Farren v. Dameron , 99 Md. 323 ( 1904 )

The appellees were shuckers of and dealers in oysters at Kinsale, Va., and the appellant (Burdette H. Farren, trading as J.S. Farren and Company), was a packer of oysters in Baltimore City. During the season of 1900 the appellees sold shucked oysters to the appellant and at the beginning of the season of 1901 they agreed to ship him oysters, for the season, of sizes known as "standards" and "selects." The price agreed upon was for so much per gallon for "standards" and "selects," respectively, in Baltimore. They were shipped in kegs furnished by the appellees and the appellant emptied them into his own pails or vessels, and returned the empty kegs. They were shipped by steamboats which left Kinsale at noon on Monday, Wednesday and Friday of each week, arriving in Baltimore early the next morning. They commenced shipping in October, and continued to ship by each trip until sometime in November, sometimes shipping more than ordered and at others less. All of the shipments were paid for excepting those of November 15th and 18th, which were accepted by the appellant, but he refused to pay for them because he claimed that those shipped on the 11th and 13th of that month, and received by him on the 12th and 14th, afterwards proved not to be merchantable, and the parties to whom he sold them refused to pay for them because they were what are called "red," or "bloody" oysters. The appellees sued for those shipped November 15th and 18th, and the appellant claimed that he only owed the difference between the price of those and the deductions made by customers on account of "red" or "bloody" oysters received by him on the 12th and 14th of that month, for which he had paid the appellees, and claimed a deduction in the third count of his amended plea of set-off. A demurrer to that count was overruled, but as the questions involved are raised by the prayers, and the demurrer was decided in favor of the appellant, it will not be necessary to make further reference to it. The case was tried before the Court and resulted in a verdict for the plaintiffs. The defendant excepted to the rulings of the Court on the prayers and appealed from the judgment rendered on the verdict.

One of the appellees was a witness and testified that he never heard of oysters turning red until his attention was called to it by the appellant, after the shipment of November 13th, and he did not know what caused it; that he did not know where his firm bought all the oysters shipped to the appellant, as they purchased them in the shells from dredge boats that came to their place. The agent of the appellant, who made the contract with the appellees, testified that the oysters were duly received at the appellant's place of business in Baltimore; at the time of the receipt they had been shucked were packed in barrels, properly iced and under his directions were taken out of the barrels, re-packed in appellant's pails, properly iced and shipped to the Forest City Oyster Company at Cleveland, Ohio; W.J. Gill of Toronto, Canada; Samuel Hagans of Columbus, Ohio, and A.L. Barr of Davenport, Iowa; that he saw some of them in the barrels and as they were being transferred to the appellant's pails, and they were apparently in good condition and good merchantable oysters without any noticeable defects, that the defendant had been engaged in the oyster business for many years and was competent to pass on this question; that he, the witness, in his years of experience in the oyster business had frequently seen what was known to the trade as "red" or "bloody" oysters; that the cause of such redness is not well understood but it gives them a red color and gives the liquor the color of blood. "That `red or bloody' oysters are unmerchantable oysters; that the redness is not always noticeable as soon as the oysters are shucked, and that in many cases it does not develop for some days after the same are shucked, and that a comparatively small number of the "red" or "bloody" oysters packed with other oysters in a pail or other vessel will, in time, discolor the other oysters in said pail, so as to render the whole contents thereof absolutely unmerchantable." He also said that if the redness in a cargo is discovered in time, it is possible to save some of them by having them steamed, which process develops the redness so that the good oysters can be selected from the red.

The appellant also offered evidence tending to show that all the oysters shipped to the four parties above named, at that time, were received from the appellees, and an agreed statement of facts as to what they would testify to was read, in which it was shown that most of the oysters received by them from the appellant at the times mentioned were unmerchantable, being "red" or "bloody."

