George P. Sexauer & Son v. Watertown Co-op. Elevator Ass'n, 9565

• Decision Date: 08 November 1956
• Docket Number: No. 9565,9565
• Parties: GEORGE P. SEXAUER & SON, a corporation, Plaintiff and Respondent, v. WATERTOWN COOPERATIVE ELEVATOR ASSOCIATION, a corporation, Defendant and Appellant
• Court: South Dakota Supreme Court

Page 220

79 N.W.2d 220

76 S.D. 381

GEORGE P. SEXAUER & SON, a corporation, Plaintiff and Respondent, v. WATERTOWN COOPERATIVE ELEVATOR ASSOCIATION, a corporation Defendant and Appellant.

No. 9565.

Supreme Court of South Dakota

Nov. 8, 1956.

Rehearing Denied Feb. 8, 1957.

Andrew E. Foley and Arthur R. Henrikson, Watertown, and Leo P. Flynn, Milbank, for defendant and appellant.

Lund & McCann, Brookings, for plaintiff and respondent.

ROBERTS, Presiding Judge.

This is an appeal from a judgment awarding damages to the plaintiff for the breach of an implied warranty of variety in the sale of flax. Plaintiff is a corporation with its principal place of business in Brookings, South Dakota, and its business includes the buying and selling of seed grains. The defendant corporation at the time of the transactions herein involved operated two grain elevators in Watertown, South Dakota.

It appears that A. A. Hoch, an employee of the plaintiff, went to the place of business of the defendant in February, 1951, and stated to its manager George Hurd that he needed 250 bushels of Sheyenne flax. The negotiations resulted in the sale and delivery to the plaintiff of that amount of flax sacked in 2 1/2 bushel bags. The consignment was given a lot number and samples were taken from each of the hundred bags and an analysis was made of the composite sample. The bags were then machine sewed. Tags showing the result of the analysis were prepared, which read as follows: 'Sheyenne Flax S. Dak. Purity 99.00%. Germ. 93%. Other Crop .20%. Tested 2-51. Inert .20%. Nox. Free. Weeds .60%. Lot 4245'. It is agreed that this flax so labeled was of the variety commonly known as Sheyenne.

The controversy arose out of a second sale and delivery of flax. It appears that plaintiff needing more flax seed to fill orders from farmers residing in the vicinity of Arlington, South Dakota, where it owned and operated a grain elevator, called by telephone about March 1, 1951, to inquire if defendant corporation could furnish an additional hundred bags of Sheyenne flax and Mr. Hurd replied that he had a number of orders and did not then know whether or not he could furnish that amount. Mr. Hoch testified that about a month later when he again went to defendant's place of business, Mr. Hurd stated to him: 'Well, you can have another hundred bags out of the same batch.' As to the second sale and delivery of flax, Mr. Hurd testified:

'Q. You were not present then at the time that George P. Sexauer & Son took delivery of this last load of 100 sacks? A. No. * * *

'Q. Who is Mr. Johnson? A. Mr. Johnson was assistant manager at the time this flax was delivered.

'Q. Was he in charge of the elevator during your absence? A. That is right.

'Q. Now when Mr. Madsen called you--sometime the first part of April I believe you said it was? A. Yes.

'Q. Do you remember just what Mr. Madsen said on the telephone? A. Not word for word, no.

'Q. Didn't he say, 'I have to have some more Sheyenne flax'? A. Yes.

'Q. That is what he said? A. Yes.

'Q. What did you say? A. I said I could let him have some of the first batch.

'Q. The same as the first batch? A. Yes.

'Q. And by the first batch you meant the shipment made in February? A. That is right.

'Q. And then you left orders with Mr. Johnson to deliver one hundred bags of that Sheyenne flax to Sexauer? A. Yes sir.'

The witness William Johnson testified:

'Q. Actually you don't know what variety of flax that was that you loaded? A. I don't know except that I was told it was flax for Sexauers.

'Q. That is all you know about it? A. Yes.'

There is testimony in the record to the effect that on April 7, 1951, thirty bags of the first consignment of flax was loaded on plaintiff's truck at Brookings and delivered to its elevator in Arlington; that plaintiff's truck driver continuing on to Watertown hauled from defendant's warehouse to the elevator in Arlington 250 bushels of flax contained in 100 hand-sewed bags. Without analysis, tags prepared by using the same stencil made for the first consignment of flax were attached to each of these bags.

It seems clear that the farmers who purchased this flax delivered to the Arlington elevator suffered substantial losses because a variety of seed other than the rust resistant Sheyenne was supplied. Victor A. Dirks, assistant agronomist at the South Dakota Experiment Station at Brookings, testified that Sheyenne flax is resistant to all races of rust that infest this state and is not distinguishable from all other varieties by visual inspection; that he made an inspection of the various fields seeded by these farmers and found them 'streaked' and there were indications of rust infestation. One of the farmers had two unopened bags of flax that he had not seeded, one was machine-sewed and the other hand-sewed. Samples were taken from these bags and plants were grown from seeds in each. Mr. Dirks testified that as a result of these tests he concluded that the sample taken from the machine-sewed bag 'was at least largely Sheyenne' and that the sample taken from the hand-sewed bag 'was definitely not Sheyenne'.

The record shows that actions were instituted by the farmers to whom the flax seed was sold against the plaintiff in the present action to recover as damages the difference between the value of the crops actually grown from the seed furnished and that of the crops which would have been produced had all the seed been of the variety ordered. Claiming that such liability on its part was secondary, George P. Sexauer & Son notified the Watertown Cooperative Elevator Association of the commencement of these actions and requested it to assume the defenses therein. This it declined to do. Settlements of the claims were made and the present action was commenced to recover the amounts paid in settlement and necessary expenses of litigation.

It is a general rule that the sale of seed by name gives rise to an implied warranty that the seed is of the variety described. 77 C.J.S., Sales, Sec. 330(2)f; and see cases collected in annotations in 16 A.L.R. 875, 32 A.L.R. 1243, 62 A.L.R. 453, 117 A.L.R. 473 and 168 A.L.R. 581. The Uniform Sales Act has not changed this rule. See Lee v. Cohrt, 57 S.D. 387, 232 N.W. 900. That Act, SDC 54.0114, provides that where there is a contract to sell or a 'sale of goods by description, there is an implied warranty that the goods shall correspond with the description'.

In Parrish v. Kotthoff, 128 Or. 529, 274 P. 1108, 1109, it is stated: 'Where specified goods are sold in compliance with an order describing the goods and the seller furnishes them, he is held to warrant that the goods are of the kind asked for. In such case it is a substantive part of the contract that the goods shall be of the kind ordered. That is one of the terms of the...