Noble v. Olympia Brewing Co.

Cbow, J.

This action was commenced by William K. Noble against Olympia Brewing Company, a corporation, to recover $945.49, remainder of purchase price on a carload of merchandise. Judgment was entered in plaintiff’s favor for $176.20, less $37.60 costs awarded to the defendant. The plaintiff has appealed.

The evidence shows that, on or about February 5, 1907, appellant sold respondent a carload of elm hoops and liners to be delivered f. o. b. at Olympia, Washington; that, after much delay, claimed by appellant to have been caused by inability to obtain a suitable car, the shipment was made from Columbus, Ohio, and reached Olympia, Washington, on or about May 3, 1907. On May 11, 1907, respondent wrote appellant the hoops and liners were of inferior quality, and requested a memorandum credit of 25 per cent on the invoice price to cover its alleged loss. Appellant promptly refused this request, contended the goods were first-class, and insisted upon full payment. Respondent, by way of affirmative defense, alleged the goods were guaranteed; that, relying upon such guarantee, it paid $454.75 freight charges, unloaded the car and discovered the goods were of inferior quality, a fact that could only be definitely ascertained by using a portion of them; that respondent notified appellant of the condition of the hoops and liners, and refused to accept them except at a discount; that when respondent ordered the hoops, appellant agreed to ship promptly, but failed to do so; that by reason of appellant’s delay, respondent was without hoops or liners for use in its business, and was compelled to commence using the shipment; that in so doing it discovered their inferior quality; that appellant has refused, and still refuses, to accept a return of the goods; that respondent now holds, subject to appellant’s order, 38,080 6-6 elm hoops, 10,000 6-0 elm hoops, and 40,000 liners, which are without value to respondent; that while attempting to adjust its demands, respondent used 15,000 of the 6-0 elm hoops, 30,000 of the 6-6 elm hoops, and 10,000 liners; that in doing so it sustained a loss of 15 per cent thereon; that the hoops and liners so used were of no greater value than $612.75; that respondent has paid thereon $454.75, the freight charges; that there remains due appellant therefor $158, which respondent tendered in court with $18.20 accrued interest and $16.20 costs, or $192.40 in all. The jury returned a verdict in appellant’s favor for $176.20.

Appellant’s controlling contention is that, from the allegations of the answer and undisputed written evidence, it clearly appears there was no rescission of the contract, and that by receiving the car and using the quantity of hoops and liners alleged in the answer, respondent not only waived its right to rescind, but also accepted the entire shipment. Making this contention, appellant requested the following instruction, which was refused:

“The defendant alleges in its answer, that after using the portions of the hoops and liners as referred to heretofore, it tendered back to the plaintiff, the remaining portions of said hoops and liners, and offered to pay for those portions used, at the contract price, less 15% for breakage, which offer the plaintiff rejected, and you are instructed that the plaintiff had a right to reject this offer, and it did not constitute a defense to this action for the reason that, by using the considerable portion of the hoops and liners that it did, the defendant waived its right to rescind the contract for a breach thereof, as to the quality of the hoops and liners, if there was any such breach, and bound itself to take all the hoops and liners, and pay for the same.”

Instead of giving this instruction, the trial judge submitted to the jury for its determination the question whether there had been an acceptance or a rescission by respondent. There is nothing in the record sufficient to show that respondent at any time made a positive and unconditional declaration of its election to rescind, or that it tendered a return of the goods prior to the filing of its answer. In making this statement Ave are not unmindful of respondent’s letters to appellant. On May 11, 1907, it wrote appellant it wouid not accept the goods unless appellant conceded a credit of 25 per cent on the invoice price, which appellant promptly refused. Much correspondence ensued, throughout all of which respondent contended the goods were of inferior quality, while appellant contended they were first-class. This correspondence continued from May, 1907, until the following December without satisfactory results. During this time respondent used in its business a large portion of the hoops and liners, the amount being alleged in its answer. It is fallacious to argue that it could continue using the goods and at the same time rescind the order, or that it was necessary for respondent to use so large a percentage for the sole purpose of ascertaining their quality, while respondent at the same time reserved to itself the right to rescind. Respondent’s first letter written after the arrival of the car, dated May 11, 1907, reads as follows: •

“We have received the car of hoops which you sent us and are now using them. We wish to state that we are exceedingly disappointed in the quality of stock sent us as the breakage of these hoops average 25%, caused from not being first class stock. The head liners are in about the same condition and Ave are mailing you a sample of them to show you what we actually received. Had we known that this car of stock would turn out so poor we would not have received it. As you promised us that you would send us strictly No. 1 stock we expected to receive it. We must insist upon your sending us a credit memorandum for 25% of the amount of your invoice to cover our loss on this shipment. We will make no settlement any other way, so hope to be favored'with your credit by return mail so as to make settlement.”

