Ungerer And Company v. Louis Maull Cheese And Fish Co.

• Decision Date: 24 January 1911
• Citation: 134 S.W. 56,155 Mo.App. 95
• Parties: UNGERER AND COMPANY, Respondent, v. LOUIS MAULL CHEESE AND FISH COMPANY, Appellant
• Court: Missouri Court of Appeals

134 S.W. 56

155 Mo.App. 95

UNGERER AND COMPANY, Respondent, v. LOUIS MAULL CHEESE AND FISH COMPANY, Appellant

Court of Appeals of Missouri, St. Louis

January 24, 1911

Appeal from St. Louis City Circuit Court.--Hon. George H. Williams Judge.

REVERSED AND REMANDED.

STATEMENT.--Plaintiff sued defendant in the circuit court of the City of St. Louis to recover damages for defendant's failure to take and pay for 32 barrels of gum tragacanth as per contract.

It is admitted that the plaintiff and defendant entered into two contracts, the first on March 27, 1908, and the second on April 8th, 1908, by each of which plaintiff agreed to sell to defendant, and defendant agreed to buy from plaintiff, 25 barrels of gum tragacanth powdered, or a total of 50 barrels under both contracts, at 26 cents per pound, f. o. b. New York, the goods to be ordered and taken by defendant, as wanted by it, by December 31, 1908, under the first contract and by April 1, 1909, under the second. The plaintiff alleged in its petition, which contained two counts, that up to September--, 1908, defendant took and paid for in the aggregate, 18 barrels under the first contract (a barrel containing about 300 pounds) but had taken none under the second, and thereafter declined to order or take any more and on December 31, 1908, repudiated both contracts and notified plaintiff that it would not order or take any more gum tragacanth. The petition further alleged that upon the faith of the contracts, plaintiff had purchased sufficient gum tragacanth to meet them, and had retained the same up to and including December 31, 1908, and up to the time of filing this suit; that the market price of gum tragacanth in the City of New York on December 31, 1908, and from thence hitherto has fallen to 12 1-4 cents per pound, and that plaintiff, after due notice to defendant and proper advertisement, had resold the 32 barrels in the City of New York at public sale, realizing only 12 1-4 cents per pound. By the first count plaintiff seeks to recover $ 427.50 as the difference between the contract price and the amount received upon such resale for seven barrels, and by the second count seeks to recover $ 1127.50 as the difference between the contract price and the amount received upon the resale of 25 barrels.

For its answers and defenses to the two counts of the petition the defendant specifically denies all allegations except those relating to the making of the contracts, and states that it canceled and rejected the contracts and refused to accept further shipments on October 21st, instead of December 31st that the 18 barrels shipped did not contain gum tragacanth powdered as called for in the contract, but contained some powdered article, claimed by the plaintiff to be tragacanth powdered, but in reality a cheap, inferior substitute; that the cancellation and rejection and refusal were due to the failure of plaintiff to carry out its warranties and obligations to deliver gum tragacanth powdered, as called for in the contracts.

By counterclaim, defendant seeks to recover of plaintiff, $ 742.50 as the difference between the contract price of eighteen barrels of real gum tragacanth, and the market price of the eighteen barrels of alleged substitute, at the times and place of the shipments of the eighteen barrels, it being alleged that they were shipped in installments between March 27th and September--, 1908.

In its replies to the first and second counts of the petition and in its answer to defendant's counterclaim, plaintiff, in addition to general denials of the allegations of new matter denies the substitution charged and asserts the genuineness of the article shipped, and then asserts that the eighteen barrels of gum tragacanth were shipped under and in pursuance of the terms of the contracts; that defendant by receiving and accepting the barrels as containing gum tragacanth in accordance with and in pursuance of the contracts, without raising any question or objecting on the ground that the contents were not gum tragacanth as called for in the contracts or were a cheap or inferior article or substitute of any kind for gum tragacanth, has estopped itself to deny or question that the article was gum tragacanth.

