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February 28, 1963

Joaquim Magalhaes MARTINS FERREIRA, Arnaldo Magalhaes Martins Ferreira, Jose Magalhaes Martins Ferreira, individually, and as a partnership trading as Martins Ferreira and Irmaos, Plaintiffs,
JAYESS CORP., Sepenuk & Sons Corp., Alexander Rodrigues and Mack Sepenuk, Defendants

The opinion of the court was delivered by: WORTENDYKE

The plaintiffs in this case are three citizens of Portugal, who sue here in their individual capacities, and as members of a partnership. The complaint, filed on November 16, 1960, names as defendants Mack Sepenuk, Sepenuk & Sons Corp., and Jayess Corp. (all of whom will be hereinafter described and referred to as the Jayess defendants, or Jayess), and Alexander Rodrigues, properly known as Alexander V. Marques, t/a Lusitania Export Agency (hereinafter Marques). Jurisdiction in this Court is predicated upon 28 U.S.C.A. § 1332.

Count 1 of the three-count complaint alleges that the defendants (acting as either principals, agents or assignees) entered into an agreement with the plaintiffs for the sale of a quantity of copper known as 'light copper' in the trade, for which the plaintiffs agreed to pay the sum of $ 44,010. Plaintiffs further allege that on or about July 15, 1957, and on subsequent dates, the defendants shipped to the plaintiffs copper which they represented to be, but which was not in fact, of the quality specified in the contract. Plaintiffs charge that the failure of the copper shipped to conform with the description specified in the contract constituted a breach of implied and express warranty, to their damage in the sum of $ 25,000.

 The second count, reiterative of the same factual basis, charges that defendants falsely and fraudulently, with intent to deceive, represented that the copper to be furnished would be of the grade known as 'light copper', while then knowing that said representation was false. Plaintiffs, claiming to have relied upon such representation, seek allegedly resultant damages, in the amount of $ 50,000.

 The third count charges a conspiracy between the defendants to defraud and deceive the plaintiffs. In this count also, the ad damnum is $ 50,000.

 The Jayess defendants deny the alleged warranty, misrepresentation and conspiracy. The same defendants further plead that by accepting and paying for the copper shipped, plaintiffs have waived any right to claim damages based upon the alleged inferior quality of the merchandise.

 We need not here consider the answer of Marques, because the complaint as to him has been dismissed on motion, for lack of jurisdiction; it having been established that he, as well as all of the plaintiffs, are citizens of Portugal. Marques remains in the case in prosecution of certain cross-claims which he has filed against the Jayess defendants, to which they, in turn, have counterclaimed against him.

 On November 27, 1962, when this case was moved for trial, it was agreed by the parties, with the consent of the Court, that only the issue of the liability of the Jayess defendants to the plaintiffs be then tried, and that the remaining questions should await the determination of the Court upon that issue.

 When the trial commenced, the plaintiffs called Marques as their first witness, and attempted to question him without the use of an interpreter, over the objection of the Jayess defendants. It became immediately apparent to the Court that the language limitations of the witness rendered his testimony unintelligible without competent interpretation. Lacking an interpreter of Portuguese, the parties agreed to submit this phase of the case to the Court upon the depositions, including the exhibits marked at the taking thereof, and the pleadings on file, together with the oral testimony which had been given before the Court.

 I find the following facts:

