Pullman Palace-Car Company v. Metropolitan St. Railway Company/Opinion of the Court

The facts found by the court below, as above detailed, bring this case within a very narrow compass, and render it unnecessary to make an extended review of the very large number of adjudged cases, American and English, cited in argument.

The subject of implied warranty in sales of personal property was examined by this court in Bridge Co. v. Hamilton, 110 U.S. 108, 116, 3 Sup. Ct. 537, and subsequently in Seitz v. Machine Co., 141 U.S. 510, 518, 12 Sup. Ct. 46. In the first of those cases it was said that, 'when the seller is the maker or manufacturer of the thing sold, the fair presumption is that he understood the process of its manufacture, and was cognizant of any latent defect caused by such process, and against which reasonable diligence might have guarded. This presumption is justified, in part, by the fact that the manufacturer or maker, by his occupation, holds himself out as competent to make articles reasonably adapted to the purposes for which such or similar articles are designed. When, therefore, the buyer has no opportunity to inspect the article, or when, from the situation, inspection is impracticable or useless, it is unreasonable to suppose that he bought on his own judgment, or that he did not rely on the judgment of the seller as to latent defects of which the latter, if he used due care, must have been informed during the process of manufacture. If the buyer relied, and under the circumstances had reason to rely, on the judgment of the seller, who was the manufacturer or maker of the article, the law implies a warranty that it is reasonably fit for the use for which it was designed, the seller at the time being informed of the purpose to devote it to that use.' This principle was reaffirmed in the other case above cited, and it was there said: 'But it is also the rule, as expressed in the text-books and sustained by authority, that where a known, described, and definite article is ordered of a manufacturer, although it is stated by the purchaser to be required for a particular purpose, still, if the known, described, and definite article by actually supplied, there is no warranty that it shall answer the particular purpose intended by the buyer.'

These cases were much commented on in argument, and for that reason we have deemed it proper to indicate the principal ground upon which each was determined.

The present case has some features that were not in either of the others. By the written contract between the parties, the cars that the plaintiff agreed to construct were to be inspected and accepted at the works of the plaintiff, after which they were to be delivered by the plaintiff, free on board the cars, at Pullman Junction, Kensington, Ill. After 10 or 12 cars were completed and were inspected at the works of the plaintiff by the superintendent of the defendant, the latter expressed himself satisfied with them, and requested the plaintiff to finish the others in the same way and forward them. Clearly, upon such inspection and acceptance, the title as to those cars passed to the defendant company. There is no claim that the remainder of the cars were not finished in the same manner as the first lot inspected by Lawless. As to these, the title certainly passed to the defendant when they were put on the cars at Pullman Junction to be forwarded, if it did not pass before and as each lot was completed under the order to make them like those that had been personally inspected and accepted at the works of the plaintiff. Halliday v. Hamilton, 11 Wall. 560, 564, and authorities cited; the Mary and Susan, 1 Wheat. 25, 35; Stock v. Inglis, 12 Q. B. Div. 564.

To what extent was the defendant concluded by the actual inspection and acceptance of the first lot of cars, and of the acceptance, in advance of their completion, of the remaining cars when finished or constructed in the same way?

The court below found that the cars could not be operated successfully with the brakes that were put upon them by the plaintiff, and that this fact was not apparent nor discoverable upon any reasonable inspection at the place of manufacture, and could not be discovered until after a practical test upon the road.

The contention, therefore, of the defendant, is that the plaintiff, having knowledge that the cars were to be used on the defendant's road, impliedly warranted that the brakes placed on them would be sufficient for the purposes for which they were designed. The plaintiff insists that the provision in the contract for inspection and acceptance of the cars at the place of manufacture is inconsistent with any idea of implied warranty upon its part of the sufficiency of the brakes to meet the peculiar difficulties on defendant's road arising from curves and grades; especially as one of the defendant's engineers had experience in the construction and operation of street cars, and was at least as well informed upon that subject as the plaintiff's officers could possibly have been.

If it be assumed that the plaintiff, notwithstanding the provision for inspection and acceptance of the cars before their delivery, impliedly warranted the sufficiency of any brakes placed by it on cars to be used on the defendant's road, and even if it be assumed that the defendant had the right, after title passed, to rescind the contract within a reasonable time after discovering the insufficiency of the brakes, the result for which the defendant contends will by no means follow.

