Aktiengesellschaft Der Harlander Buamwollspinnerie und Zwirn-Fabrik v. Lawrence Walker Cotton Co.

• Decision Date: 04 October 1955
• Docket Number: P,ZWIRN-FABRI,No. 5933,5933
• Citation: 288 P.2d 691,60 N.M. 154,1955 NMSC 90
• Parties: AKTIENGESELLSCHAFT DER HARLANDER BUAMWOLLSPINNERIE UNDlaintiffs-Appellees, v. LAWRENCE WALKER COTTON COMPANY, In., a Corporation, Defendant-Appellant.
• Court: New Mexico Supreme Court

Page 691

288 P.2d 691

60 N.M. 154

AKTIENGESELLSCHAFT DER HARLANDER BUAMWOLLSPINNERIE UND

ZWIRN-FABRIK, Plaintiffs-Appellees, v. LAWRENCE WALKER COTTON COMPANY, In., a Corporation,

Defendant-Appellant.

No. 5933.

Supreme Court of New Mexico.

Oct. 4, 1955.

Garland & Sanders, Las Cruces, for appellant.

Edwin Mechem, Edward E. Triviz, Las Cruces, for appellees.

LUJAN, Justice.

This is an appeal from a summary judgment entered in favor of plaintiff and defendant appeals.

The record discloses that on May 12, 1949, defendant entered into a written contract with the plaintiff, by the terms of which it was agreed that defendant would ship to plaintiff at Trieste, Italy (Free Territory), 440 bales of good middling cotton, with reimbursement by sight draft on New York bank under E.C.A. terms, and weight settlement on Edward T. Robertson's (controller for the defendant), sworn landed weights.

By its answer the defendant admitted the allegations of paragraphs one, two and three of plaintiff's complaint to the effect that:

'1. That defendant, Lawrence Walker Cotton Company, Inc., is a domestic corporation organized under the laws of the State of New Mexico, engaged in buying and selling cotton with its principal place of business being Las Cruces, Dona Ana County, New Mexico.

'2. That defendant and plaintiff herein, an Austrian firm, entered on May 12, 1949, into a written contract of sale, designated as A-4, a copy of which is attached hereto marked Plaintiff's Exhibit A and made a part hereof, by the terms of which it was agreed that the defendant would ship to the plaintiff to Trieste 440 bales of good middling cotton, with reimbursement being sight draft on N. Y. Bank under E. C. A. terms, and 'weight settlement on Edward T. Robertson's (controller for the defendant herein) sworn landed weights.'

'3. Pursuant to and in connection with such contract, the defendant, as apparent from its Invoice No. A-4, dated June 14, 1949, a copy of which is attached hereto, marked Plaintiff's Exhibit B and made a part hereof, received for the credit of the plaintiff the sum of $94,504.60 from the Bank of the Manhattan Company, New York, for the net invoice weight of 218,054 pounds of cotton, at 43.34cents a pound; and as also apparent from such Invoice No. A-4, 'Final settlement on Trieste landed weights supervised by Edward T. Robertson & Son,' designated on said Invoice of the defendant as 'Our Controller."

The defendant denied the allegations of paragraphs four and five which declare that:

'4. Pursuant to such contract so providing for weight settlement on the said Edward T. Robertson's sworn landed weights, the defendant's shipment was weighed at Trieste, and, as apparent from the said controller's 'Sworn Total Landing Report,' a copy of which is attached hereto marked Plaintiff's Exhibit C and made a part hereof, the difference between the net landed weight, on basis of which settlement was agreed to be made, of 215190 pounds and the net invoice weight of 218054, for which the defendant had already received the said sum of $94,504.60, represents a loss of 2864 pounds, which at the agreed price of 43.34cents a pound amounts to $1,241.26, which, contrary to the terms of the contract, defendant has detained and refused to refund plaintiff despite the fact that, as apparent from letter dated 15th October 1941 (a copy of which is attached hereto marked Plaintiff's Exhibit D and made a part hereof) from its controller, Edward T. Robertson & Son, to Office of Controller, ECA Mission c/o American Embassy, Vienna, Austria, the original Sworn Total Landing Report of defendant's controller was sent to the defendant on August 31, 1949, on the basis of which settlement was to be made according to the said contract of sale.

'5. Despite repeated demands therefor, the defendant has neglected, failed and refused to settle plaintiff's claim for the said sum of $1,241.26, so representing the loss of 2864 pounds between the net landed weight, as agreed to be settled by defendant's controller, and the net invoice weight, for which the defendant herein acknowledged payment by its invoice No. A-4.'

