Where there was a contract for the purchase of a cargo of flour
and a portion of it was delivered, paid for, and used by the
purchaser, he cannot repudiate the contract upon the ground that
the brand upon the flour was not that for which he contracted.
The cases upon this point examined.
Page 61 U. S. 150
Where the statute of limitations imposes a bar upon certain
species of contracts after three years, and upon others after two
years, and the plea did not show that the contract in question was
of the latter class, the plea was bad.
The laws of California require that actions shall be prosecuted
in the name of the real party in interest and that all parties
having an interest in the subject of the action may be joined. So
that this statute is complied with, it is not a fatal objection
that the respective interests of parties jointly concerned are not
accurately set forth.
The facts are particularly stated in the opinion of the
Court.
MR. JUSTICE CAMPBELL delivered the opinion of the Court.
This suit was commenced by the defendants in error, to recover
the price for a cargo of flour bargained and sold to the plaintiff
in error in the city of San Francisco. The judgment of the circuit
court was rendered upon a special verdict in favor of the
plaintiffs in that court. The verdict finds that on the 13th
January, 1853, the plaintiffs, and Flint, Peabody & Co., were
jointly the owners of a cargo of flour, consisting of two thousand
barrels, branded, and which were in fact Gallego, then being on the
barque
Ork, lying at a public wharf in San Francisco, and
composing its entire cargo of flour, which inspected 1,771 barrels
superfine and 229 bad.
The firm of Flint, Peabody & Co., as agents and part owners,
on the day aforesaid, concluded the following agreement with the
defendant:
Page 61 U. S. 151
"SAN FRANCISCO, January 13, 1853"
"Sold this day to Joseph H. Lyon, Esq., a cargo of Haxall flour,
now on board the barque
Ork, lying in this harbor, being
about two thousand barrels, on the following terms and conditions,
viz., Joseph H. Lyon, Esq., agrees to pay Messrs. Flint,
Peabody & Co., thirty dollars per barrel for such as shall
inspect superfine, and twenty-seven dollars per barrel for such as
shall inspect bad, payment to be made as it may be delivered, and
to be received and paid for on or before the expiration of three
weeks from date."
"If Messrs. Flint, Peabody & Co., elect, they can land and
store the flour at the expiration of one week, or so much as may
remain on board at that time, Mr. Lyon paying storage and drayage
expenses."
"J. H. LYON"
"FLINT, PEABODY & CO."
On the 25th January, 1853, the defendant applied to Flint,
Peabody & Co., for fifty barrels of flour, so purchased by him,
by a written order, as follows:
"SAN FRANCISCO, January 25, 1853"
"Messrs. Alint, Peabody & Co., will please deliver Mr.
William R. Gorham, or bearer, fifty barrels of flour, out of the
lot purchased from the ship
Ork, and oblige."
J. H. LYON.
Paying them therefor the contract price, amounting to the sum of
$1,500, and received from Flint, Peabody & Co., the following
order:
"SAN FRANCISCO, January 25, 1853"
"
Captain of Barque Ork: Please deliver the bearer fifty
barrels superfine flour, and oblige."
"FLINT, PEABODY & CO."
Fifty barrels of Gallego flour, inspecting superfine, being part
of said cargo of flour on board the barque
Ork, was
delivered from the barque to William R. Golham, a baker, to whom
the defendant had sold and transferred the delivery order and the
said flour. When the order was made for William R. Gorham, the
defendant represented that the flour was Haxall. On the 29th
January, 1853, the defendant sold to Dunne & Co. fifty barrels
of flour, which he represented to be Haxall, and gave the following
order, bearing date on that day:
"Messrs. Grey & Doane will please deliver Messrs. Dunne
& Co. fifty barrels of Haxall flour from Ork."
"J. H. LYON"
The said Dunne & Co., on discovering that the flour was
not
Page 61 U. S. 152
Haxall, but Gallego, refused to take it, and so notified the
defendant. On the 31st of January, 1853, the defendant made further
application for one hundred barrels of flour, being part of the
flour so purchased as aforesaid, and gave his check on his bankers
for the price, and received the following delivery order from
Flint, Peabody & Co., bearing that date:
"
Capt. Hutchings, Barque Ork: Please deliver to J. H.
Lyon, or to the order of Grey & Doane, one hundred barrels
superfine flour, and oblige &c."
The check was not paid on presentation. Upon the refusal of
Dunne & Co. to take the flour, the defendant, on learning the
fact, notified the plaintiffs that he would not take the flour and
countermanded the payment of the check he had given for the one
hundred barrels last mentioned.
