Cite as 24 A.D. 899 CONCLUSIONS Respondent contends in its answer to the complaint that the lettuce did not "conform to that called for by the order of respondent." Respondent states that it "called for" U.S. No. 1 grade lettuce and that the lettuce failed so to grade as shown by the Government inspection made at New York. In support of its claim that the contract was for U. S. No. 1 lettuce, respondent submitted a sworn statement by George DePaoli, who acted as broker in the transaction. This undated statement is addressed "To Whom it May Concern" and is as follows: "The agreement that Packers Super Markets, Inc. and I, George DePaoli, have is that all merchandise purchased for Packer's Super Markets, Inc. must be U. S. One with a Government inspection or, if not, U. S. One Quality at shipping point." The memorandum of sale issued by the broker makes no reference to grade or quality, but simply lists "Ram Brand Carton Lettuce," at $1.25 per carton, cooling 16¢ per carton. There is no evidence that either party made any objection to the terms of the contract as shown on the memorandum of sale. The broker's affidavit is in general terms with no references to the transaction in question. It cannot be concluded as a fact from this statement that U.S. No. 1 grade lettuce was mentioned during the negotiations leading to the transaction. We conclude, therefore, that the contract did not specify lettuce of U.S. No. 1 grade, but called for 704 cartons of "Ram" Brand lettuce. Under the contract, which did not specify a grade, complainant was required to deliver lettuce of merchantable quality which would meet the Good Delivery Standards set forth in Section 46.44 of the Regulations. This section provides that if the contract does not specify a U.S. grade or percentage of condition defects, the lettuce at destination may contain a maximum of 15%, by count, of the heads in any lot which are damaged by condition defects, including therein not more than 9% serious damage of which not more than 5% may be decay affecting any portion of the head exclusive of wrapper leaves. Since the Federal inspection of the lettuce at New York, on April 14, 1964, showed only 5% condition defects upon arrival, the lettuce was well within the Good Delivery Standards. The 20% grade defects, consisting of poorly trimmed and broken midribs, did not make the lettuce unmerchantable. Accordingly, we conclude that the lettuce met contract requirements and that respondent's rejection was without reasonable cause and in violation of Section 2 of the Act. Cite as 24 A.D. 903 Following respondent's rejection of the lettuce upon arrival and inspection at New York, respondent admits that it changed its mind about the rejection, and unloaded 404 cartons of the lettuce. It is not claimed that respondent informed complainant, however, that it decided to accept the lettuce. Since respondent was promptly notified that complainant was handling the lettuce for whom it may concern and was holding respondent liable for any loss, it should have been clear to respondent that complainant had probably taken possession of the lettuce, or exercised dominion over the shipment, on the very day that respondent rejected it. However, since respondent unloaded and took possession of 404 cartons of the lettuce, it is liable to complainant for at least the fair market value of the lettuce. While such value is greater than the amount claimed in the complaint, we award complainant reparation against respondent in the amount claimed, $529.01, with interest. It is concluded that respondent's failure to pay complainant this amount was in violation of Section 2 of the Act. We recognize that this award does not settle the question of freight charges in this f.o.b. contract. It does not appear that freight charges have been paid, or if so, by whom. Since no claim has been made for freight charges, reparation is awarded without reference thereto. ORDER Within 30 days from the date of this order, respondent shall pay to complainant, as reparation, $529.01, with interest thereon at the rate of 5 percent per annum from May 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. (No. 9929) CUSUMANO BROTHERS COMPANY v. EARL C. RECKER CO. PACA Docket No. 9490. Decided June 28, 1965. Suitable shipping condition-Not applicable-Delay in transit Dismissal Where delay in transit resulted in abnormal transportation services and conditions in f.o.b. sale of lettuce, warranty of suitable shipping condi Cite as 24 A.D. 903 tion, including good delivery standards, not applicable and complaint dismissed. Ellenson Traffic Bureau, Detroit, Mich., for complainant. Respondent pro se. Mr. James V. Wright, 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 lettuce in interstate commerce. A copy of the formal complaint and a copy of the Department's report of investigation were served upon respondent and respondent filed an answer. A copy of the report of investigation was also served upon complainant. 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 a brief. FINDINGS OF FACT 1. Complainant is a partnership composed of Dominic J. Cusumano, Jr., Frank A. Cusumano and Salvatore J. Cusumano, doing business as Cusumano Brothers Company, whose address is 10570 Gratiot Avenue, Detroit, Michigan. 