Cite as 24 A.D. 1128 (No. 10,057) B & M PRODUCE COMPANY v. HARRISBURG DAILY MARKET, INC. PACA Docket No. 9622. Decided August 25, 1965. Delivered sale-Failure to deliver-Contract terms Condition to delivery not established-Damages Respondent failed to deliver potatoes in accordance with contract which was not conditioned on availability of potatoes and damages awarded complainant for difference between contract price and price of replacement purchase. Complainant pro se. Reynolds and Lipsitt, Harrisburg, Pa., for respondent. Miss Lenore H. Langford, Presiding Officer. Decision by Thomas J. Flavin, Judicial Officer PRELIMINARY STATEMENT This is a reparation proceeding under the Perishable Agricultural Commodities Act, 1930, as amended (7 U.S.C. 499a et seq.). A timely complaint was filed in which complainant seeks reparation against respondent in connection with a transaction involving a shipment of potatoes in interstate commerce. A copy of the formal complaint and a copy of the Department's report of investigation were served upon respondent. A copy of the report of investigation was also served upon complainant. Respondent filed an answer, denying liability and requesting that the complaint be dismissed. Since the amount involved does not exceed $1,500, the issues are submitted under the shortened procedure provided in the Rules of Practice (7 CFR 47.20). Pursuant to such procedure, complainant filed an opening statement, respondent filed an answering statement, and complainant filed a statement in reply. Complainant also submitted a brief. FINDINGS OF FACT 1. Complainant is an individual, Delaney P. Brown, doing business as B & M Produce Company, whose address is 1326 5th Street, N.E., Washington, D. C. 2. Respondent, Harrisburg Daily Market, Inc., is a corporation whose address is P. O. Box 2730, Harrisburg, Pennsylvania. At the time of the transaction involved herein, respondent was licensed under the Act. Cite as 24 A.D. 1128 3. On or about June 1, 1964, in the course of interstate commerce and by oral contract, respondent sold to complainant 500 new branded 50# sacks, U.S. No. 1, Size A, 2′′ minimum, Maine Kennebec potatoes, at an agreed price of $2.12 per sack, delivered Washington, D. C., for a net invoice price of $1,062.50. The contract specified that the shipment was to arrive on Tuesday or Wednesday morning, June 2 or June 3, 1964. 4. The contract was negotiated by F. J. Davidson, III, proprietor of the brokerage firm, F. J. Davidson, Jr. & Co., 5428 McArthur Boulevard, Washington, D. C. The broker prepared a Confirmation of Sale and forwarded copies to the parties on June 1, 1964. 5. Respondent failed and refused to deliver the potatoes in accordance with the contract, and a replacement purchase of comparable potatoes was made by complainant on June 6, 1964, at a unit price of $3.15, or a total purchase price of $1,575. 6. The formal complaint was filed on October 15, 1964, which was within 9 months after accrual of the cause of action herein. CONCLUSIONS The controversy in this case revolves around the terms of the contract, concerning which the parties are in dispute. Respondent, in its answer, denies the transaction as alleged, and states that the facts are as follows: That respondent received a call from the broker requesting 500 new branded 50# sacks, U.S. No. 1, Size A, 2′′ minimum, Maine Kennebec potatoes for B & M Produce Company, Washington, D. C.; that the broker was advised respondent had one car at Boston which it would sell if it met grade, and was further advised that this was the only car respondent had and the sale was contingent upon the potatoes meeting grade; and that the price agreed upon was as alleged in the complaint. Respondent further states that when the potatoes were inspected on June 2, 1964, they did not meet grade due to condition, and the broker was immediately notified to that effect and the Confirmation of Sale was rejected; that the broker was advised that the Confirmation was incorrect because it did not show the sale was "for this one carload only, and there would be no replacement if it did not meet grade, and since the carload did not meet grade, there was no completed sale." The opening statement submitted by complainant is a detailed affidavit by F. J. Davidson, III, who negotiated the contract be Cite as 24 A.D. 1128 tween the parties. His version of the transaction is that, on June 1, 1964, he contacted Mr. Wagner of Harrisburg Daily Market, Inc., by telephone, at which time Wagner quoted a price of $2.121⁄2 for 50# sacks, U.S. No. 1, Size A, 2′′ minimum, Maine Kennebei potatoes, in new branded sacks, on a delivered basis; that the broker secured an order from complainant for 500 sacks of these potatoes, to arrive June 2 or 3, and again telephoned Mr. Wagner with the order, which Wagner confirmed by telephone; that, “At no time in either of these two conversations did Mr. Wagner state anything about the quotation or confirmation being on any basis other than usual terms, and he definitely did not state at any time anything about no replacement if the potatoes should fail to grade as sold;" that on the afternoon of June 2, Wagner telephoned Davidson and stated that some of the potatoes had shown decay and he was securing Government inspection in Boston, Massachusetts, on the balance of the car; and that Wagner further stated if the balance of the car failed to grade U.S. No. 1 at Boston, he would not fill the order of complainant because he had confirmed the order on the basis of no replacement if the potatoes failed to grade U.S. No. 1. Davidson further states in the affidavit that, "This contention of his I immediately disputed and told him the potatoes had not been sold on the basis of no replacement if they failed to grade U.S. No. 1, and told him the sale was on the basis of copy of confirmation I had mailed him June 