Lloyd-Garretson Co. v. Marvin & Co.

• Decision Date: 29 January 1929
• Citation: 128 Or. 191,274 P. 128
• Parties: LLOYD-GARRETSON CO. v. MARVIN & CO.
• Court: Oregon Supreme Court

274 P. 128

128 Or. 191

LLOYD-GARRETSON CO. v. MARVIN & CO.

Supreme Court of Oregon

January 29, 1929

Appeal from Circuit Court, Multnomah County; John H. Stevenson Judge.

Action by the Lloyd-Garretson Company against Marvin & Co. From a judgment for plaintiff, defendant appeals. Reversed and remanded.

This action was instituted to collect $719, balance claimed to be due for peaches sold by plaintiff to defendant in 1925. Defendant denied its liability for the peaches, and counterclaimed for damages based upon a breach of contract by plaintiff, and for deceit, fraud, and misrepresentation in the transaction, whereby defendant was induced to part with $100 in part payment of said peaches. The answer is too long to set out in full. It alleges in effect that on the 9th day of July, 1925, plaintiff, for a valuable consideration, to wit, $100, paid by defendant, entered into a contract for the sale and delivery to defendant of one-half carload of peaches. The kind of peaches, the manner of packing, method of shipping, and other terms were described in the contract. Defendant agreed to pay for said peaches $1.30 per box f. o b. shipping point, which was to be at or near Yakima, Wash. It was agreed by plaintiff and defendant that the peaches before shipment were to be inspected, and defendant was to pay the remainder of the purchase price on receipt of the bill of lading, with a certificate from a federal government inspector, to the effect that the peaches delivered for shipment were the kind and quality agreed to be sold by plaintiff; that said peaches were packed ready for shipment in approved manner, and were free from disease and pests. Plaintiff caused a telegram to be sent defendant at the time the peaches were loaded for shipment, to the effect that the peaches were loaded, inspected, and that a certificate was issued to the effect that said peaches were packed in accordance with said contract of sale. Said telegram omitted from said certificate this clause: "Approximately 9 per cent. defects of grade, mostly worm injury." Defendant avers that the telegram which omitted that part of the inspection was deceitful, fraudulent, and misleading; that defendant relied on said telegram, and was thereby induced to permit said peaches to be shipped to Portland, where it does business. Defendant alleges that the shipping of said peaches was contrary to the law of Washington, which forbids the shipping of diseased and infected fruit; that said peaches were below the standard required by the rules and regulations of the federal government inspector, which permits shipment of defective fruit to the extent of 3 per cent. only; that it is unlawful for defendant to offer diseased and infected fruit for sale within the state of Oregon. The Washington law (Rem. Comp. Stat. § 2853), which is pleaded, contains this clause: "And the fact that any fruit bears the mark of any such scale insect or is worm eaten by any such larvæ shall be conclusive evidence that the fruit is infected within the meaning of this section." Said answer further alleges that, if defendant had known that said certificate disclosed that 9 per cent. of the peaches were defective, mainly because worm-eaten, it would have forbidden the shipment of said peaches. The carload of peaches was shipped August 27, and arrived in Portland, August 29, 1925. Thereupon defendant and the purchaser of the other half of said carload inspected the peaches and demanded an appeal inspection. The appeal inspection was made according to law and the rules governing that work by the inspector who made the former inspection at Fruitvale, near Yakima, and another qualified person. The certificate issued on the appeal inspection contains the following language: "This certificate covers an appeal inspection of above lot, which was previously inspected at shipping point in Washington, August 27, 1925, and reported on joint Federal-State Certificate SO277984 as 'generally tight pack,' which report is hereby reversed."

