Foster v. Montgomery Ward & Co., Inc.

• Decision Date: 23 November 1945
• Docket Number: 29718.
• Citation: 163 P.2d 838,24 Wn.2d 248
• Court: Washington Supreme Court
• Parties: FOSTER v. MONTGOMERY WARD & CO., Inc.

163 P.2d 838

24 Wn.2d 248

FOSTER v. MONTGOMERY WARD & CO., Inc.

No. 29718.

Supreme Court of Washington

November 23, 1945

Department 1.

Appeal from Superior Court, King County; Howard M. Findley, judge.

Hayden, Merritt, Summers & Stafford and Stanley A Taylor, all of Seattle, for appellant.

Kerr McCord & Carey and Stephen V. Carey, all of Seattle, for respondent.

SIMPSON Justice.

Plaintiff instituted this action to recover an alleged balance due him on a contract for the sale of apples. The complaint upon which the action was tried contained the following allegations:

Plaintiff was engaged at Wenatchee, Washington, in the business of producing, packing, and selling fresh deciduous fruits. By written contract, dated October 6, 1942, defendant ordered from plaintiff 2,500 boxes of apples to be shipped directly to defendant's customers as ordered by defendant, price to be $2.25 per box, less a discount of fifteen per cent for all of the boxes shipped not later than March 30, 1943, and $1.75 per box for those not ordered shipped as of that date, less a fifteen per cent discount. The order was accepted by plaintiff, who, in compliance therewith, shipped 604 boxes prior to March 30, 1943. The defendant failed to order out the balance of the 2,500 boxes in accordance with the agreement and therefore became indebted to plaintiff in the sum of $2,825.04. Plaintiff was at all times ready, willing and able to perform his part of the contract.

The answer denied the allegations of the complaint, except that defendant had shipped to plaintiff's customers 604 boxes of apples and had been paid therefor.

In an affirmative answer, defendant alleged that there was a market for the apples, which had not been delivered to defendant's customers, and that plaintiff had either disposed of or had the opportunity of disposing of them at a price equal to or in excess of that quoted in the complaint.

The reply put in issue the allegations of the affirmative answer. The cause was tried to the court sitting without a jury. After the hearing was had, the court made findings of fact and conclusions of law and, based thereon, entered judgment for plaintiff in the amount of $2,825. A motion for a new trial was denied and this appeal followed.

The assignments of error are: (1) In permitting respondent to testify that he could purchase apples on the market to fill the balance orders; (2) in making a portion of finding No. 35; (3) in denying appellant's motion for dismissal made at the close of respondent's case and at the close of all the evidence; (4) in signing the findings of fact and judgment; and (5) in construing the contract to be one providing for liquidated damages.

In deciding this case it will be necessary to set out facts relative to the gift-box business and the contract upon which this action was predicated. Respondent owns orchards near Lake Chelan, Washington, where he raises four varieties of apples and two varieties of pears, cherries and peaches. In addition to other activities, respondent has, since 1939, conducted a gift-package business under the name of Hesperian Orchards. The gift-package business is strictly a mail-order business, secured through advertising in national publications and by circulars mailed to customers. The apples raised on respondent's orchard are of three grades, extra-fancy, fancy, and choice, the highest quality being extra-fancy. The apples used in the gift packages are a larger size of extra-fancy and are the superfine quality, taking into consideration color, shape, maturity, crispness, and 'eatability.' As the orders come in, the apples are sorted out and packed in small one-layer containers with a cell for each apple and with pad and paper wrappers surrounding the apples to avoid bruising and puncturing. The container, called a telescope box, is of fibreboard construction, has a glazed covering on the inside and contains a pad and cellophane oiled paper to further pad the fruit and protect it in shipment. Each box contains twelve apples.

The fact that the various apples reach the highest stage of perfection at different seasons or months is a determining factor as to when they should be shipped. In anticipation of the 1942 season's gift-package business, based upon the experience of the previous year, respondent placed in cold storage, as a stock from which to fill the gift-package business, approximately 12,800 boxes. From the beginning of the season in the fall of 1942 until the end of the season in 1943, respondent had on hand sufficient apples to fill all his orders, including the 2,500 boxes ordered by appellant.

