Lawder Co. v. MacKie Grocery Co.

The appellee sued the appellant for breach of a contract which is set out in the declaration as follows:

"Baltimore, May 24th, 1901.

"Bought of Samuel M. Lawder Sons Company, Baltimore, Maryland, for account of Albert Mackie Grocer Company, Limited, New Orleans, La., seven hundred (700) cases, two pound, Quail Tomatoes, at fifty-two and one-half cents per dozen. Terms cash, less one and one-half per cent. Buyer to give shipping instructions when requested by seller. To be delivered as packed during the season of 1901. F. o.b. Baltimore. Brokers Thompson Fowler, New Orleans, La.

"Accepted.

"SAMUEL M. LAWDER SONS CO. "PERCY M. LAWDER, Pres."

The defendant filed in addition to the general issue pleas two that were marked 3 and 4, which were demurred to. The demurrer was sustained and, the other pleas having been withdrawn, judgment was entered in favor of the plaintiff for the amount of its claim, and from that judgment this appeal was taken. The third plea alleges that the tomatoes referred to were purchased from the defendant on the terms and conditions contained in the contract set out in the declaration, and, as was known to the plaintiff, the defendant had then and still had its canning factory and place of business in Baltimore; that the defendant had canned and packed the tomatoes for account of said contract, and on November 5th, 1901, in accordance with the precedent request of the plaintiff to make shipment of them, the defendant notified the plaintiff of its readiness to make delivery of said tomatoes free on board at Baltimore, which, as plaintiff was then informed, were loaded on a car ready to go forward simultaneously with payment in cash therefor at Baltimore, and the defendant requested the plaintiff to remit the purchase price thereof, to which request the plaintiff replied, "Will not pay for the tomatoes until the goods reach us." It then alleges that the plaintiff failed and refused to make payment concurrently with such proposed delivery of tomatoes, and failed and refused to accept delivery of said tomatoes free on board at Baltimore for cash to be then and there paid. The other plea was in substance to the same effect.

It is contended on the part of the appellee that this contract means that the sale was made at fifty-two and one-half cents per dozen, if paid for at the expiration of the customary period of credit for such goods, but if cash be paid there was to be a discount, or rebate of one and a-half per cent, but we cannot accept that as a proper construction of the contract. The price of the tomatoes is stated to be "at fifty-two and one-half cents per dozen," and the terms mentioned are "cash, less one one-half per cent." There is not only no time fixed for payment on credit, but the contract itself fixes the payment ascash, and the addition of "less one and one-half per cent" clearly means that as the terms had been arranged for cash, the vendor had allowed that discount. We are not at liberty to read into the contract "if cash be paid a discount of one and one-half per cent will be allowed." If we did, when would the credit expire if the buyer elect not to pay cash? It will not do to say that that would be regulated by the custom of the trade, for in the first place the parties themselves have undertaken to fix the terms, and moreover there is nothing in the record from which we can infer, much less know, that there was any such custom. If there be such and the parties did not want to be governed by it, how could they more clearly express their intention than by the use of the expression "terms cash?" When contracting parties thus undertake to set out the terms of their contract and in stating when the payment shall be made simply say "terms cash," it excludes all idea of credit and when they add to that expression "less one and one-half per cent" upon what principle can the latter clause be construed to indicate an intention to give credit at the option of the purchaser? It is not difficult to understand what that expression means, if it be true that such goods are frequently or usually sold on credit. Brokers of course are kept informed as to the market price of goods they deal in. These brokers from New Orleans prepared this memorandum by which they proposed to buy of the appellant, for account of the appellee, the tomatoes at fifty-two and one-half cents per dozen, and if they had stopped there and it was proven that by the custom of the trade the purchaser was entitled to a credit of say thirty days, then presumably it would have meant that the sale was at that figure, payable at the expiration of that time. But the proposition of the brokers did not leave that to custom or usage, and named the terms. That was submitted to the appellant and was accepted by it and the contract thus made first named the price of the tomatoes, which we presume was the market price, and then proceeded to agree upon the terms of payment which were to govern this particular transaction, stating that they were "cash" and they then agreed upon the discount, which was doubtless allowed by reason of the cash payment being agreed upon. If the contract had said "at fifty-two and one-half cents per dozen, less one and one-half per cent for cash" the contention of the appellee might have some foundation, but when the terms mentioned are "cash," and no suggestion of anything else, it would be striking down all the safeguards of a contract in writing to give the effect to the expression, "less one and one-half per cent," contended for by the appellee. Even if it be possible to read into this written contract any usage or custom which might change its ordinary meaning, no such usage or custom is alleged in the pleadings, and we are only to pass on them as they are found in the record. The case of Foley v. Mason, 6 Md. 37, to say the least would have made evidence of a custom on that subject very doubtful, if it had been offered. See also Gibney v. Curtis,61 Md. 201; Susquehanna Fertilizer Co. v. White, 66 Md. 456;Balt. Base Ball Club v. Pickett, 78 Md. 387. As the case is now presented, it seems clear to us that the buyer did not have the option of either paying cash at fifty-two and one-half cents per dozen less one and one-half per cent, or having credit, without getting the benefit of the discount.

