Lewiston Milling Co. v. Cardiff

• Decision Date: 06 July 1920
• Docket Number: 3400.
• Citation: 266 F. 753
• Parties: LEWISTON MILLING CO., Limited, v. CARDIFF et al. [1]
• Court: U.S. Court of Appeals — Ninth Circuit

266 F. 753

LEWISTON MILLING CO., Limited, v. CARDIFF et al. ^[1]

No. 3400.

United States Court of Appeals, Ninth Circuit.

July 6, 1920

Rehearing Denied September 7, 1920.

This writ of error is prosecuted by defendant below, and for convenience reference will be made to the parties litigant as plaintiffs and defendant. Recovery is sought of part of the purchase price alleged to be yet due plaintiffs upon a sale to the defendant of dehydrated potatoes. The contract upon which the action is based is in writing, of date March 18 1918, and by the terms thereof the plaintiffs agreed to sell and the defendant to purchase all of the output of dried unpeeled potatoes then on hand and to be produced by plaintiffs at their plant, theretofore conducted by the Washington Evaporated Food Company, at Yakima, Wash., from the 1917 crop. Delivery was to be made at the plant. Defendant is an Idaho corporation, but was at the time engaged in the operation of a flourmill, also at Yakima. The potato chips, when delivered, were taken to the defendant's milling plant in Yakima for milling into flour. Plaintiffs allege performance on their part, and that on the other hand, defendant refused to receive a large amount of dehydrated potatoes manufactured by plaintiffs under the contract, or wholly to pay for such as had been delivered and manufactured ready for delivery.

The defendant denies that it and plaintiffs entered into a written contract for the manufacture and delivery to defendant of dehydrated potatoes as alleged in the complaint but alleges affirmatively that, on and prior to March 18, 1918, certain negotiations were had between plaintiffs and defendant, at

Yakima, Wash., upon the subject of manufacturing flour from potatoes, to be used as a substitute for wheat flour, with a view to defendant's entering into a contract with plaintiffs whereby plaintiffs should, at an agreed price, furnish defendant potatoes of the crop of 1917, processed and manufactured in the way of cleaning, slicing into chips, and drying, so that the same would be ready for use by defendant, to be ground and manufactured into potato flour, to be sold by defendant in interstate commerce as food for human beings, and designed to take the place as such of wheat flour to as large extent as possible, to meet the exigencies of the war; that defendant, as a result of such negotiations, agreed to purchase from plaintiffs potatoes of the crop of 1917, to be processed and manufactured, and delivered to defendant for manufacture into flour, and to be sold for food in interstate commerce, the amount so purchased to be limited to such as might be produced within 90 days from February 23, 1918; that it was further agreed 'that the product as produced and manufactured and delivered by the plaintiffs to the defendant under such contract should be and would be warranted by plaintiffs as a high quality product, free from the least damage in the processing and manufacturing process to be applied by the plaintiffs, and suitable and marketable for making the best grade of potato flour, and of marketable quality as a food product. ' It is then further averred, in effect, that the alleged contract set up in the complaint was signed by R. D. stanley, as manager of defendant, but without authority to execute such contract or agreement in behalf of defendant, and that such contract does not express the real agreement of the parties, as above indicated. Reformation of the contract is sought, to conform to such alleged understanding and agreement.

Defendant asserts that plaintiffs breached the agreement in several particulars, namely: That the potatoes delivered and sought to be delivered were rotten, and contained black, decayed spots, bitter to the taste, which, when ground with the healthy portions into flour, would render the product bitter to the taste; that such potatoes were scorched in drying, giving the flour product a burnt taste and odor, and a red color, thus rendering it unmarketable; that plaintiffs employed filthy and unsanitary methods in drying the potatoes, such as to render them unfit for food; and that in processing them plaintiffs used an excessive amount of sulphur, and thereby further rendered them unfit for food for human consumption. The further defense is advanced that, by reason of the use of sulphur in processing, the potatoes were rendered injurious to health, and therefore adulterated, in violation of the pure food laws of the United States and of the state of Washington, and, further, that such potatoes were misbranded within the meaning of such laws.