1." Davidson stated that the final result of the conversation was that Wagner said the potatoes would not arrive June 3, as he would wait for the results of the Government inspection in Boston and if the potatoes did not grade U.S. No. 1, he would then see what adjustment he could make with the original shipper of the potatoes and would let the broker know the outcome the next day. Davidson's affidavit continues with the following facts, in brief: On June 3, Wagner stated the potatoes failed to grade U.S. No. 1 and that the original shipper had allowed him 1212 cents per bag because of the decay, but that it would cost him 25 cents per bag to recondition the potatoes and remove the decay to make them grade U.S. No. 1; that if complainant would pay an additional 1212 cents per bag, he would deliver the potatoes June 5; and that this was agreed to by complainant; that in a telephone conversation June 4, Wagner again stated the potatoes would be delivered to complainant June 5; that on June 5 Wagner stated that the potatoes had been too bad to regrade and he would not deliver them to fill the order; that in a second conversation on the same day, the broker told Wagner complainant intended to make claim Cite as 24 A.D. 1128 against respondent for the difference it would cost to make a replacement purchase, and the broker suggested that respondent make some offer of settlement to complainant, but instead of doing this, Wagner again said he would recondition the potatoes and make them grade U.S. No. 1, but there would be a delay and the potatoes would be delivered June 8, to which complainant again agreed; that on June 6, at complainant's request, the broker attempted to contact Wagner to find out whether the potatoes would be delivered June 8, but was unable to contact him; that when complainant was informed of this fact, complainant, “in order to assure themselves of supplies on June 8," purchased another shipment of 500 bags of potatoes conforming to the specifications of the contract, at $3.15 per sack, delivered Washington, to arrive June 8; that on June 8, Wagner by telephone told the broker he was not going to deliver the potatoes to complainant at any time; and that he (Davidson) informed Wagner that complainant had instructed him to inform respondent they were demanding from respondent the difference between the contract price and the amount complainant was required to pay for potatoes as a replacement. Davidson stated finally that Harrisburg Daily Market, Inc. paid him brokerage for the transaction in controversy. Respondent filed an answering statement consisting of an affidavit by Serell S. Wagner, respondent's president, in which he states that respondent only had one car of potatoes and that he (Wagner) told Davidson that it must grade U.S. No. 1 as it would be impossible for respondent to replace the car should it fail to grade. Wagner confirmed Davidson's statement that Davidson disputed the "no replacement provision" that respondent had discussed the previous day. Wagner also confirmed Davidson's statement that he told Davidson the shipper had allowed respondent 1212 cents per sack and if complainant would pay an additional 122 cents per sack for the potatoes, respondent would regrade them so that it could secure 500 sacks to fill the order. Wagner stated further that, "due to the 'withered' condition of the potatoes it was determined that it would be impossible to grade these potatoes U.S. #1, and that Davidson was so advised on June 5, 1964." Complainant's statement in reply was a second affidavit by F. J. Davidson, III, stating that he had reviewed the affidavit of Mr. Wagner on behalf of respondent, that he had also reviewed "the facts of this entire transaction to the best of my knowledge, abil Cite as 24 A.D. 1128 ity, and records," and could find nothing which would cause him to alter the statements previously made in his original affidavit. He, therefore, reaffirmed "all of the statements contained in my Affidavit of December 14, 1964." The parties are in agreement that the contract contained all of the terms set forth in Finding of Fact 3. However, respondent alleges that the sale involved herein was conditioned up a particular carload of potatoes meeting U.S. No. 1 grade. On this issue, respondent has the burden of proof. Copies of the confirmation were mailed by the broker to the parties on June 1, the day the contract was negotiated, and respondent did not return or object to such confirmation until June 8, following numerous telephone conversations between the broker, Davidson, and respondent's Mr. Wagner. Moreover, respondent did not repudiate the terms of sale set forth in the confirmation when it was returned to the broker, but simply states, "As previously advised there will be no replacement on this sale." On the basis of evidence, we conclude that respondent has failed to sustain its burden of proof to establish its affirmative defense. We further conclude that respondent's failure to deliver to complainant potatoes in accordance with the contract, as shown in the confirmation of sale, was in violation of Section 2 of the Act. The evidence indicates that a prompt replacement purchase was made by complainant. Complainant paid $3.15 per sack for the potatoes, or a total of $1,575 on a rising market. Complainant should be awarded reparation against respondent for the difference between the latter amount and the contract price of $1,062.50, or $512.50, which represents complainant's damages as a result of respondent's failure to deliver. ORDER Within 30 days from the date of this order, respondent shall pay to complainant, as reparation, $512.50, with interest thereon at the rate of 5 percent per annum from July 1, 1964, until paid. The facts and circumstances as set forth herein shall be published. Copies of this order shall be served upon the parties. |