Hartnett v. Brown & Bigelow, 9650.

• Decision Date: 15 May 1968
• Docket Number: No. 9650.,9650.
• Parties: Fred HARTNETT, Appellant, v. BROWN & BIGELOW, a Division of Standard Packaging Corporation, Appellee.
• Court: U.S. Court of Appeals — Tenth Circuit

394 F.2d 438 (1968)

Fred HARTNETT, Appellant, v. BROWN & BIGELOW, a Division of Standard Packaging Corporation, Appellee.

No. 9650.

United States Court of Appeals Tenth Circuit.

May 15, 1968.

G. J. Cardine, Casper, Wyo., for appellant.

Morris R. Massey, Casper, Wyo., for appellee.

Before MARVIN JONES^*, Senior Judge, United States Court of Claims, and LEWIS and BREITENSTEIN, Circuit Judges.

MARVIN JONES, Senior Judge:

This is an appeal from a judgment in the net sum of $5,746.48 in favor of Brown & Bigelow, plaintiff below, against defendant Fred Hartnett in the United States District Court for the District of Wyoming. The controversy arises over a large number of etchings which had been ordered from Brown & Bigelow by appellant Hartnett through Charles Kinsey, who had been a salesman for Brown & Bigelow.

The main issue was whether the etchings, which had been machine mounted, were defective and unmerchantable and failed to measure up to the quality of the samples, which had been hand mounted and which were the basis of the order. There naturally are a number of collateral issues growing out of the resale to customers in many states.

Summary of the Facts

On March 18, 1965, Fred Hartnett contracted to purchase from Brown & Bigelow 100,000 gold print Ettinger etchings and 100,000 copper print Palenske etchings. One half of the etchings were to be delivered on June 1, 1965, and one half on March 1, 1966.

By supplemental order 25,000 decks of playing cards were also to be delivered, one half on each etching delivery date. Hartnett was to pay $26,848.00¹ for the first shipment of etchings and cards and $25,591.48 for the second shipment. These sums included $5,746.48 for each delivery of playing cards.

All parties apparently knew that Hartnett was purchasing the items for resale. Hartnett sold the etchings to Kinsey who planned through Golden Elk, a Wyoming corporation, to resell them in the open market all over the country.

Before he placed the order, Hartnett was shown handmounted sample etchings on white backboards. The etchings were described in the Brown & Bigelow order forms. The evidence showed that the order was signed in reliance upon the description and samples that were exhibited.

Four hundred sets of each type of etching were delivered by Brown & Bigelow by early air freight. Golden Elk used half of this air shipment as samples for a selling group. The other half of that shipment was then sold retail in the Yellowstone Park area. This air freight shipment conformed to the samples, contained no defects, and was of the quality represented.

Soon after the air freight shipment was sent, Brown & Bigelow shipped the remainder of the first half of the total contract, or 50,000 sets of each type of etching. Hartnett soon thereafter remitted $26,848.00, which covered the June shipment of one half of the total order of 200,000 sets of etchings and one half the total, or 12,500 sets of playing cards.

Upon delivery of the first half of the total contract, the sales force of Golden Elk began sales in 30 states. In September 1965, Kinsey of Golden Elk began encountering defective etchings. This did not bother him at first, as he had expected a few. However, by October, Golden Elk and Hartnett began to receive an alarming number of complaints of defective etchings. Kinsey began forwarding defective etchings to Hartnett and complained of difficulty in attempting to put together display boards containing four good etchings, and further sales gradually ended.

It appears that in filling the order 4 etchings were placed in each envelope, then stacked into groups of 25, then placed in boxes of 100 sets, each set being sealed for shipment to Hartnett and reshipment by Hartnett to Golden Elk.

Brown & Bigelow had ordered the etchings from Germany, and after mounting the samples by hand had then mounted the two major installments of etchings upon a white backboard by a process known as tipping. The mounting was done by a tipping machine constructed by Brown & Bigelow by converting a used printing press into a machine for that purpose. The machine could mount 2,500 etchings per hour. The etchings were fed into the tipping machine through a roller, which ran across the middle of each etching. This was for the purpose of pressing down so that the glue that had been placed either on the back of the etching or on the front of the backboard would hold the etching in place until the glue hardened.

The entire 200,000 etchings were run through the machine in one continuous operation.

Through an attorney, Hartnett notified Brown & Bigelow of the alleged defective merchandise and of his recision of the contract. This was done by letter dated November 17, 1965.

After a meeting of the parties at which they failed to reach any agreement, Brown & Bigelow filed suit for $25,591.48, the contract price of the second half of the order, or second installment, which was still undelivered.

Hartnett entered a general denial and filed a counterclaim seeking to rescind the order and agreement of March 1965, and in the alternative pleaded for the recovery of damages for breach of the contract by Brown & Bigelow for its alleged failure to deliver merchandise of the quality shown by the samples and for its delivery of unmerchantable etchings.

There was some conflict in the testimony. Brown & Bigelow presented testimony to the effect that 500 sets of the etchings were opened and only three were found to be defective. Hartnett offered evidence of numerous complaints as to the defective quality and unsatisfactory condition of the etchings, of customers' refusals to account for etchings that were unacceptable, and of their declining to order any further etchings.

The defects in the etchings were scratches or markings across the middle of the etchings. The only expert witness who testified was one T. Guard, called by Hartnett, who testified he had been in printing and allied trades 45 years, had worked in large plants, had owned his own plant and had operated his own engraving plant in making etchings. He testified that an artist does the work by hand and that mounting in some cases is still done by hand, but there are high speed machines with belts and conveyors that hold the two pieces together and glue them in place.

Guard examined several exhibits from defendant's display. He said there was a band of damage across the center of these etchings. He further said that in his opinion the defects were produced by a mechanically defective machine, and that these defective etchings were of no value whatever. The superintendent of Brown & Bigelow's operations also admitted that the etchings were...