Frigaliment Importing Co. v. B.N.S. Intern. Sales Corp., 190 F.Supp. 116 (1960) 190 F.Supp. 116 United States District Court S.D. New York. FRIGALIMENT IMPORTING (30., Ltd., Plaintiff, "'5' B.N.S. INTERNATIONAL SALES CORR, Defendant. Dec. 27, 1960. Synopsis Action by buyer of fresh frozen chicken against seller for breach of warranty. The District Court, Friendly, Circuit Judge, held that buyer failed to sustain its burden of proving that the word 'chicken' in contract referred only to chickens suitable for broiling and frying, and did not include stewing chickens. Complaint dismissed. Attorneys and Law Firms *117 Riggs, Ferris & Geer, New York City (John P. Hale, New York City, of counsel), for plainti'. Sereni, Herzfeld & Rubin, New York City (Herbert Rubin, Walter Herzfeld, New York City, of counsel), for defendant. The issue is, what is chicken? Plainti' says 'chicken' means a young chicken, suitable for broiling and flying. Defendant says 'chicken' means any bird of that genus that meets contract specications on weight and quality, including what it calls 'stewing chicken' and plainti' pejoratively terms 'fowl'. Dictionaries give both meanings, as well as some others not relevant here. To support its, plainti sends a number of volleys over the net; defendant essays to return them and adds a few serves of its own. Assuming that both parties were acting in good faith. the case nicely illustrates Hohnes' remark 'that the making of a contract depends not on the agreement of two minds in one intention, but on the agreement of two sets of external signs not on the partiesr having meant the same thing but on their having said the same thing. ' The Path of the Law, in Collected Legal Papers, p. 178. I have concluded that plainti' has not sustained its burden of persuasion that the contract used 'chicken' in the narrower sense. The action is for breach of the warranty that goods sold shall correspond to the description, New York Personal Property Law, McKinneys Consol. Laws, c. 41, 95. Two contracts are in suit. Ln the rst, dated May 2, 1957, defendant, a New York sales corporation, conrmed the sale to plainti\Opinion FRIENDLY, Circuit Judge. 75,000Ibs.21l2-3|bs ........ 25,000 lbs. 1 12-2 lbs ........ per 100 lbs. FAS New York scheduled Mayr 10, 1957' pursuant to instructions from Penson 3c (30., New York.\"1 The second contract, also dated May 2, 195?, was identical save that only 50,000 lbs. of the heavier 'chicken' were called for, the price of the smaller birds was S37 per 100 lbs, and shipment was scheduled for May 30. The initial shipment @$33.00 @$36.50 under the rst contract was short but the balance was shipped on May 1?. When the initial shipment arrived in Switzerland, plaintiff found, on lit-lay 28, that the 2 132-3 lbs. birds were not young chicken suitable for broiling and frying but stewing chicken or \"foul; indeed, many of the cartons and bags plainly so indicated. Protests ensued. Nevertheless, shipment under the second contract was made on May 29, the 2 132-3 lbs. birds again being stewing chicken. Defendant stopped the transportation of these at Rotterdam. Frigaliment Importing Co. v. B.N.S. Intern. Sales Corp., 190 F.5upp. 116 (1960) This action followed. Plainti' says that, notwithstanding that its acceptance was in Switzerland, New York law controls *118 under the principle of Rubin v. irving Trust C 0., 1953, 305 NY. 288, 305, 113. N.E.2d 424, 431; defendant does not dispute this, and relies on New York decisions. I shall follow the apparent agreement of the parties as to the applicable law. Since the word 'chicken' standing alone is ambiguous, I turn rst to see whether the contract itself o'ers any aid to its interpretation. Plainti says the 1 152-2 lbs. birds necessarily had to be young chicken since the older birds do not come in that size, hence the 2 12-3 lbs. birds must likewise be young. This is unpersuasive a contract for =apples' of two different sizes could be lled with dierent kinds of apples even though only one species came in both sizes. Defendant notes that the contract called not simply for chicken but for 'US Fresh Frozen Chicken, Grade A, Government Inspected.' It says the contract thereby incorporated by reference the Department of Agriculture's regulations, which favor its interpretation; 1 shall return to this after reviewing plaintiffs other contentions. The first hinges on an exchange of cablegrams which preceded execution of the formal contracts. The negotiations leading up to the contracts were conducted