Wilson & Co. v. Curlett

Thomas, J., delivered the opinion of the Court. Thisi appeal is from a judgment of the Baltimore City Court recovered in the short note case against the appellant in an attachment proceeding. In 191Y the appellee, John Curlett, was engaged in the canning business in Morattico, Virginia, and on the 5th of January of that year he entered into a contract, through his brokers or agents, W. E. Robinson & Co., of Belair, Maryland, with the appellant, to sell the appellant three thousand cases of “No. 3 hand packed tomatoes” at $1.05 per dozen,\ f. o. b. Morattico', Virginia, to be delivered when packed / during the season of 191Y.

Among the provisions of the' contract were the following: ¹⁴⁹ “Destruction of Factory, etc. — Seller not responsible for full delivery if prevented from making same by destruction of factory, or other providential hindrauces beyond his control. “Disputes — All disputes under this contract shall be arbitrated in the usual manner, and the decision of the arbitrators shall be final, each arbitrator to be paid $5.00 and necessary expenses, cost of arbitration to be paid by the loser.” Including the contract with the appellant, the appellee had contracted to pack and sell during that season in all 8500 cases of tomatoes. In addition to those planted on his own land, he had contracted with farmers, in the neighborhood of his factory for one hundred and seventy-five acres of tomatoes, and had made all other necessary arrangements, including the purchase of cans, for packing 15,000 cases. Beginning in July, 1917, and continuing through a period of forty days, there were frequent and very heavy rains, which resulted in reducing the tomato crop to the extent of one-third, and about the 18th of September there was a very early frost, which destroyed the tomatoes and put an end to canning for that season. Notwithstanding the damage to the crop by the heavy rains, the appellee confidently expected to have more than enough to meet all his contracts, but in consequence of the frost, which does not usually occur in that section of Virginia, until about the last of October, the appellee canned only about 5,000 cases.

Prior to the frost the appellee shipped about 3,000 cases to parties with whom he had contracted, including 600 eases shipped to the appellant, hut after the frost, when the appellee realized that he would not he able to supply the full amounts called for in his contracts, he shipped the balance of his pack, consisting of about 2,000 eases,, to the “Terminal Warehouse” in 'Baltimore- City for storage in his own name, for the purpose of meeting a demand made upon him by the Government, and pro-rating: the balance among those with whom he had contracted. In -Time, 1917, the “Committee on Canned Foods,” ¹⁵⁰ said to be acting “with the Council of National Defense and the various Departments of the Government/’ notified all eanners that they were required to reserve eighteen per cent, of their pack of tomatoes, subject to the order of the Government, for the use of the Army and Navy. The appellee received a copy of this order or notice, and the Government also sent inspectors to his factory to warn him that he was required to reserve eighteen pea* cent, of his pack for the use of the Government. Of the 2,000 cases which the appellee shipped to the warehouse for storage, the Government took 1,100 eases, for which the appellee received $1.70 per dozen, or $3.40 per case, and 685 cases were shipped to the order of the appellant.

The appellant paid for the . 600 cases shipped by the appellee in September, but refused to pay the contract price of the 685 cases, claiming that it was entitled to damages from the appellee by reason of his failure to ship^ the 3,000 oases contracted for. This suit was brought to recover the contract price of the 685 cases', and interest thereon, and during the trial, which resulted in a verdict and judgment in favor of the plaintiff for $1,518.44, the defendant reserved forty exceptions, all of which relate to rulings on the evidence, except the last, which, was to the granting of plaintiff’s two prayers and the rejection of defendant’s first, second, third and fifth prayers. The contentions of the appellant are, as stated in their brief: “1. That the clause of the contract between the parties excusing the appellee from making full delivery in the event of ‘destruction of factory or other providential hindrances beyond his control’ did not excuse him from making full delivery by reason of crop failure due to a heavy rainfall followed by an early frost, under the circumstances found in this case. “2.