There is little comparison between the gift-package business and the conduct of the ordinary commercial sale of apples in standard boxes. The gift-box apples are very large and their life short. The large apples have excess water. Their cells are weaker and they break down easier than the ordinary apple. If a large apple has a puncture in it, it immediately starts to decay. On the other hand, the little apple is woody and hard and keeps a long time. Apple buyers will not take big apples late in the season. The large apples retained for appellant became a total loss, and after March 30, 1943, they were dumped in a canyon near Wenatchee.

The contract which formed the basis of this action was in the form of a written order, dated October 5, 1942, given by appellant to respondent. June 3, 1942, W. W. Grimmer, of appellant company, wrote to respondent that appellant was considering the offer of fresh fruit to his customers. July 16, 1942, respondent explained to appellant how his gift-package business was conducted and emphasized that he would not, under any circumstances, consider shipping a stock of apples to any central point to fill orders as they might be received from customers. July 24, 1942, another letter was written to respondent to the effect that appellant company intended to use a considerable space in its Christmas gift catalogue to listing fruit in gift packages. August 10, 1942, respondent wrote appellant that he would require a definite commitment of 10,000 gift packages.

Several letters were then exchanged between the parties relative to the limitation on the number of packages that appellant should take. September 21, 1942, respondent wrote appellant as follows:

'This will acknowledge receipt of your wire and airmail letter of the 16th.

'Inasmuch as we have been making tentative plans on a 10 M box basis, it would be my suggestion that you guarantee us 5000 filled orers (instead of 2500 as suggested in your letter) and also guarantee the payment to us on whatever material we have on hand in excess of the 5000 up to 10,000 packages.

'Naturally, on the unfilled orders, the express item would enter into the price, i.e. the average express is fifty cents and this amount would be deducted from the $2.25--leaving $1.75--less 15%. On the filled orders the price would be $2.25 less the 15%.'

Thereafter, on October 6, 1942, appellant wired respondent as follows:

'Let's make up 2500 boxes. If we sell more than 2500 will refund. If you cannot get more. Otherwise terms your letter September 21st satisfactory. Mailing order also proof of page.'

This was followed by a letter on the succeeding day, the pertinent portion of which reads:

'October 7, 1942

'Mr. Myron Foster

'Hesperian Orchards

'Wenatchee, Washington

'Dear Mr. Foster:

'We wired you yesterday regarding our requirements on Hesperian apples as follows:

'Let's Make Up 2500 Boxes. If we sell more than 2500 will refund if you cannot get more. Otherwise terms your letter September 21st satisfactory. Mailing order also proof of page.

'Attached is our order 40056 for 2500 boxes. Our intention is that you proceed to procure this quantity of boxes, pack the goods and be ready to make shipments when the orders come in following the mailing of this special catalog on October 28th. By November 10th we will have received enough orders to calculate whether 2500 is enough or about how many more packages will be needed. If at that time, it is within your power to supply more goods, we shall be happy. If not, when the 2500 have been shipped, we will refund for the balance of the season. . . .

'It is unfortunate that we cannot talk with you to give you a clearer incite [insight] as to what we are trying to do, but we do wish that you would treat this experiment of ours as a special adventure and do all you can to bring it to a successful conclusion.

'I should like to have you tell us that you have provided the 2500 boxes to start with and that you will be ready to make shipments the first of November. We shall notify you exactly the date the books are mailed and we shall discuss with you promptly after that date if any further boxes are needed.'

The above letter was accompanied by a written order, dated October 5, 1942, which directed the respondent to ship '2500 boxes apples, gift packed, 2.25, 15% trade discount. To be made up packed for shipment direct to Ward's customers. Any quantity not ordered shipped as of March 30, 1943, may be invoiced at net cost less express charges--that is, $1.75 less 15%.'

Under the arrangment, orders came in to respondent from appellant and were filled by the shipment of the apples direct to appellant's customers. 604 boxes were ordered by appellant and shipped by respondent.

Appellant presses upon us error of the trial court in admitting evidence to the effect that apples were available in the Wenatchee market which could have been used in filling orders for appellant if respondent's own stock was depleted. This contention is entirely without merit for the reason that appellant was not compelled to take other apples than those grown by respondent. Appella...