2. Respondent is an individual, Earl C. Recker, doing business as Earl C. Recker Co., whose address is P. O. Box 978, Mesa, Arizona. At the time of the transaction involved herein, respondent was licensed under the act. 3. On or about December 4, 1962, in the course of interstate commerce, respondent sold to complainant a carload of lettuce, consisting of 840 cartons, Allure brand, 2-dozen size, at an agreed price of $1.35 per carton, f.o.b. Mesa, Arizona, plus 15 cents per carton cooling charges, for a total contract price of $1,260. The car was to be billed by respondent to complainant's siding. The contract between complainant and respondent was negotiated by a broker, Johnston and Brown, of Phoenix, Arizona. 4. On December 4, 1962, at 5:30 p.m., a Federal inspection was made of the lettuce at Mesa, Arizona, at respondent's request and Cite as 24 A.D. 903 the lettuce was certified to be grade U.S. No. 1 with no decay. This information was given by respondent to the broker. The broker then prepared and sent to the parties a "Broker's Memorandum of Purchase and Sale" which reads, in part, as follows: "Quantity 840/2 ALLURE Commodity and Specifications 1.35 PLUS .15 CARTON LETTUCE TWO DOZENS" There is a handwritten notation that reads: "Shipper says car grades US one orig wt 48 lbs." Price 5. The carload of lettuce was shipped from Mesa, Arizona, at 2:46 a.m., on December 5, 1962. The car arrived at Detroit, Michigan, at 12:10 p.m., December 10 and was placed at complainant's siding in Detroit, Michigan, at 6:40 p.m., December 10, 1962. 6. On December 11, 1962, at 1:30 a.m., a Federal inspection, conducted at the request of complainant, revealed the temperature of the product was 37° at the top and 40° at the bottom. The certificate also shows the following: "Quality: Clean, fairly well trimmed. Average 56% hard, 39% firm, 5% fairly firm heads. Grade defects average 4% mostly worm damage. "Condition: Head leaves: Average 4% damage by Pink Rib. In half of samples 1 to 3 heads per carton, some 4 heads, some none, average 8% decay mostly Watery Soft Rot and Gray Mold Rot mostly early, many advanced stages affecting compact portion of head. Remainder fresh and crisp, outer leaves green color. Wrapper leaves: No decay. "Grade: Meets quality requirements but fails to grade U. S. No. 1, 56% hard, 39% firm only account condition. "Remarks: Inspection and certificate restricted to product and lading between doors and 2 stacks each side of doors." 7. On December 11, 1962, complainant advised the broker of the results of the Federal inspection. On December 12 and 13, 1962, complainant resold the lettuce for gross proceeds of $1,815. On December 20, 1962, complainant advised respondent by telegram that the lettuce failed to meet good delivery requirements, that it had been resold and that complainant expected complete protection. Cite as 24 A.D. 903 8. On or about January 15, 1963, complainant paid respondent's invoice in the amount of $1,260. 9. The informal complaint was filed on July 29, 1963, which was within 9 months after accrual of the alleged cause of action herein. CONCLUSIONS Complainant contends that the contract entered into on December 4, 1962, called for U.S. No. 1 grade lettuce. On the other hand respondent contends that the lettuce was not sold on the basis of any grade and that it was not until a subsequent conversation on the same day that he told the broker, upon inquiry, the lettuce had been federally inspected and certified as U.S. No. 1 grade. The broker included this statement as to the U.S. No. 1 grade in the memorandum. Since it does not appear that this or any other grade was mentioned during the negotiations which resulted in the contract herein, it is concluded that the contract did not call for lettuce of any particular grade. Complainant next contends that the lettuce failed to meet contract requirements in that it arrived at Detroit with excessive deterioration in violation of the suitable shipping condition rule and the good delivery standards set forth in the regulations. Section 46.42 of the regulations then in effect (7 CFR 46.42) provided, in relevant part, as follows: "Unless otherwise agreed to between the parties, 'Good Delivery' in connection with f.o.b. contracts of purchase and sale means that the commodity meets the requirements of the contract at time of loading or sale and, if the shipment is handled under normal transportation service and conditions, will meet the following additional requirements on delivery at the contract destination." Section 46.42 (a) (2) provides that if the contract does not specify a U.S. grade or percentage of condition defects, the lettuce at destination may contain a maximum of 15 percent, by count, of the heads in any lot which are damaged by condition defects, including therein not more than 9 percent serious damage of which not more than 5 percent may be decay affecting any portion of the head exclusive of wrapper leaves. Respondent urges that section 46.42 is not applicable in this proceeding because the carload of lettuce did not move under |