in _\\Iew York between defendant's secretary, Ernest R. Bauer, and a Mr. Stovicek, who was in New York for the Czechoslovak got-'ernment at the World Trade Fair. A few days after meeting bauer at the fair, Stovlcek telephoned and inquired whether defendant would be interested in exporting poultry to Switzerland. Bauer then met with Stovicek, who showed him a cable 'om plainti' dated April 26, 195?, announcing that they 'are buyer\" of 25,000 lbs. of chicken 2 132-3 lbs. weight, Cryovac packed, grade A Government inspected, at a price up to 33 per pound, for shipment on May 10, to be conrmed by the following morning, and were interested in that he asked Stovicek what kind of chickens were wanted, received the answer 'any kind of chickens,' and then, in German, asked whether the cable meant 'Huhn' and received an afrmative response. Plainti attacks this as contrary to what Bauer testied on his deposition in March, 195 9, and also on the ground that Stovicek had no authority to interpret the meaning of the cable. The rst contention would be persuasive if sustained by the record, since Bauer was free at the trial om the threat of contradiction by Stovicek as he was not at the time of the deposition; however, review of the deposition does not convince me of the claimed inconsistency. As to the second contention, it may well be that Stovicek lacked authority to commit plainti' for prices or delivery dates other than those specied in the cable; but plainti' cannot at the same time rely on its cable to Stovicek as its dictionary to the meaning of the contract and repudiate the interpretation given the dictionary by the man in whose hands it was put. See Restatement of the Law of Agency, 2d, 145.; 2 Mecham, Agency 1781 (2d ed. 1914); Park V. Moorman Mfg. co., 1952, 121 Utah 339, 241 P.2d 914, 919, 40 A.L.R.2d 2t3; Henderson v. Jimmerson, Tex.Civ.App.1950, 234 S.W.2d 710, T171718. Plaintiffs reliance on the fact that the contract forms contain the words 'through the intermediary of: ', with the blank not lled, as negating agency, is wholly unpersuasive; *119 the purpose of this clause was to permit lling in the name of an intermediary to whom a commission would be payable, not to blot out what had been the fact. Plaintiffs next contention is that there was a denite trade usage that 'chicken' meant 'young chicken.' Defendant showed that it was only beginning in the poultry trade in 1957, thereby bringing itself within the principle that 'when one of the parties is not a member of the trade or other circle, his acceptance of the standard must be made to appear' by proving either that he had actual knowledge of the usage or that the usage is 'so generally known in the community further offerings. After testing the market for price, Bauer accepted, and Stovicek sent a conrmation that evening. Plainti stresses that, although these and subsequent cables between plaintiff and defendant, which laid the basis for the additional quantities under the rst and for all of the second contract, were predominantly in German, they used the English word 'chiclcen'; it claims this was done because it understood 'chicken' meant young chicken whereas the German word, 'Huhn,' included both 'Brathuhn' (broilers) and 'Suppenhuhn' (stewing chicken), and that defendant, whose ofcers were thoroughly conversant with German, should have realized this. Whatever force this argument might otherwise have is largely drained away by Bauer's testimony that his actual individual knowledge of it may be inferred.\" 9 Wigmore, Evidence (3d ed. 1940) 2464. Here there was no proof of actual knowledge of the alleged usage; indeed, it is quite plain that defendant's belief was to the contrary. In order to meet the alternative requirement, the law of Xew York dun-ands a showing that 'the usage is of so long continuance, so well established, so notorious, so universal and so reasonable in itself, as that the presumption is violent that the parties contracted with reference to it, and made it a part of their agreement.' Walls v. Bailey, 18?; 49 NY. 464, 4-2-4 '3. Frigaliment Importing Co. v. B.N.S. Intern. Sales Corp.,190 F.Supp. 116 (1960) Plaintiff endeavored to establish such a usage by the testimony of three witnesses and certain other evidence. Strasser, resident buyer inNew York for a large chain of Swiss cooperatives, testied that =on chicken I would denitely understand a broiler.