Richard P. Baer & Co. v. Mobile Cooperage & Box Mfg. Co.

• Decision Date: 04 February 1909
• Parties: RICHARD P. BAER & CO. v. MOBILE COOPERAGE & BOX MFG. CO.
• Court: Alabama Supreme Court

49 So. 92

159 Ala. 491

RICHARD P. BAER & CO. v. MOBILE COOPERAGE & BOX MFG. CO.

Supreme Court of Alabama

February 4, 1909

Rehearing Denied April 6, 1909.

Appeal from Circuit Court, Mobile County; Samuel B. Browne, Judge.

Action by the Mobile Cooperage & Box Manufacturing Company against Richard P. Baer & Co. From a judgment for plaintiff defendants appeal. Affirmed.

The contract, for a breach of which this suit was brought, is as follows: "This witnesseth an agreement made and entered into by and between Richard P. Baer & Co., a partnership composed of Richard P. Baer and M. F. Baer, of Baltimore Md., and the Mobile Cooperage & Box Manufacturing Company, a corporation organized under the laws of Alabama, as follows Said Richard P. Baer & Co. lease and rent to the said Mobile Cooperage & Box Manufacturing Company, for a term of years beginning from the date hereof, and ending on the 29th day of April, 1913, for a yearly rental of $500, payable in advance in quarterly installments of $125 each, the following described real estate, situated in Mobile county, Alabama, to wit: [Here follows a lengthy description of the land, together with the conditions concerning the water front and the use to which it should be put by either party.] It is further agreed that, should the said Richard P. Baer & Co. exercise the option which they have to extend their lease, which covers the above-described property, for a period of five years after the said 29th day of April, 1913, at the increased rental which is provided for in said lease, from Augustin Meaher, then the said Mobile Cooperage & Box Manufacturing Company shall have the option and right to extend this lease for said additional period of five years, by paying its proportion of said increased rental, and by giving notice of its purpose to extend said lease as soon as notified by the said Richard P. Baer & Co. that they have exercised their option to extend their lease. In the event the said Richard P. Baer & Co. decide not to exercise their option to extend their lease for said additional period of five years, then they shall transfer such right to the said Mobile Cooperage & Box Manufacturing Company, and shall permit the said company last named to take over the entire lease for said extended period, provided that it releases the said Baer & Co. from any and all liability for the rent for such extended period. The said Richard P. Baer & Co. further agree to sell to the said Mobile Cooperage & Box Manufacturing Company as much cull and mill cull hardwood lumber as the said Mobile Cooperage & Box Manufacturing Company may desire to buy from them, up to, but not exceeding 1,500,000 feet per year, at and for the price of $10 per M for shipping culls and $5 per M for mill culls, delivered either upon the railroad cars or upon the 20-foot right of way hereinbefore mentioned. In the event that it takes and purchases as many as 1,000,000 feet of said cull or mill cull lumber in any one year, then said Baer & Co. shall refund to it the entire $500 of rent paid for that year. [ Then follows a covenant on the box factory's part not to increase the insurance of it by any extrahazardous use, etc., a reservation in the lessee of the right to remove the buildings, etc., at the expiration of the lease, and a stipulation to hold subject to the terms of the lease under which Baer & Co. held.]" The breach alleged is that during the year 1906-07, from February to February, the plaintiff exercised the right conferred by the contract to buy from the defendant the 1,500,000 feet of cull and mill cull hard lumber, the notification to Baer & Co. of such election to pay, and their agreement to deliver said hardwood culls at the stipulated price, and that orders were given and accepted from time to time for immediate delivery, and, although plaintiff was at all times willing and ready to accept and pay for said lumber the defendant refused and wholly failed to deliver 324,000 feet, etc. The testimony was in sharp conflict, and a sufficient statement of it is made in the opinion of the court.

Pillans, Hanaw & Pillans, for appellants.

Gregory L. & H. T. Smith, for appellee.

ANDERSON J.

While the obligation to sell the culls was binding only on the defendants, it being optional with the plaintiffs to order or not as they saw fit, and would be wanting in mutuality, if this clause was the entire contract, or was in no way dependent upon or collateral to the lease, in which it was incorporated, they were both embodied in the same instrument, and the agreement to supply the culls was no doubt an inducement to the plaintiff to lease the property, and the obligation to pay rent therefor was a valuable consideration, not only for the use of the plant, but for the obligation on the part of the defendants to supply the culls. Christian & Craft Co. v. Bienville Water Co., 106 Ala. 124, 17 So. 352; Merrett v. Coffin (Ala.) 44 So. 622; Hawralty v. Warren, 18 N. J. Eq. 126, 90 Am. Dec. 613; 26 Am. & Eng. Ency. Law, 30.

Where goods are sold by description, and not by the buyer's selection or order, and without any opportunity for inspection (inspection before purchase), there is ordinarily an implied warranty, not only that they conform to the description in kind and specie, but also that they are "merchantable"--not that they are of the first quality, or of the second quality, but that they are not so inferior as to be unsalable among merchants or dealers in the article; i. e., that they are free from any remarkable defect. In such sales the doctrine of caveat emptor does not apply. This is especially true when the vendor is the manufacturer, or the sale is executory for future delivery. Benj. on Sales (7th Ed.) 685, and authorities cited in note 15; Gachet v. Warren & Burch, 72 Ala. 288. It is also settled law that, when there is a breach of warranty in the sale of goods, the buyer may rescind the sale by refusing the goods, etc., or he may accept the goods and bring an action for breach of warranty, or he may recoup by way of counterclaim damages for breach of warranty in the vendor's action for the price. Eagan Co. v Johnson, 82 Ala. 233, 2 So. 302; Frith v. Hollan, 133 Ala. 583, 32 So. 494, 91 Am. St. Rep. 54; Brown v. Freeman, 79 Ala. 410. Nor does the mere fact of acceptance and use of the goods, even after knowledge of the defect, prevent a resort to an action upon a warranty or for fraud. The warranty survives the acceptance. It has been said: "The buyer need not return the goods, nor offer to do so, nor give any notice, in order to sue upon his warranty." While this rule does not obtain in England, it does in a majority of the American states, and has not only been adhered to by recent authorities in Alabama, but was followed in the early cases of Cozzins v. Whitaker, 3 Stew. & P. 322, and Milton v. Rowland, 11 Ala. 732. As is said by Mr. Benjamin, in his valuable work on Sales (7th Ed., p. 961): "No doubt a failure to return the goods, or notify the vendor of the defect, after sufficient opportunity to examine them, may be some evidence that no defect existed, but it is not a condition precedent to the action, nor in law a waiver of the warranty, though some states seem to hold it so, especially in executory contracts and where the defect is apparent." As an...