Dawson v. Malone , 283 S.W. 634 ( 1926 )

The appellants contend that the court should have entered judgment in their favor upon the jury findings, for the damages sued for, resulting from the failure of appellee to deliver the quality of cottonseed agreed upon. It is argued that, as found by the jury, as the cottonseed were in a damaged and unsound condition when the car reached "the mill" of the appellees, where the parties intended the weight and quality of the cottonseed should be ascertained, the appellants were entitled to sue and recover the damages of the appellees on the contract, notwithstanding the proximate cause of the damage to the cottonseed was the negligence of the railroad company in delaying the placing of the car on the industrial track running by the mill of appellees, "after the arrival of the car in Houston," for there had been no acceptance by appellants of the shipment. The appellees, residing in Willis, Tex., forwarded by railway a carload of cottonseed to appellants, doing business in Houston, Tex., with delivery to be made at Houston. Tex. The agreement was that the cottonseed was to be "sound, dry, clean, and in good condition." The price was based on weight and quality. The cottonseed was "damaged" and not in a good state at the time the car reached "the mill" of appellees in Houston, due to negligence of the railway company. The agreement was verbal, and the understanding of the parties is not free from uncertainty. The appellees claim there was a completed sale of the cottonseed at Willis. The appellants claim that the understanding and intention of the parties was that the cottonseed was to be in a deliverable state at "the mill" in Houston, and the weight and quality there be ascertained as a determined quantity, the price being dependent upon weight and quality. In order to show the intention of the parties in their dealings, evidence was introduced, the understanding being ambiguous, as to usage of the cottonseed trade. Such usage in real meaning was, in case there was not an outright completed sale of cottonseed at the gin, and a carload of cottonseed was forwarded by the ginner by railway to a mill company at a distant place, the weight and quality of the shipment was to be ascertained at the mill of the buyer and the gross price then determined. It was further shown that the cotton mills in Houston were located in the city limits, on industrial tracks which were owned and used by the railroads for placing carload shipments for final delivery and unloading.

The rule is that when a universal custom is shown to have existed having origin in the sale, the transaction is prima facie presumed to have been on that basis, the parties not having specially contracted otherwise. If the understanding of the parties is made with reference to such custom, intending such custom to be a part of the agreement, the custom is binding and renders the seller liable for loss or damage resulting from failure to conform to it, and excuses him when loss or damage is not attributable to an observance of it. In such case the intention of the parties is a question of fact for the jury.

Therefore, accepting the special finding above of the jury, the understanding and intention of the parties was that the place of sale was to be "at Houston." The buyers' place of business, and not the seller's residence, and that to determine the aggregate price of the seed the buyer was given the privilege of testing by weight and inspection the shipment at the buyer's "mill at Houston." The terms were to be "cash," and a part of the price to become payable by draft at time of shipment, to be credited on the bill. Parties may so agree, in liberty of contract. This is in legal effect a contract of sale on a condition precedent, and the sale becomes incomplete until the buyer has determined that the shipment is as contracted for, or he has had a reasonable opportunity to do so. In this view the judgment should have been in favor of appellants upon the jury findings, unless such findings were eliminated by further findings the court was authorized to make under the pleading and evidence. It is claimed that the appellants by their acts changed and modified the place and manner of delivery by accepting the shipment while the car was in the yards of the railway company and before it was placed on the track running by the mill of the appellees. It is argued that the law attached to the acts of the appellants the legal consequence of passing title to the cottonseed to appellants, and therefore the appellees were not responsible for the damage to the shipment. The circumstances offered in support of this contention were that the appellants paid the draft and took the bill of lading duly indorsed and attached to the draft, and delivered the bill of lading to the railway agent, taking his receipt therefor. The appellants never had actual access to the car while it was in the general yards of the railway company, as the railway company itself was holding the car for delivery on the track by the mill.

The appellants had access to the car only after the railway company had placed it for delivery and unloading on the track by the mill. The appellants timely inspected the car after delivery was made by the railway company on the mill track, and, finding the cottonseed not in good sound condition, they promptly notified the appellees of rejection of the shipment because of the condition of the cottonseed. The seed was afterwards sold in order to lessen the damages. It is difficult to say that the mere fact that the appellants paid the draft and secured the bill of lading for delivery to the railroad company while the car was yet in the railroad yards at Houston would constitute a delivery and acceptance of the shipment. It would have been necessary that appellants should have done this with the intention of accepting the shipment. Acceptance implies the actual taking with the intention of retaining. And the circumstances point to the one conclusion that appellants did not intend to take and retain the shipment while the car was in the general yards of the railroad company. The bill of lading was delivered to the railroad agent, and receipt taken in lieu thereof temporarily, solely for the purpose and object of furthering, under methods and practices of the railroad companies, the placing of the car on the industrial tracks, in virtue of, and not independent of, the contract with the appellees. It was contemplated that the practice of the railroad company should be followed in respect to switching and placing carload shipments on a track for ultimate delivery and unloading, the delivery of the cottonseed not being complete, as pertains to appellees' contractual duty, when the car reached the general yards of the railroad company.

It is true, ordinarily, that the transmission and delivery of the bill of lading passed the property in the shipment to the buyer. The buyer can sell the shipment, pledge or hypothecate it, or divert the routing elsewhere. In such case the buyer would have put it out of his power to comply with the agreement with the seller. Even so, none of those acts appear in this case as evidencing intention of absolute acceptance in the general yards of the railroad company. And always, as between the buyer and the seller, in the absence of change or modification of place and manner of delivery, the title and risk remain in the seller until the shipment is delivered in accordance with the terms of the contract, the intention of the parties so appearing. It is of legal significance that the quality of the cottonseed, "sound and dry," at the special point of delivery was, under the contract, a condition precedent to the transfer of the property in the shipment. Unless the cottonseed was in a state in which it ought to be accepted, although the appellants had taken and retained the bill of lading, the performance of the agreement failed, and appellants could refuse to receive the shipment, as done, and sue for the price advanced, as in the nature of money had and retained.

There is no evidence from which the court would be at liberty to find a waiver. It may be that the appellants could have maintained a suit against the railway company had they so elected to do. Robinson Martin v. Railway Co., 146 S.W. 537, 105 Tex. 185. But the appellants could elect, as they did do, to sue appellees only for the resulting damages in virtue of the contract. The Robinson Martin Case, supra, is not opposed to such course. No particular case in point has been cited to us. The general principles applicable to the facts are well understood. It is incumbent upon us to render the judgment that should have been rendered in accordance with the verdict of the jury. Accordingly the judgment is reversed, and judgment is here entered on the findings of the jury and the undisputed evidence of value in favor of appellants for $550, with legal interest from September 18, 1923. Costs of appeal are taxed against appellees.

We think the venue was in Harris county as determined by the trial court, and appellees' assignment of error in that respect is overruled.