Huber Manufacturing Co. v. Hunter

72 S.W. 484, 99 Mo. App. 46, 1903 Mo. App. LEXIS 150

• Court: Missouri Court of Appeals
• Decided: February 17, 1903
• Status: Published

Opinion

BARCLAY, J.

This is an action to recover the amount of a promissory note for $825, executed to the plaintiff by defendant in part payment of the purchase price of a traction engine sold by the plaintiff to defendant in August, 1896, and to foreclose a mortgage given to secure the note. The defense is that there was fraud in the sale on the part of plaintiff whereby an old, rebuilt engine was foisted on the defendant in lieu of a new one of the pattern of 1896 which defendant verbally expressed the wish to buy and plaintiff’s agent agreed he should have in execution of the order given; that the fraud was not discovered by defendant until some months after the receipt of the engine and that the latter was not worth the amount which defendant had paid on account of the debt, etc. To that defense plaintiff made several replies, the substance of which is that the engine was sold upon an express written warranty which plaintiff fully kept; that defendant had not complied with the conditions of said warranty by which he was bound; and that he accepted, used and made payments upon the note in suit for the engine long after he had full notice of the alleged defects in its quality; and that defendant waived any right to complain thereof by his conduct after the sale.

The cause' was tried with the aid of a jury and resulted in a verdict for defendant from which plaintiff appealed in the usual manner. Those features of the trial which require notice will be mentioned along with our comment thereon.

1. The cause has been in this court by appeal on several occasions already. Huber Mfg. Co. v. Hunter, 78 Mo. App. (St. L.) 82, and 87 Mo. App. (St. L.) 50. The general outlines of the controversy are shown in the opinions reported as aforesaid. After the latter reversal the cause came again to trial with two new issues presented, namely, the one which had been tendered by the new matter in the reply, and which this court held to tender a proper issue after the trial court had stricken it out; and the other, the plea of waiver and estoppel founded on defendant’s alleged acquiescence after knowledge of the inferior quality of the engine.

After these issues were contributed to the legal materials of the litigation, the trial court endeavored to" follow the directions which accompanied the judgment of remand. They were quite specific and may well be quoted here.

The majority of the court said:

“The only issues which should be submitted to the jury on the next trial are: first, whether or not the contract embodied the entire agreement of the parties as to the hind of engine to be sold? If it did, plaintiff is entitled to judgment; second, if the contract was not completely expressed in writing, did plaintiff practice fraud on defendant by palming off on him a different engine from the one intended to be sold by the terms of the complete contract? If so, defendant is only liable for the.reasonable value of the thing purchased, but if he had paid more than that, he could not recover such overpayment since it was voluntarily made. The judgment is reversed and the cause remanded to be tried in conformity with this opinion.”

At the'last trial the note and mortgage were admitted, and defendant took the affirmative. The gist of his testimony was that he was a dealer in general merchandise, engines and threshers at the town of Novelty, Missouri, and, having a Case engine which he wanted to trade for a new 16-horsepower one, he telegraphed his wish to plaintiff, a manufacturing company at Marion, Ohio. Plaintiff then sent an agent to see defendant. The agent exhibited to defendant a catalogue of plaintiff for 1896, showing plaintiff’s engines offered for sale. Defendant selected one at the net price of $975, and, owing to a minor agreement for exchange and option of repurchase - of the other engine, the note was agreed to be $1,025. According to defendant’s testimony tbe engine pointed out by the agent as the one which would be furnished was a new one of the kind indicated in the plaintiff’s catalogue of the cur-, rent year 1896, which catalogue defendant produced at the trial. When the terms were settled verbally and the engine definitely indicated, defendant executed the written order already referred to. Defendant’s evidence tended to support his contention that the engine actually furnished by plaintiff was a secondhand one, so ingeniously put together and constructed as to be •distinguishable as such only by experts, in consequence of which defendant did not discover its real character until long after he had received the machine and had had it in use. Defendant made payments on account of his note, $40, on the day of its date, August 8, 1896; $200 on December 29, 1896; $140.25 on.February 24, 1897, and $75 on April Í6, 1897. Defendant admitted having given the written memorandum (referred to as a contract in the opinion of the court reported, 87 Mo. App. 50). It was in the form of an order by defendant to plaintiff for “one 16-horse-power Huber traction engine,” in consideration of which defendant proposed to deliver an older (Case) engine, and to execute the note and mortgage on which this action is based. The written order further recited that£ £ the machinery furnished under the above order shall be .made of good material, well constructed, and with proper use and management, capable of doing well the work for which the machines, respectively, are made and sold. If inside of six days from the date of its first use it shall fail in any respect to fill this warranty, written notice shall be given immediately by the purchaser to the Huber Manufacturing Company, at its home office, Marion, Ohio, by registered letter and written notice also to the local agent through whom the same was received, stating particularly what parts and wherein it fails to fill the warranty, and a reasonable time allowed the company to get to the machine with skilled workmen and remedy the defects, if any there may be; if. it be of such a nature that a remedy can not .be suggested by letter, the purchaser to render all necessary and friendly assistance and co-operation in making the machinery a practical success and providing opportunity for a fair test or trial of machine by company’s experts.”

