Denton Bros. v. Gill & Fisher

³⁹⁹ McSherry, C. J., delivered the opinion of the Court. The appellants brought suit in the Superior Court of Baltimore City against the appellees. The declaration contains three of the usual common counts and a fourth count in special assumpsit. To the common counts the appellees pleaded and issues were joined thereon; to the special count they demurred and the lower Court sustained the demurrer.

The trial then proceeded before a jury on the issues of fact framed on the general issue pleas, and, under the instructions of the Court, resulted in a verdict for the appellees, who were the defendants. From the judgment on that verdict this appeal was taken. The questions here involved are, first, the one raised by the- demurrer to the fourth count, and secondly, those arising on the prayers for instructions to the jury. As the question raised by the demurrer and the one arising on the fourth prayer of the appellees, which was granted, and the second prayer of the appellants — which was rejected — are identical, they will be considered together.

By doing so but one other inquiry of any consequence will remain to be disposed of, and that is the one presented by the fifth prayer of the appellees which was also granted, and the first prayer of the appellants, which was rejected. To simplify the discussion and with a view to avoid repetition the facts appearing in the record will now be concisely stated. The appellants, Denton Brothers, are grain merchants in Leavenworth, Kansas. On September the twenty-sixth, 1899, they sold to the firm of Bowring & Archibald, of New York, five thousand quarters of No. 2 corn at forty-three cSnts per fifty-six pounds “cost, freight and insurance to Liverpool,” to be shipped in January or February, 1900.

Bow-ring & Archibald then cabled to C. T. Bowring & Company, Limited, of Liverpool, an offer of five thousand quarters of corn of the same quality on cost, freight and insurance terms, and the last-named company placed the .offer with Montgomery, Jones & Company who accepted the terms, and C. T. Bowring & Company cabled Bowring & Archibald of the sale, butC. T. Bowring & Co. did not actually buy the corn. Bowring ⁴⁰⁰ & Archibald then drew, with the documents attached, on C. T. Bowring & Company in the usual way for the price of the whole 5,000 quarters sold by Denton Brothers to Bowring & Archibald and sold the draft to bankers. On January the 20th, 1900, the appellees, Gill & Fisher, through Parker & McIntyre, brokers, sold to Denton Brothers “three thousand quarters (5 per cent more or less as per London contract) of No. 2 corn” at forty-six cents per fifty-six pounds “cost, freight and insurance to Liverpool;” to be shipped during February by first-class steamer from any Atlantic port “Payment by sellers’ draft at sight on buyers with documents attached as customary.” In February the steamship “Indore” received on board in hold 5 at Baltimore and Ohio Elevator C at Locust Point the corn sold by Gill & Fisher to Denton Brothers, and upon the faith of a certificate from the railroad company’s elevator foreman that three thousand quarters of corn of the grade sold had-been loaded aboard the “Indore” for account of Gill & Fisher, the agents of the Johnston Line of steamships issued to Gill & Fisher three bills of lading for the three thousand quarters of corn, each bill of lading being for one thousand quarters.

For three cents per bushel of the forty-six cents agreed price Gill & Fisher drew on Denton Brothers who paid the draft on presentation, and for the balance of the contract price, viz.,' forty-three cents, at the request and by the direction of Denton Brothers, Gill & Fisher drew on Bowring & Archibald, with the bill of lading indorsed in blank, the insurance policies and inspection certificates attached, and the draft was paid oh presentation. These directions to the appellees were given by Denton Brothers $1 part performance of their contract with Bowring & Archibald, though no proof was offered 'that the appellees knew of the existence of that contract. Montgomery, Jones & Company paid C. T. Bowring & Company for the whole five thousand quarters. When the “Indore” reached Liverpool, about March the seventh, Montgomery, Jones & Company claim that the corn delivered to that vessel on account of Gill & Fisher at Baltimore and Ohio Elevator C weighed out 215,992 ⁴⁰¹ pounds short.

For the amount of that alleged shortage at the then value of corn in Liverpool, viz., eighteen shillings sterling per quarter, Montgomery, Jones & Company made demand for reimbursement on C. T. Bowring &Companyand were paid by that company the full amount; namely, 349 pounds, 17 shillings and 3 pence. C. T. Bowring & Company then made claim for the same amount on Bowring & Archibald and were allowed therefor in accounts between them. In April, 1900, C. T. Bowring & Company took over the business of Bowring & Archibald as a going concern and assumed all its assets and liabilities. On February the first, 1901, Denton Brothers made to C. T. Bowring & Company as assignment of any claim they might have against Gill & Fisher.

