Citations
- 253 Ill. App. 551
Full opinion text
Mr. Justice Ryner
delivered the opinion of the court.
On May 21, 1920, a written contract was entered into between the parties to this litigation by the terms of which the plaintiff agreed to sell and the defendant agreed to buy 100 tons of sugar. The provisions of the contract pertinent to the issues raised on this appeal are as follows:
“Minford Lueder & Co.
106 Wall St.
New York May 21,1920.
Sold To: Sawyer Biscuit Co.,
Chicago, Ill.
Through Meinrath Brokerage Co.,
Chicago, Ill.
By Interocean Mercantile Corporation
About one hundred (100) long tons, (10% more or less) of Java white granulated sugar, at 23%c per pound, net, duty paid, ex dock New York, landed weights less actual tare.
This sugar is sold on the basis of No. 25 Dutch Standard polarizing not less than 99 degrees, but in the event of it testing less, a corresponding allowance shall be made in accordance with New York rulings.
This sugar shall be shipped by steamer and/or steamers from Java between July 1st and August 31st, inclusive, and the relative bill of lading shall constitute proof thereof.
This sugar shall be taken delivery of by the buyer immediately on being unloaded.”
On October 18, 1920, the plaintiff wrote the defendant:
“Messrs. Sawyer Biscuit Company,
Chicago, Illinois.
Dear Sirs:
With reference to your contract with us for 100 tons of sugar, we beg to inform you that all our August Java shipments were made on two steamers. The first boat is due to arrive early in November, say about Nov. 10th, whereas the second steamer we have been advised has been delayed en route and will probably arrive some three weeks later. Will you kindly let us know whether you would prefer to receive the whole or part of your purchase out of the first steamer, or whether it would suit you best to get delivery out of the later boat, so that we can make all our arrangements accordingly, if possible. If for any reason you should prefer an immediate delivery we suggest that you take up with us the matter of giving you like sugars from spot stocks.
Kindly reply promptly, and oblige,
Tours faithfully,
Interocean Mercantile Corporation
Gen. Manager.”
The steamers referred to in the letter were the Alloway and the Honolulu Maru.
Receiving no reply to its letter, the plaintiff on October 25, 1920, sent a telegram to the defendant stating:
“Please reply immediately to our letter of eighteenth October as' we are now making allocations.”
There was no response by the defendant to either the letter or the telegram until November 22, 1920, when it telegraphed the plaintiff as follows:
“Replying your telegram received eighteenth instant we are under no obligation to accept sugar shipped on Alloway and you may take this as our refusal to do so.”
The next communication between the parties was a telegram, dated December 10, 1920, from the plaintiff to the defendant stating:
“Referring our letter Eighteenth October and your telegram Twenty-second November your hundred tons sugar will be delivered from Steamer Honolulu Maru due here next Wednesday December Fifteenth. Please arrange for payment Equitable Trust Company accordingly.”
Two days later the defendant replied by telegraph saying:
“Replying your telegram tenth instant we are under no obligation to accept sugar shipped on Honolulu Maru and you may take this as our refusal to do so.”
On December 16, 1920, the Equitable Trust Company, to whom payment for the sugar was to be made, wrote to the defendant asking for the latter’s reasons for refusing to accept the sugar from either" steamer. The reply received, six days later, was:
“We refer you to our counsel in this matter, Messrs. Putnam, Bell, Dutch & Santry of Boston.”
The steamer Alio way arrived in New York on November 12, 1920. The Honolulu Maru arrived December 15 of the same year. The defendant refused to accept the sugar or pay for it. It gave no reason for its refusal. On October 6,1922, the plaintiff instituted suit in the circuit court of Cook county to recover damages for breach of the contract. A jury trial was had resulting in a verdict, and judgment upon the verdict, in favor of the defendant. The plaintiff appealed.
The pleadings are voluminous but they present but two simple issues. The principal defense was that the sugar tendered was not of the kind or quality called for by the contract. The qther was that there was a default as to the time of shipment.
In connection with the conduct of the defendant the history of the sugar market in the Hnited States for the year 1920 is decidedly enlightening.
It is conceded, that in the early months of the year there was an acute shortage of sugar. A witness for the defendant, on cross-examination, said:
“There was a war shortage and the price went up to — wherever you could find any sugar, would bring most any old price, as far as that is concerned.”
He might well have added that parties requiring sugar were willing to pay almost any price for any “old” kind of sugar. The condition of the market and the causes of the condition were stated, by a witness for the plaintiff, to be as follows:
“Well, after the signing of the armistice, in the latter part of 1918, the restrictions on sugar throughout the world began to ease up, and the people whose sweet tooth had been denied them for three to four years previous began using sugar in large quantities, and prices gradually advanced during 1919, until the beginning of 1920, when the United States Equalization Board, which had charge of all the distribution of sugar in this country, ceased to function, and after that period there was an open market and prices advanced for granulated from about 9 cents a pound to as high as 28 to 30 cents a pound between the 1st of January and the middle of July, 1920, due to a tremendous buying move of manufacturers and consumers and grocers and distributors of sugar. Due to these high prices Europe started to sell sugar here. When I say Europe I mean all parts of the Old World, and as a consequence of this, by the middle of July we had sugars pouring in here from all sections of the world — Java, Mauritius, Belgium, France, Czecho-Slovakia, Hong Kong, Natal, India — and we had too.much sugar. We could not consume it, and we could not take care of it. The result was that beginning about the middle of July, the market broke and granulated receded down to under 5 cents a' pound by the 1st of November of the same year.”