It is contended on the part of the appellant that under the circumstances of the dealings between him and the appellees, there was an implied warranty that the oysters were merchantable and were free from latent defects. We do not understand it to be denied by the appellees that, if the oysters were not merchantable when received by the appellant, he was not under obligation to accept them, but they deny that they are responsible for latent defects, such as complained of, which developed after they were received, inspected and accepted by the appellant in Baltimore. It is not claimed that there was any fraud on the part of the appellees, and there is nothing to show that they knew of the defect when they shipped them, and, as we have seen, the member of the firm who testified said he had never heard of this trouble with oysters until his attention was called to it by the appellant. Under the contract the oysters were to be delivered in Baltimore and were actually so delivered. The appellant not only had the opportunity to do so, but in fact did inspect them, and he wrote to the appellees on November 12th acknowledging receipt of those shipped on the eleventh, stating "stock and measure all right," and enclosing check to cover indebtedness to date. On the 14th he acknowledged receipt of shipment of the 13th and said the stock to all appearances seemed to be all right, but he had just received a telegram from a customer that part of the oysters which he had received the day before were red. Two of his employees testified that they were apparantly in good condition when they examined them in Baltimore.

The important question therefore to be determined is, whether the implied warranty that the oysters were merchantable is to be so extended as to warrant their quality, so as to protect the appellant to the time they were delivered by him to the purchasers from him, against a defect such as this complained of. The general principles applicable to implied warranties have been so frequently announced by this Court that it seems almost useless to repeat them, but it may be well to recall some of them. As was said in Horner v. Parkhurst,71 Md. 116, "Where the buyer has an opportunity of examining the thing sold, there is no implied warranty, in the absence of fraud or express warranty, that it shall be fit for the purpose for which it was bought. In such cases the rule caveat emptor applies, by which is meant that unless the buyer sees fit to require a warranty, he takes upon himself the risk as to quality," citing Osgood v. Lewis, 2 H. G. 518; Hyatt v.Boyle, 5 G. J. 110; and Rice v. Forsyth, 41 Md. 389. The appellant however seeks to distinguish this case from those and others announcing a similar doctrine, on the theory that it only applies when the purchaser has had an opportunity to inspect specific existing chattels, and that it has no application to a case in which one orders goods to be supplied and delivered to him by a dealer in such articles. But conceding, as we do, that such distinction is recognized by the authorities, is the doctrine of implied warranty to be carried so far as to make the vendor liable for a defect such as this, which was not discovered until after the oysters were delivered, inspected, accepted and shipped to distant places? If, as the Court below determined by granting the defendant's second prayer, it being a contract for future deliveries, there was an implied warranty that the oysters should be merchantable, it certainly had some limit. There was a better opportunity to ascertain whether they were merchantable when they were received in Baltimore than there would have been if the appellant had gone to the appellee's place of business and selected them there. The appellant could not be required to accept them until they were delivered in Baltimore and he had the opportunity to inspect them, and when he not only had the opportunity, but actually did inspect them, in a way that was certainly as thorough, if not more so, than he could possibly have done at the appellees' place before purchase, and then accepted them as merchantable, which they apparently were, as both the appellant and the appellees had reason to believe, it is hard to see the necessity for or justice in a rule of law that would make the appellees liable for defects that subsequently develop when it is conceded they would not have been if the appellant had inspected them before he purchased them. The theory of implied warranty of quality is that the purchaser has relied on the judgment of the seller, and has had no opportunity to see for himself, and ordinarily unless that is so there is no implied warranty, for when there is ample opportunity for the purchaser to inspect, and he does so, there is no reason for the law implying a warranty. In Horner v. Parkhurst, supra, there was a controversy as to whether there was an express warranty of some benzine, and after referring to that, the Court said that the doctrine of implied warranty had no application to the facts in the case. After saying what we have quoted above the Court added, "So in this case if the defendant had an opportunity ofinspecting and testing the benzine before he used it, then, in the absence of fraud or express warranty, it was no defense to the action that it turned out to be inferior in quality to what he supposed it to be or what he wanted." There the time fixed by the Court was not before the purchase but "before he used it," if he had the opportunity of inspecting and testing the benzine.

