Miller v. Klindworth

• Court: North Dakota Supreme Court
• Writing for the Court: BURKE; SATHRE, C. J., and MORRIS
• Citation: Miller v. Klindworth, 98 N.W.2d 109 (N.D. 1959)
• Decision Date: 10 July 1959
• Docket Number: No. 7762,7762
• Parties: Josephine MILLER, Harrison Garnet Miller, and John Albert Miller, each individually and as co-partners doing business under the partnership name and style of Miller Farms, Plaintiffs and Respondents, v. Otto KLINDWORTH, individually, and doing business as Klindworth Seed and Supply Company, and John Landowski, Defendants and Appellants.

Page 109

98 N.W.2d 109

Josephine MILLER, Harrison Garnet Miller, and John Albert Miller, each individually and as co-partners doing business under the partnership name and style of Miller Farms Plaintiffs and Respondents, v. Otto KLINDWORTH, individually, and doing business as Klindworth Seed and Supply Company, and John Landowski, Defendants and Appellants.

No. 7762.

Supreme Court of North Dakota.

July 10, 1959.

Rehearing Denied Aug. 31, 1959.

Syllabus by the Court

1. Any provision of a contract is unlawful if it is contrary to an express provision of law. Sec. 9-0801, NDRC 1943.

2. Where a statute prohibits certain acts but also provides that such acts under specified conditions shall not be subject to the penalties of the statute, the statute implies that the acts under the specified conditions are not prohibited.

3. Section 4-0914, NDRC 1943, does not prohibit an intermediate vendor, who, under the provisions of Section 4-0915, NDRC 1943, is permitted, in good faith, to rely upon the label affixed to a container of agricultural seed by a shipper or grower thereof, from disclaiming any responsibility for, or any express or implied warranty under, such label.

4. A valid provision in a contract for the sale of wheat seed, disclaiming any warranty as to description, quality, or productiveness was operative against a claim for damages based solely upon the fact that the seed did not produce as large a crop as the seed, had it been of the variety described on the label, would normally have produced.

T. A. Roney, Carrington, Duffy & Haugland, Devils Lake, Dorsey, Owen, Scott, Barber & Marquart, Minneapolis, Minn., of counsel, for appellants.

Nilles, Oehlert & Nilles, Fargo, for respondents.

BURKE, Judge.

This is an action for damages alleged to have resulted from a sale of mislabeled seed wheat. In their complaint the plaintiffs alleged that they entered into a written contract with the defendants for the purchase of 200 bushels of Selkirk seed wheat; that pursuant to such contract the defendants delivered to them 200 bushels of wheat in sacks which were labeled 'Selkirk'; that Selkirk wheat is a rust resistant variety of wheat; that plaintiffs planted the seed according to the best agricultural practices; that the growing crop became highly infested with rust, and as a result gave a low yield of poor quality wheat; that the seed furnished by defendants was not Selkirk wheat as had been agreed upon and warranted; that had it been Selkirk it would have produced a crop of the value of $18,000 whereas the seed actually furnished produced a crop of the value of $2,997.61 and that by reason of the breach of contract and breach of warranty by defendants, plaintiffs were damaged in the sum of $15,002.39. The defendant, Klindworth, in his answer alleged that he sold seed wheat to the defendants which he had purchased from Inland Grain Processing Company of Prosser, Washington, as Selkirk wheat; that such wheat was contained in sacks bearing labels describing the wheat as Selkirk wheat; that prior to sale, the wheat had been identified by the State Seed Department as Selkirk wheat; that defendant, Klindworth, made no representations or warranties with respect to such wheat and that the same was purchased by the plaintiffs upon the basis of an inspection of a sample and the label of the Inland Grain Processing Company; that defendant, Klindworth, believed that such wheat was Selkirk wheat and that in the contract for the sale of such wheat the parties agreed that 'Klindworth Seed and Supply Co., gives no warranty, express or implied, as to description, quality, productiveness or any other matter of any seed it sells and will not be responsible for the crop.' In their reply the plaintiffs alleged that the disclaimer of warranty, contained in the contract, was unlawful and void.

The issues in the case were tried to the court without a jury. Judgment was rendered in favor of the plaintiffs and against the defendants in the sum of $6,352.15. The defendant, Klindworth, has appealed from the judgment and has demanded a trial anew in this court.

There are two main issues upon this appeal. The first concerns the effectiveness of the disclaimer of warranty which was made a part of the contract of sale. The second is whether the evidence is sufficient to support the judgment.

