Stanley Drug Company v. Smith, Kline & French Laboratories

• Decision Date: 02 January 1934
• Docket Number: 302
• Citation: 313 Pa. 368,170 A. 274
• Parties: Stanley Drug Company, to use, Appellant, v. Smith, Kline & French Laboratories
• Court: Pennsylvania Supreme Court

170 A. 274

313 Pa. 368

Stanley Drug Company, to use, Appellant, v. Smith, Kline & French Laboratories

No. 302

Supreme Court of Pennsylvania

January 2, 1934

Argued December 4, 1933

Appeal, No. 302, Jan. T., 1933, by plaintiff, from judgment of C.P. No. 4, Phila. Co., March T., 1931, No. 534, in case of Stanley Drug Company, to use of Laboratory Institute Inc., v. Smith, Kline & French Laboratories.Judgment affirmed.

Assumpsit for breach of contract.Before BROWN, J.

The opinion of the Supreme Court states the facts.

Verdict and judgment for defendant.Plaintiff appealed.

Error assigned, inter alia, was judgment, quoting record.

The judgment of the court below is affirmed.

Abraham Wernick, of Evans & Wernick, for appellant.

Wallace C. Stilz, with him Lester B. Johnson, for appellee.

Before FRAZER, C.J., SIMPSON, KEPHART, SCHAFFER, MAXEY, DREW and LINN, JJ.

OPINION

MR. JUSTICE SIMPSON:

The pleadings in this case consist of plaintiff's statement of claim, defendant's affidavit of defense and counterclaim, and plaintiff's reply to the counterclaim.The counterclaim is for $771.36, for merchandise purchased by plaintiff from defendant, wholly unrelated to the transaction which was the subject of dispute in the statement of claim and affidavit of defense, and the $771.36 is expressly admitted by plaintiff to be due by it to defendant.For the reasons hereinafter set forth, the trial judge decided that plaintiff could not recover upon the cause of action set forth in its statement of claim, and the jury, therefore rendered a verdict for defendant for the undisputed claim of $771.36.Upon that verdict, judgment was entered and plaintiff now appeals.The judgment must be affirmed.

So far as relevant, the facts regarding plaintiff's claim are as follows: By two separate contracts, defendant agreed to manufacture for plaintiff a specified quantity of mouth wash, according to a formula furnished by plaintiff.The only question at issue arises out of the second contract.A large part of the mouth wash bargained for therein was made and delivered to plaintiff, and later sold to its own customers.Complaints were made by some of these customers to plaintiff which, in turn, passed them on to defendant.The ensuing negotiations resulted in plaintiff cancelling the contract with defendant's consent, and in the latter agreeing to take back all of the mouth wash which plaintiff's customers returned to it, crediting plaintiff's account with the full amount charged for that which was returned.This plan was carried out, and admittedly all the mouth wash delivered to plaintiff under the contract was returned to defendant, and plaintiff credited with the full purchase price thereof.So far as appears, nothing whatever was said or intimated regarding plaintiff's intention, if it then had any, to hold defendant liable for the alleged causes of action which are the subject of this suit.

Subsequently, however, and after the settlement between the parties had been fully carried into effect, plaintiff brought this action, alleging that the mouth wash delivered under this contract and later returned to defendant as above set forth, was inferior in quality to that which defendant had agreed to deliver, and by reason thereof plaintiff had been damaged, as it averred, in the sum of $3,732.16 for advertising costs; $3,623 for loss of profits on the goods contracted for; $850 for additional wages paid to certain employees; $2,550 for additional salary for its executive officers; $5,000 for the market value of the formula for making the mouth wash; $812.10 for distributing agent's fee, and $20,000 for loss of business and goodwill, making a total of $36,567.26, being the amount claimed for defendant's alleged breach of that contract, which, as stated, had been rescinded and cancelled.

Section 69 of our Uniform Sales Act of May 19, 1915, P.L. 543, 562, provides in part as follows:

"Section 69.First.Where there is a breach of warranty by the seller the buyer may, at his election, --

"(a) Accept or keep the goods, and set up against the seller the breach of warranty by way of recoupment in diminution or extinction of the price;

"(b) Accept or keep the goods, and maintain an action against the seller for damages for breach of warranty;

"(c) Refuse to accept the goods, if the property therein has not passed, and maintain an action against the seller for damages for breach of warranty;

"(d) Rescind the contract to sell or the sale and refuse to receive the goods, or, if the goods have already been received, return them or offer to return them to the seller, and recover the price or any part thereof which has been paid.

"Second.When the buyer has claimed and been granted a remedy in any one of those ways, no other remedy can thereafter be granted.

"Fourth.Where the buyer is entitled to rescind the sale and elects to do so, the buyer shall cease to be liable for the price upon returning or offering to return the goods.If the price or any part thereof has already been paid, the seller shall be liable to repay so much thereof as has been paid, concurrently with the return of the goods, or immediately after an offer to return the goods in exchange for repayment of the price.

"Fifth.Where the buyer is entitled to rescind the sale and elects to do so, if the seller refuses to accept an offer of the buyer to return the goods, the buyer shall thereafter be deemed to hold the goods as bailee for the seller, but subject to a lien to secure the repayment of any portion of the price which has been paid, and with the remedies for the enforcement of...