The facts with reference to market conditions in the year in question were presented before the United States District Court for the Northern District of California in the case of Mathieu v. George A. Moore (& Co., 4 Fed. (2d) 251. The case involved a contract for the sale of 200 tons of Indo-Chinese sugar. The buyer refused to make payment and defended a suit brought by the seller upon the grounds that the sugar was not of the quality contracted for and that it was shipped in single instead of double bags. Neither defense prevailed. The court said:
“The record, and the correspondence are full of expressions by defendant showing that it had really contracted for a quality of sugar of which it had no knowledge whatsoever. The record, also, is full of evidence to the effect that the year 1920 was a time of frenzied speculation in sugar (as well as other commodities), and that there was a mad scramble for sugar everywhere.”
And also made the further comment that:
“It (the sugar) arrived upon a glutted and falling market, and it was contracted for at a time when American buyers were feverishly contending with one another for any kind of sugar.”
The conclusion of the court was that:
“The evidence fairly justified the conclusion that the defendant contracted for an article not readily salable in this market, and the rejection was due to‘the discovery of this fact, coupled with a falling market.”
Among the numerous pleas filed by the defendant were several charging the plaintiff with fraud and misrepresentation as to the quality of the sugar contracted for and that it was known to the plaintiff that the sugar was unfitted for the uses of the defendant. No evidence, however, was presented to support any of these charges. Not a single representative of the defendant company testified. It relied solely upon the testimony of experts, who testified that the word “granulated,” when used in connection with the description of sugar in the United States, and particularly in the vicinity of Chicago and New York, had acquired a fixed and definite meaning among dealers in sugar. According to their testimony the word signifies a sugar that has been refined by a method known as the bone char process or filtering through burned or charred animal bones for the purpose of removing impurities.
It is conceded that at the time in question, and prior thereto, no sugar made in Java was purified by this process. If is likewise undisputed that, with two exceptions, the bone char process was universally used in the manufacture of sugar in the United States. The two exceptions were beet and plantation sugars. These were purified by the same processes used in Java. These were known as the carbonation and sulphitation processes. It is deemed unnecessary to describe these processes in detail or to discuss their relative merits. It suffices to say that the experts for the respective parties disagreed on the question as to whether a high grade granulated' sugar could be manufactured without using bone char.
It is undisputed that the sugar in question graded better than No. 25 Dutch Standard, a standard of whiteness. It also polarized in excess of 99 degrees. It averaged about 99-8/10. The degree of polarization indicates the sucrose content. It came from Java. But the experts for the defendant say that the words “Java” and “This sugar is sold on the basis of No. 25 Dutch Standard polarizing 99 degrees, but in the event of it testing less, a corresponding allowance shall be made in accordance with New York rulings,” are without purpose or effect because of the use of the word “granulated.” They say this despite the fact that there was a dearth of sugar when the contract was entered into. They insist that the defendant was entitled to sugar of the same quality as American Standard granulated, refined by the bone char process, notwithstanding their testimony that this kind of sugar never polarizes less than 99-5/10 and is whiter than No. 25 Dutch Standard. If the defendant expected to receive sugar equal in quality to American Standard granulated, why did it sign a contract containing specific provisions for minimum requirements as to quality below that of American Standard granulated, and that, in the event the sugar did not meet these requirements, allowances as to price should be made?
The experts, testifying for the plaintiff, testified that the sugar shipped on the steamers Alloway and Honolulu Maru was granulated. They said it was put through a machine known as a granulator and that this process converted the wet mass of sugar into grains or granules which made it granulated sugar. They distinguished this process from that of molding the sugar into the form of cubes or dominoes.
The experts for the defendant contended that the word “granulator” was a misnomer and that the machine was nothing but a dryer and should be so designated. But whatever the name, the result is the same. Sugar in a wet cohesive mass has the moisture removed and comes out of the granulator or dryer in the form of grains or granules. It becomes granulated regardless of the particular process used to remove the impurities. Some of the witnesses, however, testified that in the process of manufacture the sugar forms into grains or crystals before it is put into the granulator. In other words, it is granulated before it is put through the granulator. But whether it is granulated before or after going through the granulator the undisputed facts in the record show that the sugar in question was “granulated” sugar.
One of the defendant’s experts admitted, on cross-examination, that Webster’s International Dictionary defines “granulated” as meaning “Consisting of or resembling grains”; “granulated in grains; granular; as granulated sugar.” Finally, he said, “I wouldn’t disagree with Webster on anything.” Another one when asked about the definition of “granulated” given by the Century Dictionary, to like effect, said he did not conduct his business according to any dictionary. These answers are typical of those given by other of the defendant’s experts.
It developed upon the trial that beet and plantation sugars manufactured and sold in the United States are designated in contracts and containers as “granulated” sugars. Some of the witnesses for the defendant said that this was a false description hut that the trade was not deceived because buyers could tell from the name of the plantation or place of origin that the sugar had not been subjected to the bone char process. Others said that it was improper to use the word “granulated” as applied to these sugars without adding the words “beet” or “plantation.”.
In the instant case there is no evidence that the defendant was deceived. It knew that the sugar contracted for was made in Java and not in America. It therefore knew that it was not to receive Standard American granulated sugar. There was not an iota of evidence showing or tending to show that the plaintiff made a single representation, false or otherwise, as to the quality of the sugar or the processes used in its manufacture. There was no competent evidence of any usage or custom with reference to the meaning to be given the word “granulated” when used as part of the description of Java sugars when sold in this country. In fact there could not have been any custom or usage because no Java sugars‘were imported into the "United States until about the time the contract in question was entered into.
We are of the opinion that the undisputed facts in the record show that the sugar tendered