McNeal-Edwards Co. v. Frank L. Young Co.

• Decision Date: 22 July 1931
• Docket Number: No. 2345.,2345.
• Citation: 51 F.2d 699
• Parties: McNEAL-EDWARDS CO. v. FRANK L. YOUNG CO.
• Court: U.S. Court of Appeals — First Circuit

51 F.2d 699 (1931)

McNEAL-EDWARDS CO. v. FRANK L. YOUNG CO.

No. 2345.

Circuit Court of Appeals, First Circuit.

July 22, 1931.

Before BINGHAM, ANDERSON, and WILSON, Circuit Judges.

BINGHAM, Circuit Judge.

Since this case was before us on rehearing, July 1, 1930, when we entered judgment dismissing the cause for want of jurisdiction for lack of personal service upon the defendant, 42 F.(2d) 362, the Supreme Court has had the case under consideration, reversed our judgment, and remanded the case for further proceedings. Young Co. v. McNeal-Edwards Co. (decided May 18, 1931) 283 U. S. 398, 51 S. Ct. 538, 75 L. Ed. 1140.

The Supreme Court, however, failed to pass upon the merits of the controversy and upon which the Young Company had been granted a rehearing. It therefore becomes essential to a disposition of the case that we should pass upon the merits.

In our opinion of November 12, 1929, 35 F.(2d) 829, as to the merits of the controversy, it was held that, inasmuch as the contract contained a provision requiring the plaintiff to return the drums, which the jury had found it had not done within a reasonable time prior to September 15, 1922, and on that date had attached the drums, wrongfully retained by it until that time, it could not recover on the ground that the case fell within the doctrine of Sipley v. Stickney, 190 Mass. 43, 76 N. E. 226, 5 L. R. A. (N. S.) 469, 112 Am. St. Rep. 309, 5 Ann. Cas. 611. This is the only question raised in the case meriting further consideration on this rehearing.

In considering this question and the applicability of the doctrine announced in Sipley v. Stickney to this case, it is essential that we should point out in a concise way just what the facts in this case are.

By a contract of January 5, 1922, the McNeal-Edwards Company, a corporation doing business in Virginia, contracted to sell to the Frank L. Young Company, a corporation doing business in Massachusetts, one thousand to twelve hundred drums of Prime A Crude Menhaden Fish Oil at 33 cents per gallon, in seller's drums, to be delivered f. o. b. at a railroad in Baltimore for shipment to the Young Company, payment to be made in cash against documents, not including the drums. The contract also contained a stipulation that the Young Company should return the drums to the seller, freight prepaid. There were other provisions in the contract guaranteeing that the oil should be under 5 per cent. acidity, and that in case a sample, to be drawn by George A. Thompson, showed, according to Gascoyne's test, at the time of the gauging, to be in excess of 5 per cent. acidity, then the seller was to make an allowance of 1 per cent. per gallon for each per cent. or fraction thereof above 5 per cent. F. F. A.; and that the oil was to be gauged and sampled by Thompson at the time of the shipment.

The McNeal-Edwards Company shipped under the contract 1,107 drums of oil, the price of which came to about $18,000, and the Young Company paid for the same in full in March, 1922, but without prejudice to its claim that the oil was not Prime A Crude Menhaden Fish Oil as contracted for. The oil turned out to be of such a character that it could not be removed from the drums during the cold weather, as it would not run from the containers. There was also a long period of time during which the parties were in controversy as to the acidity of the oil, and as to whether it was or was not of the quality contracted for.

During July and August of that year, the oil was exposed to the heat of the sun, and was finally emptied from the containers about the 22d of August. The drums, however, were retained in the possession of the Young Company down to September 15, 1922, when it brought suit against the McNeal-Edwards Company, alleging breach of warranty of the quality of the oil, and attached the drums. In answer to this suit on the contract for breach of warranty, the defendant pleaded a general denial and, further answering, alleged (1) that the oil furnished was of the quality and description ordered and agreed to be furnished; (2) that with respect to the quality and description of the oil sold the plaintiff was bound under the contract by the gauging and analysis made by George L. Thompson and the Gascoyne Company, or either of them, who were designated by the plaintiff as its agents and representatives for that purpose; and (3) that the plaintiff, before action brought, accepted the discount provided by the contract in case of excess of free fatty acids, and had adjusted its claim against the defendant by deducting such discount and paying the defendant the difference between that amount and the purchase price.