On the 3d of February, 1853, the plaintiffs informed the
defendant that they were prepared to deliver the remainder of the
cargo, and requested the defendant to receive it. And subsequently,
on the same day, they addressed him a note in which they advised
him they would sell the flour on the 5th February, at public action
for his account, and would hold him responsible for the difference
there might be in the net proceeds of the proposed sale and the
contract price, and for charges and expenses, he Lyon having
declined to take the flour under the contract. All the flour on the
barque was of the brand known as Gallego, and the barrels were
branded Gallego in printed characters from two to two and one-half
inches in length, on both heads. In the opinion of some experts,
there existed no difference in the quality or price of the flour of
either brand, Haxall and Gallego, each inspecting superfine, but,
in the opinion of other experts, there was a difference, some
preferring the one brand and some the other.
Subsequently to the sale, and up to and including the 28th
January, 1853, Gallego and Haxall flour had advanced to $35 per
barrel in San Francisco; and between that and the 5th of February
the price of both declined to $18 per barrel. On the 5th of
February the plaintiffs caused the remainder of the cargo to be
sold at public auction, according to their notice to the defendant,
for his account, and at a great reduction of price. The verdict
does not find any fact to impugn the fairness of this sale. Before
this suit was commenced, Flint, Peabody & Co., assigned their
interest in this suit to the plaintiffs, of which the defendant had
notice.
The verdict is silent in reference to the negotiations that
preceded the contract, and does not inform us whether the
Page 61 U. S. 153
cargo was at any time visible to the defendant; nor does it
discriminate with exactness the qualities of Haxall and Gallego
flour, or affirm that there is any specific difference between
them.
It is evident from the verdict that the error in the description
of the cargo did not bear on the substance or on any substantial
quality of the subject of the sale. The subject of the sale was a
cargo of flour of about two thousand barrels on board of a vessel
lying at a wharf in the city, of a quality to be ascertained by an
inspection, and from that inspection, and not from the brand, the
price was to be ascertained. The brands Haxall and Gallego are
understood to refer to different mills in Richmond, Virginia, at
which flour is manufactured. The verdict sufficiently determines
that the difference between them in the market of San Francisco is
inappreciable, at least by the mass of purchasers and consumers.
The case clearly does not belong to that class in which the subject
matter of the contract was of a nature wholly different from that
concerning which the parties to the contract made their
engagements. The brand on the exterior of the barrels of flour was
certainly not of the substance of the contract.
Young v.
Cole, 3 Bing.N.C. 724;
Gompertz v. Bartlett, 2 Ell.
& B., 19 Verm. 202
The defendant does not resist the fulfillment of his agreement
for any fraud, nor does the verdict impute any
mala fides
to the plaintiffs.
The case rests upon these facts. There was a sale of a cargo of
flour, at a price dependent upon the fact whether the component
parts inspected superfine or bad, which was described as of one
brand, but which proved to be of another. There was no material
difference in the credit of the brands, and the market price of the
flour was but little affected by the question whether the brand was
of the one or the other mill.
A portion of the flour has been delivered to, and paid for and
consumed by the defendant. He made no offer to return this flour.
The flour remained in the Ork from the 13th of January till the
31st of January, subject to the exigencies of the contract. During
that period, there was no complaint on the part of the defendant.
From the 28th of January till the 5th of February, when the refusal
to accept the remainder of the flour and the sale of it on account
took place, the price of flour was steadily declining.
It may be admitted that the description of the flour as Haxall
imported a warranty that it was manufactured at mills which used
that brand, and that the purchaser would have been entitled to
recover the amount of difference in the value of that and an
inferior brand.
Powell v. Horton, 2 Bing.N.C. 668;
Henshaw v. Robbins, 9 Met. 83.
Page 61 U. S. 154
But it cannot be admitted that the purchaser was entitled to
abandon this contract.
In the note to
Cutter v. Powell in Smith's Leading
Cases, the annotator says:
"It is settled by
Street v. Blay and
Poulton v.
Lattimore, where an article is warranted and the warranty is
not complied with, the vendee has three courses, any one of which
he may pursue. 1. He may refuse to receive the article at all. 2.
He may receive it, and bring a cross action for the breach of the
warranty. 3. He may, without bringing a cross-action, use the
breach of warranty in reduction of damages in an action brought by
the vendor for the price."
The annotator proceeds to say
"That it was once thought, and, indeed, laid down by Lord Eldon
in
Curtis v. Hanney, 3 Esp. 83, that he might, on
discovering the breach of warranty, rescind the contract, return
the chattel, and, if he had paid the price, recover it back. This
doctrine, which was opposed to
Weston v. Downes, Doug. 23,
is overruled by
Street v. Blay, 2 B. & Adol., and
Gompertz v. Denton, 1 C. & Mee. 205, and it is clear
that though the noncompliance with the warranty will justify him in
refusing to receive the chattel, it will not justify him in
returning it and suing to recover back the price."
The second and third propositions of this learned author are
indisputable, and have received the sanction of this Court.
Thornton v.
Wynn, 12 Wheat. 183, as modified by
Withers v.
