Industrial Rayon Corp. v. Caplan

Full title: Industrial Rayon Corporation, Appellant, v. Caplan

Court: Superior Court of Pennsylvania

Date published: Feb 26, 1937

190 A. 185 (Pa. Super. Ct. 1937)

190 A. 185

Opinion

October 29, 1936.

February 26, 1937.

Sales — Warranty — Notice of breach — Time — Rescission — Defect not ascertainable until after manufacture and sale.

Plaintiff sold to defendant twelve cases of rayon yarn, warranting the rayon to be of first quality. Defendant, as plaintiff knew, was engaged in manufacturing coat linings from rayon and selling these linings to his customers undyed. The rayon sold to defendant was not as warranted, in that it did not dye evenly. This defect was not ascertainable by inspection. Defendant first learned of the defective quality of the cloth he had manufactured from his purchasers, who had dyed the goods for their own trade, and thereafter, within a week, defendant complained to plaintiff. In meetings and conversations with plaintiff's vice-president and other named representatives, defendant pointed out the breach of warranty relied on and told plaintiff to take back the rayon yarn not manufactured into linings.

Plaintiff brought action to recover the contract price for the rayon. Defendant set up the breach of warranty and counterclaimed for loss by reason of cloth manufactured from plaintiff's defective yarn. Held that (1) the questions of the quality of the goods, the breach of the warranty, whether defendant had acted with reasonable promptitude upon ascertaining the defective quality of the goods, and whether defendant had given clear notice of rescission, under the evidence, were questions for the jury; (2) defendant was entitled to rely on plaintiff's express warranty and was not obliged to test the goods before manufacture of the linings for sale; (3) notice of the breach of warranty within a reasonable time after complaints to defendant by his customers was sufficient; (4) defendant was not required definitely to rescind the contract so long as plaintiff was endeavoring to remedy his complaint; and (5) defendant had a right to rescind, although a part of the yarn had been manufactured into linings, since the defect in taking the dye could not be discovered until the goods were manufactured.

Appeal, No. 129, Oct. T., 1936, from judgment of C.P. Lebanon Co., June T., 1932, No. 228, in case of Industrial Rayon Corporation v. Julius H. Caplan, trading as Keystone Silk Company.

Before KELLER, P.J., CUNNINGHAM, BALDRIGE, STADTFELD, PARKER, JAMES and RHODES, JJ. Judgment affirmed.

Assumpsit.

The facts are stated in the opinion of the lower court, by HENRY, P.J., in part, as follows:

The plaintiff in this action sought to recover from the defendant the contract price for twelve cases of rayon amounting to $1,651.84, with interest from November 5, 1931. The defendant by affidavit of defence and at the trial admitted the purchase and delivery of the rayon but denied liability upon the ground that the rayon purchased was expressly warranted to be of first quality and the rayon delivered was not of first quality and not usable in the manufacturing business of the defendant. The defendant further pleaded and offered evidence in support of a counter claim for loss suffered by reason of cloth manufactured from defective yarn furnished by the plaintiff as a part of the purchase upon which the plaintiff here claims as well as for prior purchases from the plaintiff and resulting in serious loss to the defendant by reason of the rayon not being as represented and warranted. The amount of the counter claim of the defendant was $2,208.02. The jury returned a verdict in favor of the defendant upon the claim of the plaintiff and in favor of the defendant and against the plaintiff in the sum of $882.92, upon the counter claim of the defendant. . . . . .

Three of the twelve cases of rayon for which the plaintiff claims were used by the defendant and the remaining nine cases were in his manufacturing plant at Lebanon at the time of the trial.

The defendant was engaged in manufacturing coat linings from rayon, and these linings were sold to his customers undyed; and the first intimation the defendant had of the defective quality of the cloth he had manufactured was from his purchasers, who had, after their purchase, dyed the goods for their own trade. The plaintiff knew that the defendant manufactured these linings and sold them in an undyed condition.

At the trial, the plaintiff's witnesses admitted the rayon ordered by the defendant was to be of first quality; that rayon to be at first quality must dye evenly and uniformly. The vice-president of the plaintiff company admitted that a large roll of cloth manufactured by the defendant from this rayon did not dye evenly and was not of merchantable quality. As to the other samples of cloth given to the plaintiff by the defendant, and some of which was dyed by the plaintiff, the fact was disputed as to whether the cloth dyed evenly or not. Plaintiff's witnesses contended that the defective quality of the cloth manufactured from this rayon might have been due to different causes, to defective machinery in the plant of the defendant, or to improper methods of manufacturing, or to improper dyeing.

A letter from the defendant to the plaintiff, dated November 19, 1931, seems to be the opening [written] complaint of the defendant with reference to the rayon in suit, which stated that the defendant was having trouble with the merchandise manufactured from plaintiff's rayon and that he had stopped using it for the present, that he had taken up the matter with the representative, Mr. Walters, and he [Walters] was to take it up with the officials of the company and stating that when this matter was straightened out, check would be mailed or the goods returned. Walters, the salesman for the plaintiff, and the vice-president and other employees of the plaintiff, subsequently called upon the defendant with reference to the rayon and the defendant testified expressly that he had told these representatives of the company that he could not use this rayon and as to the cases of rayon still on hand that `they were to take it back'. The evidence introduced at the trial, and especially the complaints from the customers of the defendant indicated that the defendant had started his complaint to the plaintiff within [a week] after having been notified of the defective quality of the cloth manufactured from the rayon.

