Gould v. Hiram Walker & Sons, Inc.
| Citation | 266 F.2d 249 |
| Decision Date | 26 May 1959 |
| Docket Number | No. 12414,12415.,12414 |
| Parties | Robert GOULD, d/b/a Robert Gould Company, Plaintiff-Appellant & Cross-Appellee, v. HIRAM WALKER & SONS, INC., a Corporation, and Hiram Walker, Incorporated, a Corporation, Defendants & Counter-Claimants, and Irving H. Lake et al., Interpleaded Counter-Defendants-Appellees & Cross-Appellants. |
| Court | U.S. Court of Appeals — Seventh Circuit |
Edward R. Dorr, Cincinnati, Ohio, Harry E. Witherell, Peoria, Ill., for Gould, Gallagher, Dorr & Manley, Cincinnati, Ohio, Davis, Morgan & Witherell, Peoria, Ill., of counsel.
Robert G. Day, Clarence W. Heyl, Julian B. Venezky, Jay J. Alloy, Chester L. Anderson, John E. Cassidy, Herbig Younge, Cassidy & Cassidy, Peoria, Ill., for Hiram Walker & Sons and Irving H. Lake.
Before SCHNACKENBERG, PARKINSON and KNOCH, Circuit Judges.
On September 19, 1940, at a New York Tax Commission Warrant Agent's sale, Robert Gould purchased, subject to prior sales and outstanding equities, all the right, title and interest of Pennsylvania Whiskey Distributing Corporation (later known as Kent-Darby, Ltd.) herein called "Pennsylvania", in (inter alia) a contract to purchase 1,367 barrels of whiskey from the Hiram Walker Companies, herein called "Walker", on which partial payment had been made and, in addition, warehouse receipts representing 833 barrels of whiskey. Of the total 2200 barrels only 1608 are involved in the matter now before us.
In 1941 Gould brought this action to compel delivery by Walker upon payment by Gould of charges for storage, insurance, taxes, and the balance due on the purchase contract. Walker answered Gould's demand alleging the receipt of notices of other claims from the numerous interpleaded counter-defendants (herein called "Tavern Keepers") each based on alleged prior purchases of the whiskey in question from Pennsylvania.
It was stipulated that prior to September 1940, Pennsylvania sold each of the Tavern Keepers varying numbers of barrels of whiskey; and that in each instance a part, at least, of the agreed purchase price had been paid Pennsylvania. Specific proof of the exact agreed prices and amount of payment made was reserved for later accounting.
Gould contended that he had acquired the entire legal and equitable title to the whiskey and that, as a matter of law, he took subject only to payment of the unpaid balance of the purchase price, and equities of which he had legal notice at the time of his purchase.
The only contested issue at that time was whether he took subject to or free from the rights of Tavern Keepers.
On appeal, this Court (7 Cir., 1944, 142 F.2d 544) concluded that Gould took title subject to the claims of the Tavern Keepers and remanded the cause to the District Court for further proceedings consistent with that finding.
The parties then stipulated as to the amounts paid by each Tavern Keeper and the number of barrels covered by each payment.
However, under authorization of the District Court's decree of April 14, 1943 (subsequently reversed on appeal as heretofore indicated) Gould had taken delivery and disposed of the whiskey. It thus became the duty of the District Court to assess damages.
The Tavern Keepers were all retailers, not blenders or distillers of liquor. Under the law they were prohibited from accepting delivery in barrels and could do so only in bottled form. Damages were assessed by the District Court on the basis of the wholesale value of each barrel of whiskey in bottled form, less all amounts payable as contract balances, storage and other charges, Federal Excise Taxes, and cost of bottling.
An exception was made of two Tavern Keepers who were found not to have paid Pennsylvania the full amount of their agreed purchase price. They were awarded solely the return of the amounts they had paid.
Gould asserts that all the Tavern Keepers should have been awarded damages solely in return of the amounts they had paid. His theory is that all were technically in default in completing payments and were tardy in asserting their rights. Gould argues that each Tavern Keeper should receive only the amount he actually paid, less an allocable share of the payments made by Gould to "protect" the property.
