Baird Bros. v. Walter Pratt & Co.

Clayton, J. There are 28 specifications of error in the assignment, but they go to only a few propositions of law. The first question we will consider, and the one which the counsel for defendants (appellants) most strongly relies, naming it “the crucial point in the case” is raised by the contention that as the contract on its face shows that the plaintiff is a firm doing business in Chicago, Ill., and as the order was addressed to “Walter Pratt & Co., Chicago, Ill.,” the defendants had the right to have their goods shipped from that point, and that as they were shipped from Iowa City, Iowa, although it may have been shown, as it was by the proof, to be the same firm, yet it was such a variance from the conditions of the order as to justify the defendants, on its discovery, to repudiate the contract, and refuse to receive the goods. The contention is that one upon entering into contract with another has the right to know with whom he is dealing; that there may be many things, personal to the other, which might be an inducement to the contract, such as personal integrity, business capacity, the reputation and supposed superior quality of the particular things manufactured by him, his promptness in business affairs, etc. And authorities are cited in support of this proposition, the correctness of which we concede. And if it has been shown that the firm of Walter Pratt & Co., of Chicago, Ill., is a different firm from that of Walter Pratt & Co. of Iowa City, Iowa, the appellants’ — 48 — case is established. “As is said in a recent case, ‘every one has a right to select and determine with whom he will contract, and cannot have another person thrust upon him without his consent. 'In the familiar phrase of Lord Denman: “You have the right to the benefit you anticipate from the character, credit, and substance of the party with whom you contract.” ’ If, therefore, at the time of making the contract, one of the parties supposed the other to be another than he was, as the latter knew or had reason to believe, there is a mistake as to a material fact and hence no sale. Thus, if A. orders goods of B., C., though B.’s successor in business, cannot fill the order without A’s consent, and if he does, A. is not bound. But where A. begins negotiations for a purchase with B.. supposing that he is dealing with C., but, before the negotiations are completed, is informed of the mistake, and completes the purchase, he is bound, and cannot afterwards set up the mistake to defeat his liability.” The United States Supreme Court, in Arkansas Smelting Co. vs Belden Co., 127 U. S. 387, 8 Sup. Ct. 1309, 32 L. Ed. 246, says: “But every one has a right to select and determine with whom he will contract, and cannot have' another' person thrust upon liim without his consent. In the familiar phrase, of Lord Denman: ‘You have the right to the benefit you anticipate from the character, credit, and substance of the party with whom .you contract.’ ” Benjamin on Sales, § 58; Clark on Contracts, 293; Boston Ice Co. vs Potter, 25 Am. Rep. 9. But in this case the proof conclusively shows that Walter Pratt & Co. were manufacturers and wholesale dealers of perfumery and toilet preparations, with their offices at Chicago, and their manufactory at Iowa City. They were not a corporation, but a firm, doing business under the firm name and style of “Walter Pratt & Co.” Neither “Chicago, Ill.,” nor “Iowa City, Iowa,” was a part of the firm name; the business — 49 — at the two places was not a separate and independent one; goods were manufactured by them at one-place, and sold by sample at the other. When the contract had been entered into, it with the accompanying order was sent to the place of business at Chicago, and at the same time the agent who 'made the contract wired to the manufactory at Iowa City, which is located on the Chicago, Rock Island & Pacific Railway, to forward the goods at once by that railroad, as the contract required. Under these circumstances the mere fact that, after it was disclosed by the contract that the plaintiffs' place of business was at Chicago, they shipped the goods from Iowa City, has no tendency to change the identity of the parties. If Walter Pratt & Co., of Chicago, had been an Illinois corporation, and Walter Pratt & Co., of Iowa City, had been an Iowa corporation, or had been a different firm, there would have been just grounds for the contention; but they were not. They were simply a firm manufacturing goods and selling them, their selling department at one place and their manufacturing at another; and the fact, as before stated, that this contract is made with the Chicago selling department, and shipped from the Iowa manufacturing department, has no tendency to show that the defendants thought they were dealing with a different person than the one who filled the contract. The contention is without merit; and, as heretofore stated, it is also contended that, in the course of business when goods are ordered to be shipped from a business house located at a place