Joseph Martinelli & Co. v. Simon Siegel Co.

• Decision Date: 21 July 1949
• Docket Number: No. 4391.,4391.
• Citation: 176 F.2d 98,13 ALR 2d 1243
• Parties: JOSEPH MARTINELLI & CO., Inc. v. SIMON SIEGEL CO.
• Court: U.S. Court of Appeals — First Circuit

13 ALR 2d 1243, 176 F.2d 98 (1949)

JOSEPH MARTINELLI & CO., Inc. v. SIMON SIEGEL CO.

No. 4391.

United States Court of Appeals First Circuit.

July 21, 1949.

Emerson S. Searle, Springfield, Mass. (Silvio Martinelli, Springfield, Mass., on the brief), for appellant.

D. Jerome Donovan, Boston, Mass. (Golbus & Golbus, Chicago, Ill., Vincent E. Pichulo, Boston, Mass., and Donovan & Higgins, Boston, Mass., on the brief), for appellee.

Before MAGRUDER, Chief Judge, and MARIS (by special assignment), and WOODBURY, Circuit Judges.

WOODBURY, Circuit Judge.

This is an appeal from a judgment of the District Court of the United States for the District of Massachusetts in effect affirming a reparation order made by the Secretary of Agriculture in a proceeding brought before him by the appellee against the appellant under the Perishable Agricultural Commodities Act, 1930, 46 Stat. 531, 7 U.S. C.A. § 499 a-r.

The appellant, Joseph Martinelli & Co., Inc., a licensee under the Act, is a Massachusetts corporation having its principal place of business in Springfield in that Commonwealth. The appellee, Simon Siegel Company, is a partnership doing business in Chicago, Illinois. On October 27, 1945, Martinelli, acting through a broker in Chicago as its agent, purchased a carload of 1145 "lugs" or baskets of Emperor grapes from Siegel at an agreed price of $2.07 per "lug", or $2,370.15, "f. o. b. shipping point acceptance final." This carload had been federally inspected at its shipping point, Victor, California, on October 17, and graded U.S. No. 1 Table as to 1022 "lugs"; the remaining 123 "lugs" in the carload not being covered by inspection. On the same day the car started eastward billed to Kansas City, Missouri, but while on route Siegel diverted it to St. Louis for delivery to a consignee for sale by the latter on joint account. This consignee made a hurried examination of the shipment on its arrival in St. Louis on October 26, and finding the grapes somewhat decayed, refused to accept delivery and immediately notified Siegel of its rejection and of the reason therefor. Thereupon, on the afternoon of the same day and without having the grapes officially inspected, Siegel diverted the shipment to himself at New York, New York. The transaction with Martinelli taking place while the car was on route to the latter destination, Siegel diverted it to Martinelli in Springfield where it arrived on October 30.

Upon arrival in Springfield the president and general manager of Joseph Martinelli & Co., Inc., personally inspected the shipment, and finding substantial decay therein, promptly rejected it and so notified Siegel. Siegel thereupon diverted the car to a consignee in Boston who sold the grapes at auction for a net price to Siegel of $181.34.¹ The latter then filed a complaint with the Secretary of Agriculture against Martinelli pursuant to 7 U.S.C.A. § 499f, seeking reparation in the amount of the difference between the above sum and the agreed price of $2,370.15 for the carload, or $2,188.81.

Martinelli's principal defense in the proceeding before the Secretary of Agriculture was that at the time it purchased the grapes on October 27 Siegel fraudulently represented that the grapes were in good condition and were continuously moving eastward, when in fact he well knew from the transaction with his consignee in St. Louis on the day before that such was not the case, and that this fraud practiced upon it by Siegel gave it the right to reject the shipment in spite of the fact that the purchase was on an "f. o. b. shipping point acceptance final" basis. The Secretary disposed of this defense on the ground that there was "no showing that any false or misleading statement was made for a fraudulent purpose" by Siegel, and then, interpreting the terms of the sale as giving no right of rejection, entered a reparation order in the amount demanded with interest thereon at 5% from October 30, 1945, until paid.

Martinelli thereupon appealed to the court below, 7 U.S.C.A. § 499g(c), and that court after hearing entered the judgment from which the instant appeal was taken.

At the pre-trial conference below all issues of fact save that of fraud with respect to the condition of the grapes when sold were eliminated, it being then agreed that "the only issues to be considered by the jury in the case in this court are, first, whether the grapes were decayed; and second, whether the shipper knew that they were decayed." But at the hearing the parties waived the right to trial by jury agreeing to submit the case to the court. However, that court did not make any findings with respect to the issue of fraud. It ruled as matter of law that Martinelli, having purchased the grapes "f. o. b. shipping point acceptance final", had no right of rejection, its only remedy, if it had one, being "to sue for damages if the specifications of the contract, such as grade or quality at the time of shipment, had not been complied with, or if it suffered as a result of any fraudulent representations made by the respondent." Then, however, the court went on to say: "Even assuming, but not deciding, that the petitioner actually was induced to buy the grapes through the fraudulent misrepresentations of the respondent, and that it had a right to reject the shipment because of such fraud, the defendant could not be relieved of the results of its rejection here. There is no evidence that the petitioner rejected the shipment of grapes because of any fraud practiced by the respondent. The only evidence...