John Barkley & Co. v. J. M. Burguieres Co.

OVERTON, J. Defendant is a corporation engaged in the planting and manufacture of sugar. In the summer of 1921 it placed upon the table of its broker, in the sugar exchange in New Orleans, a sample of its low-grade sugar. Plaintiff, a corporation engaged in the brokerage business, through John Barkley, one of its officers, examined the sample placed in the exchange by defendant, and took an option on a quantity of sugar corresponding to it, amounting to two carloads, at 3% cents a pound. At the time this option was taken the greater part of the sugar had been manufactured, though a part had not. Plaintiff, immediately after taking the option, placed itself in communication with Armour & Co. of Chicago, to which company it had sold low-grade sugars for a good many years for mincemeat purposes. Armour & Co. agreed to accept the two carloads offered it by plaintiff at 3 y2 cents a pound, thus giving plaintiff a profit of a fourth of a cent a pound. Plaintiff then purchased at 3% cents a pound, from the sample exhibited, two carloads of sugar, the sugar to be delivered f. o. b. cars at Cypremort plantation, in the parish of St. Mary, the price to be paid within five days from the date of the bill of lading. Two or three days latex- *725 defendant notified plaintiff that the sugar was ready for shipment and without inspecting the sugar which was packed in ordinary sugar barrels plaintiff notified defendant to ship it care of Armour & Co. Mincemeat Department, Chicago. The sugar was shipped in two cars on July 30, or 31, 1921, and reached Chicago, one car on August 7, and the other on August 9, 1921, and were placed for unloading on the 8th and 9th of that month. When the cars reached Chicago, they were opened without delay. It was found by Armour & Co. that considerable molasses was leaking from the barrels; that some of the sugar was virtually massecuite; that there was a considerable shortage; and that the sugar was not suited for mincemeat purposes. .Armour & Co., therefore, notified plaintiff of .what it found concerning the sugar, rejected the shipment, and asked plaintiff what disposition it desired made of it, and demanded of plaintiff the return of the purchase price it .had paid. When plaintiff received notice of the rejection of the shipment, it got into communication with defendant, and suggested to it that each send a representative to Chicago to examine the sugar, and made other suggestions to. defendant looking to a settlement of the matter, but defendant refused to have anything further to do with it, insisting substantially that the sugar wás up to the sample exhibited ; that it had not sold the sugar, which, in fact, it had not, for any specific use; and was not concerned with the sale to Armour & Co., not having been a party to it. Plaintiff then attempted to dispose of the shipment to the best possible advantage, and finally sold it to-Armour & Co. for 2*4 cents a pound at shipping point, actual weight. The sugar was weighed by Armour & Co., and by the official weighmaster of the Chicago Board of Trade, and showed a shortage of 2,767 pounds, a difference due probably largely, to leakage. This shortage, or the difference between the price for which plaintiff first sold the sugar and the price it later sold it for, amounts to $1,238. A few days after the sugar was received by Armour & Co., samples of it, taken about five inches from the tops of the barrels, were put in sealed cans, and shipped to plaintiff. These were kept by plaintiff, including the sample exhibited, which was in a glass jar, in cold storage, and the samples were exhibited on the trial of this case, and, on appeal, before the Court of Appeal. This suit is to recover the $1,238 mentioned above, which may be said to represent the difference between the value of the sugar that plaintiff purchased and the sugar actually delivered; the shortage, and the loss of profits, -as disclosed by the first sale that plaintiff made when compared with the second; In the trial court judgment was rendered, rejecting plaintiff’s demand. On appeal the Court of Appeal reversed the judgment of the lower court and rendered judgment for plaintiff for the amount sued for. The case is now before us on a writ of review, issued upon the application of defendant. Defendant urges that the Court of Appeal erred in the judgment rendered by it in the following respects, as appears from the grounds stated in its brief, which are substantially in accord with those assigned in its application for a writ of review, to wit: (1) In holding that the sugar was not up to sample when delivered to plaintiff at the plantation ; (2) in considering evidence of the condition of the sugar at a place other than Cypremort plantation, which was the place of delivery, and of its condition at a time other than the time of delivery; (3) in holding that' in a sale by sample the purchaser is not required to inspect the goods so purchased, and therefore that article 2521 of the Revised Civil Code has no application; and (4) in holding that article 2521 of the Code does not apply where the goods are contained in boxes, barrels, or packages. ... *727 With reference to the first' assignment, the Court of Appeal found, after an exhaustive review of the evidence, that the sugar delivered on board the cars at Cypremort plantation was appreciably inferior to that shown by the sample from which the purchase was made, and that the marked difference between that sample and the condition of the sugar when it reached Chicago, some ten days after it was shipped, could not be reasonably accounted for on the theory of deterioration from heat and other causes. In our view, these conclusions of fact reached by the Court