
    P. J. Sorg Company, App’lt, v. Charles E. Crouse et al., Resp’ts.
    
      (Supreme Court, General Term, Fourth Department,
    
    
      Filed July 5, 1895.)
    
    1. Sale — Executoby—Inspection.
    Where a c'ontract is executory, and the article or merchandise is after-wards to be procured or manufactured, the contract carries with it an obligation that the article shall be merchantable ; and, if it is not, the vendee may rescind the contract and return the article after he has had a reasonable time to inspect it.
    2. Same.
    When, from the terms of the contract or the nature of the property, the examination can be made only when it is used, and such was, therefore, the mode of examination contemplated, the vendee is not foreclosed until the test is made.
    
      3. Same.
    A vendee who purchases, though on time, under an agreement giving him the right to return vany portion when lound bad, may recover pay^ ments made, on thereafter discovering that the article is bad and re turning it.
    4. Same — Returning part.
    The vendee, under a contract giving Mm the right to return any part of the goods when found bad, need rescind the contract only as to such portion.
    Appeal from a judgment entered on a verdict in favor of defendants, and from an order denying a motion for a new trial, made on the minutes of the court.
    
      Charles S. Kent, for app’lt; Thomas Hogan, for resp’ts.
   Martin, J.

— This action was to recover the price of a shipment of tobacco made November 30, 1892, amounting to $178.32, and for an alleged balance of $7.97, due upon a shipment made August 17, 1892. The principal controversy between the párties arose over the defendants’ counterclaim of $108 for twenty-four caddies of tobacco received and paid for by them and returned to the plaintiff, for the reason that the tobacco was moldy and unmerchantable. This amount, with $3.47 discount upon one of the bills of tobacco by reason of its haying been paid for within ten days, was allowed the defendants, and deducted from the amount of the plaintiff’s bill, leaving a balance due it which, with interest, amounted to the sum of $77.40, for which the jury rendered a verdict.

