Alaska Pacific Salmon Co. v. Reynolds Metals Co.

• Decision Date: 18 September 1947
• Docket Number: No. 260,Docket 20555.,260
• Citation: 163 F.2d 643
• Parties: ALASKA PACIFIC SALMON CO. v. REYNOLDS METALS CO.
• Court: U.S. Court of Appeals — Second Circuit

163 F.2d 643 (1947)

ALASKA PACIFIC SALMON CO. v. REYNOLDS METALS CO.

No. 260, Docket 20555.

Circuit Court of Appeals, Second Circuit.

September 18, 1947.

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Julian S. Bush, of New York City (Kenneth M. Spence and Soia Mentschikoff, both of New York City, and Thomas L. Howe, of White Plains, N. Y., of counsel, for plaintiff-appellant.

Medina & Sherpick, of New York City (Harold R. Medina and William Gilbert, both of New York City, and William S. D. Woods, of Richmond, Va., of counsel), for defendant-appellee.

Before CHASE, CLARK, and FRANK, Circuit Judges.

FRANK, Circuit Judge.

Plaintiff complains that the judge erred in (1) denying its motion for a directed verdict, (2) in his charge to the jury, (3) in refusing some of plaintiff's requests to charge, and (4) in excluding certain documents. We shall consider these alleged errors in turn.

1. Denial of plaintiff's motion for a directed verdict.

The first question is whether, on the indisputable record facts, plaintiff was entitled to a directed verdict based upon proof of facts creating an express warranty, pursuant to § 93 of the New York Personal Property Law, or an implied warranty, pursuant to § 96, subd. 1 of that statute.

We shall assume that the indisputable record facts demonstrate the following: (1) After negotiations between the parties, plaintiff made an offer, in the form of an order, on March 17, 1941, to purchase 100,000,000 boxes from defendant. (2) Defendant, by its letter of March 18 and the enclosed "formal acknowledgment," made a counter-offer. (3) Plaintiff's letter of April 7 was an acceptance, by conduct, of defendant's counter-offer. (In considering the motion, this must be taken as a fact, because a jury might reasonably so have found; accordingly, in this context, we disregard as irrelevant defendant's April 18 letter and the accompanying reports, but we will consider them in point 2, infra, dealing with the judge's charge.) (4) The negotiations prior to March 17 would have given rise to an implied warranty,⁷ unless the counter-offer contained a disclaimer provision effectively precluding such warranties. Thus the question boils down to that of the legal effect of the so-called disclaimer clause.

The counter-offer was based upon, although it modified, plaintiff's order of March 17. On the face of that order, under the printed caption, "Purpose or Application of Product," were the typewritten words, "Pack dehydrated soups." Also on the face of the order, in printed type, was the statement that the order was subject to "the terms and conditions set forth on the reverse side of this page which are hereby expressly made a part hereof." On the reverse side, under the caption, "Terms and Conditions," item 6 stated, in printed type, "Seller undertakes that products sold hereunder shall correspond to the specifications on the front hereof; and Seller hereby expressly excludes all, any, or other warranties, guaranties, or representations whatsoever." Substantially that same item (the "disclaimer") was printed on the face of defendant's "formal acknowledgment" of March 18 which was enclosed with and referred to in defendant's March 18 letter; and that letter called specific attention to the conditions set forth in the enclosed "acknowledgment," although that letter also said that the boxes were to be used for the "packaging and merchandising of your dehydrated soups."

All the printed matter in these documents is easily readable, even to our aging eyes. We think the statement of "Purpose or Application" in the order was not part of the "specifications," and thus not within the sole named exception to the disclaimer clause. On the facts before us in connection with the directed-verdict-motion (i. e., omitting all consideration of defendant's April 18 letter and of the judge's charge and plaintiff's requests to charge), we think the disclaimer effectively "negatived" the asserted implied warranty, and that therefore the judge correctly denied that motion. Our reasons follow.

We shall assume that the facts, absent the disclaimer, would have given rise to an implied warranty of fitness for plaintiff's particular use, pursuant to § 96-1. If so, it would have arisen "by implication of law." That is the phrase used in § 152. Pursuant to that section, businessmen are at liberty to contract away rights and obligations which would arise under such an implied warranty. Lumbrazo v. Woodruff, 256 N.Y. 92, 97, 175 N.E. 525, 75 A.L.R. 1017; Burntisland Shipbuilding Co. v. Barde Steel Products Corporation, D.C., 278 F. 552, 554; Sharples Separator Co. v. Domestic Electric Refrigerator Corporation, 3 Cir., 61 F.2d 499, 501; Minneapolis Threshing Machine Co. v. Hocking, 54 N. D. 559, 209 N.W. 996; Ford Motor Co. v. Cullum, 5 Cir., 96 F.2d 1, 3, certiorari denied 305 U.S. 627, 59 S.Ct. 89, 83 L.Ed. 401; cf. Advance-Rumely Thresher Co. v. Jackson, 287 U.S. 283, 288, 53 S.Ct. 133, 77 L.Ed. 306, 87 A.L.R. 285; Hopkinsville Motor Co. v. Massie, 228 Ky. 569, 15 S.W. 2d 423, 424; 32 Illinois Law Review (1938) 938, 950; Corbin, The Parol Evidence Rule, 53 Yale Law Journal (1944) 603, 621.