The defendant became aware of insufficiency of the brakes as early as the 22d day of March, 1888, and notice of that fact was given to the plaintiff. The defendant did not then rescind the contract, nor intimate any purpose of so doing. It sought to know what remedy the plaintiff would suggest to meet the difficulty, and demanded that the plaintiff should make the brakes sufficient. It warned the plaintiff that, if it did not send a practical man to Kansas City to take charge of the necessary changes, such changes would be made by the d fendant at the plaintiff's expense. The latter promptly replied that it would to what was necessary in order to make the brakes sufficient. But what it did failed to accomplish the desired result. The outcome of the matter was the refusal of the defendant to pay for the cars 'on account of the imperfect brakes and other serious objectionable features.' Notice of the determination not to retain the cars or pay for them was not given by the plaintiff to the defendant until the 12th of May, 1888. We dismiss any consideration of the 'other serious objectionable features' referred to, because we are not informed by the record that any such existed. On the contrary, the defendant stated that the defects in the cars, independently of the brakes, did not interfere with their operation. The case is then to be disposed of upon the basis that the cars, apart from the brakes, were in every substantial respect what the contract contemplated, and that the only ground upon which the defendant placed its refusal to pay for them was the insufficiency of the brakes.

We are of opinion that the demand of the defendant that plaintiff make the brakes sufficient, in connection with its expressed willingness prior to its notice of May 12th (no intimation being previously given of any desire or purpose to rescind the contract) to approve the plaintiff's bill as soon as the brakes were made sufficient for use on its road, and the expressed willingness of the plaintiff, after notice from the defendant that the brakes were insufficient, to put them in proper condition (without claiming that it was under no legal obligation to incur expense to the end), so far changed the relation of the parties to each other that the defendant lost the right, if it had such right, to rescind the contract and return the cars; and the plaintiff must be held to have admitted or recognized its obligation to put the brakes in such condition that they would be adequate for use on the defendant's road.

While it must be taken upon the record before us that the brakes in question were entirely useless for the defendant's road, it is not specifically found, nor do the facts found justify the conclusion, that other brakes could not have been supplied for use on the cars constructed by the defendant. If, at trifling expense or without unreasonable exertions, the defendant could have supplied the cars in question with other brakes that were sufficient, the utmost that, under all the circumstances, it could claim in reduction of the amount it agreed to pay for the cars, would be the reasonable cost of obtaining new brakes adapted for use on such cars. Manufacturing Co. v. Phelps, 130 U.S. 520, 527, 9 Sup. Ct. 601; Miller v. Mariner's Church, 7 Greenl. 51; Davis v. Fish, 1 G. Greene, 407; Sedgw. Dam. (6th Ed.) 106, 107.

It is found that the defendant operated upon its road combination cars purchased from another company, of a similar character with those constructed by the plaintiff, weighing about 600 pounds less, and used a brake of a different pattern, costing from $75 to $100. It may well be assumed from the findings that the cars in question can be successfully operated with proper brakes costing not more than the last-named sum. If brakes adequate for use on the cars constructed by the plaintiff could not be obtained for that amount, that fact is not shown. The ends of justice will be met by a judgment in favor of the plaintiff for the contract price of the cars constructed by it, and now in the possession of the defendant, lessened by the sum of $2,500, the amount which we must assume, under the findings, it would cost the defendant to replace the brakes furnished by plaintiff with other brakes sufficient for the cars in question.

The plaintiff included in its petition claims for different sums of money, aggregating $4,219.70, which it claimed to have been expended for the use of the defendant in connection with the contract for building the cars. But the allegations in respect to those cla ms are traversed by the answer, and there is no finding in reference to them. Indeed, no finding in respect to them was asked. The judgment cannot therefore embrace them. We can only direct such judgment as is authorized by the facts specially found by the court below. Rev. St. § 701; Ft. Scott v. Hickman, 112 U.S. 150, 164, 5 Sup. Ct. 56, and authorities cited.

The judgment is reversed, with directions to enter judgment in favor of the plaintiff for the sum of $47,500, with interest thereon from the 30th day of March, 1888, at the rate allowed by the laws of Illinois.

Reversed.

Mr. Justice BREWER took no part in the consideration or decision of this case.