The jury found that the oil delivered was not of the quality and grade called for by the contract, and that the Young Company, by reason thereof, was damaged in the sum of $10,730.17.

The McNeal-Edwards Company also brought an action against the Young Company to recover damages, alleging that the Young Company had violated the provision of the contract relating to the return of the drums, in that it had not seasonably returned them. This case was tried with the one previously spoken of.

In answer to special questions submitted, the jury found that the retention of the drums by the Young Company from the time they were received (about January 28, 1922) to September 15, 1922, when they were attached, was unreasonably long, and that McNeal-Edwards Company was damaged, because of the unreasonable detention of the drums, in the sum of $100.

At the close of the testimony, the McNeal-Edwards Company, as defendant in the first suit, submitted the following requests for rulings, among others:

"1. Upon all the evidence your verdict must be for the defendant, McNeal-Edwards Company."

"6. That where a person owes a duty to do an act by virtue of the obligation placed upon him by a valid contract, he has no right to knowingly do another act which will make it impossible for him to fullfil that obligation. To apply this to the case at bar Frank L. Young Company, owing a duty to return the drums promptly, had no right by their intentional act to cause the drums to be placed in custodia legis, that is, under attachment, and to claim that they were therefore unable to so return them to McNeal-Edwards Company.

"7. To so place them under attachment as described in the foregoing request, and to still retain them, constitutes a breach of the contract in suit, and your verdict must be for the defendant."

These requests were refused, and their refusal was assigned as error.

It is not questioned but that the contract contained a warranty that the oil sold was of the quality and grade known in the market as Prime A Crude Menhaden Fish Oil. And it is unquestionable that the Young Company, having examined the oil before payment and finding that it did not correspond to the warranty, could have returned it or paid for the same according to contract, and sued for damages for breach of the warranty. It took the latter course. This being so, the parties, under the terms of the contract, understood that the only condition precedent to the Young Company's right to maintain an action on the warranty was that it should first pay the price, which it did. The stipulation in the contract that the Young Company should return the drums, freight prepaid, was an independent stipulation and not a condition precedent to its right to maintain an action on the warranty. Consequently, in order to maintain an action on the warranty, the Young Company did not have to allege in its declaration and prove that it returned the drums, and did so seasonably. The McNeal-Edwards Company recognized this in its answer, for it did not set up the breach of the stipulation to return the drums as a defense.

There was evidence in abundance from which the jury could find that the oil was not of the character and quality contracted for, and, this being so, request No. 1 for a directed verdict was properly denied.

The sixth request has no application to this suit on the warranty. Its application, if any, was to the action brought by the McNeal-Edwards Company against the Young Company alleging breach of the stipulation seasonably to return the drums.

The seventh request incorporates in it a portion of what is stated in request No. 6 and a fair interpretation of the request is:

"7. To so place them under attachment as described in the foregoing request by their intentional act to cause the drums to be placed in custodia legis, that is, under attachment and to still retain them constitutes a breach of the contract in suit, and your verdict must be for the defendant."

In other words, the defendant's position is that under this request and on the evidence in the case the jury could have found that the breach of the stipulation to return the drums was willful and a defense to the action brought by the Young Company on the warranty. But, as above pointed out, the stipulation in the contract relating to the return of the drums was an independent stipulation and not a condition precedent to the right of the Young Company to maintain an action on the warranty. And, such being the case, it is unimportant in this action whether the breach of the independent stipulation was intentional or not. Furthermore, if the breach of this independent stipulation could be regarded as a defense to the action on the warranty, it should have been set up as a defense in the answer, and, not being set up in that manner, it could not be availed of by a request for rulings. But it was not a defense; it was only an independent stipulation, the breach of which could be set up in recoupment of damages, or made the subject of a...