Further along in the order it is written that all the agreements appertaining to the order are included therein, that no verbal promises or agreements in addition are valid, that no agent has authority to make any different warranty, or to modify any of the written terms, or to waive any of the expressed conditions, etc.

The plaintiff accepted the order by sending the engine which constitutes the bone of contention now-

The plaintiff’s testimony tended to show that the written order was the complete agreement of the parties, and that defendant had given no' notice of complaint for some months after full knowledge of the alleged imperfections of the engine. It is not necessary to give a full outline of the evidence. It will suffice to say that there was testimony to support the contentions of each of the parties:

The learned trial judge refused to give a peremptory instruction for the plaintiff which was founded on the theory that the defendant was precluded by his written memorandum of August 1, 1896, from showing by oral testimony that some of the essential terms of sale were not included therein, namely, the representar tion in the nature of a warranty that the engine was to be new. But that ruling was obviously based on the directions for trial accompanying the order of remand in 87 Mo. App. (St. L.) 62.

Under the most recent adjudications in the Supreme Court on the subject, those directions constitute the law of the particular case in the event of a new trial. It has been held to be manifestly improper for the trial court to depart from the directions of the appellate court where the facts disclosed at the last trial do not substantially change the ease which was under review when the directions were given. Bealey v. Smith, 158 Mo. 515; Brummell v. Harris, 162 Mo. 397.

The written order' of defendant was before this court on the appeal reported, 87 Mo. App. (St. L.) 50. The issue whether or not it'4 ‘embodied the entire agreement of the parties as to the kind of engine to be sold” was referred back for trial, as stated in the report of that appeal. That issue as to the real agreement of sale between these parties was a proper one to be submitted for a finding. It was submitted and the finding was for defendant. There was testimony to support that result by a proper .application of the principles announced by this court in the last -previous appeal in the •cause.

2. In submitting the aforesaid issue to the jury the learned trial judge gave the following instruction •at the instance of the plaintiff:

4 4 3. The court instructs the jury that if they shall believe from the evidence that the written contract read in evidence for the purchase of said engine, embodied the entire agreement between the plaintiff’s agent and the defendant, Hunter, as to the kind of engine to be sold, then your verdict must be for plaintiff'.”

• On the issue of fraud raised upon the answer of defendant the learned circuit judge gave the following instructions for plaintiff:

4 4 4. The court instructs the jury, that the defendant, Hunter, alleges in his answer that he was misled and deceived by false and fraudulent representations made by the agent of plaintiff in the sale and delivery of the engine in question. Unless the defendant shall show by a preponderance of the evidence, and to the reasonable satisfaction of the jury, that the agent of plaintiff in making said sale and delivery, and fbr the purpose of inducing the defendant, Hunter, to purchase •or receive said engine, did make the false and fraudulent representations set forth in defendant’s answer,, yonr verdict should be for the plaintiff.

“5. The court instructs the jury that if they shall believe from all the evidence.in the case, that the transactions between the plaintiff’s agent, Elliott, and the defendant, Hunter, in regard to the sale and delivery of the engine in question were as consistent with honesty and fair dealing as with dishonesty or fraud, then they shall find the same to be honest, and return a verdict for plaintiff.”

The instruction given by the court at the instance of defendant was as follows:

“1. The court instructs you, on behalf of defendant, that if you find from the greater weight of the' evidence, that the written order, for the engine, in evidence does not embody the entire agreement of the parties as to the kind of engine sold and to be delivered to defendant; and that by the complete contract of the-parties the defendant was to have a new and up-to-date engine, and that the plaintiff by its agent committed fraud upon defendant by palming off on him a different engine from the one agreed to be delivered to him, by the complete contract of the parties, and that defendant has paid plaintiff all that it is reasonably worth, then your verdict should be for the defendant. ’ ’

The learned trial judge refused the following instruction asked by plaintiff:

“8. If the jury believe from the evidence that the' engine in question was the consideration of the note, and was worth anything, and that the defendant has failed to give notice of its alleged defects in a reasonable time to the plaintiff or to return the same, then he is presumed to have acquiesced in the alleged defects, and is not entitled to any deduction from the amount of the note.”