That the appellee had no right to proceed into court with his case without first offering to comply with the arbitration provision of his contract, which ¹⁵¹ reads: ‘All disputes under this contract shall he arbitrated in the usual manner, and the decision of the arbitrators shall be final. “3. That there was no warrant in law for the action of the appellee in delivering tomatoes to the Government at the expense of those persons, including the appellant, who held contracts with him for his 1917 pack.” In support of the first contention, counsel for the appellant argpe that, under the familiar rule ajusdem generis, the words “other providential hindrances” cannot be held to include “hindrances” due to heavy rainfalls or early frost mentioned in the evidence, and they say: “If his factory were destroyed, his facilities for canning tomatoes would vanish, and it is apparent that he could not possibly fulfill his contract. In like manner, if there were ’an actual commandeer by the Government as a war measure of the tomato crop in the entire United States sufficiently close to his cannery not to permit him to purchase fruit on the open market and transport it to his cannery without, rotting, he might he reliever!, although of course, it would not he a ‘providential hindrance.’ So, a total failure of the tomato crop throughout the eastern section of the United States might relieve him of responsibility.” In the plaintiff’s first prayer the court instructed the jury that the words, “providential hindrances beyond his control,” used in the contract mean “such acts only as, may he attributed to the act of God, and uot to mere unavoidable causes, such as accident resulting from and attributable to human conduct”; and counsel for the appellant say in their brief that the prayer contains the proper definition of the terms of the contract. But they insist that the act of God relied on must he such as “prevented” the fulfillment of the contract, or rendered fulfillment impossible.

Even if we were fi> accept this view as being strictly correct, when we turn to the evidence we find that the appellee testified in chief that after the frost in September “it was impossible to get any tomatoes, * * * ¹⁵² That he tried to get tomatoes sufficient in amount to enable him to pack but was unable to do so,” and on cross-examination he said that there w'as not a single acre of tomatoes in '“my whole section of the- country that was not contracted for in 1917,” and that he tried to find some tomatoes that were not contracted for and 'failed. With this evidence before the jury the court could not have directed a verdict for the defendant on the ground that there was no evidence legally sufficient to show that the hindrance caused by the rains and early frost prevented the fulfillment of the contract, and so far as this feature of the case is concerned there was clearly no error in the rejection of the defendant’s first prayer, which asked the Court to direct a verdict in its favor. According to the evidence in the case, prior to the frost mentioned there was no reason why the appellee should have made- any further provision for the necessary supply of tomatoes, and whether the statement of the appellee that “it was impossi-' ble” to get any tomatoes after the frost was true was a question of fact for the jury to determine under proper instructions. We cannot go to the extent indicated by the case of Newell v. New Holstein Canning Co., 119 Wis. 635 .

In the case of Jenkins v. Spedden, 136 Md. 637 , where the suit was brought against the packer to recover for his failure to deliver the number of eases of tomatoes which he contracted to deliver to the plaintiff, Opiiep Judge Boyd said, on page 645, in reference to plaintiff’s second prayer: “Their second prayer was clearly objectionable on several grounds. It utterly ignored any other contracts the defendants had, and it gave the jury no information as to what would be proper diligence under the circumstances for the defendants to exercise. The jury may have thought that notwithstanding the failure-of-erop clause, if the defendants could have purchased tomatoes elsewhere, regardless of the place and price, it was their duty to do so. They were not so required under our construction of the contract.” The second contention of the appellant is based upon the clause of the contract referring to arbitration.

This defense ¹⁵³ was not made by a special plea, but assuming that it was not waived by the defendant by going to trial on the merits of the case, and the agreements of counsel in the record (Franklin Fire Ins. Co. v. Chicago Ice Co., 36 Md. 102 ; McEvoy v. Harn Co., 129 Md. 93 ; 2 R. C. L, 364; 5 C. J. 46), the clause does not expressly provide that arbitration is a condition precedent to the right to sue on the contract. It is said in 2 R. C. L. 363; “But the courts generally will not construe an arbitration clause as ousting them of their jurisdiction unless such construction is inevitable, and consequently when the arbitration clause is not made a condition precedent by express words or necessary implication, it will be construed as merely collateral to the liability clause, and so no bar to an action in the courts without ail award.” See also 5 C. J., p. 45. In the case of Hamilton v. Home Ins.

Co., 137 U. S. 370 , the Court said: “A provision in a contract for the payment of money upon a contingency that the amount to he paid shall be submitted to arbitrators, whose award shall be final as to that amount, but shall not determine the general question of liability, is undoubtedly valid. If the contract further provides that no action upon it shall be maintained until after such an award, then, as was adjudged in Hamilton v. Liverpool, London & Globe Ins. Co. ( 136 U. S. 242 ), above cited and in many cases therein referred to, the award is a condition precedent to the right of action. But when no such condition is expressed in. the con-' tract, or necessarily to be implied from its terms, it is equally well settled that the agreement for submitting" the amount to arbitration is collateral and independent; and a breach of this agreement, * * * cannot be pleaded in bar to an action on the principal contract.” See also Green, v. American Cotton Co., 112 Fed. 743 .

The contract in question contains a number of provisions under which disputes might have