Redlands Orange Growers Ass'n v. Gorman

Biggs, J. The plaintiff sues for $486.50. The defendant set up in his answer a counterclaim for $450 as damages, growing out of the failure’ of the plaintiff to ship the goods within the time stipulated in the contract. A jury was waived and the cause submitted to the court on the following agreed statement of facts: “1. The plaintiff is a corporation organized under the laws of the state of California. Statement. “The defendant is a citizen of the state of Missouri and a resident of the city of St. Louis, and engaged in the business of a merchant at said city under the name and style or John Grorman & Bro. “2. On the 19th day of December, 1895, the plaintiff contracted to sell to the defendant two car — 188 — loads of oranges, to wit, one car to contain three hundred boxes of Fancy Redland Naval Oranges at the price of two dollars and fifty cents per box; the other car to contain three hundred boxes of Fancy Redland Seedling Oranges at the price of one dollar and seventy-five cents per box. “3. The plaintiff at the time of said sale specially agreed with the defendant as part of said contract to deliver said oranges free on board of railroad cars at Redlands, California, and to cause the same to be shipped to the defendant, not later than December 21st, 1895, as the defendant desired the oranges at St. Louis as early as possible, of which the plaintiff was at the time of said contract informed. “4. The said oranges were not delivered on said cars by the plaintiff on the 21st of December, 1895, and were not shipped to the defendant on that date, but said oranges were (without the knowledge or consent of the defendant) delivered by plaintiff on board of cars at Redlands and by him caused to be shipped to the defendant on the 23d and 24th days of December, 1895. One of said cars being loaded and shipped on the 23d and-the other on the 24th day of December, 1895. “5. At the time when said oranges arrived at St. Louis and-when they were delivered to the defendant the market value of said oranges was four hundred and fifty dollars less than it was at any time at which said oranges would have arrived at St. Louis, or at which they would have been delivered to the defendant if they had been shipped within the time provided by said contract. “6. The defendant received notice by letter from the plaintiff two days prior, to the arrival of said oranges in St. Louis of the dates at which the same had actually been delivered at and shipped from Redlands, California. — 189 — “7. Upon the arrival of said oranges at St. Louis the defendant having notice of shipment as aforesaid accepted the same without objection or protest. “8. The contract price of the oranges actually shipped as aforesaid amounted in the aggregate to the sum of $1,236. The defendant had paid to plaintiff of said amount the sum of $749.50 and refused and still refuses to pay the balance, to wit, $486.50, being the amount herein sued for. “9. It is agreed if the defendant is entitled to any damages on its counterclaim the amount of $450 shall be allowed therefor, and in such case the judgment shall be in favor of plaintiff for $36.50 and costs, otherwise the judgment shall be for $486 with interest from the first day of January, 1896, and costs.” The court allowed the defendant’s counterclaim and rendered judgment in favor of plaintiff for $36.50 and for costs. The plaintiff has appealed. Tlcontra«.ence of The position of the appellant is, that when goods are delivered out of time and the vendee accepts them without protest, he thereby waives his right to damages resulting from the breach of the contract, except where the goods are accepted of necessity — that is, where the surrounding circumstances are such as to make it necessary for him to accept in order to avoid the accumulation of much greater damage. We can not accede to this view of the law. We believe the law to be that where time is made the essence of the contract delay beyond the stipulated time in the shipment or delivery of goods does not preclude the vendee 'from accepting them. If he does so and is damaged on account of the delay and he has paid the purchase money, he may bring this action and recover his damage. If he has not so paid, he may recoup his damage when sued for the purchase price. The authorities treat such a stipulation in the — 190 — nature of a warranty or condition precedent that the goods will be shipped or delivered within the stipulated time. (Beach Mod. Com. Law, see. 616.) To hold in such a case that an acceptance out of time, without objection or protest, is a waiver by the vendee of his claim for damages resulting from the' violation of the agreement, is to our minds uni’easonable. With equal reason it could be said that where goods are bought with an express warranty of quality, and goods of an inferior quality are accepted by the vendee, that he thereby waives his right to rely on the warranty. All of the authorities are against that proposition. Our views find ample support in the authorities. Lord Blackburn in his work on Contracts states the law on the subject as follows: “When the contract was to deliver goods at a certain date and that date is passed, the vendee may accept the goods and bring his action for any damages he may have actually suffered in consequence of the late delivery. He does not, by accepting a late delivery, waive any claim he may have for damages arising from the delay. Just as where, by accepting goods which were not up to the warranted quality, he does not waive his right to damages for breach of warranty.” Hare on Contracts states the rule thus: “When the thing tendered under an executory contract differs as regards time, quality, amount or kind from what the buyer agreed to receive, it may be declined and the breach treated as entire, or it may be accepted as so much on account of what the contractor agreed to do