This language indicates an election, intention, and willingness to' accept and use the goods at a reduced price. On May 16, appellant answered, refusing the requested credit, saying:

“Wish to say that we cannot entertain any thoughts of allowing you to deduct twenty-five per cent from the face of our invoice, as, if you cannot use this car as per invoice rendered you, wish you would kindly wire us immediately upon receipt of this letter.”

Respondent did not wire as requested, but on May 24 wrote another letter in which it evidenced its continued use of the hoops and liners by making the following statement:

“Each cooper is keeping a daily report of the number of hoops broken which they mark on their time slips. Will you take their count as rendered or if you want, we can have them make sworn statement and you are to allow us for breakage less 3% which we believe to be a liberal allowance for first class stock. You surely cannot expect us to stand this loss alone and we are willing to work the stock up on this basis. This way, we believe will be a square deal to us both. We believe that this way of adjusting this matter would be more preferable and profitable to you than going to the expense of reloading and paying freight to some other point.”

Respondent did not act diligently in refusing the shipment, but continued its use of the stock. Its letters indicate that it needed the stock, and that it used a large percentage for that reason. If goods are purchased under a guaranty of quality, and upon examination do not measure up to the guaranty, the vendee, for his protection, has an election of two remedies. He may, upon discovery of the inferior quality, with due diligence and without unnecessary delay, rescind the contract, return or offer to return the goods, and proceed against the vendor for his damages sustained, or he may retain the goods and recover his damages, either in an action prosecuted by himself for that purpose, or by recoupment in an action for the purchase price prosecuted by the vendor. Seattle Nat. Bank v. Powles, 33 Wash. 21, 73 Pac. 887.

In Cream City Glass Co. v. Friedlander, 84 Wis. 53, 54 N. W. 28, 36 Am. St. 895, 21 L. R. A. 135, a vendee claimed a shipment of soda ash was not suitable for the purpose intended, and so notified the vendor. Thereafter he used six tierces out of sixty-three shipped, and then attempted to rescind the contract of sale and recover the purchase price which he had paid. In reversing a judgment in his favor the supreme court of Wisconsin said:

“Now, in this case the plaintiff’s officers determined at once, and upon inspection alone, that the material was unfit for their purposes, and so notified the defendant, and rejected the entire lot. They did not claim to need any test. They took their position definitely. After that act they could not deal with the property in any way inconsistent with the rejection, if they proposed to insist upon their right to reject. Churchill v. Price, 44 Wis. 540. They must do no act which they would have no right to do unless they were owners of the goods. Benjamin, Sales, 6th ed., § 703. Under these rules it is evident the plaintiff had no right to use up a quantity of the material several weeks after the rejection. By the rejection it became defendant’s property, if such rejection was rightful. Plaintiff had no right to use any part of it. It is claimed that the use was simply for the purpose of providing evidence of unfitness for the purposes of the trial of this case; but one has no right to use his opponent’s property .for the purpose of making evidence. The act was an unmistakable act of ownership, and entirely inconsistent with the claim that the material had been rejected, and was owned by defendant.”

Here the respondent not only claims a rescission, but offers to return only about one-half or a little more of the shipment. Applying the law to the undisputed facts which appear in the written correspondence, we are compelled to hold that, by using an excessive and unnecessary percentage of the goods, respondent not only accepted them, but also waived its right to rescind. The trial court erred in submitting to the jury the issue of acceptance or rescission. If the respondent has suffered damages it is entitled to recoup them in this action, and for that purpose may amend its pleadings if it so desires.

The judgment is reversed, and the cause remanded for. a new trial.

Mourns, Parker, Mount, Ellis, and Fullerton, JJ., concur.