Otto Seidenberg, Inc., v. Tautfest

• Decision Date: 26 January 1937
• Citation: 155 Or. 420,64 P.2d 534
• Parties: OTTO SEIDENBERG, Inc., v. TAUTFEST et al.
• Court: Oregon Supreme Court

64 P.2d 534

155 Or. 420

OTTO SEIDENBERG, Inc., v. TAUTFEST et al.

Supreme Court of Oregon

January 26, 1937

In Banc.

Appeal from Circuit Court, Marion County; L. G. Lewelling, Judge.

Suit by Otto Seidenberg, Incorporated, against Henry Tautfest and others. Decree dismissing the suit, and plaintiff appeals.

Affirmed.

Paul C. King and Elmer Johnson, both of Portland for appellant.

Robin D. Day, of Salem, for respondent Henry Tautfest.

Roy F Shields, of Portland (Maguire, Shields & Morrison, of Portland, on the brief), for respondent Pacific Hop Growers.

BELT Justice.

The plaintiff corporation, engaged in the business of buying hops, commenced this suit to foreclose liens on two hop crops produced by the defendant Tautfest. The liens accrued by reason of advances made by plaintiff to the grower for the purpose of cultivating and harvesting the hops contracted to be delivered.

On June 13, 1932, the plaintiff and said defendant entered into a contract by the terms of which the defendant agreed to sell to the plaintiff 60,000 pounds of hops to be grown on certain described land, in each of the years from 1933 to 1937 inclusive. The contract stipulated the price to be paid for the hops each year and, among other things, provided that "Said hops shall be prime quality, of even color, well and cleanly picked, free from damage by vermin, properly dried and cured, not broken and shall not be of the first year's planting."

On November 19, 1932, the same parties entered into a similar contract whereby the plaintiff agreed to buy and the said defendant agreed to sell 25,000 pounds of hops during each of the above mentioned years, the same to be grown on land of the seller described in the contract.

The only crop year involved in this suit is 1935. During that year, under the first contract, the plaintiff advanced for cultivating and harvesting purposes the sum of $4,500; under the second contract, the sum of $2,250. It is further conceded that, under the first contract, the defendant grower produced approximately 42,679 pounds of hops-17,321 pounds less than the amount specified in the contract. Under the second contract, the grower produced 24,188 pounds of hops, or 812 pounds less than the amount stated in the contract. After the hops were harvested the defendant, pursuant to agreement, stored them, on September 24, 1935, in a warehouse operated by the defendant Oregon Electric Company at Salem, Or.; the warehouse receipts being issued in the name of the defendant Tautfest. Plaintiff concedes that defendant Tautfest delivered all the hops produced.

While the hops were in the warehouse, representatives of the plaintiff inspected them and took samples from various bales to determine their quality. These samples were later forwarded to the plaintiff at New York City. After a report from the plaintiff had been received relative to the samples sent to New York, Luckenbaugh, an executive officer of the plaintiff corporation, told the defendant Tautfest, on October 19, 1935, that the hops were not of contract quality and that they "would not accept them as contract hops." On November 22, 1935, the plaintiff, by letter, advised the defendant Tautfest that the hops were rejected for the reason that they did not "meet the quality required by these contracts." No reference was made to the fact that the quantity of hops delivered was less than that specified in the contract. Thereafter, on November 30, 1935, the defendant grower, acting upon the theory that the hops had been wrongfully rejected, sold the same on the open market to the defendant Pacific Hop Growers for the best price obtainable. Lake County Pine Lbr. Co. v. Underwood Lbr. Co., 140 Or. 19, 12 P.2d 324; Call v. Linn, 112 Or. 1, 228 P. 127; Wigan v. La Follett, 84 Or. 488, 165 P. 579; Daniels v. Morris, 65 Or. 289, 130 P. 397, 132 P. 958; Krebs Hop Co. v. Livesley, 59 Or. 574, 114 P. 944, 118 P. 165, Ann.Cas.1913C, 758. After deducting the expenses of the sales, the plaintiff was given credit for the money advanced for cultivating and harvesting purposes; the damages sustained by defendant Tautfest being the difference between the market price and the contract price. The defendant grower realized from the sale of the hops $119.15 more than was due him from plaintiff under both contracts, after expenses of sales had been paid, and such sum was tendered into court for plaintiff.

The decisive question in the case is whether plaintiff was justified in rejecting the hops. It is well settled in this jurisdiction that if the rejection was wrongful, the grower, being ready, able, and willing to perform, would be entitled to retain the money advanced and credit the same on the damages sustained. Livesley v. Strauss, 104 Or. 356, 206 P. 850, 207 P. 1095; Lachmund v. Lope Sing, 54 Or. 106, 102 P. 598.

Plaintiff bases his right to reject the hops upon the ground that the quantity and quality of the same did not comply with the contracts. It is noted, however, that, in the formal letter of rejection, the objection to the hops was based solely upon quality.

Regardless of what may be the rule in other jurisdictions, it was incumbent upon the plaintiff, under the statute of this state, to specify its objections to the hops at the time delivery was tendered. Section 9-1403, Oregon Code 1930, provides: "The person to whom a tender is made shall at the time specify any objection he may have to the money, instrument, or property, or he must be deemed to have waived it; and if the objection be to the amount of money, the terms of the instrument or the amount or kind of property, he must specify the amount, terms, or kind which he requires, or be precluded from objection afterwards." (Italics ours.) Having objected solely to the quality of the hops at time delivery was tendered, it will not do for the buyer at this time to mend his hold and undertake to justify rejection of the hops on the ground that the grower failed...