or render, and an action brought for the amount by which the performance falls short of the promise.” This statement of the rule is subject to the qualification that time must be of the essence of the contract and there must be an express warranty as to the quality of the goods. — 191 — In the case of Dignan v. Spurr (3 Wash. 315), the supreme court of the state of Washington had the question before it. The court said: “Counsel contended that appellant waived no right to damages arising out of any delay in delivering the brick by respondent, notwithstanding they were accepted at a latter date than that fixed for their delivery by the agreement between the parties, and as we are inclined to the opinion that the objection is well founded.” So in the case of Whalon v. Aldrick (8 Minn. 359), the supreme court of Minnesota says: “The defendant, as the case shows, was entitled to have the logs in St. Croix Boom in 1857; Six or seven hundred thousand feet of them were not so delivéred but were delivered the next year and received by the defendant. This acceptance did not cut off any claim the defendant had for the nondelivery of the logs at the contract time, but enters as an element into the question of what damages he was entitled to recover.” In the case of McMartin v. New York (108 N. Y. 553), the court says: “The contention that where there is a breach of contract by one party and the other thereafter is permitted to perform the same in part, receiving the contract price for such part performance, the injured party thereby waives or releases bis right to damages fo.r the breach has no foundation in reason or authority. It is undoubtedly the rule that where one party to a contract breaks the same the other party may stop and refuse further performance. But instead of doing so he may perform, so far as he is permitted, and then claim the damages he has suffered from the breach.” In Bagby v. Rivers (78 Md. 224), the supreme court of Maryland,, said: ‘ ‘Mere acceptance of the lumber after the expiration of the time fixed in the agreement for its delivery was not of itself a waiver of the breach — 192 — committed by the failure to deliver it according to the terms of the contract; nor did such an acceptance preclude the vendees from subsequently suing to recover the damages resulting to them by reason of the nondelivery, from the time of default up to the date of acceptance; nor from recouping when sued by the vendors, those damages against the latter’s claim for the purchase money. So in Van Winkle v. Wilkins, 81 Ga. loc. cit. 104, the supreme court of Georgia expressed the same view. It said: “It was urged in the argument that receiving the material was a waiver both of its defects and of damages resulting from its nondelivery in due time. Why so? * * * Under the circumstances there was no obligation to return the machinery or to offer to return it. * * * As to the damages resulting from delay, these had already been sustained when the mill was received; its reception in so far as it affected them at all could only hinder more from accruing; it certainly could not increase them. There was no inconsistency between reception of the machinery and retention of the claim for damages on account of delay to furnish it by the time stipulated. To hold that there was a waiver by implication would be very unreasonable. To the same effect is Gaylord v. Karst, 17 N. Y. 720. s’ii™e'VaVki-3 tu fion%?écedent. In the case at bar it was stipulated that the oranges should be shipped not later than the twenty-first of December. Was the time of shipment intended to be of the essence of the contract? If so, then the stipulation must be construed as 3 warranty or condition precedent, and not a mere representation, The doctrine of the foregoing cases must rest on this distinction. On no other principle can they be distinguished from — 193 — the eases which hold that in the absence of an express warranty as to quality, an acceptance of goods of an inferior quality to those bargained for will be held to be a waiver of the breach of the contract. “In determining whether stipulations as to the time of performance of a contract of sale are conditions precedent, the court seeks to discover the intention of the parties, and if time appears, from the language used and the circumstances, to be of the essence of the contract, stipulations in regard to it will be held conditions precedent.;; Beach, Mod. Com. Law, sec. 618. There is no. difficulty in determining the question in the present case. It was the evident purpose and intention of the parties that the shipment should be made at the stipulated date so that the oranges might reach St. Louis in time for defendant to get the advantage of the better prices for such fruit, which usually prevails at the beginning of the holidays. The appellant cites in support of its position Beck v. Healy, 8 Daly, 156. That case declares the law as appellant contends. The opinion does not attempt to discuss the question on principle, but merely decided that where goods are delivered out of time, the vendee by accepting them without protest, waives his claim for damages for breach of the contract. The other authorities relied on hold, that in executory contracts for the sale of goods if there is no express warranty as to kind or quality, the vendee must examine the goods promptly, and if they are not according to contract, he must return them to the vendor. Failing in this he will be held to have waived his objection to the quality of the goods. This we concede to be the law, but we deny its application in the present case. The judgment will be affirmed. Judge Bland concurs in this opinion as written; Judge Bond dissents and is of the opinion that the decision is opposed — 194 — to that of the supreme court in the case of Estel v. R. R., 56 Mo. 282. The cause will therefore be certified to the supreme court for final determination.