\" However, the force of this testimony was considerably weakened by the fact that in his own transactions the witness, a careful businessman, protected himself by using 'broiler' when that was what he wanted and 'fowl' when he wished older birds. Indeed, there are some indications, dating back to a remark of Lord Manseld, Edie v. East India (30., 2 Burr. 1216, 1222 {IT-'61), that no credit should be given 'wimesses to usage, who could not adduce instances in verication.\" 7 Wigmore, Evidence (3d ed. 1940), 1954; see McDonald v. Acker, Merrall & Condit Co., 3dDept.1920, 192 AppDiv. 123, 136, 182- _\\'.Y.S. 60'. While Wigrnore thinks this goes too far, a witness' consistent failure to rely on the alleged usage deprives his opinion testimony of much of its eect. Niesielouski, an ofcer of one of the companies that had nnished the stewing chicken to defendant, testied that 'chicken' meant 'the male species of the poultry industry. That could be a broiler, a 'yer or a roasteri, but not a stewing chicken; however, he also testied that upon receiving defendant's inquiry for 'chickens', he asked whether the desire was for 'fowl or ying chickens' and, in fact, supplied fowl, although taking the precaution of asking defendant, a day or two after plaintiff's acceptance of the contracts in suit, to change its conrmation of its order from 'chickens,' as defendant had originally prepared it, to 'stewing chickens.' Dates, an employee of truer-Barry Company, which publishes a daily market report on the poultry trade, gave it as his view that the trade meaning of 'chicken' was \"broilers and fryers. " In addition to this opinion testimony, plaintiff relied on the fact that the truer-Barry service, the Journal of Commerce, and Weinberg Bros. & Co. of Chicago, a large supplier of poultry, published quotations in a manner which, in one way or another, distinguish between \"chicken,\" comprising broilers, 'yers and certain other categories, and 'fowl,' which, Bauer acknowledged, included stewing chickens. This material would be impressive if there were nothing to the contrary. However, there was, as will now be seen. Defendant's witness W'eininger, who operates a chicken eviscerating plant in New Jersey, testied 'Chicken is everything except a goose, a duck, and a turkey. Everything is a chicken, but then you have to say, you have to specify which category you want or that you are talking about.' Its witness Fox said that in the trade 'chicken' would encompass all the various classications. Sadina, who conducts a food inspection *120 service, testied that he would consider any bird coming within the classes of 'chicken' in the Department of Agriculture's regulations to be a chicken. The specications approved by the General Services Administration include fowl as well as broilers and 'yers under the classication 'chickens.' Statistics of the Institute of American Poultry Industries use the phrases 'Young chickens' and 'Mature chickens,\" under the general heading =Total chickens.' and the Department of Agriculture's daily and weekly price reports avoid use of the word 'chickeni without specication. Defendant advances several other points which it claims airmatively support its construction. Primary among these is the regulation of the Department of Agriculture, 7' OER. 'O.300-70.3T0, entitled, 'Grading and Inspection of Poultry and Edible Products Thereof.' and in particular 70.301 which recited: "Chickens. The following are the various classes of chickens: (a) Broiler or fryer . . . (b) Roaster . . . (c) Capon . . . (d) Stag ... (e) Hen or stewing chicken or fowl . . . (f) Cock or old rooster . . .Defendant argues, as previously noted, that the contract state that we shall make you fully responsible for all resulting incorporated these regulations by reference. Plaintiff answers costs." Defendant argues #121 that if plaintiff was sincere that the contract provision related simply to grade in thinking it was entitled to young chickens, plaintiff would and Government inspection and did not incorporate the not have allowed the shipment under the second contract Government definition of chicken,' and also that the to go forward, since the distinction between broilers and definition in the Regulations is ignored in the trade. However, chickens drawn in defendant's cablegram must have made it the latter contention was contradicted by Weininger and clear that the larger birds would not be broilers. However, Sadina; and there is force in defendant's argument that the plaintiff answers that the cables show plaintiff was insisting contract made the regulations a dictionary, particularly since on delivery