
    Shaw et al. v. Lighthouse.
    
      (Supreme Court, General Term, Fifth Department.
    
    October, 19, 1889.)
    Sale—Waiver of Defects.
    Retention by the purchasers of goods shipped to them under a contract for the sale of all the goods of a certain description then owned by the seller, but which contains no warranty of quality, without offering to return the goods or notifying the seller, after inspection, that part of the goods do not answer the description contained in the contract, constitutes a waiver of their right to damages on that ground.
    Appeal from circuit court, Monroe county.
    Action by Francis M. Shaw and another against John C. Lighthouse. Judgment for plaintiffs, and defendant appeals.
    Argued before Barker, P. J., and Dwight and Macomber, JJ.
    
      Walter Gf. Hubbell, for appellant. W. E. Edmunds, for respondents.
   Barker, P. J.

This action was brought to recover damages for the breach of a written contract, by the terms of which the appellant agreed to sell and deliver in the city of Boston, to the respondents, a quantity of scrap leather. The defendant contends that upon the trial paroi evidence was received to contradict and vary the terms of the written agreement, and for this reason the judgment should be reversed, and a new trial granted. We are unable to find in the record any exception which fairly presents this question. The appellant, a tanner, doing business in the city of Rochester, had a contract with the United States governmentfor the making of leather mail-bags, which were manufactured at the appellant’s establishment in the city of Rochester, mostly from leather which he tanned. When the leather was finished and ready to be used for that, purpose, a side of leather, which was one-half of the entire hide as taken from the animal, was spread on the cutting table, and a pattern for a mail bag laid thereon, and so much of the side of leather as was suitable for any part of a bag was cut out and the remnants were called in the trade “mail-bag scrap,” which had a market value, and was mostly used for soles for boots and shoes. Before any pieces were cut out from a side of leather for a mail-bag the back line of the side was straightened and brought to a true line. In doing this sometimes narrow strips or strings were cut off, varying in length from 6 to 24 inches. When all of the side suitable for mailbags was cut out, the remnants were removed from the table, and this refuse material was put in sacks, and stored in the defendant’s warehouse. The plaintiffs were manufacturers of shoes, doing business in the city of Boston. When the agreement was made, the defendant had a large amount of this class of stock on hand, not weighed. The contract recites that the purchaser had bought of the seller “his whole stock of mail-bag scrap, not to exceed 50 tons, at the rate of 15 and 3-4 cents a pound, delivered in Boston. * * * Each shipment to be drawn on by sight draft, with bill of lading attached. ” The stock was shipped in separate car-load lots, and was paid for by the purchasers before the goods were received by them. They now insist that each shipment contained several sacks of pieces of leather not included in the contract, which were of much less value than the article known as “mail-bag scrap,” and the evidence produced by them tended to show that the contents of those sacks was made up, in part at least, of “straightenings,” or “strings,” so called, ajid were not mail-bag scraps, within the meaning of that term as used in the contract.

On the trial the question was sharply contested whether all the pieces or remnants of a side of leather left after getting out the part suitable for a mailbag was included in the term “mail-bag scrap,” or was limited to the large pieces so left, excluding strings or straightenings, as before described. ETo objection was made by the defendant to any of the evidence on the ground that it tended to contradict the written contract. As to.the kind and amount of property sold, the contract was definite and certain. The dispute is not as to the terms of the contract, but as to what was included within the meaning of the words used descriptive of the article sold. The plaintiffs did not seek to change the contract so as to excludefrom the purchase any article that would come within the term “mail-bag scrap.”

