Katz v. Delohery Hat Co. , 97 Conn. 665 ( 1922 )

My view of the duty of the plaintiff differs so materially from that held in the majority opinion, and the question is of such practical importance in the law of sales, that I feel obliged to file this dissent.

One of the grounds of appeal is the denial of defendant's motion to set aside the verdict of the jury. Viewing the evidence in the light of the verdict, the most favorable finding of facts which the jury could have found in behalf of the plaintiff was as follows: 1. Plaintiff and defendant entered into a contract by which plaintiff sold to defendant fur of a certain quality and amount at $6.50 per pound, and agreed to deliver it to a carrier consigned to defendant at Danbury. 2. Plaintiff delivered fur of the quality and amount called for by the contract to such carrier, at Newark, N.J. 3. Defendant received the fur late in October, 1918. It inspected the fur and wrote plaintiff that the part tried was found very unsatisfactory, and asked if it should return the fur and have plaintiff make fur for it according to the contract. Plaintiff replied that the fur was the same quality he had made for years and recommended that he use some from another bale. Thereupon, "on or about the 5th day of November, 1918, the defendant returned said fur to the plaintiff and refused to accept or pay for it." 4. The fur was delivered by an express company to plaintiff on November 12th in his absence, and on his return plaintiff, on November 13th, reshipped the fur by a carrier, consigned to defendant at Danbury, and wrote defendant that he refused to accept the fur and would start suit if he did not hear from defendant by the following Monday. 5. Defendant refused to receive the fur, and it remained with the carrier until December 10th, at about which time the carrier notified plaintiff that defendant had refused to receive the fur, and upon plaintiff's order it was reshipped to him and received by him December 20th. 6. Between November 5th and December 20th, plaintiff made no effort to sell the fur. Subsequent to December 20th, he made such effort, but could find no purchaser until May 19th, when he sold five cases at $3 per pound. 7. On November 11th, the price of fur of this quality began to fall, so that on December 20th there was no market for this fur. Between November 11th and December 5th there was a market for it.

We omit from this statement the offer to plaintiff, on December 4th, of Von Gal to purchase fur of this quality and amount, and confine, for the present, consideration to the facts above stated which are not in dispute. The first delivery of the fur to the carrier by the plaintiff conveyed the title to the fur and its constructive possession to defendant. Home Pattern Co. v. Mertz Co., 86 Conn. 494, 86 A. 19, and 88 Conn. 22,90 A. 33. Defendant still had the right to inspect the fur within a reasonable time before paying for it. It exercised its right of inspection, and then it returned the fur to plaintiff for its failure to conform in quality to the contract. The verdict for the plaintiff involved a finding that the fur was according to the contract. Therefore, the defendant had no right to return the fur. Plaintiff's and defendant's claims of facts proven, agree that on November 5th defendant refused to receive or pay for the fur. Its return was full notice to plaintiff that this was defendant's stand upon this matter. What remedies were open to plaintiff upon notice on November 11th of defendant's refusal to receive the fur? Under the Sales Act (General Statutes, § 4729) an action for the price lay, and the action obtained whether the seller stored or retained the fur for the defendant or left it where it was, as he had the right to do. Under the common law two additional remedies were open to plaintiff: 1. He might, after reasonable notice to the buyer that he intended to take such course, sell the fur acting as agent of the defendant, and recover the purchase price less the price obtained on the resale. 2. He might, giving due notice, retain the property as his own and sue to recover the difference between the market price at the time and place of delivery on or about November 11th, and the contract price. Plaintiff chose to pursue the first of these common-law remedies. The defendant, on November 5th, wrongfully refused to retain the fur and returned it to plaintiff; this imposed no obligation on the plaintiff to receive or retain it. But he was obliged to determine the remedy he would pursue within a reasonable time after November 11th, when notice came to him that defendant had rejected the fur. He could not return the fur a second time, and thereafter conclude to adopt the first of these two remedies and sell the fur and credit it upon the contract price, as the majority opinion holds. I have been unable to find any authority which holds or suggests such a right to a seller. The unreasonableness to the defendant of permitting it is apparent. It may in good faith have refused to retain the fur because it believed the fur was not of the contract quality. To force it, when it had in good faith rejected the goods, to accept the results of a sale made long after might, as it did in this case, prejudice it seriously. Plaintiff's return of the fur was an appropriation of it to his own uses, and thereafter he could recover only upon the second of these common-law remedies. Since he has not proven the market price at the time he appropriated it, he has not laid a basis in the evidence for a judgment. It must be remembered that it was not proven that the fur had no available market until on and after December 20th.