of young chickens and that defendant shipped old the reference to Government grading was already in plaintiff's ones at its peril. Defendant's point would be highly relevant on initial cable to Stovicek. another disputed issue- whether if liability were established, the measure of damages should be the difference in market Defendant makes a further argument based on the value of broilers and stewing chicken in New York or the impossibility of its obtaining broilers and fryers at the 33c larger difference in Europe, but I cannot give it weight on the price offered by plaintiff for the 2 1/2-3 lbs. birds. There is issue of interpretation. Defendant points out also that plaintiff no substantial dispute that, in late April, 1957, the price for proceeded to deliver some of the larger birds in Europe, 2 1/2-3 1bs. broilers was between 35 and 37c per pound, and describing them as "poulets'; defendant argues that it was only that when defendant entered into the contracts, it was well when plaintiff's customers complained about this that plaintiff aware of this and intended to fill them by supplying fowl developed the idea that 'chicken' meant 'young chicken. in these weights. It claims that plaintiff must likewise have There is little force in this in view of plaintiff's immediate and known the market since plaintiff had reserved shipping space consistent protests. on April 23, three days before plaintiff's cable to Stovicek, or, at least, that Stovicek was chargeable with such knowledge. When all the evidence is reviewed, it is clear that defendant It is scarcely an answer to say, as plaintiff does in its brief. believed it could comply with the contracts by delivering that the 33c price offered by the 2 1/2-3 lbs. 'chickens' was stewing chicken in the 2 1/2-3 lbs. size. Defendant's closer to the prevailing 35c price for broilers than to the 30c at subjective intent would not be significant if this did not which defendant procured fowl. Plaintiff must have expected coincide with an objective meaning of 'chicken.' Here it defendant to make some profit- certainly it could not have did coincide with one of the dictionary meanings, with the expected defendant deliberately to incur a loss definition in the Department of Agriculture Regulations to which the contract made at least oblique reference, with at Finally, defendant relies on conduct by the plaintiff after the least some usage in the trade, with the realities of the market. first shipment had been received. On May 28 plaintiff sent two and with what plaintiff's spokesman had said. Plaintiff asserts cables complaining that the larger birds in the first shipment it to be equally plain that plaintiff's own subjective intent was constituted 'fowl.' Defendant answered with a cable refusing to obtain broilers and fryers; the only evidence against this is to recognize plaintiff's objection and announcing 'We have the material as to market prices and this may not have been today ready for shipment 50,000 lbs. chicken 2 1/2-3 lbs. sufficiently brought home. In any event it is unnecessary to 25,000 lbs. broilers 1 1/2-2 lbs.,' these being the goods determine that issue. For plaintiff has the burden of showing procured for shipment under the second contract, and asked that 'chicken' was used in the narrower rather than in the immediate answer 'whether we are to ship this merchandise broader sense, and this it has not sustained.to you and whether you will accept the merchandise.' After several other cable exchanges, plaintiff replied on May 29 This opinion constitutes the Court's findings of fact and 'Confirm again that merchandise is to be shipped since resold conclusions of law. Judgment shall be entered dismissing the by us if not enough pursuant to contract chickens are shipped complaint with costs. the missing quantity is to be shipped within ten days stop we resold to our customers pursuant to your contract chickens All Citations grade A you have to deliver us said merchandise we again 190 F.Supp. 116 Footnotes WESTLAW @ 2022 Thomson Reuters. No claim to original U.S. Government Works. 4 Frigaliment Importing Co. v. B.N.S. Intern. Sales Corp., 190 F.Supp. 116 (1960) The Court notes the contract provision whereby any disputes are to be settled by arbitration by the New York Produce Exchange; it treats the parties' failure to avail themselves of this remedy as an agreement eliminating that clause of the contract. 2 These cables were in German; 'chicken', 'broilers' and, on some occasions, 'fowl,' were in English