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Rothenberg v. Rothstein

decided.: March 24, 1950.

ROTHENBERG
v.
H. ROTHSTEIN & SONS.



Author: Kalodner

Before BIGGS, Chief Judge and O'CONNELL and KALODNER, Circuit Judges.

KALODNER, Circuit Judge.

On this appeal, the parties have presented two issues for determination: (1) whether the defendants properly raised their defense based on the Statute of Frauds contained in the Pennsylvania Sales Act, 69 P.S. § 42, and (2) whether the learned trial judge erred in holding that the contract involved was outside the statute. However, on examination, the record discloses another, and more important, issue which, because it was not here developed by the parties, warrants the granting of an opportunity for them to do so.

Rothenberg commenced this litigation by complaint to the Secretary of Agriculture pursuant to the Perishable Agricultural Commodities Act, 7 U.S.C.A. § 499f, seeking thereby to enforce against the Rothsteins liability for a specific violation of the Act.*fn1

In accordance with the statutory procedure, a hearing was had in Philadelphia, Pennsylvania, and ultimately damages were awarded by the Secretary's Judicial Officer to the plaintiff. The defendants perfected their appeal to the District Court, in which tribunal they were entitled to, and obtained, a "trial de novo * * * [proceeding] in all respects like other civil suits for damages, except that the findings of fact and order * * * of the Secretary shall be prima-facie evidence of the facts therein stated. * * *" 7 U.S.C.A.§ 499g(c). The jury returned a verdict against them and this appeal is taken from the judgment entered thereon, their motion for judgment under Rule 50(b), Federal Rules of Civil Procedure, 28 U.S.C.A., having been denied, D.C., 9 F.R.D. 211.*fn2

It is undisputed that on March 23, 1944, by means of the telephone, the defendants, in Philadelphia, Pennsylvania, accepted the offer of the plaintiff, in Buffalo, New York, to sell them a specific carload of fresh peas. Thus, the contract would appear to have been made in Pennsylvania. Restatement, Conflict of Laws, Sec. 326, Comment C.

It is further undisputed that the car reached Philadelphia, at the latest, on the morning of March 27, 1944, and that the defendants refused to take the peas on the ground that inspection disclosed a failure to conform to the qualitative description allegedly given to them by the plaintiff when the contract was made. The telegraphic exchanges between the parties are summarized in the margin.*fn3 Later the peas were sold by the plaintiff.

The remaining facts are established by the jury's verdict and are controlling, especially since the findings are not now attacked:

(1) The defendants were delivered peas of the quality described by the plaintiff, and therefore breached their contract in refusing the car.

(2) The carload of peas was purchased under a term of contract, "acceptance final", which gave them no right of rejection.*fn4

(3) The carload of peas was not rejected by the defendants within a reasonable time, which, under the Regulations of the Secretary of Agriculture, is not more than twenty-four hours after receipt of notice of the arrival of a rail shipment.*fn5

It is obvious that, other considerations aside, the jury might well have found for the plaintiff on any one of these three grounds, and on either of the latter two grounds even though the plaintiff had misrepresented the peas.

Finally, it may be noted that the reparation award to the plaintiff by the Secretary was based primarily on the finding that the contract included the term "acceptance final", which defendants had denied. However, it was also found, as fact, that the defendants gave notice of rejection to the plaintiff more than twenty-four hours after delivery and inspection of the car, and that the contract was for "good" peas only. In this latter respect, the defendants had contended, as they did at the trial below, that the contract was for "U.S. No. 1 peas" with "dark green pods and green calyx".

The defendants asserted the Statute of Frauds in their pleading before the Secretary, but it was found that the telegrams exchanged by the parties constituted a memorandum sufficient to remove the agreement from its operation. The defendants also invoked the Statute of Frauds ...


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