Hennig v. Iron Ridge Canning Co.

— 509 — The following opinion was filed February 10, 1925: Eschweiler, J. It is earnestly and ably contended on behalf of appellants in this case that the judgment of the court below ought not to stand for the following reasons: First, that the issues involved were issues of fact proper to be disposed of in an action at law as distinguished from an equitable proceeding, and that the verdict of the jury must therefore be regarded as entitled to the same weight and consideration as though rendered in an action at law, and not merely advisory as held by the court below. Second, that upon the facts and the verdict of the jury there was shown and determined such a failure in performance and breach of the conditions of the original contract as to prevent recovery thereon, inasmuch as the 1,100 bushels of Perfection peas were grown by the E. B. Clark Company, another wholesale dealer and grower of seed peas, and not by Keeney. Third, that the Perfection seed peas were.not in compliance with the warranty and not reasonably fit for the known purpose for which they were sold. The original proceeding here, instituted by creditors of an insolvent corporation to wind up its affairs, was clearly equitable, and in such there might be properly adjusted questions concerning claims made against the insolvent corporation and its assets, which questions might, except for the pendency of these proceedings, be more properly adjusted in an action at law than in equity. Harrigan v. Gilchrist, 121 Wis. 127, 281, 99 N. W. 909. The intervenor, Keeney, voluntarily applied in this equitable proceeding for relief as against the assets and funds of the insolvent then in the hands of a receiver and yielded to the suggestion of the receiver that the Alaska peas be also given over to his possession, and neither the receiver for himself or for the. insolvent can be heard to object that — 510 — the intervenor continued to remain in this equitable action rather than resort to an independent action at law, though granted permission so to do. Such option is with the inter-venor and its exercise cannot be controlled by the receiver. If there were error in denying a jury trial, as in an action at law, to the individual defendants, indorsers of the notes of the corporation, it must be held, in view of the result here reached upon the facts, non-prejudicial and therefore not reversible error. As the issues were finally framed between all the parties, questions were presented that could be properly disposed of in the equitable proceeding to wind up the affairs of the corporation. There were involved questions as to what extent, if any, the claim of Keeney, if allowed, for the $3,000, was to be a first lien upon the trust funds; how much, if any, of a claim Keeney had on account of the original transaction against the corporation considering him as a general creditor merely. We are therefore of the opinion that the court below properly held and viewed the verdict of the jury under the record here as advisory only and as presenting a situation where, for that reason, he might properly make the changes that he did in their answers or disregard their findings and substitute therefor his own findings of fact and direct the judgment he did. Upon the second proposition above stated we think the trial court was right. The original contract of January, 1920, provided that Keeney should grow or cause to be grown Perfection seed peas in the states of Montana, Idaho, Washington, or Wisconsin, and that such seed shall show a germination quality of not less than ninety per cent, at the time of delivery and shall not contain to exceed two per cent, by weight of impurities or other foreign matter. It also provided that Keeney gives no warranty, express or implied, as to the quality or productiveness of the seed except — 511 — as therein definitely stated, and agreed to- deliver on that contract only such peas as he believed to be of good, merchantable quality and nearly, if not perfectly, free from mixtures or impurities of any kind. Keeney further agreed to use due care in the production,- selection, growing, roguing, and handling of the seed stock and crops and to keep the peas grown in various fields separate as far as possible. It appeared on the trial that as a matter of fact the Perfection seed peas had not been grown under the personal care or selection of Keeney but had been purchased, his own supply being insufficient, from another reputable and well established wholesale grower and dealer in peas, and that such peas had been grown within the designated states. It further appears that such method of purchasing seed peas from other wholesalers and growers was a recognized custom among such growers and wholesalers. Ross v. Northrop, King & Co. 156 Wis. 327, 340, 144 N. W. 1124. Under the evidence the trial court properly found that there was no particular or special brand of Perfection peas known to the market or to the buyer here as being grown by Keeney as a particular grower as distinguished from other seed peas of the Perfection brand or quality; in other words, that there was no Keeney brand of Perfection brand of seed peas. The contract itself, by its express terms, provided for Perfection peas as such in general terms and not for any particular brand or special sort of Perfection -peas, and there is no showing whatever, under the testimony, that Keeney expected to or was expected to furnish any other than that which was designated as Perfection seed peas grown in four designated states. The very language of the contract covering not only seed peas grown by Keeney but