the evidence there was an available market for the fur during November, 1918, and early in December, at a price substantially higher than the price received, and that by the exercise of due diligence the plaintiff could have secured a substantially higher price for the fur, and that the jury could not reasonably have found otherwise. This claim is based upon the assumption that the duty of the plaintiff, of using due diligence to procure the best available price for the fur, began either on November 5th, 1918, when the defendant shipped the fur back to the plaintiff, or on November 13th, when the plaintiff found the fur at his place of business. The fur was sold for $4,395 by the plaintiff, and the jury rendered a verdict for $5,355, that being the purchase price, $9,750 less the $4,395 received by the plaintiff for the fur. The general verdict of the jury to this effect shows that they found that the fur delivered to the defendant by the plaintiff was fur of the quantity, character and quality called for by the contract, and that the price for which the plaintiff sold the fur was a price that he was justified in selling it for, in the exercise of reasonable diligence.

The defendant's claim that the duty rested on the plaintiff of procuring the best available price for the fur early in November, 1918, leads us to consider the relations of the parties to this fur in November, 1918, under the undisputed facts and the law of sales.

When in September, 1918, fur of the quantity, character and quality called for by the contract, as the jury found this fur to be, was shipped to the defendant by rail and delivered to the defendant in Danbury, the plaintiff had executed the contract and title passed to the defendant. The payment of the purchase price by the defendant in accord with the agreement was then the only executory part of the contract. The defendant could not at will, by returning the fur, divest the plaintiff of his right of action for the purchase price and cast upon him only a cause of action for nonacceptance of the fur. When fur of the quantity, character and quality called for by the contract was delivered to the defendant, it was accepted in law; the fact that the defendant had the right to inspect the fur and refuse to accept it if not of the character and quality called for by the contract, did not entitle it to refuse to accept fur of the character and quality called for by the contract, title to which had passed to it by delivery, and thereby deprive the seller of his right of action for the purchase price and remit him to an action for damages for nonacceptance. The title of the defendant to the fur, which had accrued to it upon its delivery, was not divested by the return of the goods to the plaintiff on November 5th, but still continued in the defendant. When the plaintiff reshipped the goods to the defendant by rail about November 13th, 1918, the title was still in the defendant. The title remained in the defendant while the goods remained in the railroad freight-house in Danbury. 2 Mechem on Sales, § 1618; Home PatternCo. v. Mertz Co., 86 Conn. 494, 86 A. 19, 88 Conn. 22,90 A. 33; Murphy v. Sagola Lumber Co.,125 Wis. 363, 103 N.W. 1113; General Statutes, §§ 4712, 4685; Williston on Sales, §§ 482, 278, 562.

The plaintiff in his notice of December 5th, 1918, informed the defendant, in substance, that he was about to take this fur of the defendant into his possession and hold it as the agent of the defendant and as such sell it for the defendant, and apply the proceeds upon his account against the defendant for the purchase price of the fur, unless the defendant notified him to the contrary. After receipt of this notice the defendant had a reasonable time (which under the circumstances would be a very short time) to take possession of its fur, or notify the plaintiff not to sell it. To the statement of the plaintiff's purpose in the notice of December 5th, the defendant made no response, and under the pleadings and evidence it must be deemed to have acquiesced in it. This action of the plaintiff and acquiescence of the defendant is intelligible in view of the fact that the parties were then in controversy as to whether the fur delivered to the defendant was of the character and quality called for by the contract.

The plaintiff received the defendant's fur on December 20th. He entered upon his self-imposed task of selling it for the defendant, within a reasonable time after notice and with due diligence, at the best available price. The defendant claims that when, in December, 1918, the plaintiff decided to hold the fur as agent or bailee of the defendant and sell it at the best available price, the plaintiff's rights and duties as such agent or bailee in law relate back to the time when the fur was first reshipped to him by the defendant early in November, 1918.