Greene, 9 How. 213. The first proposition,
concerning the right of the purchaser to reject the article because
it varies from the warranty, is an open question. In
Dawson v.
Collins, 10 C.B. 527, 70 E.C.L., the judges dissent from it.
The Chief Justice expressed his favor for the conclusion "that the
buyer has no right to repudiate the article," because it did not
correspond to the warranty, and Cresswell, Justice, said,
"Where the rule is of an individual and specific thing, the
vendee can only defend himself, altogether, against an action for
not accepting it, if the thing be utterly worthless, as in
Poulton v. Lattimore, or in part by giving the breach of
warranty in evidence in reduction of damages."
And this corresponds with the conclusions of this Court in the
case of
Thornton v.
Wynn, 12 Wheat. 183, where very similar language is
used.
But while the first proposition of the note in the Leading Cases
is a matter of dispute, there is none in respect to the conclusion
that the purchaser who has received and used the article and
derived a benefit from it cannot then rescind the contract. This
principle is stated in
Hunt v. Silk, 5 East. 449, in which
Lord Ellenborough says: "Where a contract is to
Page 61 U. S. 155
be rescinded at all, it must be rescinded
in toto, and
the parties put
in statu quo." And
"If the plaintiff might occupy the premises two days beyond the
time when the repairs were to have been done and the lease
executed, and yet rescind the contract, why might he not rescind it
after a twelve-month on the same account? This objection cannot be
gotten rid of. The parties cannot be put
in statu
quo."
In
Perley v. Balch, 23 Pick. the same principle is
applied to contracts of sale of chattels. The court said:
"The purchaser cannot rescind the contract and yet retain any
portion of the consideration. The only exception is where the
property is entirely worthless to both parties. The purchasers
cannot derive any benefit from the purchase, and yet rescind the
contract. It must be nullified
in toto or not at all. It
cannot be rescinded in part and enforced in part."
In
Burnett v. Stanton, 2 Ala. 183, the court said:
"A contract cannot be rescinded without mutual consent when
circumstances have been so altered by a part execution that the
parties cannot be put
in statu quo, for if it be rescinded
at all, it must be rescinded
in toto."
To the same effect is
Christy v. Commins, 3 McLean 386;
2 Hill N.Y. 288, per C.J. Nelson;
Kase v. John, 10 Watts
107. In
Thornton v.
Wynn, 12 Wheat. 183, this Court said:
"That if the sale of a chattel be absolute and there be no
subsequent agreement or consent of the vendor to take back the
article, the contract remains open and the vendee is put to his
action upon the warranty unless it be proved that the vendor knew
of the unsoundness of the article and the vendee tendered a return
in a reasonable time."
If the verdict had found that the defendant had sustained any
damage from the difference in the brands on the flour, the price
would have been diminished accordingly, and so the defendant might
have been indemnified upon an action commenced by himself alleging
a breach of the contract. But without considering whether he could
refuse to accept any portion of the flour for the variance from the
letter of his contract, we decide that he lost this power when he
applied to have, paid for, and sold the parcels, on the 25th and
31st of January, 1853.
The defendant pleaded that the several causes of action in the
complaint mentioned did not accrue within two years before the
commencement of the suit. The Code of California provides that
"An action upon any contract, obligation, or liability founded
upon an instrument of writing, except those mentioned in a
proceeding section, shall be brought within three years, and within
two years if founded upon a contract, obligation, or liability not
in writing, except in actions on an open
Page 61 U. S. 156
account for goods, wares, and merchandises, and for any article
charged in a store account."
The plea of the defendant does not allege that the cause of
action is founded upon a contract, obligation, or liability not in
writing, nor show that it falls within the limitation of two years,
as pleaded. The complaint is framed so as to admit evidence of a
contract in writing quite as well as an oral contract, and the
evidence shows this action is founded on a written contract. The
plea should have contained an averment that the cause of action was
not in writing, with such other averments as to show that the bar
of the statute pleaded was applicable.
A plea cannot be sustained which rests for its validity upon a
supposed state of facts which may not exist. The plea must be an
answer to any case which may be legally established under the
declaration.
Winston v. Trustees' University &c., 1
Ala. 124.
It was objected that the proof shows that the assignment by
Flint, Peabody & Co., was made to the plaintiffs in the suit,
and that the declaration alleges that they assigned their interest
in the claim to John Bertram, one of the plaintiffs. The Code of
California requires that actions shall be prosecuted in the name of
the real party in interest, and that all parties having an interest
in the subject of the action, and in obtaining the relief demanded,
may be joined as plaintiffs. The plaintiffs are shown to be the
parties jointly interested in the subject of the action, and in the
claim for relief. It is quite immaterial in what proportions they
may be concerned. Their case is substantially established, when
their joint interest is shown, and the error in respect to the
degree of the interest of the several parties is not such a
variance as will be considered.
Judgment affirmed.