Julius Kessler & Co. v. Veio

Sales — Offer and Acceptance — Executed Contract. An offer and acceptance by letter for 10 barrels of whiskey, followed by a segregation of them in the seller’s bonded warehouse and the issuance of warehouse receipts and invoice therefor, constitute an executed contract which transfers title to the whole quantity, though only two barrels are shipped to the buyer at the time of the sale.

Error to Cheboygan; Shepherd, J. Assumpsit by Julius Kessler & Company against Joseph Veio and Fred Veio, copartners as Veio Bros., for goods sold and delivered. There was judgment for plaintiff on a verdict directed by the court for less than the amount claimed, and it brings error. Plaintiff is an Illinois corporation, with its headquarters in Chicago. It owns United States bonded distillery warehouses at several points in Kentucky. Defendants are retail liquor dealers in Cheboygan, Mich. Negotiation for the purchase and sale of some liquor was began by the defendants writing a letter to the plaintiff on January 29, 1903, in which they said: “We are in the market for ten barrels whiskey. If you can furnish us satisfactory prices, we will give you the business. Kindly quote us prices on five bbls. W. H. McBrayer Spring 1896, five bbls. Sam Clay Spring 1896. * * * If you will make the Spring 1896 W. H. McBrayer at $1.25, and the Sam Clay Spring 1896 at 65 cents, we will take five barrels of each, and you can ship one of each at once, and the b'lance we will order as we want it. * * * We would want them reduced to 95 proof. We always pay cash thirty days, less discount. Look us up in Bradstreet.” To this plaintiff replied January 31st, as follows: “We have filled the order for the Sam Clay, as well as for the W. H. McBrayer, at your own figures, and beg to hand you herewith invoice for the ten barrels, amounting to $448.32. You may deduct four per cent, from this amount if you remit within thirty days. We enclose also warehouse receipts Nos. 7,304 and 8,371 for four barrels Sam Clay and four barrels W. H. McBrayer’s Cedar Brook, respectively. We have ordered one barrel of each tax paid and shipped to you reduced to 95 per cent., and will draw for the government tax after shipment is made. * * * Please note that you will have no warehouse charges to pay on these goods prior to January 31, 1903; in other words, the warehouse charges begin only with this date.” Plaintiff sent this letter, the warehouse receipts, and invoices by registered mail, and they were received by the defendants February 2d. The warehouse receipts read as follows: “ Received and stored in our United States bonded distillery warehouse of our Paris Distillery No. 77, situated in Paris, in the 7th district of Kentucky, five (5) barrels Sam Clay whiskey, to be held .by us on storage and on account of and subject to the order of Veio Bros., deliverable only upon payment of the United States taxes and all other taxes and charges and storage on said whiskey at the rate of (5) cents per barrel per month from date of entry and payment'of the purchase price of said whiskey or of the notes given therefor and upon the return of this receipt properly indorsed and the written order of the holder thereof. Loss or damage by the elements, fire, riots, accidents, evaporation, leakage,' shrinkage, or natural decay shall be at the risk of the owner or holder of this receipt. Storage, State and county tax paid up to date of sale.” The other receipt was the same, except that it described another warehouse and the other brand of whiskey. Upon the back of each receipt was indorsed the following: “Address all correspondence in regard to shipment of the within-described whiskey to Julius Kessler & Co. {Inc.}, Distiller, Ashland Block, Chicago.” The invoice described the same 10 barrels of whiskey mentioned in the warehouse receipts and identified them in the same manner. The two barrels were withdrawn from the warehouse in the usual manner and shipped. Plaintiff made application in due form to the collector of internal revenue to reduce the whiskey to 95 per cent, proof, as directed by defendants. Plaintiff drew a draft upon the defendants for the amount of the tax advanced by plaintiff, which the defendants paid upon receipt of the two barrels. Oil' February 26, 1903, defendants wrote plaintiff that they had just opened the two barrels of whiskey, and upon gauging the same found that they were only 80 per cent, proof, instead of 95, stating they could not use either package, asked plaintiff to send draft for amount paid, including freight, and further stating that they would return the goods and warehouse certificates and consider their business relations closed. Upon regauging, defendants found that their gauger had made a mistake, and that the whiskey was found to be on a second gauging 90 and 92£ per cent. A small sample was drawn and sent to the plaintiff at its request, and it had it regauged, and wrote a letter to defendants, dated March 10th, acknowledging that one of the samples fell below 95 proof. Plaintiff afterwards requested the Michigan collector of internal revenue, in the district where the defendants lived, to re-gauge the whiskey. This was done, and he reported that it was 95 proof. This report was sent to the defendants, but was ignored by them. Considerable correspondence-passed between the parties which is immaterial to here state. Defendants kept and used the two barrels. About May 25th they returned the warehouse receipts and a check in payment for the two barrels, but declined any liability for the other eight barrels. The receipts and check were promptly returned by plaintiff to defendants, and this suit instituted to recover the price of the 10 barrels. The court declined, as requested, to direct a verdict for plaintiff for the entire amount, but directed a verdict for plaintiff for the price of the two barrels used by the defendants, and plaintiff appeals.