The evidence of the defendant Ackerman was to the effect that when the first arrangement was made between the plaintiff and the defendants, in pursuance of which the dealings between them commenced, and under which all the tobacco received by the defendants was delivered, the representative of the plaintiff with whom such arrangement was made agreed with the defendants that the plaintiff would stand back of all the tobacco it sold the defendants, and, if it was not satisfactory in every way, shape, and manner, they could return it whenever they chose. The defendant Orouse’s testimony as to this transaction was, in substance, that the plaintiff’s, representative said to them that at any time any tobacco was bad, no matter how long they had had it, they might return it. Under this arrangement with the plaintiff the defendants purchased and paid for a large quantity of tobacco. The tobacco so purchased and paid for included the twenty-four caddies in question, which were purchased a year or a year and a half before they were returned to the plaintiff. After the defendants had discovered that one caddy of this tobacco was musty, and consequently valueless, they offered to return it to the plaintiff, who refused to accept it, although ah agent of the plaintiff directed them to set it one side, and charge it to the plaintiff. When afterwards it was discovered that the remaining twenty-three caddies were also defective, the defendants had a conversation with the manager of the plaintiff in regard to them, who directed the defendants to do nothing with them until he returned to the factory, and stated that everything would be arranged to the defendants' entire satisfactian. The plaintiff afterwards refused to allow the defendants for this tobacco or any portion of it. They thereupon shipped it to the plaintiff at its place of business, but it refused to accept such tobacco, and it still remains in the warehouse of the carrier who transported it. The proof tended to show that, without practically destroying the value of this tobacco, no inspection of it could be made, nor its condition ascertained, until it was placed in the hands of a retail dealer, and was opened for use. That the tobacco in question was moldy and worthless was proved, and practically undisputed. The defendants’ proof was also to the effect that this kind of tobacco, when kept in a place like that in which the defendants kept this, would suffer no injury for five to ten years, and that it was the custom of the trade not to inspect such tobacco until it was opened for use. Upon the evidence the court submitted to the jury the question whether the tobacco was unmerchantable when sold, whether the defendants could have properly inspected it when received by them, or before the time when its unmerchantable condition was discovered, and charged the jury that, if it was examined in a proper way, within a reasonable time to ascertain its condition, and it was unmerchantable when received by the defendants, they had a right to return the tobacco, and receive credit for its value. Upon all these questions the jury found for the defendants. The court held and submitted the case to the jury upon the theory that, as this tobacco was manufactured by the plaintiff, and purchased by the defendants in the regular course of trade, there was an implied warranty that it was merchantable. The rule seems to be well settled that, where a contract is executory, and the article or merchandise is afterwards to be procured or manufactured, the contract carries with it an obligation that the article shall be merchantable ; and, if it is not, thevendee may rescind the contract, and return it, after he has had a reasonable time to inspect it. Gallagher v. Waring, 9 Wend. 20; Hargous v. Stone, 5 N. Y. 86; Reaper Co. v. Thayer, 50 Hun, 516, 551; 2 Benj. Sales, p. 865, § 899 ; Hoe v. Sanborn, 21 N. Y. 555, 562; Howard v. Hoey, 23 Wend. 350 ; Cleu v. McPherson, 14 N. Y. Supr. Ct. 480 ; Peck v. Armstrong, 38 Barb. 215; Newbery v. Wall, 35 N. Y. Supr. Ct. 106. The appellant, however, contends that the defendants did not inspect this tobacco within a reasonable time, and therefore it was accepted by them, and they could not sustain the counterclaim in this action. It is clearly the duty of a purchaser to act promptly in examining goods sent upon his order, and thus determine whether they comply with it. He must also give prompt notice to the vendor of their rejection, if detective, or he cannot avail himself of his right to return them. The vendee has, however, a reasonable time in which to make such an examination, and what is a reasonable time is generally a question of fact to be determined by a jury upon all the circumstances, including the situation, liability of injury to the vendor by delay, and the convenience, and necessities of the vendee. Pierson v. Crooks, 115 N. Y. 539; 26 St. Rep. 492. But when, from the terms of the contract, or the nature of the property, the examination can be made only when it is used, and such was, therefore, the mode of examination contemplated, the vendee is not foreclosed until the-test is made. Gurney v. Railroad Co., 58 N. Y. 358, 364. Applying these rules to the facts in this case, we are of the opinion that the question whether the defendants examined this tobacco within a reasonable time was a question of fact for the jury, and that its-finding upon that question must be regarded as conclusive, especially in view of the fact that it was agreed between the parties-that the defendants might return any portion of the property that was not satisfactory whenever they chose, or any time, no matter how long, after they received it, if it was bad. This agreement shows quite clearly that the plaintiff understood and recognized the fact-that this kind of tobacco could not be inspected until it was sold to the retailer for use, and that that rule was to be applied in this case.

The plaintiff’s claim that the defendants could not recover for the tobacco thus returned after they had paid for it cannot, we think, be sustained. The payments were to be made in ten or sixty days. If made in the former time, it was doubtless before the property reached the defendants, or they had any opportunity whatever to inspect it. It was thus paid to save the two per cent, discount.’ Having the right, under their agreement, to return any portion of the tobacco purchased by them when found to be bad, it is quite manifest, we think, that upon such return they had the right to recover the money they had paid for the property returned, or have credit for it upon their account with the plaintiff. As was said in Pierson v. Crooks, 115 N. Y. 554; 26 St Rep. 492, the consideration upon which they paid the money failed, and they were entitled to recover it back. Nor we do think the plaintiff’s claim that the defendants could not rescind their contract for the purchase of the tobacco in question without also rescinding it as to the other tobacco which was purchased at the same time, and returning that as well, can be sustained. McKnight v. Devlin, 52 N. Y. 399. By the express terms ofjbe contract between the parties it was agreed that they might return any of the tobacco that was bad, no matter how long they had had it. Moreover, it. may be said that, if the evidence was not sufficient to'justify the jury in finding that the tobacco in question was in the same condition when delivered by the plaintiff as when returned by the defendants, yet, under the contract by which the plaintiff agreed that the defendants might at any time return any tobacco that was bad, no matter how long they had had it, the defendants had the right to return the tobacco in question, and to receive credit for their amount.

Having carefully examined all the evidence given upon the trial, the judge’s charge, and the exceptions and rulings by the trial court, we are of the opinion that there are no exceptions which would justify a reversal of the judgment, that the verdict is sustained by the evidence, and that the judgmentshould be affirmed.

Judgment and order affirmed, with costs.

All concur.  