Plaintiff argues that, although other kinds of implied warranties may be excluded by a general disclaimer, the implied warranty of fitness for use (§ 96-1) has such peculiar importance that it cannot be avoided by a general disclaimer not specifically brought to the buyer's attention. We doubt the soundness of that distinction.⁸ It is noteworthy that Llewellyn, a distinguished commentator on the "law of sales," suggests a quite different classification.⁹ He thinks the courts should accord special dignity to an implied warranty in a "sale by description" under § 14 of the Uniform Act, § 95 of the New York statute,¹⁰ as distinguished from warranties which he considers of less dignity such as (1) implied warranties of "fitness for use" and "merchantability" under § 15(1) of the Uniform Act, § 96, subd. 1 of the New York statute, and (2) "express warranties" under § 12 of the Uniform Act, § 93 of the New York Act.¹¹ However that may be, plaintiff's contention lacks pertinence here: As previously noted, defendant's letter of March 18 specifically called plaintiff's attention to the "conditions" contained in the enclosed "acknowledgment," one of those "conditions" being the disclaimer.

Although it has withdrawn its claim of fraud and asserts no illegality, accident or mistake, plaintiff, citing Lumbrazo v. Woodruff, 256 N.Y. 92, 175 N.E. 525, 75 A.L.R. 1017, and Morris Run Coal Co. v. Carthage Sulphite Pulp & Paper Co., 210 App.Div. 678, 206 N.Y.S. 676, affirmed 242 N.Y. 567, 152 N.E. 430, urges that the New York courts hold invalid a disclaimer where there is "unfair dealing" or where the disclaimer, if held effective, would produce a result "contrary to natural justice" or "good morals." Assuming that to be the New York rule, on the facts here considered, it is inapposite. Because we think the disclaimer provision not ambiguous, we regard as not in point such cases as O'Neil Supply Co. v. Petroleum Heat & Power Co., 280 N.Y. 50, 55, 19 N.E.2d 676 and White v. Hoyt, 73 N.Y. 505, 511.

We find nothing in the undisputed evidence of what occurred, up to and including April 7, which constituted an express warranty.¹² Accordingly, since anything in the nature of an implied warranty was negatived by the disclaimer, plaintiff's motion for a directed verdict was properly denied.

2. Alleged error in the judge's charge.

Up to now, in considering the motion for directed verdict, we have discussed the case on the basis that — as the jury might have found — plaintiff on April 7 accepted defendant's counter-offer. We now turn to the judge's charge, which properly discussed events occurring after April 7 (including plaintiff's receipt of defendant's April 18 letter and the accompanying reports of tests made by defendant), ignored in the previous part of this opinion. In this connection, our earlier discussion of warranties is irrelevant, as the judge's charge on that subject was correct, except as noted below.

Plaintiff in its complaint alleged that it had entered into the agreement with defendant in April.¹³ In support of this allegation, plaintiff introduced testimony to the effect that the agreement was made shortly after plaintiff's receipt of, and in reliance upon, defendant's April 18 letter and the accompanying reports. In the closing argument of plaintiff's counsel to the jury, he took that position, saying that the agreement was made when Allen, the day or the day after he received the April 18 letter, told defendant to proceed to manufacture the boxes.

The judge instructed the jury, in effect, as follows: (1) If they found that such an agreement was made on or shortly after April 18, then they must ignore the disclaimer and must find for plaintiff (subject to determination of damages), if they also found the facts (described by the judge¹⁴) necessary to constitute an express or implied warranty. (2) If the jury found there was no such agreement at that time, then they must find that the March 18 counter-offer was accepted by plaintiff's conduct, with the consequence that the disclaimer was effective, and they must then find for the defendant.

Plaintiff now argues that that part of the charge summarized in (2) just above was erroneous for this reason: Even if (contrary to plaintiff's position at the trial) no agreement was made on or shortly after April 18, nevertheless the disclaimer would have been ineffective and plaintiff would have established a warranty, if the jury had found — as they might have found under proper instructions — that plaintiff accepted the counter-offer by conduct at any time after plain...