designated by their advertisements or otherwise, the buyer has the right, not only to have the order filled by the particular person or firm to whom the order is sent, but to have it shipped from that place, “(a) Acceptance of an offer to result in a contract must be absolute and unconditional, (b) Identical with the terms of the offer, (c) In the mode, at the place and within the time expressly or impliedly required by the offer.” Clark on Contracts, § 36. “To constitute a contract there must — 50 — be a proposition by one party, accepted by the other, without any modification, whatever. If the acceptance modifies the proposition in any particular, however trifling, it amounts to no more than a counter proposition; it is not in law an acceptance which will complete the contract. The mere proposal of a bargain by one person to another imposes no obligation upon the former until it is accepted by the latter according to the terms in which the offer is made. Any qualification of or departure from those terms invalidates the offer unless the same be agreed to by the person who. made it.” Mr. Mechem, in his work on Sales (section 1124), says that when no place is specified delivery is to be where the goods were at the time of the sale. The contract specified that delivery was to be to the Chicago, Rock Island & Pacific Railway. And as that railway runs through both Chicago and Iowa City, it was left uncertain; and the goods at the time of the sale having been at Iowa City, the delivery to the -railway company at that place was sufficient, especially s.o when it is considered that they were delivered by the plaintiffs at a place where one of its departments of business was located. But it is also contended that, as at the time of the-deh very of the goods to the railway company, ■ the plaintiffs, by their invoice, sent at the same time the goods were forwarded, set out in it different terms of payment from that contained in the contract, the defendants could, on its discovery, repudiate the contract and refuse to receive the goods. The contract gives 30 days’ timé for payment, with 6 per cent, discount, if paid within that time in cash; or, within that time, to be settled by five notes, due in 2, 4, 6, 8, and 10 months. If the paper heretofore referred to were really but an order, then its acceptance should have been in accordance with its exact terms; and when the plaintiffs shipped the goods on the invoice changing the conditions of payment, it would not have been an — 51 — acceptance of the order, but only a counter proposition, which the defendants could accept or refuse at their discretion; and it was' upon this ground that the defendants refused to receive them. The privilege of rejecting goods by a buyer and refusing to pay for them arises in cases where there has been an offer, and the acceptance is not in accordance with the offer; and this is on the theory that until there is an acceptance by the seller, either in words or conduct, complying in all particulars with the offer, there is no binding contract between the parties; and a delivery in compliance with the terms of the offer is an acceptance, and passes title to the goods to the purchaser. But, as heretofore shown, title only passes when the acceptance is in accordance with the terms of the offer; and if not in accordance with the offer, there being no contract of sale consummated between the parties and the buyer having no title to the goods, he may reject them and refuse payment. But, if there be such a contract as will pass title from the vendor to the vendee, he may not do this for he will not be allowed to reject his own property and refuse to pay the purchase price. And, therefore, it becomes necessary for us to examine the contract and determine if it be a mere offer or order, as it is called, or a contract of sale which vested in the defendant title as soon as it was executed- by the signature of the parties. The agreement- commences with a guaranty of certain profits to the purchaser of the goods bought under this “order.” Then follows a provision for the exchange of any of the goods for others,-after which there is a warranty clause, to wit: “All goods are warranted to be same in quality, material, and in all other respects as samples shown by salesman, and if goods are returned by the consumer for any cause, they may be returned as above provided. The purchaser agrees to examine and inspect the goods, and each part thereof, at once upon their arrival at destination, and if said goods fail to comply with — 52 — said warranty he shall, within five days from the date of arrival at destination, give itemized written notice by registered letter to Walter Pratt & Co., Chicago, Ill.; otherwise all warranty of said goods is waived. Goods cannot be returned for credit on account, except as herein provided. We deliver all goods to the purchaser by delivering them to the transportation company herein specified; purchaser to pay all transportation charges, except as above provided.” Then follows a long itemized list of the