of Appeal are fully supported by the evidence in the record. Certainly, the evidence would not justify us in disturbing those findings. As relates to the second assignment of error, defendant cites, in support thereof, Peterkin v. Oglesby, 30 La. Ann. 907; Hall, Kemp & Co. v. Plassan, 19 La. Ann. 11, and Lowe & Pattison v. Nelson, 7 La. Ann. 646. These decisions are authority for the proposition that the quality of the goods must be determined from their condition at the date and place of delivery, and not from their condition at some other place, where delivery was not to be made. However, these cases 'are not authority for the proposition that evidence of the quality or condition of the goods at the place where and at the time when received, or soon thereafter, is not admissible for the purpose of showing their condition at the time of sale or place of delivery, or that the goods were not of the quality contracted for. In our opinion, evidence of that nature, for the purpose stated, is admissible. It may show, or have a direct tendency to show, that the goods were not in the condition they should have been when delivered on board the cars, or that they were, when thus delivered, of a quality inferior to the goods purchased. It was only to determine the quality of the sugar delivered on board the ears at the factory that the court considered the evidence of its condition and'appearance after it was delivered. The court was correct in so considering that evidence. The third assignment is based on article 2521 of the Civil Code, which reads as follows: “Apparent defects, that is, such as the buyer might have discovered by simple inspection, are-hot among the number of redhibitory vices.’' The Court of Appeal held that, as the sale involved in this case was one by sample, the article quoted does not apply. The court based its reason for so holding primarily upon the ground that in a sale by sample the vendor impliedly warrants that the article sold will conform to the sample, and that the purchaser has the right to rely on this warranty, and not to inspect the goods prior to delivery, and cited in support of its ruling Barnard v. Kellogg, 77 U. S. (10 Wall.) 388, 19 L. Ed. 987. It does not admit of question that in sales by samples the vendor impliedly warrants that the bulk of the article sold agrees in quality with the sample. Phillipi v. Gove, 4 Rob. 315; Clarke v. Lockhart, 10 Rob. 5; Hall, Kemp & Co. v. Plassan, 19 La. Ann. 14; Benjamin on Sales (7th Ed.) § 648, p. 635. Nor does it admit of question that the nonconformity of the bulk with the sample must exist at the time of delivery. Hall, Kemp & Co. v. Plassan, supra. However, there seems to be no case in the jurisprudence of this state directly in point as to whether the purehásér must inspect the article sold at the time of or before delivery to ascertain whether there are any patent defects in it which render the bulk of the article not in accord with the sample, though in McNeil & Higgins Co. v. Martin, 160 La. 443, 107 So. 299, it is said that the inspection must be made in a reasonable time, and, unless so made, the purchaser will be concluded by his laches. While we find no case directly in point in this jurisdiction, still, in view of the warranty implied in sales by sample, and of the fact that sales are general *729 ly made by sample because of the difficulty or impracticability of inspecting the bulk, and frequently where the bulk is at a distance from the purchaser, we think that Such sales contemplate that the purchaser shall have the right to inspect the article after delivery, and to reject it or demand a diminution of the price, if the bulk of the article does not agree with the sample, though he must act with reasonable promptness. There possibly may be cases where inspection would be required pri- or to or at the time of delivery, but, if so, the present case is not one. Here, delivery was effected by loading the sugar on the cars at the factory, which was 100 miles or more from where the sale was made and the purchaser domiciled. In these circumstances it seems to us that it would be impracticable to hold that inspection should have been made prior to or at the time of delivery. We therefore conclude that there was no error in the refusal of the Court of Appeal to apply article 2521 of the Civil Code 'to this ease. The conclusion we have reached on the assignment, just considered, renders it unnecessary that we pass upon the fourth assignment relative to the applicability of article 2521 of the Civil Code, where the sugar or merchandise sold is packed in barrels. Plaintiff complains in its brief that the Court of Appeal erred in allowing thd full amount of plaintiff’s claim. However, we may say that we find no error in that respect. Nor did the court err in holding that plaintiff was not precluded from recovering, because he paid defendant for the sugar after it had b.een delivered on board the ears. The payment was made while the sugar was in transit, and upon the obvious supposition that it was in accord with the sample, a supposition which plaintiff, for the time being, had a right to rely on. Before closing we may say that there is an exception of no cause of action in the record. This exception we have considered in passing on the merits. There is also in the record, offered by plaintiff, the rules of the sugar exchange pertaining to sales by sample. These rules add nothing to the case, since they are a virtual reproduction of the law as to the right of rejection when the article sold does not conform to the sample, and therefore were not mentioned in considering the case. Por the reasons assigned, the judgment under review is affirmed. O’NIELL, C. J., dissents, and will hand down reasons.