Plaintiff's Exhibit D referred to in paragraph 4 of his complaint reads as follows:

'We, are given to understand from receivers for the buyers that this latter has not yet been able to get settlement relating to the loss in weight, ascertained on the above shipment at the port of discharge, apparently owing to the non-receipt by somebody of our Sworn Total Landing Report showing a loss in weight of Lbs. 2864.

'As you know, as per standing regulations, we, as shippers' controllers, have to send the original of said report to shippers and copy of ECA Mission concerned. This has been done on August 31, 1949, but for order's sake, we are today sending shippers another copy of the Total landing Report in question and, herewith, attach another copy for your files.

'We remain, dear Sirs,

'Very truly yours,

(sgd.) Edward T. Robertson & Son

By __________

unleserliche Fertigung'

By way of new matter the defendant alleged:

'1. That it complied fully with the contract between it and the plaintiff dated May 12, 1949.

'2. That if any loss in weight of said cotton occurred it was by reason of the loss of 22 bales of cotton in transit, the weight of same being unknown; that there was no authority in said contract between plaintiff and defendant dated May 12, 1949, to use the average weight of bales of cotton shipped to make up any loss which may have occurred; and there was no authority in said contract to substitute other cotton for cotton which may have been lost in transit, the weight of bales of which are unknown.

'3. That to permit the substitution of other bales of cotton for that lost in transit without knowing the weight, staple and grade of same is too vague and indefinite to charge defendant with the loss of weight of bales of cotton for which other bales of cotton was substituted, weight of which is unknown; all of which would be a mere matter of speculation and would be insufficient in law upon which to base a judgment.'

Defendant did not allege or plead as a defense that the determination of its controller was fraudulent, made in bad faith, or in such gross mistake or gross negligence as to imply bad faith or failure to exercise honest judgment.

On March 23, 1954, notice was given defendant of plaintiff's motion for production of Edward T. Robertson & Son sworn landing report. On March 24, 1954, defendant replied 'that said landing report or a copy thereof is not in its possession, custody or control, and has not been since this action was filed and long prior thereto; hence, defendant cannot produce said landing report or a copy thereof.'

On March 25, 1954, on motion of plaintiff, the court ordered defendant to take the necessary steps to produce before the court by April 19, 1954, or such other place as may be agreed upon by the parties, the original or copy of Edward T. Robertson & Son (defendant's controller), sworn total landing report.

On January 24, 1954, the day of the trial this report had not been produced:

'The Court: What efforts have you made to comply with the Court's previous Order to produce this before the Court?

'Mr. Garland: We haven't made any. We don't have it--we don't have a copy of it.

'The Court: That is the only thing: when the Court issues an Order it expects some sort of an effort be made to comply with that order.

'Mr. Garland: Well, personally, we haven't made any showing because we don't have it, and we haven't had it since 1952. Mr. Walker said he asked the Shippers to return that, but it wasn't done.'

At this stage of the trial the plaintiff renewed its motion for summary judgment and for judgment by default, pointing out that according to the contract of the parties, the defendants' controller, Edward T. Robertson, was made the arbiter and in the absence of any defense and pleading by defendant that such arbiter acted fraudulently, or through gross error, negligence, there was no genuine issue of fact, and for the further reason that plaintiff was entitled to judgment by default for failure of defendant to comply with the court's order for the production of said landing report.

In this connection the court observed that due to the poor showing on the part of the defendant, he would have to admit the landing report, and further that the contract could not allow speculation as to the method of determination in that the contract shows the weights settlement were to be made by Edward T. Robertson's landed report and the contract itself gave Robertson that authority.

The court found:

'2. The defendant and plaintiff entered on May 12, 1949, into a written contract of sale, designated as A-4, a copy of which is attached to plaintiff's complaint marked Exhibit A and made a part thereof, by the terms of which it was agreed that defendant would ship to plaintiff to Trieste 440 bales of good middling cotton, with reimbursement being sight draft on N.Y. Bank under E.C.A. terms, and 'weight settlement on Edward T. Robertson's (controller for the defendant) sworn landed weights.'

'3. Pursuant to and in connection with such contract, the defendant, as apparent from its Invofice No. A-4, dated June 14, 1949, a copy of which is also attached to plaintiff's complaint marked Exhibit B and made a part thereof received for the credit of the plaintiff the sum of $94,504.60, from the Bank of the Manhattan Company, New York, for the net invoice weight of 218,054 pounds of cotton at 43.34cents a pound; and as also apparent from such Invoice No. A-4, 'Final settlement on Trieste landed weights supervised by Edward T. Robertson & Son,' designated on said Invoice of the defendant as 'Our Controller.'

'4. (a) The defendant in answer to plaintiff's request for admission of fact pertaining to Edward T. Robertson & Son sworn total landing report, stated that 'further answering, defendant states that an instrument purporting to be a...