California Fruit Exchange v. Henry

• Citation: 89 F. Supp. 580
• Decision Date: 07 March 1950
• Docket Number: Civ. A. No. 6866.
• Parties: CALIFORNIA FRUIT EXCHANGE v. HENRY et al.
• Court: U.S. District Court — Eastern District of Pennsylvania

89 F. Supp. 580

CALIFORNIA FRUIT EXCHANGE v. HENRY et al.

Civ. A. No. 6866.

United States District Court W. D. Pennsylvania.

March 7, 1950.

COPYRIGHT MATERIAL OMITTED

COPYRIGHT MATERIAL OMITTED

Harvey A. Miller and Harvey A. Miller, Jr., of Miller & Miller, Pittsburgh, Pa., for complainant.

George S. Goldstein, and Michael E. Catanzaro of Pittsburgh, Pa., for respondents.

GOURLEY, District Judge.

The proceeding comes before the Court on appeal from the reparation award entered by the Secretary of Agriculture under the Perishable Agricultural Commodities Act. 7 U.S.C.A. § 499g.

We are in reality concerned with two separate causes of action:

(a) California Fruit Exchange against Morris Henry and Anthony Spracale, partners, trading as Spracale Fruit Company, for the amount of $2119.40, with interest from October 22, 1946.¹

(b) Counterclaim of Morris Henry and Anthony Spracale, trading as Spracale Fruit Company, against California Fruit Exchange for the amount of $1125.50 with interest from October 22, 1946.²

The written contract which gives rise to the causes of action was executed and to be performed in Pennsylvania, and related to Emperor Grapes, U. S. No. 1 Table Grade, Dependable Brand.

Under Pennsylvania Conflict of Laws rule, interpretation of a contract in diversity cases is determined by the law of the place of contracting. Faron v. Penn Mutual Life Ins. Co., 3 Cir., 176 F.2d 290; Restatement, Conflict of Laws, Section 348; Levy v. Levy, 78 Pa. 507, 21 Am.Rep. 35; Newspaper Readers' Service v. Canonsburg Pottery Co., 3 Cir., 146 F.2d 963.

Since jurisdiction does not arise through diversity, the rule just expressed would be subject to the provisions of the Perishable Agricultural Commodities Act.³

While additional protection and remedies are provided to shippers of perishable commodities under the P.A.C.A., the statute was not intended to repeal the law of sales or to destroy the rights and liabilities of contracting parties thereunder. LaRoy Dyal Co. v. Allen, 4 Cir., 161 F.2d 152; A. J. Conroy, Inc. v. Weyl-Zuckerman & Co., D.C., 39 F.Supp. 784.

A verdict was returned in favor of California in the amount of One Dollar and against Spracale.

The matters before the court relate to:

(a) Motion for arrest of judgment entered in favor of California in the amount of $1.00, and for judgment notwithstanding the verdict to be entered in favor of California and against Spracale in the amount of $2119.40, with interest from October 22, 1946.

(b) Motion for new trial filed on behalf of California.

(c) Motion to set aside verdict or for arrest of judgment in favor of California and against Spracale, and to enter judgment in favor of Spracale.

(d) Motion to set aside verdict or arrest of judgment in favor of California and against Spracale, and to enter judgment on the counterclaim in favor of Spracale and against California in the amount of $1125.00, with interest from October 21, 1946.

Statement of Facts.

California and Spracale negotiated a sale through the Tri-State Sales Agency at Pittsburgh, Pennsylvania, on October 3, 1946, for two carloads of Emperor Grapes, U. S. No. 1 Table Grade, Dependable Brand, f.o.b. shipping point. One carload was shipped on October 8, 1946, and the other on October 11, 1946. Each of the cars was federally inspected and it was certified that the defects in each instance were average and within the grade tolerance and that decay was generally less than one-half of one percent.

The first car arrived in Pittsburgh on October 17, 1946. Federal inspection was restricted to the top layer, and it was found, as to decay, that from the samples inspected the average of ½ of 1% to 5%, many none, average 1% gray mold rot, generally nesting. The second car arrived in Pittsburgh on October 22, 1946. Federal inspection and findings were in substance similar to the inspection of the first car.

Both cars of grapes were rejected by Spracale. The first car was reconsigned to Philadelphia, Pennsylvania, and the second car to New York. The grapes were sold and California's claim is based on the loss sustained.

California contends:

(1) That the grapes complied with the contract.

(2) That the refusal to accept by Spracale was without cause or justification.

(3) That after the grapes were rejected, they were sold to the best advantage.

(4) That markets were selected where the best prospects and prices prevailed.

(5) That California minimized the loss through the extension of most reasonable effort.

Spracale contends:

(1) That California failed and neglected to ship the type and quality of merchandise as provided by the terms of the contract.

(2) That the condition which existed did not arise through transportation and that the grapes had a latent defect.

