Great Atlantic & Pacific Tea Co. v. Smith

• Citation: 75 F. Supp. 156
• Decision Date: 14 January 1948
• Docket Number: Civil Action No. 718.
• Parties: GREAT ATLANTIC & PACIFIC TEA CO. v. SMITH.
• Court: U.S. District Court — Western District of Arkansas

75 F. Supp. 156

GREAT ATLANTIC & PACIFIC TEA CO. v. SMITH.

Civil Action No. 718.

District Court, W. D. Arkansas, Fort Smith Division.

January 14, 1948.

Pryor, Pryor & Dobbs, of Fort Smith, Ark., and Owens, Ehrman & McHaney, of Little Rock, Ark., for plaintiff.

Sullins & Perkins, of Fayetteville, Ark., for defendant.

JOHN E. MILLER, District Judge.

On March 7, 1947, the plaintiff filed its complaint in the Fayetteville Division against the defendant and two other persons doing business as Litteral Canning Company and also individually against the defendant Clarence T. Smith.

The case was transferred to the Fort Smith Division on April 15, 1947, and on April 28, 1947, the plaintiff upon notice dismissed the complaint as against the defendants J. W. Cain and G. A. Coulter, leaving only the defendant Clarence T. Smith.

In the complaint the plaintiff seeks to recover the sum of $6,747.25 with interest on $6,557.95 from March 8, 1945, and interest on $189.30 from June 17, 1946.

In due time the answer of the defendant was filed and following a hearing on requests by both parties for admission of facts and a pre-trial conference on August 27, 1947, the parties agreed that they would be able to stipulate the material facts.

On November 5, 1947, the parties filed a stipulation of facts to which were attached certain exhibits and on November 25, 1947, a supplemental stipulation of facts was filed. On that date the case was submitted to the court upon the stipulations and exhibits thereto. The parties were allowed time in which to file written briefs in support of their respective contentions. The briefs have now been filed and have been considered by the court along with the pleadings, the stipulations of facts and exhibits thereto, from all of which the court finds the facts to be as follows:

Findings of Fact.

I. The plaintiff, The Great Atlantic & Pacific Tea Co., is a corporation organized and existing under and by virtue of the laws of the State of Arizona and is authorized to do business in the State of Arkansas. The defendant, Clarence T. Smith, is a citizen and resident of the Western District of Arkansas and is engaged in business under the name of Smith Canning Company. The amount involved herein exceeds $3,000 exclusive of interests and costs.

II. On January 26, 1945, the defendant, Clarence T. Smith, telegraphed R. U. Wilson, agent of the plaintiff, as follows:

"Do you want 3300 cases standard twos spinach 1.10 Government Certificate."

On the same date the said R. U. Wilson wired the defendant as follows:

"Will accept certificated spinach offered if last of February shipment okay advise if available our labels."

On February 2, 1945, the defendant wrote the said R. U. Wilson advising that he had found by investigation that he could not ship the spinach in refrigerator cars, because a shipment of 1650 cases in each car would not bring the weight up to the 65,000 pound minimum. On February 6, 1945, Wilson replied to the defendant and advised him to increase the order from 3300 cases to 3600 cases with a proportionate change in the extended figures.

III. The negotiations were reduced to a formal contract dated January 30, 1945, a copy of which is attached to the stipulation as exhibit 5. The terms of the contract reflect that the plaintiff purchased from the Smith Canning Company, the trade name of the defendant, 3600 cases 24/2 Iona Label Full Standard Spinach at $1.10 Dozen; that the same was to be shipped in box cars each containing 1800 cases of 24 cans with Government Grade Certificate attached to invoice.

The contract contained the terms of payment and other matters that are not material to a determination of the issues before the court. The contract further provides:

"Any dispute involving the quality or grading of canned foods is to be settled by submitting samples to the local office of the U. S. Agricultural Marketing Service whose decision will be final and binding on all concerned. Other disputes to be arbitrated in the usual manner."

IV. Under the contract the defendant shipped to the plaintiff 3600 cases 24/2 Iona Label Full Standard Spinach on or about February 20, 1945, and on February 22, 1945, sent the plaintiff an invoice of the spinach shipped. The shipments were delivered to the defendant at Jacksonville, Florida, in due course.