The learned counsel for the appellant insists that the court in effect ruled that paroi evidence might be used to modify or contradict the written agreement, by refusing to charge this proposition, to-wit, that the jury must find from the evidence in the case that the plaintiffs purchased the whole stock of mail-bag scrap, not to exceed 50 tons, belonging to the defendant. If the defendant sought by this request to have the jury instructed that by the terms of the written contract the plaintiffs purchased all the mail-bag scrap then owned by the defendant, not exceeding 50 tons, he was entitled to the instruction, for such was the plain meaning of the contract, unless the court had already informed the jury that such was the import of the agreement. I think he had in effect so instructed the jury before this request was made. It is-unnecessary, in this connection, to repeat the portions of the charge referred to, as it cannot be doubted, after a perusal of the same, that the jury must „ have understood that such was the meaning of the contract from the remarks of the court, referring to the nature and character of the agreement. It is manifest, when the request to charge is read in connection with the charge as-made, to which the defendant took no exception, that the purpose of the appellant in making the request to charge was to secure a ruling from the court that the term “mail-bag scrap” included strings and straightenings, as claimed by the defendant. It is unnecessary to pursue this question further, as we think the plaintiffs by their action on receipt of the stock shipped to them are precluded from claiming that the same was not of the kind and quality purchased. The entire amount of stock shipped was about 38 tons, in 3 car-loads; the first ear being started from Rochester May 7th, and the third, the last of J une or the 1st of July following. By the plaintiffs’ special direction, the last car-load was consigned to them at Boston, where it was received by them. At the time the contract was made the stock was sacked and in store in the defendant’s building, which one of the plaintiffs and their agent visited with a view of ascertaining the quality of the stock, and they opened and inspected the contents of some of the bags. These persons testified as witnesses that they then discovered that some of the sacks were filled with pieces of leather which were not mail-bag scrap, and, as they understood from statements made by a person in the employ of the defendant, were not to be shipped under the contract. The plaintiffs claim, and their evidence tended to show, that 95 of the sacks shipped, containing about 10 tons in all, contained strings and pieces of leather not “mail-bag scrap” within the meaning of that term as used in the contract. It was also proved on the trial that the material in those sacks was worth less in market value than the contract price mentioned in the contract, and was also of less value than the material known as “mail-bag scrap.”

The rule of damages adopted on the trial was the difference between the value of the goods in view of their actual quality and the market value of goods answering the description of those purchased. When the first car-load was received by the plaintiffs and unloaded at their factory, one of the plaintiffs personally inspected the goods, and he discovered that several sacks were filled with “chips and stuff,” and they were weighed and stored in a room separate and apart from the sacks which contained mail-bag scrap proper. This entire car-load was afterwards sold by the plaintiff to a manufacturer, and shipped to Salem, Mass., who, upon inspection of the goods, returned to them two tons, and used the balance in his business. On the receipt of the second car-load some of it was used by the plaintiffs in their own factory, and some of it sold to third parties. The evidence tended to show that some of this ■ consignment was not mail-bag scrap, but was refuse of very little value;' but it is admitted that most of the stock which was condemned, was used by the plaintiffs in their business, and the rest consumed as fuel. When the third car-load was received in Boston it was forwarded unopened to Rowley, a place 50 miles distant. On ite arrival there the goods were inspected by the plaintiffs, and they discovered that several sacks were filled with refuse material, not of the kind and quality purchased. All of this car-load was either, sold or used by the plaintiffs, and their proofs tended to show that there were ten or eleven thousand pounds of rejected goods.

Upon these undisputed facts the legal proposition is presented whether the plaintiff's, by not returning or offering to return the goods, after discovering - that the goods were not of the kind or quality purchased, waived all objections on account of defects of quality. We think they did, and for that reason failed to make out a cause of action. It was their duty, in view of the facts and features of this transaction, to accept the goods as answering the contract, or, on inspection, to return each shipment as rejected by them because the quality was defective, and not suchtas was contracted for. The contract of sale was executory, and no title passed to the purchasers on the execution and delivery of the written agreement. After delivery of the contract, the - goods owned by the defendant and on hand at that time, of the kind mentioned therein, were to be separated from the entire stock then on hand, and • delivered to the plaintiffs, the freight prepaid, in the city of Boston. The. sale was nob limited to the contents of a particular number of sacks pointed out and designated by a mark, nor did the contract exclude from the purchase pieces of leather which would answer the description of “mail-bag scrap,” although at the time of the sale they were in sacks mingled with scraps and remnants not “mail-bag scrap” within the meaning of that term. The contract contained no warranty as to the quality of the property; therefore a breach of the contract was not a breach of warranty, but a mere non-compliance with the contract that the defendant had agreed to fulfill. In cases of executory contracts for the sale and delivery of the personal property, the remedy of the vendee to recover damages on the ground that the article furnished does not correspond with the contract does not survive the acceptance of the property by the vendee after opportunity to ascertain the defect, unless notice has been given to the vendor, or the vendee offers to return the property. The retention of the property by the vendee is an assent on his part that the contract has been performed. The delivery of the property corresponding with the contract is a condition precedent to the vesting of the title in the vendee; the parties understanding that the vendee is not bound to accept the property tendered, except upon this condition. This the vendee is to determine upon the receipt of the property; There is no intention that a defective article should be accepted, and that the vendee should rely upon some kind of a covenant for his indemnity. The latter is not bound to receive and pay for a thing that he has not agreed to purchase; but if the thing purchased is found on examination to be unsound, or not to answer the order given for it, he must immediately return it to the vendor, or give him notice to take it back, and thereby rescind the contract, or he will be presumed to have acquiesced in its quality. He cannot accept the delivery of the property under the contract, retain it after an opportunity of examining its quality, and recover damages if it be not of the quality or description called for by such contract. These are elementary propositions, and are found stated in Reed v. Randall, 29 N. Y. 358. (See, also, Fisher v. Samuda, 1 Camp. 190; Hargous v. Stone, 5 N. Y. 73; Shields v. Pettee, 2 Sandf. 262.

