Investors' Mortgage Security Co. v. Strauss & Co., Inc., 5618

• Citation: 298 P. 678,50 Idaho 562
• Decision Date: 21 April 1931
• Docket Number: 5618
• Court: United States State Supreme Court of Idaho
• Parties: THE INVESTORS' MORTGAGE SECURITY COMPANY, a Corporation, Appellant, v. STRAUSS & COMPANY, INC., a Corporation, Respondent

298 P. 678

50 Idaho 562

THE INVESTORS' MORTGAGE SECURITY COMPANY, a Corporation, Appellant, v. STRAUSS & COMPANY, INC., a Corporation, Respondent

No. 5618

Supreme Court of Idaho

April 21, 1931

SALES-BREACH OF WARRANTY-DAMAGES-PRINCIPAL AND AGENT-AUTHORITY OF AGENT-RIGHTS OF THIRD PARTY.

1. That buyer, having received winter instead of spring wheat as requested, alleged breach of express warranty, was not inconsistent with implied warranty (C. S., sec. 5687, subds 1, 6).

2. Express warranty, if inconsistent with implied warranty governs (C. S., sec. 5687, subds. 1, 6).

3. Refusal to give requested instruction on issue presented by pleadings and by theory on which case was tried is error.

4. Where agent of seller, sued for breach of warranty, was called as buyer's witness, allowing cross-examination relating to defense that agent had instructions limiting his authority held not abuse of discretion.

5. Buyer who, having received winter instead of spring wheat refrained from planting crop during following year hoping winter wheat would mature, could not recover for such loss damages being properly limited to first year.

6. Whether seller's agent had been forbidden to sell wheat with warranty held inadmissible, being no proof as to whether warranty was given.

7. Generally, third person dealing with agent without notice of limitations on agent's authority is not bound thereby.

APPEAL from the District Court of the Fifth Judicial District, for Power County. Hon. Robert M. Terrell, Judge.

Action in damages for breach of warranty. Judgment for defendant. Reversed.

Judgment reversed, with instructions. Costs to appellant.

P. B. Carter, for Appellant.

Where seed buyer makes known to seller needs for planting, and selects seed upon seller's recommendation, there arises implied warranty that seed is suitable for purposes intended. (Tomita v. Johnson, 49 Idaho 643, 290 P. 395; Rauth v. Southwest Warehouse Co., 158 Cal. 54, 109 P. 839; Gubner v. Vick, 42 Hun, 657, 6 N.Y.S. 4, 25 N.Y. Week. Dig. 356; Gardner v. Winter, 117 Ky. 382, 78 S.W. 143, 63 L. R. A. 647.)

By the great weight of authority, the sale of seed as of a certain kind--in other words, a sale by description--constitutes a warranty that the seed is of the variety described. (Johnson v. Foley Milling & Elevator Co., 147 Minn. 34, 16 A. L. R. 856, 871, 179 N.W. 488; Keeler v. Green, 51 Mont. 42, 149 P. 286; Ross v. Northrup, King & Co., 156 Wis. 327, 144 N.W. 1124; 35 Cyc. 409; Gubner v. Vick, supra; 24 R. C. L. 413; Hoffman v. Dixon, 105 Wis. 315, 76 Am. St. 916, 81 N.W. 491; Rauth v. Southwest Warehouse Co., supra.)

Secret or private instructions, or limitations upon the general authority of an agent, however binding they may be as between the principal and his agent, can have no effect on a third person, who deals with an agent in good faith, in ignorance of the instructions or limitations and in reliance on the apparent authority with which the principal has clothed him. (2 C. J., sec. 209, citing cases from practically all states.)

Jones, Pomeroy & Jones, for Respondent.

Where the seller expressly refuses to warrant the seed, there is no room for any question of implied warranty in connection with the sale and such refusal to warrant seed relieves the defendant of any implied warranty that the wheat sold was of the variety desired. (Couts v. Sperry Flour Co., 85 Cal.App. 156, 259 P. 108; Leonard Seed Co. v. Crary Canning Co., 147 Wis. 166, Ann. Cas. 1912D, 1077, 132 N.W. 902, 37 L. R. A., N. S., 79; 2 Williston on Contracts, p. 1871; 35 Cyc. 373.)

