Newbery v. Wall — 35 N.Y. Super. Ct. 106

Majority

p. 106

WILLIAM B. NEWBERY, et al., Plaintiffs and Appellants, v. CHARLES WALL, et al., Defendants and Respondents.

Headnote

Where merchandise is sold to arrive, which the vendor has not on hand, and which neither party can inspect, it would be contrary to sound morality and public policy to enforce the doctrine of “ caveat envptor,” and compel the purchaser to pay for goods of an unmerchantable quality.

The first principle of the civil law, 11 caveat venditor,” should be applied in such cases. ,

p. 107

In such a case, there is an implied engagement in the contract itself, that the article sold should be merchantable (Clue v. McPherson, 1 Bos. 489; Reed v. Randall, 29 N. Y. 358 ; Peck t>. Armstrong, 38 Barb. 215 ).

Before Freedman and Curtis, JJ.,

Decided November 2, 1872.

Appeal from judgment, and also from order denying a motion for a new trial.

The plaintiffs sue as vendors of 1,000 bales of Dowrah jute to defendants on the 25th of May, 1870, shipped at London for New York per ship “American Congress.” The plaintiffs employed Mr. Sturges, a jute broker, to effect a sale of it previous to its arrival. They stated to him that they had received advices from their friends in London, of having shipped 1,000 bales of good Dowrah jute, and wished him to go out in the market and see what he could do with it, and the best price he could get for it, and let them know. Sturges offered it to the defendants, who said that if it was “good Dow-rah jute, good quality,” they would take it at 5f cents gold per pound. Sturges reported the offer to the plaintiffs, who accepted it, and then notified the defendants of the acceptance, stating it was good Dowrah jute. Sturges then signed and delivered to the plaintiffs the following broker’s note.

Daniel L. Sturq-es, "i

Hemp Broker, 111 Wall Street, J-New York, May 25,1870. )

Sold for Messrs. Newbery & Son, to Messrs. Wm. Wall’s Sons, 1,000 bales Dowrah jute, shipped at London for New York, per ship “American Congress,” in good order and free from damage, at 5f cents per pound gold, cash payable in fifteen days from delivery alongside ship, purchasers to advance gold for duties. Brokerage per cent.

Daniel L. Sturges, Broker.

:ír. S. Int. Rev. Stamp,;

; 5 cents cancelled. :

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Sturges thereafter told the defendants that he had made a contract, and that by the terms it was good Dowrah jute, and that plaintiffs had accepted defendants’ offer of 5f cents. He also sent a copy of the broker’s note by his young man to the defendants, but there was no evidence that it was ever delivered to them or that they ever received it.

The jute arrived, part July 20th, and the balance August 2d, 1870. The defendants had' arranged with Driggs & Co., warehousemen, to store it. At defendants’ request, plaintiffs entered the goods in bond. Plaintiffs also took out custom-house permits, and sent defendants an order for the jute when the permits were out. When the jute was being landed on the dock, Mr. Truslow, one of the defendants, told the ware-housemen that he had seen it, and did not think it was what they had bought at all, and he thought the defendants would reject it, and it should not be stored on their account. The warehousemen replied that the goods were entered in bond, and that if their carts did not cart them, the government. carts would, at a vastly increased expense.

The goods were stored by direction of the defendant Truslow, and the warehousemen, upon being informed that plaintiffs were the importers, erased the defendants’ name, and inserted in their place in their receiving books the plaintiffs’ name. After the goods or any part of them were landed, no instructions were given by the defendants to have them carted.

On the 2d of August, 1870, the plaintiffs sent the defendants their bill for the jute, claiming the amount as due August 16th!

In the meantime the jute was examined, and on the 16th of August, when plaintiffs sent to collect their bill, the defendants notified them by letter that owing to its inferior and unmerchantable quality, they declined tó receive it. The defendants directed the warehousemen

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to send plaintiffs the storage receipt for the jute. This was done August 22d, some days subsequent to plaintiffs’ directing it, and returned by plaintiffs the same day.

At the trial no testimony was introduced by the defendants. It was shown that the jute was not of good quality, was not merchantable, and was almost entirely worthless. 1

The court dismissed the complaint.

Mr. Henry Whittaker, for appellants.

Mr. Richard H. Huntley, for respondents.

The defendants did not sign the memorandum of sale made by the broker, nor was he their agent to sign in their behalf a contract containing such provisions. Ho copy of it appears to have been delivered to the defendants when plaintiffs’ broker offered the jute to the defendants ; they said they would take it, if it was “good Bowrah jute, good quality,” and when he verbally notified them of the acceptance by plaintiffs of their offer and of the contract, he said that by its terms it was good Bowrah jute. This condition is omitted from the terms of the contract. Although this contract is executory, and no part of the consideration paid, and the statute requires that it should be signed by both parties or their agents to be binding upon either, yet the defendants might so far ratify and adopt the acts of the broker, as to become bound. Where there is no employment of a person, his acts may be adopted, relating back to the original transaction, the same as if authority had been given ' before.

In a case like the present, there must be not only a delivery of the goods by the vendor, but a receipt and acceptance of them by the vendee to pass the title, or

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make the vendee liable, for the price, and this acceptance must be voluntary and unconditional (Caulkins v. Hellman, 47 N. Y. R. 452). The evidence fails to show any such voluntary and unconditional acceptance as ratifies and adopts the contract, or the authority of the broker to make it. As soon as the jute was landed, the defendants raised objections to its quality, as not being that called for in the verbal contract, and refused to have it stored on their account. It was subsequently examined, and the defendants, on the 16th of August, 1870, notified the plaintiffs by letter, that owing to its inferior and unmerchantable quality, they declined to receive it. There does not appear to have been that voluntary and unconditional acceptance, or such retention or conduct on the part of the defendants, as is required to supply the place of a written contract.

There is another difficulty with the plaintiffs’ case, and that is whether the broker’s note of itself, and without any extrinsic testimony, does not imply a representation and condition that the jute should be merchantable.

Where goods are sold to arrive which the vendor has not in hand, and which neither party has' an opportunity of inspecting, upon a contract thus purely executory, it would be contrary to sound morality and public policy to enforce the doctrine of caveat emptor, and compel the purchaser to pay for goods of an unmerchantable quality.

The just principle of the civil law in such cases, caveat venditor, should be applied.

In an action to recover upon a broker’s note similar to this (Clue v. McPherson, 1 Bos. 489), the court held, that there was an implied engagement in the contract itself that the article should be merchantable. The learned judge, in his opinion, after reviewing the cases tending to establish the principle, concedes that it is a departure from the common law, and made necessary

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"by its superior morality, and cites the treatise of Mr. Yerplanck, as illustrating this doctrine with great learning and ability. In Reed v. Randall, 29 N. Y. 358 , and in Peck v. Armstrong, 38 Barb. 215 , this same rule is applied to the vendor in executory contracts.

It appears to me that in the present case, the plaintiffs failing to show that the article was merchantable, and the defendants refusing to accept it, that there was no error on the part of the judge who dismissed the complaint.

There does not appear to have been any question of fact, arising on the trial, that should have been submitted to the jury. The exceptions to the rulings of the court on the admission of testimony are not tenable.

The judgment and order appealed from should be affirmed with costs.

Cases cited

Reed v. Randall 29 N. Y. 358 N.Y. p. 107, p. 111
Peck v. Armstrong 38 Barb. 215 N.Y. Sup. Ct. 1862-09-01 p. 107, p. 111