But it is contended that conceding that the appellant had the right to require the payment in cash, it could only be demanded after the tomatoes reached New Orleans. We are, however, again confronted with the terms of the contract, in passing on that question. It provides "Buyer to give shipping instructions when requested by seller. To be delivered as packed during season of 1901. F. o.b. Baltimore." There is nothing in that language which would justify us in saying that the cash was not to be paid until the tomatoes reached New Orleans. Indeed there is no express provision in the contract for shipping them to that city. It may be said that it states the residence of the buyer to be at New Orleans, and hence the presumption is that they were to be shipped there. In the absence of some instruction to the contrary from the buyer it may be that the contract should be construed to mean that they were to be shipped to that city, but as the seller was only required to deliver them "f.o.b. Baltimore" and the contract provided for the "Buyer to give shipping instructions when requested by seller" there would be no reason why the seller should not ship them to some other point, if so instructed by the buyer, unless such shipment would impose a greater burden on the seller than shipping them to New Orleans would have done. If, for example, the buyer had sold those tomatoes in bulk to some one in Richmond, there could be no valid reason for the seller sending them to New Orleans and thus require the buyer to pay the freight to that place, and then reship them to Richmond. It would seem therefore to be possible that the tomatoes might never have gone to New Orleans, under the terms of the contract, and hence it is difficult to see how it can be said that the cash was not to be paid until they reached that city.

But if it be conceded that the contract contemplated that the shipment should be to New Orleans, and not elsewhere, it cannot be denied that if the appellant had placed the tomatoes purchased, in proper condition, on board the cars at Baltimore, with correct shipping instructions, its responsibility would have been at an end. The carrier would then have been the agent of the buyer and the seller would have had no redress against the carrier in case of loss. If the goods had been destroyed or injured, the buyer and not the seller could have held the carrier responsible, so far as there was any responsibility, and if there was none the buyer would have been compelled to sustain the loss. The seller would not even have had a lien on the goods for the purchase-money, and no right but that of stoppage in transitu, if circumstances arose that justified the exercise of that right. When then the contract provides for payment of cash and only requires the seller to deliver the goods free on board at Baltimore, why should the seller be required to wait until they arrive at New Orleans before it is entitled to its money? While the terms "f.o.b. Baltimore" required the seller to place, at its own expense, the goods on board in Baltimore, the buyer was required to pay the freight to the carrier and the goods were then at his risk. This contract not only uses the term "f.o.b. Baltimore" but it says "To be delivered as packed during season of 1901. F. o.b. Baltimore." In the record there is a period after "1901," but the expression "To be delivered," etc., unquestionably refers to and is connected with "f.o.b. Baltimore," and hence shows that the delivery was intended to be there. Although the sale was for cash, a delivery made unconditionally and without fraud or mistake would have vested the title to the goods in the appellee,Foley v. Mason, supra, and hence such a delivery in Baltimore would have had that effect, and a delivery elsewhere would not have been in accordance with the contract. It seems clear to us then that by the terms of the contract the payment was to be made in Baltimore upon delivery of the tomatoes on board the car and the appellee having refused, as alleged in the pleas, to make such payment, it cannot sustain this action, without in some way meeting the allegations of the pleas. Any other construction would be placing the appellant in a position not contemplated by the contract.

It was conceded by the appellee that a cash sale means a sale for cash to be paid on delivery of the goods, and that as a general rule the place of delivery is the place where the goods are being manufactured, but it is said that this rule is not invariable and may be affected by the situation of the parties, the nature and subject-matter of the contract, and other collateral circumstances which show a different intention, to which Courts give effect, and that there is a distinction noted in the authorities between the rules governing deliveries in sales of specific and ascertained chattels and those of goods not in existence, but to be manufactured by the seller to correspond with the description in the contract of sale. It is true that such a distinction is made in the absence of stipulations in the contract which govern the parties, but when the contract itself prescribes the terms and these terms are free from doubt, they must be the guide for Courts in passing on the rights of the parties.

Great stress was placed on the right of the appellee to inspect the goods before acceptance. If it be conceded that it had such right, as it may be, the further question arises as to where, under this contract, it could be exercised. The mere fact that the buyer has the right to inspect goods before acceptance does not necessarily mean that the inspection is to be made at the residence or place of business of the buyer. He might inspect at the seller's place of business, but if the contract provides for delivery at a particular place, he must accept or reject at that place, unless otherwise provided for in the contract. In short a contract to deliver at one place cannot be said to mean delivery at another place, because the buyer lives there and has the right to inspect the goods, and there is no such uncertainty as to the place of delivery in this contract as would justify the Court in holding that it was at New Orleans, because the appellee had its place of business there. An inspection of canned goods at any place away from the canning establishment must be attended with some difficulties. Every can that is opened is doubtless injured for the ordinary purposes of trade, for unless it is speedily sold the fruit or vegetables must soon become worthless. There is nothing in the record to show what the custom is as to inspection and the parties made no special provision in the contract for it, but it is manifest that there could not be an inspection of every can in seven hundred cases at the place to which they were to be shipped. But whatever inspection was to be made could have been done as well at the place from which the goods were shipped as at the point of destination, and it is mainly a question of convenience to the respective parties as to where it shall be made. If they determine that by their contract, it must control, and if it is silent as to inspection but it is as clear as this is as to delivery any inspection that is desired before payment, must be made before or at the time of delivery, when the terms are cash.

It was said on behalf of the appellee that the usual method of collecting the purchase-money for such goods is for the vendor to draw on the vendee and not deliver the bill of lading until the draft is paid, but a sufficient answer to that is that it was not the method adopted in this contract. The standing of these parties is not known to us, and we do not mean to reflect upon either of them, but if a vendor wants to relieve himself of all risk of loss, or unfair dealing by a vendee residing at a distance, he has the undoubted right to require payment at the place where the goods are to shipped from, and not subject himself to the risk of loss or inconvenience by the vendee declining to accept the goods at the place of destination, and when the contract provides for that, as we think this does, the contracting parties are bound by it.

So without deeming it necessary to further prolong this opinion by considering such warranties as may be implied in sales of this kind, or other matters affecting the rights of the respective parties, we are of the opinion that the Court below erred in sustaining the demurrer to these pleas and the judgment must be reversed.

Judgment reversed and a new trial awarded, the costs to bepaid by the appellee.

(Decided April 1st, 1903.)