Alabama Chemical Co. v. International Agr. Corporation

• Decision Date: 14 October 1926
• Docket Number: 3 Div. 771
• Parties: ALABAMA CHEMICAL CO. v. INTERNATIONAL AGRICULTURAL CORPORATION.
• Court: Alabama Supreme Court

110 So. 614

215 Ala. 381

ALABAMA CHEMICAL CO. v. INTERNATIONAL AGRICULTURAL CORPORATION.

3 Div. 771

Supreme Court of Alabama

October 14, 1926

Rehearing Denied Jan. 6, 1927

Appeal from Circuit Court, Montgomery County; Walter B. Jones Judge.

Action by the International Agricultural Corporation against the Alabama Chemical Company. From a judgment for plaintiff defendant appeals. Affirmed.

Hill Hill, Whiting, Thomas & Rives and Ball & Ball, all of Montgomery, for appellant.

Marion Smith, of Atlanta, Ga., and Steiner, Crum & Weil, of Montgomery, for appellee.

BOULDIN J.

The suit is upon a promissory note given for certain shipments of Florida land pebble phosphate rock for use in the manufacture of commercial fertilizer. The theory of the defense is that the product shipped was defective in quality for lack of content of bone phosphate of lime stipulated in the written contract of sale, for which defendant claims an abatement of the price equal to the unpaid balance of the note sued upon.

The pleadings raising the issues are voluminous, but our labors are reduced by a thoughtful concession on both sides that the controlling questions turn upon the legal construction of the contract. The pertinent provisions of the contract are:

"Quantity.--The buyer agrees to purchase and receive and the seller agrees to sell and deliver, under the terms and conditions hereinafter set forth, a total of twenty-four thousand (24,000) tons of Florida land pebble phosphate rock of 2,240 pounds each.

"Quality.--The phosphate to be delivered under this contract is sold on the basis of 68 per cent. bone phosphate of lime, dry basis, and not more than 4 per cent. combined oxide of iron and alumina (when determined separately on dry basis), and not more than 3 per cent. moisture.

"Price.--The price shall be four dollars and seventy-five cents ($4.75) per ton of 2,240 pounds f.o.b. cars at seller's mines, Mulberry, Florida, for rock testing 68 per cent. bone phosphate of lime on a dry basis; with an increase in price at the rate of 7 cents per unit, fractions in proportion, for any official analysis in excess of 68 per cent. B.P.L. and a corresponding reduction in price, if below 68 per cent. down to and including 66 per cent. absolute minimum B.P.L., with an additional charge of $2.50 per box car for furnishing car door boards and labor installing same in car. Seller however not to charge for any excess B.P.L. above 70 per cent. ***

"Sampling and Analysis.--An average sample representing the cars shipped during each calendar month shall be made, unless otherwise mutually agreed upon by the buyer and seller, in accordance with the following method: Seller shall take sample from each car at time of shipment. At the end of the month in which samples are taken, or upon the completion of the shipment ordered, if such shipment is completed before the end of the month, seller shall make an average sample in triplicate from the samples so taken; one sample to be sent at once to Messrs. Gascoyne & Co., Baltimore, Md., for account of seller and one to Shuey Laboratory, Savannah, Ga., for account of buyer, the third sample to be held for referee. Each chemist to send certificate of analysis at once to both seller and buyer, and settlement to be based on the mean of the two results, provided the difference between these chemists does not exceed one per cent. Bone phosphate of lime or one-half of one per cent. combined oxide of iron and alumina. Should such an excess difference exist between seller's and buyer's chemists, the third sample shall be sent to Messrs. Wiley & Co., Inc., Baltimore, Md., as referee for analysis of the ingredient at fault, and the mean of the two nearest of the three results obtained shall be accepted as final. Each party to pay his own chemist, cost of referee to be equally divided.

"Buyer shall have privilege of maintaining a representative at mines to check all weighing and sampling, and in such case settlement shall be based on the samples and weights as checked by such representative.

"Terms of Payment.--Payment for all phosphate rock delivered under this contract shall be made in New York funds on or before the 10th of each month for shipments made the previous month at the contract price of $4.75 per gross ton, adjustment to be made promptly upon receipt of analysis. ***

"It is understood and agreed that the phosphate rock purchased under this contract is for buyer's own consumption and for shipment to buyer's works at Savannah, Ga., Valdosta, Ga., Montgomery, Ala. ***

"Buyer to have privilege of settling for shipments of phosphate rock under this contract by giving four months' note with interest at six per cent. (6 per cent.) from the 10th of the month following shipments."

It would be difficult to express the intent of the parties more clearly and exactly than in the language chosen by them. The rock was sold upon a prescribed standard of quality, an "absolute minimum" in content of bone phosphate of lime. Any shipment below the minimum was without the terms of the contract. Deliveries were conditioned upon the shipment coming within the standard of quality. Upon ascertainment in the manner provided that the product was without the terms of the contract, the buyer was free to reject and return it. If he elected to retain it, or had consumed it before acquiring knowledge of the fact, an implied contract arose to pay the reasonable market value of same.

The price was fixed on a basis grade with differentials for greater or less content bone phosphate of lime, subject to the absolute minimum. The major questions arise under the stipulations for "sampling and analysis." It is a form of sale upon or subject to inspection; inspection by third persons chosen by the parties for their special knowledge and equipment; the method of inspection by chemical analysis of samples selected subject to check of a...