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CALIFORNIA FRUIT EXCH. v. HENRY

March 7, 1950

CALIFORNIA FRUIT EXCHANGE
v.
HENRY et al.



The opinion of the court was delivered by: GOURLEY

The proceeding comes before the Court on appeal from the reparation award entered by the Secretary of Agriculture under the Perishable Agricultural Commodities Act. 7 U.S.C.A. § 499g.

We are in reality concerned with two separate causes of action:

 (a) California Fruit Exchange against Morris Henry and Anthony Spracale, partners, trading as Spracale Fruit Company, for the amount of $ 2119.40, with interest from October 22, 1946. *fn1"

 (b) Counterclaim of Morris Henry and Anthony Spracale, trading as Spracale Fruit Company, against California Fruit Exchange for the amount of $ 1125.50 with interest from October 22, 1946. *fn2"

 The written contract which gives rise to the causes of action was executed and to be performed in Pennsylvania, and related to Emperor Grapes, U.S. No. 1 Table Grade, Dependable Brand.

 Under Pennsylvania Conflict of Laws rule, interpretation of a contract in diversity cases is determined by the law of the place of contracting. Faron v. Penn Mutual Life Ins. Co., 3 Cir., 176 F.2d 290; Restatement, Conflict of Laws, Section 348; Levy v. Levy, 78 Pa. 507, 21 Am.Rep. 35; Newspaper Readers' Service v. Canonsburg Pottery Co., 3 Cir., 146 F.2d 963.

 Since jurisdiction does not arise through diversity, the rule just expressed would be subject to the provisions of the Perishable Agricultural Commodities Act. *fn3"

 While additional protection and remedies are provided to shippers of perishable commodities under the P.A.C.A., the statute was not intended to repeal the law of sales or to destroy the rights and liabilities of contracting parties thereunder. LaRoy Dyal Co. v. Allen, 4 Cir., 161 F.2d 152; A. J. Conroy, Inc. v. Weyl-Zuckerman & Co., D.C., 39 F.Supp. 784.

 A verdict was returned in favor of California in the amount of One Dollar and against Spracale.

 The matters before the court relate to:

 (a) Motion for arrest of judgment entered in favor of California in the amount of $ 1.00, and for judgment notwithstanding the verdict to be entered in favor of California and against Spracale in the amount of $ 2119.40, with interest from October 22, 1946.

 (b) Motion for new trial filed on behalf of California.

 (c) Motion to set aside verdict or for arrest of judgment in favor of California and against Spracale, and to enter judgment in favor of Spracale.

 (d) Motion to set aside verdict or arrest of judgment in favor of California and against Spracale, and to enter judgment on the counterclaim in favor of Spracale and against California in the amount of $ 1125.00, with interest from October 21, 1946.

 Statement of Facts.

 California and Spracale negotiated a sale through the Tri-State Sales Agency at Pittsburgh, Pennsylvania, on October 3, 1946, for two carloads of Emperor Grapes, U.S. No. 1 Table Grade, Dependable Brand, f.o.b. shipping point. One carload was shipped on October 8, 1946, and the other on October 11, 1946. Each of the cars was federally inspected and it was certified that the defects in each instance were average and within the grade tolerance and that decay was generally less than one-half of one percent.

 The first car arrived in Pittsburgh on October 17, 1946. Federal inspection was restricted to the top layer, and it was found, as to decay, that from the samples inspected the average of 1/2 of 1% to 5%, many none, average 1% gray mold rot, generally nesting. The second car arrived in Pittsburgh on October 22, 1946. Federal inspection and findings were in substance similar to the inspection of the first car.

 Both cars of grapes were rejected by Spracale. The first car was reconsigned to Philadelphia, Pennsylvania, and the second car to New York. The grapes were sold and California's claim is based on the loss sustained.

 California contends:

 (1) That the grapes complied with the contract.

 (2) That the refusal to accept by Spracale was without cause or justification.

 (3) That after the grapes were rejected, they were sold to the best advantage.

 (4) That markets were selected where the best prospects and prices prevailed.

 (5) That California minimized the loss through the extension of most reasonable effort.

 Spracale contends:

 (1) That California failed and neglected to ship the type and quality of merchandise as provided by the terms of the contract.

 (2) That the condition which existed did not arise through transportation and that the grapes had a latent defect.

 (3) That the grapes when delivered to Pittsburgh, Pennsylvania, contained a gray mold rot condition ...


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