Luria Bros. & Co. v. Klaff

⁵⁸⁸ Adkins, J., delivered the opinion of the Court. This suit was brought by appellee to recover from appellant a balance of $3,790.30 for several carloads of metal, sold and shipped between March 15th and June 5th, 1920. The amount of this balance was admitted by appellant, the dispute being only as to'the validity and amount of appellant’s claim of set off arising out of a previous sale of five carloads of steel shells by appellee to appellant, shipped from the naval proving ground at Aberdeen, Maryland, to appellant at its yard in Beading, Pennsylvania, and reconsigned by appellant to the Carpenter Steel Company, also located at Beading. Three of the five carloads were rejected by the Carpenter Steel Company, and appellant tendered a return to appellee.

On the refusal of appellee to accept the return of the three rejected carloads and furnish appellant with shipping instructions, they were re-shipped by appellant to appellee at the naval proving ground. The claim of set off was for the purchase price paid by appellant for the rejected cars, together with railroad demurrage charge which accrued pending shipping instructions from appellee. There are seven bills of exception in the record, all based on the rulings of the trial court on evidence. It appears from the testimony that the shells were purchased over the telephone, three or four days after the president of the appellant company had called at appellee’s office in Baltimore and been shown a few sample shells, which he had in his yard.

After the telephone conversation appellant sent appellee a written order for the shells, which was accepted. The order was as follows: “Lebanon, Pa., January 15, 1920. “Bo. 3576 L. “Lima Brothers & Company, Lebanon, Pa., agrees to buy and Messrs. H. Klapp & Co., Central Ave. and Gough Street, Baltimore, Md., agrees to sell: “Material: Steel shells, 3 inch, 6 inch, and 9 inch. “Quantity: Approximately two hundred (200) tons. ⁵⁸⁹ “Price: $25.00 per gross Ion f. o. b. cars Aberdeen Proving Grounds, Md. “Delivery: Prompt. “Terms: Usual. “Remarks: Shipping instructions will follow within a few days. “Luria Bros. & Company, “Main Office. “Received Jan. 22, 1920. “(Rote. — Material must be waybilled as scrap iron and be loaded in not less than minimum carload lots. Unless otherwise instructed, material must be loaded in gondola cars. “Accepted: H. Klaif & Co. “Dated: P. P. W. M. Schreiber 1/21/20. “Luria Brothers & Company. “By Max Silberman.” On January 29, 1920, appellant wrote appellee: “Confirming ’phone conversation with our Mr. Silberman, kindly proceed with the loading of the shells; they are intended for Jersey City.

We will give you correct shipping instructions in a lew days.” And on February 21, 1920: “Please ship your shells to the Crucible Steel Company, Atha Works, Harrison, R. J., for our account.” And on February 24, 1920: “Our Mr. Silberman advises us today that you have not received our letter of Feb. 17th, changing shipping instructions on the 200 tons of steel shells covered by our order Ho. 3576. “We advised you on the above date to ship to Luria Brothers & Company, Reading, Penna., P. & R. or Penna. R. R. delivery, P. & R. preferred, providing the freight rate is the same as via Penna. R. R.” ⁵⁹⁰ H. Klaff (trading as H. Klaff & Co.), the appellee, was asked on cross-examination: “Q. I am talking about at the time the contract was made. Was any reference made by either yon or Mr. Silberman as to- the samples Mr. Silberman had seen in your office ?

A. I cannot remember. Q. Yon are familiar with the business carried on by Luria Brothers & Company, are you not ? A. I am familiar as far as iron and steel goes; yes, sir; I am not familiar with their business at all; I am only familiar with what business they have done with us. Q. You also knew that they resell scrap iron and scrap steel to mills for reheating purposes, do you not?