goods, giving the number of articles of each kind, the price of each, the total, and the retail price of each. The terms of the sale are next set out, as follows: “Terms 6 per cent., 30 days from date of invoice, or 2, 4, 6, and 8 and 10 months net, divided into five equal payments each for onefith the amount of this order. When long terms of credit are taken, account must be closed within 30 days from date of invoice by notes without interest due in 2, 4," 6, 8, and 10 months from date of invoice. Accounts not closed as provided above will be subject to sight draft without further notice. Time is the essence of this agreement.” Then follows the order of shipment, and the signature of the parties,' as follows: “Bartlesville, I. T., 4 — 24, 1903. “Walter Pratt & Co., Chicago, Ills. — Gentlemen: Please ship us, care of Chicago, Rock Island & Pacific R’y, the assortment of goods listed above, like samples shown us by your salesman, at the prices specified, and in accordance with all the terms above specified; which terms and conditions we have carefully read and find to be complete and satisfactory. We have no agreement or understanding with salesman, except as printed or written on this order. Receipt of duplicate of this order from your salesman is hereby acknowledged. “Name of Purchaser: Baird Bros. “Order signed by E. G. Baird. — 53 — Walter Pratt & Co. “By P. W. Bouldin, Salesman.' While there are no direct words to the effect that the one sells and the other buys, yet no other conclusion can reasonably be reached, but that it was the intention of the parties to enter into a contract of sale. The goods were specified, the terms of the purchase, a warranty of the quality, and to whom they were to be delivered’, and the instrument further provided that the defendants could not countermand the order, and it was signed by both of the parties. The instrument might well have been considered an offer, or an order, if it had been signed by the defendants only; but if an order, when it was signed by the plaintiff, that act was certainly an acceptance of its conditions, and consummated the binding contract between the parties. Regarding it, then, as an executory contract of sale, was the defendant, because of the fact that the invoice stated the terms of payment and credit differently from the contract, justified in repudiating the contract and refusing the goods? If the contract had the effect of vesting in the defendants the title to the goods at the time it was executed, it is clear they would not; but if the contract is such that title does not vest in the buyer until delivery in accordance with the terms of the contract, then if the delivery be not in accordance with its terms, the buyer may ordinarily repudiate the contract and refuse to accept the goods. Mechem on Sales, 810; Clark, Contracts, §§ 14-27; Tiedeman on Sales, § 84. In this ease .the contract provides: “We deliver all goods to purchaser by delivering them to the transportation company herein specified;'' and the order for the shipment of the goods provides, that they shall be shipped “in -care of the Chicago, Rock Island & Pacific R’y.” This was an executory — 54 — contract of sale, and, according to the rule, title did not pass until the goods were delivered to that railway company. And it was the duty of the plaintiffs to deliver them in accordance with the terms of the contract; and when, upon the delivery, they informed the defendants, in effect, by the invoice which they sent, that the goods were delivered upon condition, that he should have 15 days instead of 30 in which to pay cash if he so chose, and that the discount would be 5 per cent, instead of- 6 as provided by the contract, and that if he paid by notes, he must execute four notes, payable in 2, 4, 6, and 8 months, instead of five payable in 2, 4, 6, 8, and 10/as he had contracted to do, thus shortening the terms of credit, which was not a delivery in compliance with the terms of the contract, and ordinarily this would justify the defendants in repudiating the contract and in refusing to receive the goods. But it is clearly shown by the proof that the terms stated by the invoice, wherein they differed from the contract of sale, was made by mistake; that the contract, when executed in Bartlesville, had been sent by the salesman to Chicago, and a telegram sent to Iowa City; and not having the contract before them, for some reason, probably because it was their-usual rate, by mistake, and with no intention of changing the terms of the contract, the invoice was made as it was. When the defendants received the invoice, because of this, they refused to receive the goods, and at once wrote plaintiffs at Chicago, informing them of that fact, stating the reasons for their refusal to be that: “We bought these goods from salesman; terms, 6 per cent., 30 days, or 2, 4, 6, 8, and 10 months, 5 equal payments, while you have billed differently.” Immediately on receipt of this letter, the plaintiffs wrote defendants that they could not understand their reasons for rejecting the