But if plaintiff had the right to pursue remedy one and sell the fur as the agent of defendant, he was bound to have effected this within a reasonable time after November 11th; that time must be determined in view of the situation as disclosed by the record. The court held, in Thayer Export Lumber Co. v. Naylor,100 Miss. 841, 848, 57 So. 227: "The preponderance of the testimony was with the defendant on this point, and yet the charge omits to state the vital point — that it was the duty of the plaintiff to prove that he sold the lumber within a reasonable time after the breach of the contract at the best price obtainable in the market . . . after the breach of the contract and before the sale." See, also, Jochams v. Ong, 45 La. Ann. 1289, 14 So. 247; Carver, Frierson Co. v. Graves,47 Tex. Civ. App. 481, 106 S.W. 903. A circumstance of first importance was the falling market for fur. If there had been no market between November 11th and December 20th, so far as substantial damages were concerned, it would have been immaterial whether plaintiff endeavored to sell in this period or not. But this was not the situation. The plaintiff's witness Von Gal, president of the Von Gal Hat Company, testified that he sought to purchase for his company of plaintiff on December 4th, a quantity of fur of the kind and quality called for by defendant, and was ready and willing to pay $6 per pound for it, but plaintiff neglected to offer the fur to Von Gal. There was no question upon the trial as to this fact. The plaintiff justified his neglect to offer the fur to Von Gal upon three grounds: 1. That at this time the fur was out of his possession and in the hands of the railroad company. 2. That he still hoped that defendant would take the fur. 3. That Von Gal would not have bought if he had known the fur was the subject of controversy between plaintiff and defendant. The last reason is mere hypothesis: Katz did not know that Von Gal was of this mind. He was under no obligation to make such disclosure; and there was no reason why he should have made it, and hence no possibility of concealment by him of the identity of the fur. Katz could not be relieved of his duty to offer the fur to Von Gal for sale for any such reason. It later appeared that he sold thereafter three cases of this fur to Von Gal without disclosing its identity. The trial court excuses Katz from offering the fur to Von Gal, upon the assumption that he might have rejected it. But if the evidence is examined it will be found that Katz has never said that this was the motive for not offering the fur to Von Gal on December 4th. His own justification was that he thought the defendant would probably take the fur. He had no right to return the fur after defendant had refused to retain it, as I have before stated. His shipment of the fur did not put the fur out of his possession. He had no right to act upon the hope or believe that defendant would change its mind, and charge the consequences of his delay to defendant. If plaintiff had the right, as the majority opinion holds, to adopt remedy one, which was the remedy the seller adopted in Dunstan v. McAndrew, 44 N.Y. 72, 79, he must be governed in the application of the remedy by the rule there announced: "In such case, the vendor is treated as the agent of the vendee to make the sale, and all that is required of him is, that he should act with reasonable care and diligence, and in good faith. He should make the sale without unnecessary delay, but he must be the judge as to the time and place of sale, provided he act in good faith and with reasonable care and diligence."

Did the plaintiff act with reasonable care and diligence in effecting this sale? Can it be held to be due diligence to wait from November 11th to December 20th before attempting to make a sale when there was a market for the fur on December 4th, and a steadily falling market from November 11th? The burden of proving his diligence in effecting a resale was on the plaintiff, and he has met it by proving that he could have sold the fur on December 4th, at such a price as to make the loss $750 instead of the $5,250 of the verdict. The trial court in its memorandum says there was evidence to show that there was no available market, but evidence of this fact related to the period on and after December 20th. The question is, not as the plaintiff assumes, whether Katz' due diligence is to be measured by what he did after December 20th, but whether he used due diligence prior to this time. The defendant's rejection of the fur was unqualified, and plaintiff was bound to choose his remedy within a reasonable time thereafter. The plaintiff failed to avail himself of an opportunity to sell to Von Gal, and hence failed to exercise the reasonable care and diligence which the law imposed upon him in making the resale. It follows under remedy one, that the greatest amount the plaintiff was entitled to recover was $750 and accrued interest. Upon the Von Gal offer the defendant claims that the court erred in failing to charge that if the Von Gal Company on December 4th, 1918, was ready and willing to purchase the fur at $6 per pound, and plaintiff knew this fact and neglected to offer the fur to this company, the plaintiff's recovery should be limited to $750. No reference was made in the charge to this vital fact in the case. No specific request to charge upon this point was made by defendant. In most instances such a failure will bar the raising of the point on appeal. This case presents an exception to the general rule. The subject of damages could not be adequately or accurately presented to the jury without a consideration of this point. We can have no guaranty that the defendant has had a fair trial unless the jury had before it this point. The issue of the plaintiff's reasonable effort to make a resale, without reference to the Von Gal offer, did not fulfil the duty of the court in submitting to the jury the issues of the case. I am not insensible to the defendant's claim that counsel had a right to assume, without a specific request, that the court would fairly instruct the jury upon so vital an issue as the Von Gal offer. The reference of the court to the efforts of the plaintiff to resell after December 20th for the purpose of showing plaintiff's due diligence, emphasized its omission of all reference to the Von Gal offer of December 4th. Practically it excluded this offer from the consideration of the jury upon the question whether or not the plaintiff used due diligence in making a resale. Other assignments of errors in the charge which I regarded as erroneous have already been sufficiently covered.