The defendant attached to the bills of lading, issued for each car, inspection certificates from the United States Department of Agriculture. One of the certificates, exhibit No. 11 to the stipulation, is dated February 24, 1945, and the other certificate, attached to the stipulation of facts as exhibit No. 12, is dated February 15, 1945. Before issuing these certificates the inspector of the United States Department of Agriculture with offices at Fayetteville, Arkansas, inspected the spinach shipped by opening some of the cans (12 in one lot and 9 in the other lot as revealed by the certificate), but it is not disclosed what tests were made by the inspector to determine the quality and grade of the spinach. The certificate dated January 24, 1945, recites that the grade is:

"U. S. Grade C or U. S. Standard Score Range 77 to 83 points."

The certificate dated February 15, 1945, shows the grade as follows:

"U. S. Grade C or U. S. Standard Score Range 79 to 84 points."

Both certificates recite that the inspection was made and certificate issued in compliance with the regulations of the Secretary of Agriculture governing the inspection and certification of the product, and that the quality and condition of the product as shown by the samples examined are as listed in the certificate.

V. Subsequent to the arrival of the spinach in Jacksonville, Florida, the Food and Drug Administration caused to be purchased and analyzed certain cans of the spinach and the analysis made by the inspector of said Administration disclosed that the spinach contained aphis.

VI. A libel action was instituted in the District Court of the United States for the Southern District of Florida, Jacksonville Division, on November 26, 1945, and resulted in the condemnation of 2427 cases of the spinach. See copy of libel information, exhibit 6 to the stipulation.

VII. Subsequent to the filing of the libel action the defendant, Clarence T. Smith, filed a claim in the name of the Smith Canning Company alleging that he was the owner of the spinach that had been seized under the process of the court. Likewise the plaintiff filed a similar claim and alleged that it was the owner of the seized spinach and prayed that it be permitted to defend the libel proceeding as the owner of the spinach.

VIII. On November 1, 1946, the court entered an order permitting the plaintiff to withdraw from the seized spinach samples for inspection and analysis and in accordance with that order plaintiff withdrew 96 cans of the spinach and caused the same to be inspected and analyzed. Later the plaintiff filed a supplemental answer in said court and stated that it was unable to reprocess the spinach and that it was of no value as a food.

IX. On November 6, 1946, the District Court of the United States for the Southern District of Florida entered a final decree in which it found that the spinach was adulterated and was therefore condemned in accordance with the provisions of Title 21 U.S.C.A. § 334. Costs of the proceeding were adjudged against the defendant, Smith, and the plaintiff, the Great Atlantic & Pacific Tea Company. See copy of decree, exhibit 10 to stipulation.

X. The plaintiff paid the defendant $7,651.80 as the purchase price of the spinach and prior to the seizure of the spinach by the Food and Drug Administration had sold or disposed of all of the spinach except 2427 cases. The plaintiff has no knowledge as to whether any person suffered ill effects from eating the spinach.

XI. The plaintiff paid $761.73 freight on the 2427 cases shipped to it by the defendant. It paid $109.54 for having the spinach moved in and out of its warehouse, and the storage charge from December 17, 1945, to November 29, 1946, was $378.60. It also paid $100 to Thornton & Company for an analysis of the spinach that was condemned and paid its attorneys $265.81 for services and expenses in connection with the condemnation of the spinach. The actual purchase price of the 2427 cases condemned was $5,245.96.

Discussion.

The plaintiff contends that there was an implied warranty that the spinach tendered by the defendant was merchantable and reasonably fit for the purpose for which it was purchased.

Even though the contract of sale and purchase may have been made outside of Arkansas it was to be performed and was in fact performed in Arkansas and the law of Arkansas determines the nature, obligation and effect of the contract.

The Uniform Sales Act was adopted in Arkansas on March 31, 1941, Acts of Arkansas 1941, Act 428, page 1231. Section 14 of the Act reads as follows:

"Where there is a contract to sell or a sale of goods by description, there is an implied warranty that the goods shall correspond with the description and if the contract or sale be by sample, as well as by description, it is not sufficient that the bulk of the goods corresponds with the sample if the goods do not also correspond with the description."

Section 15 of the Act is as follows:

"Subject to the provisions of this act and of any statute in that behalf, there is no implied warranty or condition as to the quality or fitness for any particular purpose of goods supplied under a contract to sell or a sale, except as follows:

"(1) Where the buyer, expressly or by implication, makes known to the seller the particular purpose for which the goods are required, and it appears that the buyer relies on the seller's skill or judgment (whether he be the grower or manufacturer or not), there is an implied warranty that the goods shall be reasonably fit for such purpose.

"(2) Where the goods are bought by description from a seller who deals in...