When, in an executory contract for the sale of goods, there is a warranty as to the quality of the goods contracted for, the vendee, on receipt of the article and subsequent discovery that it is defective in quality, is not bound to return or offer to return the property, but may retain and use the same, and have his action for damages upon the contract of warranty. Such was the case of Day v. Pool, 52 N. Y. 416, where the contract was for the sale of an article known as “Rock-Candy Syrup” “ that could not crystallize, or the sugar fall down, ” in its use. The goods were shipped to and received by the purchasers in small parcels, at different times; and before it was all received they discovered that the syrup did not answer the warranty or recommendation, but used the same; and it was held that the warranty survived the delivery, acceptance, and use of the goods by the buyer. The case at bar and the material facts are similar to the case of Sprague v. Blake, 20 Wend. 61, and the principle upon which that case was decided has never been questioned. The proof there was that the defendant had agreed to purchase the whole of a crop of wheat belonging to the plaintiff, estimated to amount to between three and four hundred bushels, to be delivered at a place mentioned, for which the vendee agreed to pay a stated price. By the terms of the agreement the wheat was to be merchantable. After a portion of the wheat was delivered, it was agreed that the balance should be delivered at another point, and the plaintiffs delivered at that point a quantity of wheat, which was accepted and not paid for. The purchaser used the wheat. In an action for the price of the wheat last delivered, the purchaser attempted to set up the inferior quality of the wheat as a partial defense, and offered to prove its real value, and the evidence was rejected. A verdict for the contract price was sustained, the court laying down the proposition that the buyer must refuse to accept the property at the time of its delivery, or, if its inferiority be subsequently discovered, lie must return it to or require the purchaser to take it back. In Hargous v. Stone, supra, it was held that if the contract was an executory one to furnish goods of a particular description the purchaser was bound to •examine them when received and opened, and to return them if the quality was not such as was promised. Not having done so, he waived all objections ■on account of defects of quality.

In the contract before us the thing sold was “mail-bag scrap,” as that article was known in the trade. It was simply an agreement to sell so much of mail-bag scrap as he had then on hand, not exceeding 50 tons. The seller .shipped the goods as answering the description “mail-bag scrap,” and if the purchasers, on receiving the goods, discovered that any portion of the shipment was not of the kind of goods purchased, and they were unwilling to receive the same as complying with the contract, it was their duty to have returned the same, or notified the seller; and, not having done so, they deprived themselves of the right to claim damages on account of inferiority of the article. The learned judge who presided at the trial, and who heard and denied the defendant’s motion for a new trial, disposed of the point now under consideration by citing Meagly v. Hoyt, 12 N. Y. St. Rep. 357, as authority that the right of action survived the acceptance of the goods. We think that case not in point. There it was alleged by the buyer that the defendant warranted and agreed to sell tallow of a quality or a grade known as “prime tallow,” but in violation of that agreement they delivered an article which contained 30 per cent, of foreign matter. The plaintiff recovered a verdict, which was •sustained by the general term. Although the contract in that case was ex-ecutory, it contained a warranty as to the quality, and belonged to the class •of actions in which Day v. Pool, supra, is a leading one in this state.

We have examined with care the correspondence which took place between the parties concerning the third car-load before its receipt by the plaintiffs at Boston, and we find nothing in it which amounts to a warranty, or makes ■the case any different as to the rights of the parties than as the same stood before the correspondence was opened. The judgment and order should both' •be reversed, and a new trial granted, with costs to abide event. All concur.  