The foregoing declaration is substantially a copy of the first instruction for plaintiff in Barr v. Baker, 9 Mo. (1 Ed.), 840 (2 Ed.), 850, copied in the later case of Brown v. Weldon, 99 Mo. 567. A most interesting and ingenious argument has been submitted here to demonstrate that the decisions cited amount to an approval of that declaration as applied to a case like this. But in weighing that argument it should be remembered that in the Barr decision the instruction was given for the plaintiff, the defendant prevailed in the circuit court, and plaintiff brought a writ of error in the Supreme Court where the judgment was affirmed. If the instruction, therefore, was more favorable to plaintiff in that case than strict law permitted, there was no occasion for the court to say so. We do not regard the ruling in the Barr case as decisive of the exception taken to the refusal of the eighth instruction in the case at bar. But another decision cited is more nearly in point. In Estes v. Reynolds, 75 Mo. 563, plaintiff sued for damages for fraud in the sale of bonds and was held disentitled to recover. He “did not notify defendant of his discovery” (to quote the statement of facts opening the report of that decision). The court held that he could not keep the benefit of the contract and repudiate its disadvantages.

Moreover, in American Ins. Co. v. Kuhlman, 6 Mo. App. (St. L.) 522, it was held that where a party claims 'to be injured by fraudulent representations he must “make his objections known within a reasonable time after his discovery of the alleged falsehood, and that he shall not leave the other contracting party to suppose the contract in full force while the objector continues to enjoy its benefits.”

Yet, on the other hand, we find other decisions (some of them later) which announce and enforce the proposition that, where a sale of personalty has been induced by' fraudulent misrepresentation, the injured party may stand by the bargain and may even execute it thereafter fully on his part, without prejudice to his right of action for the fraud, and, necessarily, without prejudice to his right to recoup for those damages in an action for the price. Jarrett v. Morton, 44 Mo. 275; Parker v. Marquis, 64 Mo. 38; Finlay v. Bryson, 84 Mo. 669; Nauman v. Oberle, 90 Mo. 667; Robinson v. Siple, 129 Mo. 208; Campbell v. Hoff, 129 Mo. 317; Moore v. Emerson, 63 Mo. App. (St. L.) 137; Edwards v. Noel, 88 Mo. App. (St. L.) 434.

In view of those positive rulings we must hold that the eighth instruction was properly refused in the case at bar. If the entire agreement (as found by the jury) contemplated the delivery of a new engine, and by fraud on defendant’s part an old one instead was imposed on plaintiff, he might recover damages for the fraud in diminution of the seller’s demand for the price. That right of recovery would not depend on his having given notice to defendant “in a reasonable time,” or returning the property. A purchaser imposed on by fraud in the sale of an article may retain it and recoup his damages resulting from the fraud, when sued for the price. Benjamin, Sales (2 Am. Ed.), sec. 452, note a; Brown v. Weldon, 99 Mo. 564, and the last group of cases above cited.

3. The foregoing observations will suffice to dispose of another assignment of error on the refusal of an instruction (the eleventh) declaring, in substance, a waiver by defendant of his right to recoup on account of the quality of the engine if he failed to object thereto within a reasonable time after hé receivéd and used the engine.

4. Exception was taken to the testimony of experts who examined the engine a long time after the sale and gave statements as witnesses for defendant concerning the physical facts they saw, from which it might be inferred that the machine was not a new one when delivered to defendant in August, 1896. The facts they attested concerned the condition of the machine in particulars which tended to show its permanent construction when bought. The lateness of their examination did not necessarily weaken or disqualify the testimony. The facts they stated tended to show that the machine was not a new one at the time of the contract of sale, and we think, their testimony was rightly admitted.

5. In fine, we regard the merits of this appeal as concluded by the rulings on the last previous hearing in this court, and by the Missouri cases of the type of Nauman v. Oberle, 90 Mo. 669. The findings by the trial court in regard t.o the true terms of the contract, to the delivery of an old for a new machine, and that defendant paid the full value of the delivered machine, leave little for review, considering the precedents which are binding authority in this court.

The judgment is affirmed.

Bland, P. J., and Goode, J., concur.