Rheinberg-Kellerei GMBH v. Vineyard Wine Co.

281 S.E.2d 425 (1981)

RHEINBERG-KELLEREI GMBH
v.
VINEYARD WINE COMPANY, INC.

No. 8026SC1192.

Court of Appeals of North Carolina.

September 1, 1981.

Williams, Kratt & Parker by Neil C. Williams, Charlotte, for plaintiff-appellant.

Caudle, Underwood & Kinsey, P.A. by Lloyd C. Caudle and Donald M. Etheridge, Jr., Charlotte, for defendant-appellee.

WELLS, Judge.

The first question presented by plaintiff's appeal is whether the trial court was correct in its conclusion that the risk of loss for the wine never passed from plaintiff to defendant due to the failure of plaintiff to give prompt notice of the shipment to defendant. Plaintiff made no exceptions to the findings of fact contained in the judgment and does not contend that the facts found were unsupported by the evidence. Our review on appeal is limited to a determination of whether the facts found support the court's conclusions and the judgment entered. Rule 10(a), N.C. Rules of Appellate Procedure; Swygert v. Swygert, 46 N.C.App. 173, 180-81, 264 S.E.2d 902, 907 (1980).

All parties agree that the contract in question was a "shipment" contract, i.e., one not requiring delivery of the wine at any particular destination. See J. White & R. Summers, Uniform Commercial Code § 5-2, at 140-42 (1972). The Uniform Commercial Code, as adopted in North Carolina, dictates when the transfer of risk of loss occurs in this situation. G.S. 25-2-509(1)(a) provides, in pertinent part:

Risk of loss in the absence of breach. — (1) Where the contract requires or authorizes the seller to ship the goods by carrier (a) if it does not require him to deliver them at a particular destination, the risk of loss passes to the buyer when the goods are duly delivered to the carrier even though the shipment is under reservation (25-2-505)....

Before a seller will be deemed to have "duly delivered" the goods to the carrier, however, he must fulfill certain duties owed to the buyer. In the absence of any agreement to the contrary, these responsibilities, set out in G.S. 25-2-504, are as follows:

Shipment by seller. — Where the seller is required or authorized to send the goods to the buyer and the contract does not require him to deliver them at a particular destination, then unless otherwise agreed he must

(a) put the goods in the possession of such a carrier and make such a contract for their transportation as may be reasonable having regard to the nature of the goods and other circumstances of the case; and

(b) obtain and promptly deliver or tender in due form any document necessary to enable the buyer to obtain possession of the goods or otherwise required by the agreement or by usage of trade; and

(c) promptly notify the buyer of the shipment. Failure to notify the buyer under paragraph (c) or to make a proper contract under paragraph (a) is a ground for rejection only if material delay or loss ensues.

The trial court concluded that the plaintiff's failure to notify the defendant of the shipment until after the sailing of the ship and the ensuing loss, was not "prompt notice" within the meaning of G.S. 25-2-504, and therefore, the risk of loss did not pass to defendant upon the delivery of the wine to the carrier pursuant to the provisions of G.S. 25-2-509(1)(a). We hold that the conclusions of the trial court were correct. The seller is burdened with special responsibilities under a shipment contract because of the nature of the risk of loss being transferred. See W. Hawkland, 1 A Transactional Guide to the U.C.C. § 1.2104, at 102-107 (1964). Where the buyer, upon shipment by seller, assumes the perils involved in carriage, he must have a reasonable opportunity to guard against these risks by independent arrangements with the carrier. The requirement of prompt notification by the seller, as used in G.S. 25-2-504(c), must be construed as taking into consideration the need of a buyer to be informed of the shipment in sufficient time for him to take action to protect himself from the risk of damage to or loss of the goods while in transit. But see J. White & R. Summers, Uniform Commercial Code § 5-2, fn. 12 (1972). It would not be practical or desirable, however, for the courts to attempt to engraft onto G.S. 25-2-504 of the U.C.C. a rigid definition of prompt notice. Given the myriad factual situations which arise in business dealings, and keeping in mind the commercial realities, whether notification has been "prompt" within the meaning of U.C.C. will have to be determined on a case-by-case basis, under all the circumstances. See W. Hawkland, 1 A Transactional Guide to the U.C.C. § 1.2104, at 106 (1964).

In the case at hand, the shipment of wine was lost at sea sometime between 12 December and 22 December 1978. Although plaintiff did notify its agent, Frank Sutton, regarding pertinent details of the shipment on or about 27 November 1978, this information was not passed along to defendant. The shipping documents were not received by defendant's bank for forwarding to defendant until 27 December 1978, days after the loss had already been incurred. Since the defendant was never notified directly or by the forwarding of shipping documents within the time in which its interest could have been protected by insurance or otherwise, defendant was entitled to reject the shipment pursuant to the term of G.S. 25-2-504(c).

In its final assignment of error plaintiff asserts that the trial court erred in not imposing a constructive trust upon money received by defendant from a third party in connection with the remarketing of a canceled portion of the wine order. This issue was not presented in the pleadings nor does the record reveal that the issue was raised at trial. Plaintiff cannot now present this theory on appeal. Baer v. Davis, 47 N.C.App. 581, 582, 267 S.E.2d 581, 582, disc. rev. denied, 301 N.C. 85, 273 S.E.2d 296 (1980); Men's Wear v. Harris, 28 N.C.App. 153, 156, 220 S.E.2d 390, 392 (1975), disc. rev. denied, 289 N.C. 298, 222 S.E.2d 703 (1976).

We do not reach the assignments of error presented by defendant. Since by our decision we have left undisturbed the judgment in defendant's favor, it is not a party aggrieved and therefore may not appeal. G.S. 1-271; Boone v. Boone, 27 N.C.App. 153, 218 S.E.2d 221 (1975).

In the plaintiff's appeal, the judgment is

Affirmed.

In the defendant's appeal, the appeal is

Dismissed.

HEDRICK and HARRY C. MARTIN, JJ., concur.