The general rule is that when a manufacturer sells articles for a purpose known to him, there is a warranty against latent defects growing out of the process of manufacture. That is because he is presumed to know the defect caused by the way in which it is made, and so if he knowingly uses improper materials in the manufacture of the article sold, but even then the authorities differ as to whether he is liable for latent defects in materials used which he could not have discovered by reasonable diligence, and it has been held in some cases that he does not impliedly warrant against latent defects unknown to him, resulting from the unskillfulness in the work of some other manufacturer, or from the use of defective materials furnished by others. 15 Am. Eng. Ency. of Law, (2 ed.) 1233. In the recent case of Queen City Glass Co. v. Pittsburg Clay Pot Co.,97 Md. 429, we held that where the manufacturer of clay pots, madeby a secret process, sold some of them with knowledge of what they were to be used for, there was an implied warranty under the principle approved inRice v. Forsyth, 41 Md. 403, that "Where a manufacturer contracts to supply an article which he manufactures to be applied to a particular purpose, so that the buyer necessarily trusts to the judgment or skill of the manufacturer, there is in that case an implied term or warranty that it shall be reasonably fit for the purpose to which it is to be applied. In such a casethe buyer trusts to the manufacturer or dealer, and relies on hisjudgment and not upon his own." As a reason for holding the manufacturer liable we said in the Clay Pot case that "It was impossible for the purchaser to know, by an inspection or otherwise, whether the various component elements had all been used, or, if used, whether they had been used in proper proportions," etc. In 15 Am. Eng. Ency. of Law, 1235, the substance of what is quoted above from Rice v. Forsyth, is said to be sustained by the weight of authority, where a dealer contracts to supply an article in which he deals to be applied to a particular purpose, but the author adds, "This rule, ofcourse, does not extend to cases where the purchaser and theseller have equal means of knowledge as to the fitness of the thing sold for the purpose for which it is sold," and on p. 1237 it is said "The liability of a grower or producer of an article or commodity sold for a particular purpose is identical with that of the manufacturer of an article or commodity so sold. This rule obviously has its limits. It does not impute to the seller knowledge as to the qualities or fitness which no human foresight or skill can attain, and raise an implied warranty in respect to them, when the vendor and the purchaser are in equal conditionas to the means of knowledge, or the latter must understand fromthe nature of the case that the information, experience andknowledge of the vendor are not superior to his own." This qualification is very applicable to the case now before us. As we have seen, the member of the firm who testified for the appellees said he had never heard of red or bloody oysters before, while the appellant's agent was familiar with them. The appellant could not therefore have relied on the appellees' judgment as to whether these oysters were free from this defect. If the appellant, or his agent, could not detect the defect when they arrived in Baltimore, surely the appellees could not have done so, before they shipped them from Virginia. If it be true that they never heard of such defect, it is certain they never intended to warrant against it, and if it was known to the appellant, and he wanted to guard against it, he ought to have demanded an express warranty.

In addition to what we have said, we think it would be an exceedingly dangerous extension of the doctrine of implied warranties to apply it to such articles as oysters under the facts of this case. The evidence offered by the appellant is that a few oysters having this defect may impregnate or affect all in the pail or vessel in which they are shipped. There is some testimony tending to show that the appellant did include some oysters to his customers which were not purchased from the appellees. If that was the case, it may be that those sold by the appellees were not so infected until brought in contact with others that were. What causes the trouble is not explained, and indeed what the redness is is not well nnderstood. It is not even shown that an oyster in which it afterwards develops may not have been entirely free from it when shucked. The inference can be drawn from the evidence that it may be, as it was said that a few red oyster in a pail will in time affect all the others in that pail. Possibly the pails of the appellant were infected by the oysters of other dealers and produced the trouble. If it be a defect that may not develop until some days after they are shucked, and it is necessary to guard against loss on account of it, the purchasers can protect themselves against it by requiring express warranties, but we are not willing to so extend the doctrine of implied warranty as to make a vendor liable for such perishable articles as oysters for such length of time and under such conditions as this record discloses. The only case cited to sustain the appellant's theory that much resembles this, is that of Beer v. Walker, 46 L.J.C.P. 677. There some rabbits that were shipped from Beer, in London, to Walker, in Brighton, were accepted by Walker and shortly afterwards those in one of the casks were found by him to be in an unmerchantable condition. An expression used by the Court in that case, if approved, would not only make the seller liable for such deterioration of quality as would result necessarily from the transit to the purchaser, but even after that time while he was shipping them to his customers. For reasons we have given, we cannot follow that decision, if it can be construed to apply to such facts as we have shown to be in this record, which we do not think it does. Without deeming it necessary to discuss the several prayers, we will affirm the judgment of the lower Court.

Judgment affirmed, the appellant to pay the costs.

(Decided June 9th, 1904.)