goods, and stated the terms upon which they had shipped the goods, being identical with the terms of the contract. The evidence — 55 — further shows that the transaction was properly entered in plaintiffs’ books of account, that the incorrect statement in the invoice was simply a mistake on the part of the person who shipped the goods and made out the invoice at Iowa City, and that there was no intention of changing the terms of the contract was proven beyond question. And such a mistake on the part of the plaintiffs, under the circumstances, was not a breach of the contract, so as to entitle the defendants to rescind. If the plaintiffs had insisted on the contract being performed in accordance with the terms of the invoice, it would have been a different thing; but they did not. As soon as the mistake was brought to his knowledge, he explained and corrected it at once, and not only offered to carry out the contract, but insisted that it be done. In the case of Miller et al vs Benjamin (N. Y.) 37 N. E. 631, the defendant contracted to purchase from plaintiff a certain amount of split steel of two sizes (Nos. 27 and 29), each month, for a specified time; the order to be given each month, and to name the size wanted. June and July, size 29 was ordered, and, by mistake, 27 was sent. Plaintiff corrected the mistake at his own expense when notified. On account of the mistake, defendant refused to order any more slits. It was held that plaintiff’s mistake did not amount to a breach of the contract, so as to entitle defendant to rescind. In Githens vs Zorn, 1 Wkly. Notes Cas. (Pa.) 118, A. agreed to buy from B. 70 barrels of white beans, which were to come up to sample. B. commenced delivering the barrels, which A. opened as received, and, when 20 barrels had been delivered, it was found that one contained red beans. B. immediately offered to change the barrel for one of white beans, which offer A. refused, and refused to receive any of the barrels, declaring that he had rescinded the contract. Held, that A. was not justified in rescinding the contract,' and B. was entitled to recover. Tiedeman in his work on Sales, § 107, says: “If the first attempt at delivery proves — 56 — unsuccessful; a second attempt may be made, and it will be just as effective as if it had been done right in the first instance, provided the time of performance had not expired.” In this case no time for delivery was fixed by the contract, and therefore the plaintiffs would only be required to deliver them within a reasonable time; and if they had been returned by the defendants, or taken back by the plaintiffs, and the mistake immediately corrected, inasmuch as the first delivery was ineffectual, if it were, and the goods were at once reshipped, in strict compliance with the contract, it would seem the defendants would be required to receive them. But the mistake was corrected without a reshipment, and that at once; and why would not this have the effect of a prompt reshipment? Why require the plaintiffs to go to the expense of shipping the goods back to Iowa City and return, for the mere purpose of correcting the unintentional' errors of an invoice of goods delivered on a contract of sale? All of the goods contracted were at the depot at Bartlesville. The contract, signed by plaintiffs, fixing the price, was in defendants’ possession; the error was promptly corrected, and no damage, except that caused by the trifling delay of a few days, could' occur to the defendants. We are of the opinion that the exception of the appellants on this point is not well founded. A number of specifications of error go to the refusal of the court to permit certain testimony to go to the jury tending to establish the fact, that the show ease mentioned in the contract was different and inferior to the sample by which it was sold, and to the instruction to the jury, which virtually took from them the consdieration of that question. The goods were sold by sample. It is claimed that, while the salesman had no sample of the show case, yet one that was in defendants’ store was pointed out, and the one to be shipped was to be like it. The contract provided, in the warranty clause, that all.goods — 57 — were warranted to be the same in quality, material,, and in all other respects as samples shown by salesman; and, further, that the purchaser “agrees to examine and inspect the goods and each part thereof at once upon their arrival at destination, and if said goods fail to comply with said warranty, he shall, within five days from the date of arrival at destination, give itemized written notice * * *; otherwise all warranty of said goods is waived.” This requirement of "the defendants was not complied with. In their letter, they only complain of the fact that the goods were invoiced differently from the contract. Until the answer in the case was filed, there was no complaint made as to breach of warranty. It was an afterthought, and comes too late. In the case of Walter Pratt & Co. vs Meyer (Ark.) 87 S. W. 123, the Supreme Court of Arkansas, in passing