Whatley v. Weston, Dodson & Co.

Argued February 1, 1927. This action was brought to recover the purchase price of eighteen cars of coal. The trial resulted in a verdict and judgment for defendant, from which plaintiffs appeal, contending that under the evidence judgment should have been entered in their favor for the full amount of their claim.

Defendant gave a written order to plaintiffs on October 12, 1920, for sixty cars of coal. The order stipulated that it was to be shipped to Tidewater Coal Exchange, Incorporated, "Pool 34," at the Curtis Bay Coal Piers, Baltimore, for the account of defendant under a permit held by it. The price named was $10.75 per ton. The order provided that plaintiffs should "Report all car numbers to us [defendant] at Bethlehem the day cars are shipped. Follow with weights immediately after coal passes scales."

The Tidewater Coal Exchange was a corporation composed of certain dealers in coal, defendant being one of them, whose purpose was to aid and facilitate the handling and shipment of coal at tidewater. Its physical entity consisted of a large number of railroad tracks on which the cars were run and where they remained until the coal was loaded into vessels. When the coal reached the Exchange it was inspected and if it passed inspection was loaded directly into boats from the cars or was placed on the tracks devoted to coal of similar grade. When coal was accepted by the Exchange its identity was lost in the mass of other coal of like kind. The coal in question, owing to its grade, was to go into pool 34, to which defendant's written order directed shipment. There is no denial that the coal was shipped to and accepted by the Tidewater Exchange. Six cars thereof were shown to have been loaded directly into a named boat in which defendant was shipping coal, and the rest was mingled with the other coal of similar kind in the Exchange for defendant's account. The Exchange did not handle or receive any money for the coal which passed through it. It credited to each consignee the coal received consigned to him and charged him with the coal which went out of its hands to fill his commitments. Under certain conditions members of the Exchange were permitted to take more coal out of the mass in the Exchange than was to their credit, being charged with the overdraft which they made up by subsequent shipments into the Exchange. Shortly after the receipt of the eighteen cars of coal in question defendant overdrew its credit in the Exchange several thousand tons. This establishes the fact, an important one in the case, that all the coal in question was sold by defendant and shipped to its customers.

With this general view of the situation outlined, we will now take up in detail the circumstances disclosed by the testimony which to our minds convincingly show that defendant should pay for the coal, that its defenses against payment are justly unavailing and that the trial judge was in error in not directing a verdict in plaintiffs' favor.

First there is the circumstance that defendant's written order directed plaintiffs to ship the coal to the Tidewater Exchange for its account. This constituted the Exchange defendant's agent to receive it. The coal arrived at the Exchange on October 17th and 18th and the Exchange notified defendant of arrival and that the cars had been "dumped" for its account. Defendant wag also informed that it had been credited on the books of the Exchange with the tonnage contained in the eighteen cars. The Exchange reported the car numbers but not the name of the consignor as it did not know who was the consignor. These notices from the Exchange were received by defendant on October 25th, 26th and 27th.

Plaintiffs did not comply with the requirements of defendant's order to "Report all car numbers to us at Bethlehem the day cars are shipped." This report was not made until November 18th. In connection with it plaintiffs stated that according to their records the eighteen cars had gone forward to Frame, Friend Stineman, but the latter had advised them that the Tidewater Exchange showed that the cars had arrived there for defendant's account. Upon receipt of plaintiffs' communication of November 18th giving the car numbers, defendant wired plaintiffs acknowledging that the cars had arrived for its account without being reported as the order required, saying further, "We will accept your invoice at nine dollars ninety-seven cents per ton, our average price," and on November 24th by letter defendant formally acknowledged receipt of plaintiffs' letter of November 18th "relative to cars shipped to Frame, Friend Stineman, but arrived for our account at Curtis Bay. As wired you yesterday, these cars arrived without having been reported and we will agree to accept your invoice at $9.97 per net ton, which is our average cost price on coal of similar quality on date shipped." This proposition was accepted by plaintiffs on January 25, 1921. The price of coal was declining and on January 28th defendant replied refusing to stand to its offer but making a proposition to pay $5 per ton. This offer was repeated on February 12th. On December 22, 1921, and December 28, 1921, defendant acknowledged that the eighteen cars of coal had arrived at the Tidewater Exchange consigned to it and "dumped for our account." From the foregoing it will be seen that defendant does not deny, indeed it admits, that the coal in compliance with its order was shipped to the Tidewater Exchange and received by the latter for its account and the proofs established that the coal passed from the Exchange to customers of defendant to whom it had been sold by the latter. So far as the six cars are concerned which were dumped directly into the vessel, defendant admits the actual receipt of the money for the coal which they contained.

