Cite as 24 A.D. 983 reparation against respondent in connection with a transaction in interstate commerce involving a carload of tomatoes. 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 failed to file an answer to the formal complaint and was thereafter advised that it was deemed in default. Prior to the issuance of a default order, however, respondent moved that its default be set aside and that it be allowed to file an answer to the complaint. Respondent's motion was granted over complainant's objection, the default was set aside, and the answer submitted by respondent was accepted for filing. Since the damages claimed in the formal complaint do not exceed $1,500, the evidence is submitted under the shortened procedure provided in the rules of practice (7 CFR 47.20). Pursuant to this procedure complainant and respondent, respectively, were given the opportunity to file an opening and an answering statement, but did not do so. Each party filed a brief. FINDINGS OF FACT 1. Complainant, Blue Ribbon Sales Company, is a corporation whose address is P.O. Box 706, Homestead, Florida. 2. Respondent, Narcise Produce, Inc., is a corporation whose address is City Market, Huntington, West Virginia. At the time of the transaction involved herein, respondent was licensed under the act. 3. On January 8, 1964, in the course of interstate commerce, respondent, acting through its agent, C. L. Russum, a broker, of Florida City, Florida, purchased from complainant one carload of mature green tomatoes, U.S. Combination grade, in the quantities and at the prices indicated below, f.o.b. Florida City, Florida, plus icing charges as shown: Cite as 24 A.D. 983 4. The broker issued a Broker's Memorandum of Purchase and Sale on the date of sale, January 8, 1964. Included on the memorandum, under "Shipping Instructions, Routing, and Destination," was the following notation, in relevant part: "Huntington, W.Va. . . . 1 ton ice North Bunker at origin. 2 Heaters at Florence, S. C. Thermo 5212°. FGEX 56453" 5. Complainant, on January 8, 1964, shipped from Flordia City, Florida, to respondent in Huntington, West Virginia, 960 cartons of mature green tomatoes in FGEX 56453. These tomatoes had been subjected to a joint Federal-State inspection beginning on January 7 at 7 p.m. and ending at 5 p.m. on January 8, 1964, and were certified as follows: 6. Car FGEX 56453 was initially iced at Florida City by the shipper, pursuant to instructions from the broker, with 2,000 pounds of ice being placed in the north bunker. Subsequently, two heaters were placed in the subject car at 8:30 p.m. on January 10 at Erwin, Tennessee, while the car was enroute to contract destination, at Huntington, with the thermostats being set at 52° F. 7. Car FGEX 56453 arrived at Huntington on the morning of Sunday, January 12. Respondent was advised of the arrival and proceeded to examine the tomatoes in the car. Being of the opinion, after its examination, that the temperatures in the car were too high for the good of the tomatoes, respondent raised the vents and unloaded 360 cartons from the car. An inspection was then made at 10 a.m. the following morning by the Railroad Perishable Inspection Agency, which reported the commodity temperature, top, as being 71° F. and bottom, 46° F. The RPIA certified the stock in the car as being 16 to 88%, average 48% light to serious defects, mostly sunken discolored areas over shoulders. Cite as 24 A.D. 983 8. The subject tomatoes were unloaded from car FGEX 56453 into respondent's warehouse, where they were federally inspected on January 16, 1964, at 1 p.m. The results of that inspection, in relevant part, are as follows: "Quality: ... Grade defects average 6%, chiefly scars. "Condition: Average approximately 15% green, 20% turning, 35% light red, 25% red, 4% decay. Condition defects range from 20 to 88%, average approximately 50%, approximately half of which is discolored skin checks, remainder slightly sunken discolored areas, generally occurring over the shoulders." 9. Respondent resold the tomatoes, beginning on January 18, 1964, and finishing on January 31, 1964, for total proceeds of $3,030. Of the tomatoes involved in this transaction, 216 cartons were certified on January 30 by the State of West Virginia Department of Agriculture as having no commercial value due to very serious damage by sunken discolored areas and soft rot condition. 10. The f.o.b. contract price, plus icing charges, of the subject carload of tomatoes is $2,799.25. Respondent has paid complainant $1,407.86, leaving a disputed amount of $1,391.39. 