We do not agree to this claim as to the plaintiff's duty. This fur, under the undisputed facts and the jury's verdict, never ceased to be the fur of the defendant until it was sold by the plaintiff acting as its agent with its acquiescence. The plaintiff did not begin to act as such agent until early in December, 1918. Under the undisputed facts and the finding of the jury, that the fur delivered to the defendant was of the character and quality called for by the contract, this case is one of an executed contract of sale where the title has passed to the buyer. Under such circumstances the goods are accepted, in law, by the buyer. In the proper use of terms under such conditions, the only cause of action that the seller has is an action for damages for the non-payment of the purchase price, the measure of damages being the purchase price. Section 63 of the Sales Act (General Statutes, § 4729). The situation was one of goods sold and delivered. Home Pattern Co. v. MertzCo., 86 Conn. 494, 503, 86 A. 19. There could be no cause of action for nonacceptance of the goods, which in law have been accepted. Williston on Sales, § 482;Home Pattern Co. v. Mertz Co., 86 Conn. 494, 503,86 A. 19. The complaint in this case sets up a cause of action for damages for nonpayment of the purchase price. The plaintiff, in December, 1918, learned that this fur of the defendant was still lying unclaimed in the Danbury freight-house subject to loss by fire, water or other injury. This fur, the plaintiff claimed, was the fur of the defendant because it was fur of the kind and quality contracted for, and had been delivered to the defendant according to the contract; but it had not been paid for, because the defendant claimed that the title to it never passed to it but remained in the plaintiff, because the fur delivered to the defendant by him was not of the kind and quality contracted for (this claim the jury found unfounded). In this anomalous situation the common law, in order to effect a practical solution of the situation, gives to the seller the option to follow one of four courses: (1) He may leave the fur where it is and sue for the entire purchase price. (2) He may store the fur for the defendant and sue him for the entire purchase price. The law, in view of the fact that the buyer must usually act while a controversy is pending as to the quality of the goods being in accord with the contract, permits the seller to take other courses. (3) He may, after reasonable notice to the buyer that he intends to take such course, sell the fur acting as agent of the defendant, and recover the purchase price less the price obtained on the resale. (4) He may, upon due notice, retain the property as his own and sue to recover the difference between the market price at the time and place of delivery and the contract price. Williston on Sales, § 555; Meagher v. Cowing, 149 Mich. 416, 112 N.W. 1074; Dustan v.McAndrew, 44 N.Y. 72.

The plaintiff, in accord with his notice of December 5th, followed the third course. Since the duty of the plaintiff, to use due diligence in selling the fur at the best price obtainable, did not arise until after a reasonable time for the defendant to act after its receipt of the plaintiff's notice of December 5th, the jury, under the evidence, could have reasonably found that the plaintiff had exercised such duty and that he obtained the best price available; and the jury, under the evidence, could not have reasonably found otherwise.

The defendant further claims that the court made errors harmful to it in its charge and in its rulings upon the admission of evidence. In dealing with these claims of error, we shall refer to the undisputed and established facts as stated in the foregoing discussion. The parties were at issue as to whether the fur delivered to the defendant was of the character and quality contracted for. The court charged as follows: "The plaintiff further claims, and this may be considered in this connection, that since, under the law, it was not necessary for the defendant to return the fur if it intended to avoid or rescind the contract, but notice by word of mouth or in writing to the plaintiff would have been sufficient, — if you find that the defendant not only wrote a letter but returned the fur to the plaintiff at Newark, and if you find further that he prepaid the freight thereon, this conduct you may consider as to whether it is consistent or inconsistent with the claims which he now makes, or what, if any, other significance should be attached to the conduct of the defendant. This is a question purely for the jury to consider." The court charged, therefore, in substance, that the conduct of the defendant as outlined in the charge, inconsistent with the simple requirement of § 4716, might be taken into consideration by the jury to determine what significance, if any, such conduct had in relation to the claim of the defendant that the fur did not conform to the contract. The logical connection between the premises and the conclusion, sought to have the jury draw, is so tenuous, that this portion of the charge might well have been omitted as an over-emphasis of a minor fact, but we are satisfied that at the most this charge was a harmless error.