We will now proceed to examine defendant's claim of nonliability. The coal was originally sold and shipped to Frame, Friend Stineman, consigned for their account to the Tidewater Exchange. For some reason not made entirely clear but apparently because it was believed by plaintiffs that the coal could not go forward to Frame, Friend Stineman on their permit, plaintiffs, while the coal was in transit, changed the order for its shipment and directed it to be consigned to defendant. As a result of conflicting instructions and misunderstandings among plaintiffs or their office force it was believed for some time that the coal had gone to Frame, Friend Stineman. Even after defendant's acknowledgement of receipt of the coal and plaintiffs' notice to it of November 18th and defendant's proposition to pay for it at a lower figure, this mistaken conclusion continued to exist to such an extent indeed that plaintiffs brought suit against Frame, Friend Stineman to recover the price of the coal. On being satisfied, however, that defendant and not the original consignees had received the coal, plaintiffs discontinued the suit.

Defendant contends that, after consigning the coal to Frame, Friend Stineman, plaintiffs could not reassert dominion over it, take title out of them and reconsign it to the Tidewater Exchange for defendant's account. This might be so if Frame, Friend Stineman were claiming the coal, but they are not and defendant undoubtedly received and sold it; under this state of facts, when called upon to pay, it does not lie with defendant to raise this question.

Defendant argues that plaintiffs cannot recover because they did not comply with the terms of the written order by reporting the car numbers to it the day the cars were shipped and by following this with the weights after the coal had passed the scales. Defendant was precluded from setting up these derelictions of plaintiffs against their demand for payment when it assented to its agent's act in accepting the coal and thereafter exercised ownership by selling it. One who receives a commodity, not defective in quality, which he has purchased from another, and appropriates it to his own uses, cannot refuse payment therefor because of unperformed conditions of the sale by the vendor; such conditions are waived by acceptance and use. Defendant, by its letter of November 18th, in which it offered to pay for the coal at a reduced price, waived the conditions mentioned and recognized its liability. Defendant alleges that owing to plaintiffs' failure to give notice, not knowing from whom the coal had come, it was compelled to and did purchase eighteen other cars of coal at $11 per ton or twenty-five cents above the sale price of the coal in question in order to meet its commitments to customers. It does not set up this difference in price by way of counterclaim, does not divulge the price at which it sold this coal nor allege any loss on its sale. Defendant needed this tonnage and more to meet the overdraft in the Exchange. It is difficult to see how this transaction even if ascribable to plaintiffs' default, which is not altogether apparent, was to defendant's disadvantage.

Defendant makes point of the circumstance that one of its witnesses testified there was doubt about the fact that the coal in question arrived at the Tidewater Exchange"consigned to our company." In his opinion on the motion for judgment the trial judge said that "This testimony raised the dispute about the arrival of the coal for the account of defendant and was consequently a question for the jury." This is a palpably mistaken view of the actualities of the case. There can be no doubt, because defendant admits it, that the coal was received by its agent, the Exchange, in its behalf, and that defendant used the coal. If there was a doubt as to whom it was consigned, which we think there was not (otherwise, how could the Exchange have notified defendant of the arrival), that doubt was of no consequence in the determination of the issue in the light of what actually happened to the coal. Defendant in writing expressly admitted that the coal arrived consigned to it; "arrived for our account at Curtis Bay," "subsequently arriving under our permit, consigned to us and dumped for our account." In view of these admissions how can it be said that there was doubt on the matter or that any such question was open for the jury's determination? Slightly paraphrased, the language used in Wilbur v. Lamborn, 276 Pa. 479, fits the situation with which we are now dealing: "The subject-matter of this contract is the sale of [coal]. That is the material thing in it, and that part of the contract which provides [for certain notices] . . . . . . is an incident of that sale and delivery, and unless somebody was harmed [by the failure to give notices] that part ought to give way to the common intent of the contract, which is the sale of [coal] and its delivery."

We think under the very terms of the Sales Act (Act May 19, 1915, P. L. 543, section 48) the defendant is bound to pay. "The buyer is deemed to have accepted the goods when he intimates to the seller that he has accepted them, or when the goods have been delivered to him and he does any act in relation to them [here defendant sold and delivered the coal to its customers] which is inconsistent with the ownership of the seller, or when, after the lapse of a reasonable time he retains the goods without intimating to the seller that he has rejected them."

Our conclusion is that plaintiffs under all the evidence were entitled to an affirmance of their point for binding instructions in their favor.

The judgment is reversed and the court below is directed to enter judgment for plaintiffs for the amount of their claim with interest.