A. I do; yes, sir. Q. Were the shells mentioned in the contract sold to Luria Brothers & Co'. at scrap-steel prices ?” Objection to this question was sustained, and the refusal of the court to permit this question to he answered was the ground of the first exception. The second exception was to the refusal of the court to permit appellee to answer the following question: “Q. Did you know the purpose for which the defendant purchased the shells mentioned in the contract ?” Appellee further testified that appellant paid seventy-five per cent, of the hill for these shells upon receipt of invoices before tbey reached Reading, Appellant then put Max Silberman, its vice-president, on the stand, and offered to prove by him: “that the material mentioned in the above contract was purchased as, and understood between the parties to he; scrap' metal in the form of exploded shells to he used for remelting purposes.” Objection to this offer was sustained and this constitutes the third exception. Appellant then proved by Abe Luria that he had been for three years general manager of appellant company, that one of bis duties was to identify shipments which are purchased and consigned to his company, and report to his company; that their traffic manager then ordered the material shipped to his company’s purchasers; that he made only a casual examination of the shells in controversy; that he consigned ⁵⁹¹ the shipment to the Carpenter Steel Company, of Eeading, Pa.; that three of the live cars were rejected by said company, and were returned to appellee at Aberdeen, Maryland.

Charles C. Wilson, superintendent of the melting furnaces of the Carpenter Steel Company, was asked: “Q. Did you make an examination of the shells at the time they were received? A. Yes. Q. Did your examination disclose any defect which would render the shells unsuitable for your purposes ?’” Objection to this question was sustained, and this was the basis for the fourth exception. The court further refused to permit this witness to answer the following questions: What happened when you attempted to use the shells in your furnaces ?

Why did you not attempt to use them immediately? (The witness having testified that the shells had been in the company’s yards about three or four weeks before he attempted to remelt them.) These rulings of the court were the grounds for the fifth and sixth exceptions. Appellant then made a formal offer to prove by the said witness, “that the material mentioned in the above contract was dangerous and unmerchantable as material bought and sold by dealers in scrap iron and steel.” Eefnsal of the court to permit said testimony was the ground for the seventh exception. It will he seen that the purpose of appellant was to establish the following facts: First, that the shells were understood between the parties to he unloaded, non-explosive shells and were bought as scrap1 steel; second, that they were to he used for remelting purposes and that appellee knew this fact, and that appellant relied on appellee’s skill and judgment ; third, that the shells were, in fact, explosive and unfit for remelting, and were dangerous and unmerchantable as material bought and sold by dealers in scrap iron and steel; fourth, that the defects were latent and only discoverable by heating test; fifth, when the explosive nature of the shells was discovered; sixth, why the Carpenter Company allowed. ⁵⁹² the shells to remain, for three or four weeks in its yard before a furnace test was made.

The trial court, in excluding testimony tending to prove these facts acted, apparently, on the theory that the written contract must speak for itself and that there was! no implied warranty. It seems reasonably clear that the view taken by the court in regard to implied warranty was in accordance with the settled law of this State and of nearly all the states of this country as it stood prior to the Uniform S'aies Act of 1910, codified as article 83. In Commercial Realty Etc. Co. v. Dorsey, 114 Md. 178 , decided after the passage-of .the Uniform Sales Act, but in reference to a contract made prior thereto, the law of implied warranties was stated to be as follows: “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 he reasonably fit for the purpose to which it is to be applied.

In such a case the buyer trusts to the manufacturer or dealer and relies upon his judgment and not .upon his own.” Citing Queen City Glass Co. v. Clay Pot Co., 97 Md. 429 ; Rice v. Forsyth, 41 Md. 403 , and Jones v. Just, L. R. 3 Q. B. 197. “We have held with equal clearness that when the seller is not the manufacturer of the article sold and the buyer has an opportunity of examining it, there is no implied warranty, in the absence of fraud, that it shall be fit for the purpose for which it was bought. In such cases, if there be no express warranty, the doctrine of cam eat envptor applies and thy buyer not having seen fit to exact- a warranty, takes upon himself the risk as to- quality.” Citing Horner v. Parkhurst, 71 Md. 116 ; Farren v. Dameron, 99 Md. 337 ; Rice v, Forsyth, 41 Md. 389 , and Raisin v.