upon a provision of a contract identical with this, recently held that in a contract for the sale of goods by sample, a provision that the buyer should examine the goods promptly on delivery, and if they failed to comply with the warranty, he would, within five days from the date of delivery, give notice of such failure to the seller, and, if such notice was not given, all warranty of the goods should be waived, was valid; and a failure to give notice within the time specified operated as a waiver of the warranty. To the same effect is Walter Pratt & Co. vs W. C. Morris & Co., 87 S. W. 783, decided by the Supreme Court of Kentucky on June 1, 1905. And therefore, when it was shown, as it was in this case, that the defendant had failed to give the written notice of the defect claimed in the show case, as required.by the contract, whether he had examined it or not, he should not have been allowed to prove the defect, or anything else in relation to it, nor should the question have been submitted to the jury at all. The court, after telling the jury, in' substance, that there was no evidence of an inspection of the goods by the defendants upon théir delivery, left that question for the jury to decide, — 58 — the effect of which was that, if they found there had been an inspection, and if, in the judgment of the jury, the goods did not come up to the contract stipulations, they were, of course, to find a breach of the contract on the part of the plaintiffs, and return their verdict for the defendants. This was error. The breach of the contract, on the part of the plaintiffs so as to annul it and give the defendants the right to repudiate it and refuse the goods, did not depend upon that alone, but the inspection was to be followed within five days with a written itemized notice by registered mail to plaintiffs of the defects; otherwise the breach was waived. There is no pretense on th'e part of the defendants or anybody else that this was done. There is not a scintilla of evidence to support it; on the contrary, it is admitted on all sides that it was not. The defendants in their letter make no mention of it, but rely solely on the error contained in the invoice as being the breach justifying them in refusing payment. Had there been the most perfect inspection, and the goods found wholly defective, the defendants might still -have waived those defects, and taken the goods; and by refusal or neglect to forward the itemized notice, as the contract required, this they did, and therefore they may not refuse payment on this account; and the jury should have been so informed. That they were not, however, was not prejudicial to the defendants, and therefore not reversible error. After the testimony had made it clear that there had been a waiver by the defendants as to the quality of the goods, it was not error to refuse testimony tending to show' an inspection. The sixth specification of error is: “The court erred in refusing to allow' the Witness, Baird, to state over what road he directed the goods .to be shipped, as follows: 'Q. What road did you tell him to ship the goods to Bartlesville on?' ” The Chicago, Rock Island & Pacific Railway does not pass through Bartlesville. At some point on that railroad, freight — 59 — coming from the north destined to Bartlesville had to be diverted and forwarded on some other line of railway. It seems that both the Atchison, Topeka & Santa Fe and the Missouri, Kansas & Texas railroads had such connections. The goods in question, after leaving the Rock Island, came over the Santa Fe. It is claimed by the defendants that, at the time the contract was executed, he had a verbal understanding with the salesman that the goods were to be shipped over the Missouri, Kansas & Texas, after leaving the Rock Island; and that the failure to comply with this condition was a breach of the contract such as to justify a refusal of and payment for the goods. There is a provision in the contract upon which the goods were sold that “separate verbal or written agreements with salesman are not binding upon Walter Pratt & Co. All conditions of' sale must be shown on this order.” In the order the defendants-say: “We have no agreement or understanding with salesman, except as printed or written on this order.” The language-of the order directing the shipping of the goods is: “Please-' ship us, care of Chicago, Rock Island & Pacific Railway.” Neither the Santa Fe, the Missouri, Kansas & Texas, or any other railroad is mentioned. If it be true that there was such a verbal understanding with the salesman as claimed, in view of the stipulations of the contract that no such agreements-were to be binding, the court did not err in rejecting all testimony tending to establish such an agreement. That a contract-between parties providing that no agreements, not contained in the contract shall be binding, is a valid one. See Walter Pratt & Co. vs Meyer, supra. Finding no reversible error, the judgment of the court-below is affirmed. Townsend and Gill, JJ., concur. Raymond, O. J-, not participating.