(3) That the grapes when delivered to Pittsburgh, Pennsylvania, contained a gray mold rot condition which was of field origin.

(4) That such condition of the grapes constituted a failure to deal in accordance with the terms of the contract, and Spracale is not liable for any loss sustained by California.

(5) That Spracale is entitled to recover for the loss which it had suffered under the contract as a result of the failure of California to comply with the terms thereof.

Legal Principles Involved.

The purpose of the P.A.C.A. was primarily to eliminate unfair practices in the marketing of perishable agricultural commodities in interstate commerce in the case of a declining market by making it difficult for unscrupulous persons to take advantage of shippers by wrongful rejection of the goods upon arrival at a point where it is expensive and impractical for the shipper to enforce his legal rights. To effectuate this purpose, Congress did not go so far as to make rejection by buyers unlawful altogether. Instead, it made rejection of shipments of perishable agricultural commodities by buyers unlawful "without reasonable cause." LeRoy Dyal Co. v. Allen, supra; Joseph Martinelli & Co. v. Simon Siegel Co., 1 Cir., 176 F.2d 98.

A prima facie case made out by the findings of the Secretary of Agriculture must prevail in this court unless overcome by evidence submitted by Spracale, notwithstanding the proceeding in this court is not in the nature of an appeal from, or review of determination, but is a proceeding de novo. Barker Miller Distributing Co. v. Berman, D.C., 8 F.Supp. 60; Alexander Marketing Co. v. Harrisburg Daily Market, D.C., 87 F.Supp. 124.

The Secretary of Agriculture may make such rules and regulations as may be necessary to carry out the provisions of the Act. 7 U.S.C.A. Section 499o.

7 C.F.R. 46.24(i) of the Regulations promulgated by the Secretary of Agriculture provides as follows: "F.o.B. * * * means that the produce quoted or sold is to be placed free on board the boat, car, or other agency of the through land transportation at shipping point, in suitable shipping condition * * * and that the buyer assumes all risk of damage and delay in transit not caused by the shipper, irrespective of how the shipment is billed. The buyer shall have the right of inspection at destination before the goods are paid for, but only for the purpose of determining that the produce shipped complied with the terms of the contract or order at time of shipment, subject to the provisions covering suitable shipping condition. Such right of inspection shall not convey or imply any right of rejection by the buyer because of any loss, damage, deterioration, or change which has occurred in transit."

The Regulations further provide that "suitable shipping condition" means that the commodity, at the time of billing, is in a condition which, if the shipment is handled under normal transportation service and conditions, will assure delivery without abnormal deterioration at the destination specified in the contract of sale. 7 C.F.R. 46.24(j); Alexander Marketing Co. v. Harrisburg Daily Market, supra.

A motion for a directed verdict or judgment notwithstanding the verdict under the Federal Rules raises a question of law only; that is whether there is any evidence which, if believed, would authorize a verdict against the defendant and the trial court in considering such motion does not exercise any discretion but makes only a ruling of law. Marsh v. Illinois Central R. Co., 5 Cir., 175 F.2d 498; Grayson v. Deal et al., D.C., 85 F.Supp. 431.

In passing upon a motion to set aside a verdict for plaintiff and to enter judgment for the defendant, evidence including all reasonable inferences to be drawn therefrom must be taken in the light most favorable to the plaintiff and all conflicts must be resolved in his favor. Waggaman v. General Finance Co. of Philadelphia, Pa., Inc., 3 Cir., 116 F.2d 254; Schad et al. v. Twentieth-Century Fox Film Corp., et al., 3 Cir., 136 F.2d 991; Lukon v. Pennsylvania R. Co., 3 Cir., 131 F.2d 327; Meyanberg v. Penna. R. Co., 3 Cir., 165 F.2d 50; Kraus v. Reading Co., 3 Cir., 167 F.2d 313; O'Brien v. Public Service Taxi Co., 3 Cir., 178 F.2d 211; Fore v. Southern Ry. Co., 4 Cir., 178 F.2d 349.

Upon a motion for a directed verdict, the evidence must be viewed in the light most favorable to the party against whom the verdict would be directed, and all conflicts must be resolved in his favor. Reno Sales Co., Inc. v. Pritchard Industries, Inc., 7 Cir., 178 F.2d 279; Aetna Casualty & Surety Co. v. Yeatts, 4 Cir., 122 F.2d 350.

The court cannot concern itself with the credibility of the witnesses or the weight of the evidence. Roth v. Swanson, 8 Cir., 145 F.2d 262.

The court is not free to reweigh the evidence and set aside the jury's verdict merely because the jury could have drawn different inferences or conclusions, or because the court regards another result as more reasonable. Tennant v. Peoria & P. U. Ry. Co., 321 U.S. 29, 64 S.Ct. 409, 88 L.Ed. 520.

Where uncertainty arises from a conflict in the testimony, or because, the facts being undisputed, fair-minded men will honestly draw different conclusions from...