The record also contains a copy of the “London Contract” referred to in the memorandum of the sale of the 3,000 quarters of corn for account of Gill & Fisher to Denton Brothers; and the following clauses appear in that contract: “Two per cent more or less,” and “Seller has the option of shipping a further 3 per cent, more or less, on contract quantity, the excess or deficiency over the 2 per cent to be settled at the c. L& i. price on date of bill of lading; value to be fixed by arbitration, unless mutually agreed;” and again “Any deficiency on bill of lading weight to be paid for by seller, and any excess over bill of lading weight to be paid for by buyer at contract price. ” It is denied by the appellees that there was any shortage in the weight of the corn; but with that contention we have nothing to do as it is conclusively a matter for the jury to determine. Compressed into the narrowest compass the situation presented is this: Denton Brothers purchased from Gill & Fisher 3,000 quarters of corn, and sold the same corn to Bowring & Archibald; Bowring & Archibald through C. T. Bowring & Company sold the same corn to Montgomery, Jones & Company. The last-named purchasers paid C. T. Bo wring & Company in full.

It is alleged that there was a material shortage in the weight when the corn was delivered. Montgomery, Jones & Company were refunded the amount ⁴⁰² of that shortage by C. T. Bowring & Company; C. T. Bow-ring & Company were refunded the same amount by Bowring & Archibald, and the latter have made a demand on Denton Brothers to refund the same amount. Denton Brothers have not paid back that amount but have sued Gill & Fisher, their vendors, to recover the sum which they, Denton Brothers, are liable to pay on account of the same shortage to their vendee. The question on these facts is can Denton Brothers maintain this suit until they actually pay back to their vendee the amount claimed by the latter from Denton Brothers on account of that shortage?

This question is the one raised by the demurrer to the fourth count of the narr. and - by the fourth instruction granted at the instance of the appellees and the second rejected prayer of the appellants. We will dispose of that question before stating or considering the other or remaining inquiry. If Denton Brothers had not resold the grain to Bowring & Archibald and if, after they had paid Gill & Fisher the agreed price for the entire three thousand quarters of corn purchased from the latter, it had been discovered that the vendors had In fact failed to deliver over two hundred thousand pounds of the corn sold and paid for, it could not be questioned that Denton Brothers would have a sustainable cause of action against Gill & Fisher for a breach of the latter’s contract. How can the resale of the corn by Denton Brothers extinguish Gill & Fisher’s obligation to comply with their contract, or exonerate them from the consequences of a breach which occasions a failure of consideration?

The right of the vendee to recover from the vendor for a failure of consideration is founded on the simple fact that the former has not received from the latter what the vendor sold and agreed to deliver and what the vendee paid for and contracted to get. The breach consists in the failure of the vendor to live up to his contract and no subsequent sale of the grain by the vendee can obliterate or condone that breach. If a sale of the same commodity by the vendee to a sub-vendee extinguishes the responsibility of the vendor to make good a shortage to his vendee, ⁴⁰³ then a payment to the sub-vendee by his vendor of the damages caused by the shortage, would revive the first vendor’s responsibility to his vendee; and thus the obligation of the first vendor to make .good a deficiency to his vendee would depend, not upon his own breach of the contract of sale, but upon a collateral and independent transaction between the vendee and a third party who is a total stranger to the original contract of sale. The adjudged cases do not support that view.

Allusion will now be made to some of them. Perhaps the most apposite is Randall and another v. Raper, Ellis, Black & Ellis, 84. The defendant in that case by warranting 30 quarters of seed barley to be then chevalier seed barley, sold the same to the plaintiff at and for il. 2s. 6d. per quarter which the plaintiffs paid him. The plaintiffs were corn factors and purchased the seed barley for the purpose of reselling it in the way of their trade.

The seed barley delivered was not chevalier seed barley. Without any knowledge of the breach of the warranty and believing the seed to be chevalier seed barley the plaintiffs sold to several sub-vendees the same seed barley delivered to them by the defendant and sold it under a like warranty given by the defendant to the plaintiffs. The sub-vendees sowed the seed and the seed not being chevalier seed barley, as it had been warranted to be, produced inferior crops whereby the sub-vendees were damnified and injured. The plaintiffs then became liable to compensate and make good to the sub-vendees, respectively, the damages by them so