It is plaintiffs' contention that the disclaimer is ineffective for any purpose because it is unlawful and void. Section 9-0801, NDRC 1943, provides:

'Any provision of a contract is unlawful if it is:

'1. Contrary to an express provision of law * * *.'

Section 4-0914, 1953 Supp. NDRC, provides:

'* * * It shall be unlawful for any person in this state to: * * *

'5. Use on seed labels or tags, or to use or attach to literature, or to state in any manner or form of wording designed as a 'disclaimer' or 'non-warranty' clause with the intent to disclaim responsibility of the vendor of the seed for the data on the label required by law;'

Section 4-0910, 1953 Supp. NDRC, provides:

'Each container of agricultural seed which is sold, offered for sale, exposed for sale, transported for sale, or held in storage with the intent to sell for sowing purposes within this state shall bear thereon or have attached thereto in a conspicuous place, or there shall be properly (promptly) delivered with bulk sales or movements of said seed, a plainly written or printed label or tag in the English language giving the following information:

'1. The commonly accepted name of the kind, or the kind and variety, of each agricultural seed component in eacess of five percent of the whole and the percentage by weight of each. * * *'

Relying on the foregoing statutes the plaintiffs say that all agricultural seed must be labeled; that the label must bear the name of the kind and variety of the seed; that it is unlawful for a vendor of seed to disclaim responsibility for the data required by law to be placed upon the label and that such a disclaimer, being contrary to an express provision of law, is illegal and void.

Appellant, in opposition, urges that Chapter 4-09, 1953 Supp. NDRC, of which Section 4-0914, supra, is a part, is a penal statute which makes the violation of any part thereof a misdemeanor and that it therefore does not in any manner restrict a limitation of civil contract liability. He also states, that, if the statute does prohibit a disclaimer of civil liability, such prohibition only relates to the vendor who prepares the seed label and does not prohibit an intermediate vendor from disclaiming responsibility for a label prepared and affixed to the containers of seed by a grower or seed processor. In support of the latter contention he calls our attention to Section 4-0915, Supp. NDRC, which provides in part:

'No person shall be subject to the penalties of this Act (chapter) for having sold, exposed for sale, or transported for sale in this state any agricultural or vegetable seeds which were incorrectly labeled or incorrectly represented as to kind, variety, or origin and which could not be identified by examination thereof, unless such person has failed to obtain an invoice or grower's declaration stating the kind, or kind and variety, and origin, if required, or has failed to take such other precautions as may have been necessary to insure the seed was properly identified.'

We think the latter contention has merit. Section 4-0915, supra, exempts persons who sell seeds under the conditions specified therein from the penalties of the act. It would hardly seem logical to say that, while such persons are not subject to the penalties of the statute, they remain subject to its prohibitions. The provisions exempting certain acts from the penalties of the statute must impliedly declare that the exempted acts are not illegal. We therefore hold that Section 4-0914, supra, does not prohibit an intermediate vendor, who, under the provisions of Section 4-0915, supra, is permitted, in good faith, to rely upon the label affixed to a container of agricultural seed, by a shipper or grower thereof, from disclaiming any responsibility for, or any express or implied warranty under, such label.

The test of good faith on the part of an intermediate vendor is that he shall have taken 'other precautions as may have been necessary to insure the seed was properly identified.' Mr. Klindworth testified that he had ordered certified Selkirk wheat seed from the Inland Grain Processing Company in October 1954; that he was informed that the order could not be filled because of the Canadian embargo on Selkirk, but that commercial Selkirk could be obtained in quantities from the State of Washington. Before ordering any of this commercial Selkirk, Mr. Klindworth called on Irven Hagen, Deputy State Seed Commissioner, at his office at the Agricultural College at Fargo and discussed the advisability of such a purchase with him. Mr. Klindworth stated that Hagen told him that such a purchase would be a good deal, and upon securing this opinion he made arrangements to have Hagen inspect the seed when and if he ordered it. Klindworth thereafter ordered a carload of the commercial Selkirk and when it arrived at Carrington, called Hagen by telephone and requested an inspection. Hagen went to Carrington and inspected the seed. According to Klindworth, Hagen examined the seed with a magnifying glass and after examination declared the seed to be Selkirk Wheat. Upon inquiry Hagen stated that he had a secret method of identifying Selkirk by visual examination. Substantially the same procedure was followed with the shipment to Drayton from which plaintiffs' seed was taken.

Hagen testified...