Under these facts the question of the quality of the goods, the breach of the warranty, the question of rescission as well as whether the defendant had acted with reasonable promptitude upon ascertaining the defective quality of the goods, were questions to be submitted to and determined by the jury. The Court could not have directed a verdict in favor of the Plaintiff, nor can the Court say that the verdict was against the law, and the evidence under this state of facts.

It is contended upon the part of the plaintiff, that under Section 49 of the Sales Act of 1915, it was the duty of the defendant to ascertain within a reasonable time after the receipt of the rayon that it was defective, in other words, that he should have known that it was defective before consuming three of the twelve cases of rayon. This might be so where the defect was ascertainable by inspection, but under the evidence in this case the defective quality of the rayon was not ascertainable until after dyeing and the plaintiff knew the business of the defendant as a manufacturer of coat linings and that he was not a dyer. Under the facts in this case, the defendant could rely on the express warranty of plaintiff that the goods were first class and would dye evenly and uniformly, and it was not incumbent upon the purchaser to first manufacture some linings and then go to the expense of having them dyed for the purpose of ascertaining whether the goods were of first quality or not. It was his duty to promptly notify the plaintiff upon ascertaining that the rayon was not of first quality and this, under the evidence, seems to have been done. We do not think there is any evidence to warrant the inference that the defendant `ought to have known' of the defective quality of the rayon.

With respect to the rescission we are not unmindful of the authorities, among them Wright v. Bristol Patent Leather Company, 257 Pa. 552, Tinius Olsen Testing Machine Company v. Wolf, 297 Pa. 153, among others, in which it is held that the notice of rescission must be clear and unambiguous as to when and to whom the recission was made. In this case, under the evidence and the testimony of the defendant himself, the notice must have been given at one of the conferences with the vice-president of the plaintiff company and the time must have been one of the two occasions when he was here at the plant of the defendant. If the testimony of the defendant was true, then there could be little doubt as to whom the notice was given or the time when it was given, nor was the notice ambiguous if given as the defendant testified. The manner in which the plaintiff acted in taking numerous small samples or rolls of cloth for the purposes of dyeing or making tests, would indicate the serious character of the complaints made by the defendant. . . . . .

The seventh point submitted by the plaintiff for charge, was declined for the reason that it presupposes that, even though the goods were expressly warranted to be first quality, it was the duty of the defendant to finish a `representative sample of manufactured cloth' before consuming all or a substantial part of the rayon. We do not conceive this to be the law. The defendant had a right to rely upon the express warranty and was not under duty to make any test, although it was his duty to act promptly upon acquiring knowledge that the rayon was defective. We think this point was properly declined. We find nothing in this case to warrant the disturbing of the verdict. . . . . .

And now to wit, February 10, 1936, the motion of the plaintiff for judgment non obstante veredicto is overruled. An exception to this action of the Court is hereby noted for the plaintiff. The motion of the plaintiff for a new trial is overruled, a new trial is refused, and judgment is directed to be entered upon the verdict in favor of the defendant and against the plaintiff in the sum of $882.92, with interest from May 12, 1934, upon payment of the jury fee.

Error assigned, among others, was refusal of judgment n.o.v.

Clarence D. Becker, of Becker Ehrgood, for appellant Eugene D. Siegrist, for appellee.

Argued October 29, 1936.

PER CURIAM, February 26, 1937:

On the argument of this appeal the appellant, plaintiff, did not press its motion for a new trial. It rested its case on its right to judgment non obstante veredicto. The opinion of the learned President Judge of the court below, — so far as it bears on the present controversy — is printed in the reporter's statement and fully justifies the action of the court assigned for error. The difference between complaints of dissatisfaction, averred in general terms in an affidavit of defense, (See Spiegelberg v. Karr, 24 Pa. Super. 339, 341; Werbitsky v. Fisher, 64 Pa. Super. 284, 287; Meguire v. Gallagher, 89 Pa. Super. 576, 580, and similar cases relied on by appellant), and definite evidence, on the trial, of meetings and conversations with the seller's vice president and other named representatives, in which the breach of warranty relied on was pointed out and the seller was told to take back the rayon yarn not manufactured into coat linings, is manifest.

Kirk Johnson Co. v. Light, 100 Pa. Super. 425, and the cases cited therein are authority for the proposition that the defendant was not required definitely to rescind the contract as long as plaintiff was endeavoring to remedy the buyer's complaint; and Moskowitz v. Flock, 112 Pa. Super. 518, 171 A. 400, supports the buyer's right to rescind, although a part of the yarn had been manufactured into linings, where the defect in taking the dye could not be discovered until the goods were manufactured.

The judgment is affirmed.