The whiskey would have been deliverable to the Tavern Keepers only after Pennsylvania had paid the Federal Excise Taxes, bottled the whiskey and been reimbursed for its cost. Gould thus contends that the Tavern Keepers owed Pennsylvania about $200 per barrel. This is about what would have been owed to Pennsylvania, had Pennsylvania paid the Federal Excise Taxes, Walker's charges for storage and insurance, shipping charges and bottling cost, and delivered the whiskey to the Tavern Keepers in bottled form. These things, however, were not done. In computing the value of each of the barrels, in bottled form, the District Judge gave full consideration to all these charges which the Tavern Keepers would have had to pay Pennsylvania at such time as they sought delivery of their whiskey in bottled form from Pennsylvania.
It was undisputed that for some time prior and subsequent to April, 1943, when Gould took possession of the whiskey, war conditions caused a great imbalance in demand and supply of whiskey, production of which ceased during the war years. Further, because of the great price differential between Office of Price Administration "ceilings" for bulk whiskey and bottled whiskey, very little whiskey could be purchased in bulk. As a matter of self interest, owners of bulk whiskey had it bottled before sale to take advantage of the differential.
Thus the Tavern Keepers could not have purchased other whiskey in bulk in 1943 and had it bottled. They would have had to buy bottled whiskey at the higher prices then in effect.
Gould appeals on the ground that the District Court has made an unjust award of damages. The District Judge made no allowance for profit and based damages only on the differences between what it would have cost each Tavern Keeper to obtain a barrel of whiskey in bottled form (with taxes and charges paid) and what it would have cost him to get his own whiskey, of which Gould had taken possession, in bottled form with all taxes, contract balances, charges, etc., paid.
The Tavern Keepers have also appealed from the District Court's failure to allow interest. They contend that the measure of damages for conversion of personal property properly includes interest from the time of conversion.
Gould characterizes the interest of the Tavern Keepers as less than full ownership title. It is, however, unquestioned that Pennsylvania owned the warehouse receipt barrels outright (subject only to storage and insurance charges, etc.) and owned the contract barrels subject to such charges and balance of the purchase price due Walker. Purchase orders were signed by each Tavern Keeper. Pennsylvania issued each Tavern Keeper a whiskey warehouse certificate to evidence his interest. The purchase orders stated:
"Title to the whiskey described in this order and covered by Warehouse Certificate shall remain in seller until payment of purchase price and any notes in connection therewith have been paid. * * *"
The certificates also provided:
"The title to the whiskey covered by this certificate shall pass only upon full payment of the purchase price both in cash and the payment of any notes that shall be given in connection with the purchase price."
The certificates did not specify the agreed purchase price. The purchase orders did.
With the exception of two Tavern Keepers, who had not paid the full purchase price, as noted above, each Tavern Keeper, prior to the New York Tax Sale, paid Pennsylvania in full the purchase price set forth in the purchase order, and title to the bulk whiskey had passed from Pennsylvania to the respective Tavern Keepers. Gould, in acquiring Pennsylvania's right, title and interest at the Tax Sale acquired no title in the barrels of whiskey specified in the purchase orders of these Tavern Keepers.
Gould argues that something remained to be done to put the whiskey in a deliverable state, and that title therefore did not pass until the whiskey was bottled.
He quotes from Section 19 of the Uniform Sales Act, Rule 2 (Chapter 121½, Sec. 19, Illinois Revised Statutes):
"Where there is a contract to sell specific goods and the seller is bound to do something to the goods, for the purpose of putting them into a deliverable state, the property does not pass until such thing be done."
However, the rules from which...
To continue reading
Request your trial
-
Alliance for Water Efficiency v. Fryer, 14 C 115
...Reed v. Allen,286 U.S. 191, 203 (1932); Wyatt v. Syrian Arab Republic, 800 F.3d 331, 340 (7th Cir. 2015); Gould v. Hiram Walker & Sons, Inc., 266 F.2d 249, 253 (7th Cir. 1959). It is generally conceded that a restitution claim is not aimed at compensating the plaintiff so much as forcing th......
- BEACON FED. S. & L. ASS'N v. Federal Home Loan Bank Bd.