The cause went to the jury under the theory that the sale was by sample, resulting in a verdict and judgment for plaintiffs.

James E. Babb, of Lewiston, Idaho, and E. B. Velikanje, of Yakima, Wash., for plaintiff in error.

Orland & Lee, of Moscow, Idaho, and Voorhees & Canfield, of Spokane, Wash., for defendants in error.

Before GILBERT and HUNT, Circuit Judges, and WOLVERTON, District judge.

WOLVERTON District Judge (after stating the facts as above).

The first question presented for our consideration is whether the court erred in refusing to instruct the jury, at the close of the testimony, to return a verdict for defendant. Counsel assert insufficiency of the evidence to carry the case to the jury in several particulars, namely: That corporate execution of the written contract is not shown; that the product furnished did not conform to sample; that it appears that the sulphur dioxide used by plaintiffs in processing the potatoes is an added ingredient, which may have rendered the article injurious to health; and that the containers of the product sold were not labeled as required by the Food and Drugs Act (Comp. St. Secs. 8717-8728).

As it relates to the corporate execution of the agreement, the court instructed that the defense had been abandoned, and that the written contract put in evidence is the contract of the parties. There was no exception reserved to this instruction, and it must be taken to be a true interpretation of the acts of the defendant in the conduct of the trial. Aside from this, a reading of the record lends ample support to the court's position.

The larger question, and the one about which the real controversy hinges, is whether the testimony was sufficient to compel submission to the judgment of the jury touching the use of sulphur dioxide in treatment of the potatoes in the process of dehydration, namely, whether it constitutes a deleterious ingredient, which may have rendered the product injurious to health, in view of the statute of the state of Washington relative to the adulteration of articles of food and drugs. The question is presented in another form by exceptions to failure to give requested instructions in the language employed, and to instructions of the court respecting the same subject-matter.

As a premise to the discussion, in view of the record, it may be affirmed that the United States pure food and drugs legislation does not come into the case, for the reason that the controversy does not involve interstate commerce. The processed potatoes were to be delivered to the defendant at plaintiffs' place of business in Yakima, Wash., and what the defendant may have desired or intended to do with the potatoes when received, whether to deal with them intrastate or interstate, could not affect or otherwise dominate the instant sale or transaction between the parties. We may therefore turn our attention exclusively to a consideration of the question in the light of the local statute. The result must be the same, whether the one or the other statute is applicable, as the statutes themselves are practically alike.

The fifth subdivision of section 7 of the federal Food and Drugs Act (34 Stat. 769 (Comp. St. Sec. 8723)), is practically identical with the fifth subdivision of section 5455, R. & B. Statutes of Washington. By these statutes an article is deemed to be adulterated 'if it contain (in case of food) any added poisonous or other added deleterious ingredient which may render such article injurious to health. ' This clause has received the interpretation of the Supreme Court of the United States in United States v. Lexington Mill Co., 232 U.S. 399, 34 Sup.Ct. 337, 58 L.Ed. 658, L.R.A. 1915B, 774. This case involved the application of the 'Alsop process,' by which nitrogen peroxide gas, generated by electricity, was mixed with atmospheric air, and the mixture then brought into contact with flour. It was claimed that the process added to the flour product a poisonous or other deleterious ingredient, 'which might render the flour injurious to health. ' After stating that the purpose and intent of the statute was to protect the public health from possible injury by adding to articles of food consumption poisonous and deleterious substances, which might render such articles injurious to the health of consumers, the court goes on to define the clause 'which may render such article injurious to health,' as follows:

'The word 'may' is here used in its ordinary and usual signification, there being nothing to show the intention of Congress to affix to it any other meaning. It is, says Webster, 'an auxiliary verb, qualifying the meaning of another verb, by expressing ability, * * * contingency or liability, or possibility or probability.' In thus describing the offense Congress doubtless took into consideration that flour may be used in many ways, in bread, cake, gravy, broth, etc. It may be consumed, when prepared as a food, by the strong and the weak, the old and the young, the well and the sick; and it is intended that if any flour, because of any added poisonous or other deleterious ingredient, may possibly injure the health of any of these, it shall come within

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