The evidence tended to prove that the plaintiff, a corporation dealing in gum tragacanth with its place of business in the City of New York, had a selling agent in St. Louis named D. B. Morris. Prior to March 27, 1908, it sent Morris a sample of the grade of gum it had in stock. Morris, it seems, had a personal arrangement with one Howland, dealer in ice cream materials, to furnish at thirty-two cents per pound all the gum tragacanth powdered the latter would need in his business during the season of 1908, the article being used as a filler in ice cream, much the same as gelatine. The defendant was a corporation doing business in the city of St. Louis. Morris visited defendant's president and by showing him the arrangement whereby Howland was to take his season's need of gum tragacanth, amounting, so Morris said, to thirty or forty barrels of 300 pounds each, at thirty-two cents per pound, and by promising to sell the gum for defendant, probably to Howland, induced the defendant to enter into the contracts sued upon. The contracts were in writing and were each for "25 Bbls. Powd. Gum Tragacanth." The first one, but not the second, stipulated that the article was to be "identical with sample sent to Morris." The evidence on the part of the plaintiff tended to prove that plaintiff dealt only in "Indian Gum" which its witness designated as a grade of "gum tragacanth." Between the time of making the contract and some time in September, 1908, the plaintiff shipped to the defendant eighteen barrels of "gum tragacanth powdered" as its witness called it. These were paid for by the defendant at the contract price of twenty-six cents per pound. Defendant had an arrangement with Morris whereby he was to dispose of the gum apparently to Howland, for thirty-two cents per pound, and was to divide the difference, or 6 cents per pound, between defendant, Morris, and one Larremore, whose connection with the matter does not appear. Defendant's officers personally took no part in disposing of the eighteen barrels. It paid for them and held them in its warehouse while Morris disposed of them to Howland. Thirteen of the barrels were entirely acceptable to Howland and he took and used and paid for their contents without any objection. Three barrels he refused to take on account of defect in quality, but defendant was put to no trouble on this account as Morris took the three barrels and disposed of them elsewhere on plaintiff's account, and plaintiff delivered instead three other barrels which were entirely acceptable to Howland and which he took and used and paid for. One barrel Howland objected to Morris about on account of defect in quality, but took and used and paid for it upon Morris' personal assurance that either the plaintiff would give Howland a ten per cent rebate on the barrel or he, Morris, would do so personally. These difficulties defendant apparently knew nothing about, the matter being attended to by Morris alone. There is no pretense in this case that defendant or any one connected with it knew anything about gum tragacanth powdered or had ever handled or dealt in it before. This was a mere outside speculation on its part.

In September, 1908, Morris and defendant separated as to their selling arrangement. This seems to have left the defendant in the predicament of having still to take thirty-two barrels of gum tragacanth powdered as to which it knew absolutely nothing and had no customers for. It was then that defendant's president "began to investigate" as he puts it, and he discovered the objections already mentioned, which Howland, the defendant's only customer, had made to the four barrels.

In October and again in December of the year 1908, in response to proffers of shipment, defendant wrote to the plaintiff repudiating the contract and refusing to take any more goods under it, laying its repudiation and refusal upon the ground that the goods furnished were of poor quality. He had no information at that time that the goods furnished were not genuine gum tragacanth.

The evidence tended to prove the resale of the thirty-two barrels in the city of New York, after notice and advertisement, all substantially as alleged in the petition; it appearing that the price received was $ 1118.43, or 12 1-4 cents per pound for the thirty-two barrels sold in one lot. Plaintiff's evidence also tended to prove that the thirty-two barrels had been purchased by it to meet its contracts with defendant and that the contents of each of the thirty-two barrels were exactly like the contents of each of the eighteen barrels shipped.

Defendant was permitted without objection to show that there is a substitute in common use for powdered gum tragacanth. It consists of gum which is called in India, where it originates, Karaya or Karel gum; it is also known in the gum trade as "Indian Gum" and "Indian Gum Tragacanth." It is frequently used as a substitute for real gum tragacanth. That since the defendant entered into its contracts with the plaintiff the highest market price which said substitute had attained was 20 cents per pound.

Defendant produced as a witness Dr. Charles E. Caspari, an expert chemist, who, after this suit was filed, had tested a sample taken from the barrel which defendant still retained out of the eighteen barrels delivered under the contract. He was asked by counsel for defendant if the barrel contained "gum tragacanth powdered." Objection being made by plaintiff, counsel for defendant stated that he offered to prove by the witness that the article shipped was not gum...