The third assignment of error is not well taken. The court charged the jury as follows: "That is, as applied to a case like the present, your inquiry will be as to whether, at or about the time the defendant returned these goods — the date I think was November 5th, 1918 — the state of the fur market was such that this fur could then be sold by the plaintiff to another buyer or buyers by the exercise of reasonable diligence, and if there was such a volume of transactions that there was an established . . . price. . . . If you determine this question in his favor, that there was no available market, that he was not able to sell at once on account of the lack of a market, and that he did sell it as soon as the market reasonably justified a sale and did as well as could be done under all the circumstances, then you will determine from the evidence how much he received for the fur, and deduct this amount from the price fixed in the contract, to wit, as I recollect it, the total price was $9,750. . . . If the jury find that the price of fur dropped after the signing of the armistice, November 11th, 1918, that Mr. Katz offered it for sale to a number of hat manufacturers in Danbury, Newark, N. J., and Reading, Pa., and that there was no market for the same until the sales to the Kingston Hat Company and the Von Gal Hat Company, then you would be justified in finding that the plaintiff used due diligence in endeavoring to effect a sale at the best available price." The defendant's claim, as to error in these portions of the charge, is based upon the erroneous claim that the plaintiff's duty to use due diligence to procure the best available price for the fur began on November 5th, 1918. In the discussion on the claimed error in denying the motion to set aside the verdict, we have held that, under the undisputed facts, the plaintiff's duty to use due diligence to procure the best available price for the fur began in December, 1918. With that fact in mind, it is apparent that such error, if any, as the court made in the excerpts from the charge where it stated that such duty began November 5th, 1918, was too favorable to the defendant and could not have been prejudicial to it. The law relating to the conduct of the seller in dealing with the nonacceptance of goods by a buyer in an executory contract of sale where the title has not passed, is rarely pertinent in an action for the purchase price where the contract, as here, has been executed by the seller and the title has passed.

The fourth, fifth and sixth assignments of error are not well taken. The defendant claims that "the court erred and mistook the law in failing to charge the jury that if the Von Gal Hat Company, on December 4th, 1918, was ready and willing to purchase said fur at $6 per pound, and the plaintiff knew said fact and failed and neglected to offer said fur to said Von Gal Hat Company, the plaintiff's recovery should be limited to $750, to wit: the difference between the contract price and the price at which the Von Gal Hat Company was ready to buy said fur." This claimed error is based upon the same erroneous conception, that the duty of the plaintiff to use due diligence to procure the best price available for the fur, began early in November, 1918.

The eighth assignment of error is not tenable. The assignments of error numbered 9, 10, 11, 13, 14, 15, 18, 19, 20 and 21, may be discussed together, as they involve substantially the same questions of law. The plaintiff testified, in effect, that he was an importer of raw skins and a manufacturer of hatters' fur for hat making; that he had conducted this business for many years and manufactured only one kind of fur, to wit, Yellow Carrot B. C. B. unpulled fur; that he called the fur he made Y. C. Superior B. C. B. unpulled fur; that he had sold it to numerous hat makers, including the companies mentioned below, for many years and that the character and quality of his fur so designated was well known in the trade; that in July, 1918, he had one lot of this fur on hand, all of the character and quality he was accustomed to make, sufficient to fill seven cases, each case holding about 250 pounds; that he then sold two cases from this lot at $6.50 per pound to the Cuff Hat Company of Danbury as Y. C. Superior B. C. B. unpulled fur, and the five remaining cases to the defendant (the sale in controversy); that subsequently, acting in behalf of the defendant as above stated, he sold three of the five cases that had been sold and delivered to the defendant, to the Von Gal Hat Company of Danbury and two of the five cases to the Kingston Hat Company; that these five cases were sold as his Y. C. Superior B. C. B. unpulled fur, and at the then market price. The plaintiff then testified that the fur was delivered to the three companies, accepted by them and paid for without complaint as to its character and quality. The plaintiff claimed that the facts as to each of these sales to the three companies were evidential facts, tending to prove that the lot of manufactured fur, from which the fur in controversy came, was Y. C. Superior B. C. B. unpulled fur; and claimed, also, that because the three hat companies received the fur and accepted and paid for it without complaint, as fur of the character and quality of the plaintiff's Y. C. Superior B. C. B. unpulled fur, which they were accustomed to buy, these facts tended to prove that the five cases of fur in question were of the character and quality of the plaintiff's fur known in the trade as Y. C. Superior B. C. B. unpulled fur. The setting as to the evidential assignments of error appearing in the finding has been supplemented, in the above statement, by an examination of the evidence before us on the appeal from the denial of the motion to set aside the verdict. Friedler v. Hekeler, 96 Conn. 29,34, 112 A. 651. The defendant objected to the admission of all these transactions as irrelevant and incompetent. The court admitted the evidence and the defendant duly excepted.