After this appeal inspection, both the buyers refused to accept the peaches, and they were sold by the railroad company for its charges for freight, demurrage, and storage. Plaintiff, in its reply, denied the material allegations of the affirmative answer and counterclaim, and, for an affirmative reply, set up substantially the following: On the next day after said inspection, the Willamette Fruit & Produce Company, the other purchaser, began an action to recover the $100 paid at the time the contract was made for the purchase of said peaches. In that action said Willamette Fruit & Produce Company included the claim of defendant herein for the $100 it had paid at the time the contract was entered into, which claim had been assigned in writing by this defendant to said Willamette Fruit & Produce Company. Plaintiff herein answered, denying that it had breached the contract, and alleging that said fruit was packed and shipped in accordance with the contract of sale, and that said peaches were of the kind and quality described in said contract. A trial was had to a jury, and a verdict returned for plaintiff herein, defendant in that action, for the sum of $719. Plaintiff having recovered a judgment in the case at bar against defendant for the sum of $719, defendant appeals, assigning two principal errors, to wit, the admission in evidence of the assignment from defendant to said Willamette Fruit & Produce Company of the claim for $100 against plaintiff, and the admission in evidence of the record in said Willamette Fruit & Produce Company action, which are marked respectively Plaintiff's Exhibits A and T herein.

Robert R. Rankin, of Portland, for appellant.

Marvin K. Holland, of Portland (Carey & Kerr and Marvin K. Holland, all of Portland, on the brief), for respondent.

COSHOW C.J. (after stating the facts as above).

Defendant, by assigning its claim for $100 to Willamette Fruit & Produce Company, for the purpose of recovering same from plaintiff in the instant case, rescinded the contract for the purchase of the peaches. Bringing the action for the return of the money so paid was a rescission of the contract to purchase. In the Willamette Fruit & Produce Company case, Lloyd-Garretson Company, plaintiff herein, attempted to collect from said Willamette Fruit & Produce Company the price for the entire carload of peaches. Said Lloyd-Garretson Company, as defendant in that case, counterclaimed for that amount. As a matter of law it could not collect from Willamette Fruit & Produce Company for peaches purchased by Marvin Company, defendant herein. The jury thereupon ignored the assignment of the claim of $100, and brought in a verdict in favor of Lloyd-Garretson Company for $719, being the exact amount due from Willamette Fruit & Produce Company, providing the peaches conformed to the contract of sale. There is no controversy about the price of the peaches, if according to contract. There is no controversy about the amount paid at the time the contract for the purchase of the peaches was entered into. In the Willamette Fruit & Produce Company case the plaintiff therein was the owner of the claim owned by defendant in the instant case against Lloyd-Garretson Company. But the assigned claim was ignored. It was not litigated. It was not considered or determined.

The law is well settled in this state that, when a litigation has once been determined on its merits, the issue therein actually litigated, and all other matter which could have been litigated within the pleadings, become final between the parties to the litigation and those in privity with them. It would seem that the defendant herein is in privity with Willamette Fruit & Produce Company, and would be bound by that determination. But it appears affirmatively that the claim of defendant herein for the $100 was not litigated. It was no fault of defendant that it was not litigated. In order, however, for the rule to apply, the parties in the later litigation must be the same or in privity. In the instant case the parties are not the same. The only relation between the Willamette Fruit & Produce Company and defendant in the instant case is that of assignee and assignor. It affirmatively appears that the assigned claim was not considered or litigated. Plaintiff in the instant case allows defendant credit for amount of the assigned claim, which it would not have done if the claim had been litigated in the other action. La Follett v. Mitchell, 42 Or. 465, 471, et seq., 69 P. 916 (95 Am. St. Rep. 780); Vanderpool v. Burkitt, 113 Or. 656, 234 P. 289; Barnes v. Anderson, 108 Or. 503, 509, 217 P. 836; Stillwell v. Hill, 87 Or. 112, 169 P. 1174; Spence v. Hull, 75 Or. 267, 271, et seq., 146 P. 95, 98; Taylor v. Taylor, 54 Or. 560, 577, 103 P. 524.

Plaintiff herein cannot well urge that the claim of defendant for the $100 was litigated in the Willamette Fruit & Produce Company Case, because plaintiff has given defendant credit for that $100 in the action at bar. If, as plaintiff argues, the claim advanced now by defendant had been litigated in the former proceedings, plaintiff would be...