Agoos Kid Co. v. Blumenthal Import Corp.

Decision Date10 October 1932
Citation282 Mass. 1,184 N.E. 279
PartiesAGOOS KID CO., Inc., v. BLUMENTHAL IMPORT CORPORATION et al.
CourtUnited States State Supreme Judicial Court of Massachusetts Supreme Court

OPINION TEXT STARTS HERE

Appeal from Superior Court, Suffolk County; Qua, Judge.

Suit by the Agoos Kid Company, Incorporated, against the Blumenthal Import Corporation and others. From an adverse decree, defendant named appeals.

Reversed and remanded, with directions.J. N. Welch and A. Brayton, both of Boston, for appellant.

Lee M. Friedman and P. D. Turner, both of Boston, for appellee.

J. Garfield and John Barker, Jr., both of Boston, amici curiae.

CROSBY, J.

This bill in equity, although brought to reach and apply, has become a claim for damages arising from the alleged breaches of two contracts in writing for the purchase and sale of certain goat skins. The case was tried by a judge of the Superior Court sitting without a jury. A brief has been filed on behalf of the National Association of Importers of Hides and Skins as amicus curiae.

The eighth and ninth paragraphs of the bill relate, respectively,to two claims which, it is agreed by the parties, are owed to the plaintiff, one for the sum of $4,633.43 with interest from June 19, 1931, and the other for $500 with interest from March 26, 1931. The contracts are substantially identical in form. Under the first contract, dated September 9, 1930, the defendant agreed to sell and the plaintiff to buy four thousand dozen Bagdad goat skins dry salted; and under the second contract dated September 25, 1930, to buy three thousand dozen of the same kind of skins. The skins arrived in two shipments, each containing a part of the goods purchased under each contract. The plaintiff received, paid for and used the entire first shipment, but refused to accept or pay for the second. The claim of the plaintiff is for breach of warranties as to the skins delivered under the first shipment, and it contends that it was lawfully entitled to refuse, receive or pay for the second shipment. The defendant claims damages for the plaintiff's failure to accept and pay for the second shipment. Both contracts involve the purchase and sale of ‘Bagdad goat skins dry salted’ of various weights and at different prices, and provided that the skins were ‘to be of the good season.’ It was agreed that the skins were in fact ‘of the good season.’

It is the contention of the plaintiff that there was a breach of warranty in two respects, (1) that the merchandise delivered by the first shipment was not merchantable as ‘Bagdad goat skins dry salted,’ and (2) that as the plaintiff made known to the defendant the particular purpose for which the skins were required (G. L. c. 106, § 17, cl. 1) and relied on the defendant's skill and judgment for the selection of the skins, those delivered were not reasonably fit for such purpose. It is by reason of these alleged breaches of contract that the plaintiff contends it was justified in not further proceeding to carry out the contracts, and the judge so found. The defendant contends that the plaintiff failed to notify it in writing within one week after the receipt of the goods of any claim, and for that reason any claim which the plaintiff might otherwise have is barred. Upon this issue the judge found that the plaintiff gave notice to the defendant within a reasonable time after the plaintiff knew or ought to have known of such defect. Both contracts provided that the skins were to be paid for by the plaintiff ‘Net Cash or Domestic letter of credit against documents.’ The judge found that as to the first shipment ‘no inspection by the plaintiff was had before the goods were paid for. The goods were then shipped by the plaintiff to its factory at Lynn, and on January 14, 1931, the plaintiff started the tanning and finishing of one pack of the skins amounting to eight hundred and ten skins.’ The entire evidence before the trial judge is contained in the record.

