McNeil & Higgins Co. v. Czarnikow-Rienda Co.

• Decision Date: 02 June 1921
• Citation: 274 F. 397
• Parties: McNEIL & HIGGINS CO. v. CZARNIKOW-RIENDA CO.
• Court: U.S. District Court — Southern District of New York

274 F. 397

McNEIL & HIGGINS CO. v. CZARNIKOW-RIENDA CO.

United States District Court, S.D. New York.

June 2, 1921

Garrard Glenn, of New York City, for the demurrer.

Sumner Ford, of New York City, opposed.

LEARNED HAND, District Judge.

The Sales of Goods Act (article 5 of the Personal Property Law of New York (Consol. Laws, c. 41)) does not change the general rule of the common law that sales of chattels prima facie are made caveat emptor (section 96). It does provide (section 93) that 'any affirmation of fact or any promise by the seller relating to the goods is an express warranty,' when reasonably relied on, unless it concern their value or the seller's opinion of them.

Again section 95 provides that, when there is a sale by description, there is an implied warranty that the goods shall conform to the description. The complaint does not allege any violation of either of these sections. To say that the sugar was off color and not regular does not contradict its being 'Eastern cane fine granulated' and of 'Federal Sugar Refining Company brand.' It is argued that 'fine' means 'excellent,' 'superior,' or 'pure,' but that I should say was not so. 'Fine granulated' normally would mean 'finely granulated,' and refer to the size of the granules. At least, that would be its meaning unless the trade means something else. Besides, if it refers to the excellence of the sugar, it is clearly within the exception of section 93, since it is an adjective of opinion. If it means 'pure,' there is no allegation that the sugar was impure.

Section 96 of the Sales of Goods Act governs warranties of quality. It provides:

'There is no implied warranty or condition as to the quality or fitness for any particular purpose of goods supplied * * * except as follows.'

Of the six following subdivisions only two, subdivisions 2 and 4 can possibly be considered relevant. Subdivision 2 reads as follows 'Where the goods are bought by description from a seller who deals in goods of that description (whether he be the grower or manufacturer or not) there is an implied warranty that the goods shall be of merchantable quality.'

Subdivision 4 reads:

'In the case of a contract to sell or a sale of a specified article under its patent or other trade-name, there is no implied warranty as to its fitness for any particular purpose.'

Under subdivision 2 the sugar must have been 'merchantable quality,' which means a good enough delivery to pass generally under that description after full examination. 'Medium quality or goodness' (Howard v. Hoey, 23 Wend. (N.Y.) 350, 35 Am.Dec. 572) seems to me perhaps too high a standard.

The allegation is that this sugar was 'not up to the quality of standard Eastern cane, and not up to the usual quality of Federal brand sugar. ' These are the only material allegations in the complaint under either subdivision. Let me assume on demurrer that the allegation is equivalent to saying that the sugar was not merchantable Eastern cane, and that, though in fact Federal brand, it was not of a quality equal to what would pass on examination for Federal brand. If the average Federal brand was itself not merchantable Eastern cane-- that is, if the brand was known to be inferior--the plaintiff has no ground of complaint. He got what he ordered if he got average Federal brand. Therefore the breach, if any, consisted in delivering what might be called 'nonmerchantable' Federal brand.

The case, therefore, comes down to whether in a sale of fungibles a stipulation for a specific brand or make is to be taken as part of the description of the goods. It is true that literally a brand only means that the goods are made by the brand owner, and it is argued that, if so made the contract is fulfilled. Yet that argument, when applied to the description proper, would, and for long did, preclude any implied warranty whatever, because the assumption in these cases always is that the goods literally conform with the description. The implied warranty is an added obligation imposed by law. Williston on Contracts, Sec. 984. It seems to me that precisely the same considerations make for a similar implied warranty touching the brand as touching any part of the description. Although the goods are actually made by the owner, unless they be of passing grade for such goods, the buyer is disappointed in his reasonable reliance. The case can be tested by the supposed sale of a manufacturer. Assume that, having a reputation distinguished by his brand, he agrees to sell under that brand. Presumably the brand means some uniform quality, which has made it known and desired. The buyer exacts it because he expects the delivery to have that quality. The seller knows of the buyer's expectations, and he is in a position to know whether the delivery conforms with those expectations. He knows that the buyer relies upon his better knowledge to insure their realization. He cannot suppose that the buyer cares for the fact that he makes the goods independently of the quality of which that fact assures him. If he is charged with more than a literal compliance with any part of the description because of his better information, he ought, I should say, be charged with this. If not, it can only be because the brand is taken as signifying nothing in the quality of the...