 In 1957 Alexander V. Marques resided at 190 Walnut Street, Newark, New Jersey, from which address he conducted business under the name of Lusitania Export Agency. In that year he learned, through the Portuguese Vice-Consul's office in Philadelphia, that in 1955 a Portuguese concern had made inquiry by letter respecting sources from which it might purchase scrap copper. With this letter in hand, Marques set about locating sellers of metal who might be able to supply him in the event of a sales agreement with the author of the letter. Marques was referred to the office of Sepenuk & Sons, where he discussed with Mack Sepenuk the possibility of selling copper to a Portuguese company, with which he had been placed in contact. He obtained from Mr. Sepenuk prices for light copper, light copper number 1 and number 2, and yellow heavy brass. Marques then prepared his own price list, having in mind the prices quoted to him by Sepenuk, for the materials in question, and transmitted his offer to sell by letter, dated March 16, 1957, to the plaintiffs. The terms of sale contained in this letter contemplated shipment of the specified merchandise C.I.F. Tagus or Porto, Portugal, upon a letter of credit being opened in Marques' favor in a New York bank. By their responsive letter dated March 22, 1957, plaintiffs offered to purchase 15 tons of light copper at $ 578.00 per ton, C.I.F. Porto, and revealed that they were opening credit for the total amount of this purchase. This offer was accepted by Marques by letter dated March 30, 1957. On May 17, 1957, a further order for 60 tons of light copper at $ 600, and 50 tons of yellow brass, was confirmed by Marques' letter to plaintiffs. Jayess entered into a written contract dated May 17, 1957, to sell to Marques 60 metric tons of light copper scrap at 24 3/4 cents per pound, and 50 metric tons of yellow brass scrap at 19 1/2 cents per pound, F.A.S. Coast ports, with any freight in excess of that from New York to be borne by Jayess. The contract required Marques to open an irrevocable letter of credit acceptable to and in favor of Jayess, on or before May 24, 1957, at the Chase National Bank in New York City. Marques undertook to obtain a proper export license. Payment was required against commercial invoice of Marques, weight certificates, and dock receipts. The first 15 tons were shipped on the S.S. Ribiera Grande on either June 22 or June 26, 1957. A letter of credit in the amount of $ 9,000 had been issued to Marques, who in turn assigned it to Jayess. The cost of insurance in the amount of $ 79.94 was borne by the plaintiffs. Jayess, upon presentation of the proper forms to the Chase Manhattan Bank, received its $ 9,000 and paid to Marques the amount in excess of the price quoted by the Jayess defendants, in three installments of $ 200, $ 200 and $ 473.12, on the respective dates of June 13, June 20 and June 28, 1957. The forms referred to, which were required by the bank, were filled out by Barian Shipping Company, acting upon the request of Marques, which company also presented them for payment.

 From the inception of its negotiations with Marques, Jayess had insisted upon assurance of letters of credit in its favor. In addition to the one for $ 9,000 referred to above, Marques assigned another letter of credit in the amount of $ 35,010 which was covered by Advice No. E-694854, from the Chase Manhattan Bank, on May 24, 1957. This second letter of credit was to cover the 60 tons of light copper specified in the contract of May 17, 1957 between Jayess and Marques (the sale of the 50 tons of brass referred to was never consummated by shipment). The second purchase of copper was shipped on two vessels; 26.9145 metric tons on the S.S. Fortuna, on July 31st, and 32.8760 metric tons on the S.S. Monte Brasil, on August 8, 1957. The invoices for these shipments were prepared by Jayess upon forms supplied by Marques, which bore his business name as consignor. On June 29, July 2, and July 18, 1957, Jayess wrote checks totalling $ 600, in equal respective amounts, to Marques, at his request, to enable him to cover the cost of freight which, in each instance, was to be borne by him, as in each case the insurance costs were assumed by the plaintiffs.

 At the end of July, Marques received notification from plaintiffs that the copper supplied was inferior in quality to that specified in the contract. When he carried the complaint to Mack Sepenuk, the latter assured him he had nothing to worry about, and that the quality of the merchandise was as represented. When asked about the 60 ton order, Sepenuk said that the material for the S.S. Fortuna had been delivered, but that for the S.S. Monte Brasil was either on the trucks or was half-way delivered. Marques indicated that the plaintiffs wanted these shipments held up, and Sepenuk told him to make whatever arrangements he could at the pier.

 As a result of legal difficulties by reason of the Portuguese bank's refusal to honor the letter of credit, Jayess had to put it in the hands of an attorney, who did collect thereon, and paid to Jayess $ 34,575.91 (the difference between the amount received and the face amount of the letter of credit, being the cost of collection). There was due to Jayess $ 32,624.45 for the materials delivered, at the price they had quoted, but the difference was not turned over to Marques, as was done on the first ...

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