In Plumb v. Curtis, 66 Conn. 154, 166, 33 A. 998, we stated the following principles as underlying the admission of evidence: "Unless excluded by some rule or principle of law, any fact may be proved which logically tends to aid the trier in the determination of the issue. Evidence is admitted not because it is shown to be competent, but because it is not shown to be incompetent. No precise and universal test of relevancy is furnished by the law. The question must be determined in each case according to the teachings of reason and judicial experience. Thayer's Cases on Evidence, 2, 3. ``If the evidence offered conduces in any reasonable degree to establish the probability or improbability of the fact in controversy, it should go to the jury.' Insurance Co. v. Weide, 11 Wall. (U.S.) 438, 440. The question as to its admission or rejection addresses itself to the court as one to be answered with a view to practical rather than theoretical considerations. . . . The word ``relevant' means that any two facts to which it is applied are so related to each other, that according to the common course of events one either taken by itself or in connection with other facts proves or renders probable the past, present, or future existence or nonexistence of the other." Stephen's Digest of the Law of Evidence, Chap. 1, p. 36. The trial court, as indicated by its ruling, was of the opinion that if the jury found that the seven cases of fur of the plaintiff were of one lot of fur of identical quality, then the acceptance of and payment for, without complaint, of portions of this fur by each of the three companies as Y. C. Superior B. C. B. unpulled fur of the kind bought by each, rendered it probable that the lot of fur constituting the seven cases was of that quality. We do not find that this conduct of each of the three companies does not conduce in a reasonable degree to establish the probability that the fur in question was of the quality known in the trade as the plaintiff's Y. C. Superior B. C. B. unpulled fur. An evidence question similar to the one at bar arose in the case of Mears v.New York, N. H. H.R. Co., 75 Conn. 171,52 A. 610. The plaintiffs were consignees of a boxed piano shipped by freight from Massachusetts to New Haven. When the box arrived at New Haven, the plaintiffs employed an express company to cart the box to their home. When received, the box was wet inside and out and the piano damaged. The plaintiffs sued the railway company for this damage. The defendant claimed that the box was not so damaged while in its custody. In order to prove the fact that the box was not wet when delivered to the express company, the railroad company offered evidence to prove that when the agent of the express company receipted for the box he looked at it and made no complaint. The railway company claimed that if the box was in fact then wet, the agent would have naturally said something about it. The silence of the agent under the circumstances was held by us to be admissible evidence tending to prove the condition of the box at the time. So here, under the circumstances claimed to have been proved, the failure of either of the three companies, who received fur from the same lot identical in quality or the very fur in question, to complain of its quality, is a fact reasonably tending to prove that the fur in question was of the quality contracted for, namely, Y. C. Superior B. C. B. unpulled fur.

There was clearly a sufficient foundation for the admission of the opinion of M. T. Cuff as to the quality of fur coming from the same lot identical in quality, subject, of course, to the finding of the latter facts by the jury. So, also, there was sufficient foundation for the admission of the opinion of E. J. Von Gal as to the quality of the fur in question derived from an inspection of the hats made from this fur. Assignments of error nine to eleven, thirteen to fifteen, and eighteen to twenty-one, are not well taken.

The sixteenth assignment of error is that the court erred in admitting the testimony of A. M. Rosenberg as an expert as to the general condition of the fur market after the armistice of 1918. The witness had been in the hat manufacturing business for thirty years, was vice-president and manager of the Kingston Hat Company, and had bought fur. The decision of a trial court as to the qualifications of an expert witness is conclusive, unless there has been an abuse of discretion, that is, unless it clearly appears that the decision was based on incompetent or insufficient evidence. We find no abuse of discretion by the trial court in the ruling complained of.

There is no error.

In this opinion BEACH and BURPEE, Js., concurred; GAGER, J., concurred in the result, but died before the opinion was written.