those which he should cause to be grown, even though coupled with the agreement on Keeney’s part to use due care in the production, selection, growing, etc., of the seed stock — 512 — and crops, cannot be relied upon as making an express condition on Keeney's part to perform the evidently impossible duty of personal and individual supervision of the actual growing of all these seed peas. We are therefore satisfied that under the contract and the facts in the record there can be no successful defense interposed for the Canning Company or the individual defendants under the original contract of January, 1920, as modified in March. On'the last proposition involved we are satisfied that the trial court reached the proper conclusion. -The peas delivered in pursuance to the contract of January, 1920, were not used for sowing in the spring of that year, as it was undoubtedly intended, but were kept stored in the Canning Company's possession all of that summer, the fall, and winter. When, by stipulation of the parties and under the approval of the court, the arrangement, was made just prior to the sowing season in 1921 for the purchase of the Perfection and Alaska peas for $8,000, a substantial reduction from the original price, both such lots of seed peas were in the actual possession of the receiver with fttll opportunity for examination and test either by himself or by the State Department of Agriculture. The testimony discloses that shortly after the original arrival of the Perfection peas at Iron Ridge, a test was made on behalf of the Canning Company, resulting in a showing that was held by the trial court to be a substantial compliance with the germinating test. Under the stipulation, pursuant to the confirmation of which by the court the final deal was made, there was no warranty or representation on the part of Keeney as to their then condition, if such transaction be considered as a new and independent sale. If, however, it be considered, as it more properly can be, as a mere modification of the original contract, to meet the then present situation of the insolvency of the corporation and the necessity confronting the receiver — 513 — m arranging for the operating of the plant during the coming canning season in order to better preserve its assets, then no additional warranty or guaranty could be implied as against Keeney, who was constantly and consistently asserting his rights under the contract of January, 1920. By that contract the guaranty as to the germinating powers was limited to the time of delivery and not as to a period long subsequent thereto and during which period, under the un-contradicted testimony, there was possibility for deterioration and lessening of the germinating power, but which deterioration, if any, could have been ascertained by the receiver. An examination of the testimony satisfies us that the court was amply justified in setting aside and disregarding the findings by the jury as pure surmise and substituting his own findings and conclusions to the effect that the shortage in the crop grown in 1921 from these seeds could not be and is not attributable to any breach of warranty on the seller’s part in the original contract. A controlling fact, however, sufficient to dispose of the case, is presented by the fact that the receiver gave no notice to the seller of any possible breach of contract on his part until by letter of July 6th, received by the seller on the 10th, and after the harvesting was practically at an end, rendering it impossible for the seller then to have an opportunity to learn himself or through others and from an examination of the actual situation. To give such an opportunity is the purpose of such notice required by statute. The receiver supervised the planting either personally, having had considerable experience in the pea-canning industry, or by former employees of the Canning Company retained in service. The planting of the peas commenced April 28th and ended May 29th. After the planting that season such peas came up in from ten to fourteen days. It was the plain duty of the receiver himself or through his — 514 — employees, if anticipating or having good reason to ántici-pate any breach in the germinating qualities of the seed peas so recently purchased, to ascertain that fact promptly and then promptly notify the seller. For a jury to return a finding, as they did, that under the circumstances the earliest date at which such receiver ought to have discovered that the seed peas were not fit for reproduction was July 5th rather than May 15th as found by the court, is so clearly and obviously an answer based upon prejudice or bias that the court was required to and properly did entirely disregard it. His conclusion, therefore, on this branch of the case, namely, that the receiver had ample opportunity to discover, could have and should have discovered, any possible defect in the germinating power of the seed peas involved long before June 1st, is ample warrant for the disposition that was made below on this feature of the case. We deem it unnecessary to discuss more in detail the testimony or the various alleged errors. We are satisfied that upon the merits the case was properly disposed of by the trial court. By the Court. — Judgment affirmed. The appellants moved for a rehearing. In support of the motion there was a brief by Lueck, Clark & Lueck of Beaver Dam, attorneys, and Harry L. Butler of Madison, of counsel. In oppositign thereto there was a brief by Johns & Flanagan of Randolph, attorneys, and Grady, Farnsworth, & Walker of Portage, of counsel. The motion was denied, with $25 costs, on April 7, 1925.