1. Upon the question whether there was an implied warranty of merchantable quality under G. L. c. 106, § 17, cl. 2, the following facts were found: The goods described in the contracts known in the trade as ‘Bagdad goat skins dry salted’ are a well known article of commerce. The defendant maintains an organization in various places in Asia Minor and India for the purpose of collecting dry salted skins for shipment to the United States, and at the time of the collection of the skins in question it had a representative in Bagdad. At times such representatives buy from local collector and butchers skins which have been cured by the dry salting process. This process is efficient in preserving the texture of the skins only when an attempt is not made to dry them too quickly by the hot rays of the sun, which is likely to result in a rotting of the inside of the skin, where it cannot be detected by ocular or manual inspection or in any other practicable way until the skins are put into the process of being made into leather. With reasonable precaution in the care and selection of the skins in the Orient, a certain number of improperly cured and rotted skins is likely to be found in a large lot. Both parties were aware of this fact. In the trade it is considered that a lot is normal if it does not appear that more than one and one half per cent, or at the most three per cent, are improperly cured and therefore worthless. ‘Certainly a lot containing more than three per cent of rotted skins is abnormal.’ It was found that so far as defects appeared the defendant was ignorant of their condition, and the same was true of the plaintiff until the defects were shown in the plaintiff's tannery. Beginning with the first pack of skins of the first shipment the plaintiff, on January 14, 1931, began the process of manufacturing them into leather, and at different times thereafter all the other packs were put through the process, and many of them showed that more than three per cent were rotten. The entire first shipment was finally put through the process, and it was found that ‘the defects in the first shipment were very material and important and extended to nearly half the skins contained in it.’ Upon the foregoing findings which were warranted by the evidence, the further finding was warranted that the goods delivered by the first shipment were not of merchantable quality.

The contracts in question were for a sale of goods by description and there was an implied warranty that they would correspond with the description. G. L. c. 106, § 16. ‘The goods are merchantable when they are of the general kind which they are described or supposed to be when bought.’ Williston on Sales (2d Ed.) § 243. ‘Where goods of a character commonly known in trade are ordered by description, and there is no inspection, there is an implied warranty that those furnished will be such as are merchantable under the descriptive term used by the parties. The purchaser is entitled to get what he ordered.’ Leavitt v. Fiberloid Co., 196 Mass. 440, 451, 82 N. E. 682, 687,15 L. R. A. (N. S.) 855, and cases cited. See, also, Randall v. Newson, 2 Q. B. D. 102; Bristol Tramways, &c. Carriage Co., Ltd., v. Fiat Motors, Ltd., [1910] 2 K. B. 831, 841; Nichol v. Godts, 10 Ex. 191. The plaintiff did not contract to buy seven thousand dozen goat skins, one half of which were to be rotten and worthless. It agreed to buy that number of skins dry salted, and there was an implied warranty that, with the exception of not more than three per cent thereof, they should be of merchantable quality. Keown & McEvoy, Inc., v. Verlin, 253 Mass. 374, 377, 149 N. E. 115, 41 A. L. R. 1319,Whitty Manuf. Co. v. Clark, 278 Mass. 370, 180 N. E. 315. Although it was found that a lot of dry salted goat skins is deemed of merchantable quality and reasonably fit for the purpose of making it into leather if the defect here existing is limited to not more than three per cent of the lot, it was found that the first shipment was not merchantable throughout ‘within this definition, and was not reasonably fit throughout within this definition for the purpose of being made into leather.’ If the skins had been inspected by the plaintiff before they were subjected to the process of making them into leather, it is found that defects in many of the skins were latent and could not be discovered by inspection. The judge accordingly ruled as follows: ‘Upon the facts hereinbefore stated, I rule that there was an implied warranty of merchantability as to the goods included in the first shipment. The goods were sold by description. There was no inspection in fact; and inspection would have been not only useless, because the defect was latent, but also impracticable, because the price was to be paid upon delivery of the documents, before delivery of the goods. The defendant was a dealer in goods of the same description. The goods were not sold by any ‘patent or other trade name’ so as to relieve the seller from implied warranties provided he delivered goods corresponding to the name. * * * Goods are not merchantable simply because their defect is latent and an unsuspecting buyer might be found. * * * Neither are goods merchantable because a fragment of a large lot may be free from defect.' It is plain that the evidence warranted these findings, and that the rulings were correct. In Inter-State Grocer Co. v. George William Bentley Co., 214 Mass. 227, 231, 233, 101 N. E. 147, 149, it was said: ‘Upon the sale of goods, by name or description, in the absence of some other controlling stipulation in the contract, a condition is implied that the goods shall be merchantable under that name. * * * This is not a warranty of quality. * * * It is a requirement of identity between the thing which is described as the subject of the trade and the thing proffered in performance of it. The buyer is entitled to receive goods fairly answerable to the description contained in his contract of sale. * * * The jury must have understood that the plaintiff, in order to prevail,...

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