11. The formal complaint was filed on June 2, 1964, which was within 9 months after the cause of action herein accrued. CONCLUSIONS A preliminary question to be decided has to do with a term of the contract. Respondent contends that complainant, in shipping the tomatoes on January 8, 1964, breached the contract between the parties, since the tomatoes were to have been shipped at an earlier date. In reviewing the evidence before us, however, including the memorandum issued by the broker, respondent's agent, we conclude that the contract provided for the shipment of the tomatoes on January 8, 1964. Since this was the date upon which the tomatoes were shipped, we find no merit in respondent's claim of a breach of contract on the part of complainant with respect to the shipping date. The principal issue presented for decision, however, is whether complainant is liable to respondent for the damaged condition of the tomatoes at contract destination, as evidenced by the RPIA and the Federal inspections made at Huntington on January Cite as 24 A.D. 983 13 and January 16, respectively. It is undisputed that the shipment of tomatoes was warranted to be U.S. Combination grade at shipping point, and that the produce was certified, as the result of a joint Federal-State inspection made at Florida City on January 8, as being of this grade at that time and place. It is also undisputed that the sale herein was made on an f.o.b. basis. The regulations in effect at this time, section 46.43 (i) and (j), provide that in an f.o.b. sale there is a warranty that the produce quoted or sold will be placed free on board the boat, car, or other agency of the through land transportation at shipping point, in suitable shipping condition, and that the buyer assumes all risk of damage and delay in transit not caused by the shipper. "Suitable shipping condition," in relation to direct shipments, is defined as meaning that the commodity, at time of billing, is in a condition which, if the shipment is handled under normal transportation service and conditions, will assure delivery without abnormal deterioration at contract destination. (Emphasis ours). There is some evidence in the record which indicates that the subject tomatoes were not handled under normal transportation service and conditions, including the fact that the commodity temperatures on arrival at contract destination were found to be 71° F. top and 46° F. bottom. The principal defects found in the tomatoes at Huntington, however, were discolored skin checks and slightly sunken discolored areas, which defects are not subject to increase under the transit conditions present in this case. On the contrary, this damage is caused by handling at the time of packing and loading, and develops at its own speed, regardless of the temperatures in transit. This damage may not be noticeable at shipping point, but does become apparent during the transit period and at destination. In view of the foregoing, we conclude that the warranty of suitable shipping condition applies to this transaction. We also conclude that, based upon the results of the inspections at destination, the shipment was not in suitable shipping condition by reason of the discolored skin checks and slightly sunken discolored areas, averaging approximately 50%, in violation of section 2 of the act. Respondent accepted the shipment and is liable to complainant for the purchase price thereof, less damages sustained by reason Cite as 24 A.D. 983 of complainant's breach. Respondent's damages amount to the difference between what the tomatoes would have been worth at contract destination, had they met contract requirements at that point, and the value of the tomatoes actully received. With respect to the value of a carload of tomatoes meeting the requirements of the contract, there being no better evidence available, we will accept as indicative of such value the f.o.b. contract price of $2,799.25, plus freight charges of $327.11, or a total of $3,126.36. Corte & Sons v. Lerner & Son, 14 A.D. 320. The actual market value of goods delivered may be evidenced by the resale price, when such goods are resold by the buyer in a prompt and proper manner. Kirby & Little Packing Co. v. United Fruit & Produce Co., 16 A.D. 1066. Respondent resold 744 of the cartons of tomatoes for a total of $3,030 in a resale which appeared, under the circumstances, to have been prompt and proper. Respondent furnished evidence showing that the remainder of the tomatoes, or 216 cartons, had no commercial value. Accordingly, we accept the figure of $3,030 as the value of the tomatoes actually delivered to respondent. The difference between this value, $3,030, and the value the tomatoes would have had if they had met contract requirements, $3,126.36, is $96.36, and represents a part of the damages suffered by respondent as the result of complainant's breach. Other damages suffered by respondent due to complainant's breach include the costs of material and labor used by respondent in preparing these tomatoes for resale. These amount to $713.63 and should be added to the damages already found, $96.36, bringing the total of respondent's damages to $809.99. This sum should be deducted from the f.o.b. contract price of $2,799.25, leaving a balance due complainant of $1,989.26. Respondent has paid complainant $1,407.86 in connection with the transaction, leaving $581.40 due and owing. Respondent's failure to pay this sum to complainant is in violation of section 2 of the act, for which reparation of $581.40 should be awarded, with interest. ORDER Within 30 days from the date of this order, respondent shall pay to complainant, as reparation, $581.40, with interest thereon at the rate of 5 percent per annum from March 1, 1964, until paid. Copies of this order shall be served upon the parties. |