Statements of an agent without proof of the agency are inadmissible. (Hample v. McKinney, 44 Idaho 436, 258 P. 179.)

The measure of damages for a crop that has been lost after the same has been planted is the market value of said crop at maturity less any expense for harvesting and marketing. (Kingsbury v. Bacon, 38 Idaho 701, 224 P. 438; Henson v. Seawell, 35 Idaho 92, 204 P. 660; Risse v. Collins, 12 Idaho 689, 87 P. 1006; Shotwell v. Dodge, 8 Wash. 337, 36 P. 254.)

MCNAUGHTON, J. Lee, C. J., and Budge, Givens and Varian, JJ., concur.

OPINION

MCNAUGHTON, J.

This is an action in damages for breach of warranty in the sale of seed wheat. It is shown that 12,500 pounds of wheat were purchased by plaintiff from defendant for spring seeding; that 3,495 pounds of the wheat delivered was of the variety known as Blue Stem wheat, and that 9,005 pounds was of the variety known as Gold Coin; that Gold Coin is a type of winter wheat suitable only for fall planting; that Blue Stem wheat and Gold Coin wheat, though of entirely different variety, are both white wheats and very similar in appearance. It is claimed by the plaintiff that Blue Stem seed wheat was sought and contracted for but Gold Coin wheat was delivered, and that in reliance upon the representations of the seller that the wheat offered was Blue Stem wheat it seeded the Gold Coin seed upon land set apart and prepared for spring wheat, and that as a result of the discrepancy between the seed bargained for and that delivered and sowed upon the land the season's crop was lost; that the Gold Coin seed being of a winter variety sown in the spring of the year did not and could not be expected to mature a crop.

The complaint sets forth an express warranty on the part of the seller that the wheat sold was Blue Stem seed wheat, breach of which is alleged. In the same cause of action setting forth the express warranty the following further allegation is contained: "That the plaintiff notified defendant at the time of the said purchase that it wanted Blue Stem Spring Wheat for planting that Spring; that the defendant so knowing plaintiff's wants, needs, purposes did not sell it the seed contracted for, but sold it a variety of winter seed."

The verdict was for the defendant, and plaintiff appeals. Plaintiff specifies error in the court's instructions to the jury, also on the admission of testimony.

The trial court refused an instruction proffered by plaintiff upon the doctrine of implied warranty. Under the instructions given the jury was limited to the issue raised by the allegations of express warranty and the denial thereof. It is thought the express warranty alleged was in no way inconsistent with the implied warranty which obtains under the law of sales in this state.

C. S., sec. 5687, provides:

"Subject to the provisions of this law and of any statute in that behalf, there is no implied warranty or condition as to quality or fitness for any particular purpose of goods supplied under a contract to sell or a sale, except as follows:

"1. Where the buyer expressly or by implication, makes known to the seller the particular purpose for which the goods are required, and it appears that the buyer relies on the seller's skill or judgment (whether he be the grower or manufacturer or not) there is an implied warranty that the goods shall be reasonably fit for such purpose. . . .

"6. An express warranty or condition does not negative a warranty or condition implied under this law unless inconsistent therewith."

In Tomita v. Johnson, 49 Idaho 643, 290 P. 395, this court said:

"Where one desiring seed makes known to a dealer his needs for planting, and a selection of seed is made upon recommendation by the seller, there arises an implied warranty that the seed is suitable for the purposes intended. Wapato Fruit & Cold Storage Co. v. Denham, 126 Wash. 676, 219 P. 30."

The respondent, in justification of the trial court's refusal to instruct on implied warranty, states:

"The authorities hold generally that where there is an express warranty none will be implied; or to state the rule in another way, an express warranty excludes an implied warranty on the same or closely related subject."

Of course where there is an express warranty inconsistent with the warranty implied by law the express warranty proved will govern. That was the situation in Bucy v. Pitts Agricultural Works, 89 Iowa 464, 56 N.W. 541, cited by respondent. But that case is not authority against pleading and relying upon both an express and an implied warranty where such warranties are not inconsistent. The court in that opinion...