Lester v. Percy

364 P.2d 423, 58 Wash. 2d 501, 1961 Wash. LEXIS 333

• Court: Washington Supreme Court
• Decided: August 24, 1961
• Docket: 35461
• Status: Published

Opinions

Ott, J.

July 9, 1957, John Stenger, a salesman employed by Percy’s Parts and Equipment (which will be referred to as though it were the sole defendant and respondent) sold to Mrs. Gloria Lester (who will be referred to as though she were the sole plaintiff and appellant) a Duplex washer and dryer for use in her nursing home. When the equipment failed to function as represented, she brought this action for rescission of the contract. (Although the Duplex Corporation was named as a defendant, service on it was never obtained.)

The cause was tried to the court, and, at the close of plaintiff’s case, the defendant moved for dismissal of plaintiff’s complaint upon the ground that there had been a waiver of the right to rescind. The court granted the motion and entered findings of fact, conclusions of law, and judgment of dismissal. Mrs. Lester appeals.

Appellant asserts seven assignments of error, all of which relate to the single issue of whether the vendee had waived her right to rescind.

Appellant’s evidence had established, inter alia, that, during the conversation leading to the sale, she informed Mr. Stenger of the nature and extent of the nursing home washing requirements, consisting of approximately eleven or twelve separate washings in a twenty-four hour period. Mr. Stenger assured her that the equipment was adequate for her extensive washing needs, in that it was “heavy-duty commercial type” equipment. The washing machine motor was guaranteed for five years, and other parts and service for one year. The dryer was similarly guaranteed for one year. She relied upon Mr. Stenger’s representations and judgment, and purchased the equipment on contract. The washer was installed in July, 1957. The dryer was installed in October, 1957.

Mrs. Lester encountered mechanical difficulty with the equipment shortly after it was installed. The respondent replaced the washer in August, 1957. The dryer was also defective and was replaced in February, 1958. It was necessary for respondent to repair and service the newly installed equipment on numerous occasions. There was no charge to appellant for the calls, which were covered by respondent’s warranty of service. Appellant did pay respondent $10.33 and $15.50 for service calls, and $4.65 to the Peninsula Propane Company for repairs to the dryer, which respondent contended were not within the service contract. She also, paid the installments on the contract of purchase in full.

March 28, 1958, the washing machine motor burned out, and appellant called the respondent for service. Mrs. Lester testified that:

“He [Mr. Percy] came up and we had a verbal argument. He said he had done all he could do, and he was going to wash his hands of me and the equipment, and he left, and he was very angry with me.”

April 9, 1958, Mrs. Lester gave notice of her intention to rescind the contract because of the breach of various warranties, and thereafter commenced this action pursuant to RCW 63.04.700(1).

The respondent’s motion to dismiss admitted the breach of the warranties and the truth of the evidence offered by the appellant. It was based upon the sole ground that the appellant had waived her right to rescind by her use of the equipment after notice of its defective condition, by paying the purchase price in full, and by the payment of certain repair expenses as noted above.

Respondent contends that the rule in this state is that one who seeks to rescind a contract upon the ground of breach of warranty must do so promptly upon discovery of the breach, otherwise the right to rescind is waived. We agree with respondent’s statement of the general rule, but it is subject to certain exceptions, two of which are (1) the waiver must be voluntary and intentional, and (2) the right to rescind is not waived when the delay in claiming it is induced by the vendor.

This court has recognized these exceptions to the general rule in the following decisions:

In Birkeland v. Corbett, 51 Wn. (2d) 554, 565, 320 P. (2d) 635 (1958), we said:

“A ‘waiver’ is the intentional and voluntary relinquishment of a known right, or such conduct as warrants an inference of the relinquishment of such right. The person against whom a waiver is claimed must have intended to relinquish the right, advantage, or benefit, and his actions must be inconsistent with any other intention than to waive them. [Citing case.]”

In Eliason v. Walker, 42 Wn. (2d) 473, 477, 256 P. (2d) 298 (1953), we said:

“. . . Diligence in rescission is a relative question, and whether or not there has been an unreasonable delay in a given case depends upon the particular circumstances of that case. . . . Delay in the decision to rescind, induced by the promise of the seller to make the equipment comply with the warranty, cannot result in a waiver of the right to rescind.”

The equipment which the appellant purchased carried two warranties: First, a warranty of fitness to meet appellant’s requirements, and, second, a warranty to furnish necessary parts and service for a specified period of time. The difficulty experienced by the appellant immediately after the machines were installed would have supported an action for rescission, but to hold that she was required to rescind at that time would render the warranty on parts and service a nullity, and deny to the vendor an opportunity to repair and service the equipment to meet the requirements of the vendee. The appellant’s failure to rescind immediately upon acquiring knowledge that the equipment was defective is justified by her election to afford the respondent an opportunity to service and repair the equipment to meet the standard of the warranty of fitness. Appellant’s tolerant conduct in this regard does not warrant an inference that she relinquished the right to rescind, or that she intended to waive her right to do so.

Applying the general rule, together with the exceptions here applicable, appellant’s conduct in paying the miscellaneous repair costs, under the circumstances here present, did not in and of itself establish an intentional or voluntary waiver of the right to rescind. On March 28, 1958, the vendor, for the first time, made known its intent to disavow its contractual obligations. Until that date, the vendor’s conduct led the appellant to believe that the vendor would fully honor its contract; thus, the appellant was induced to postpone the exercise of her right to rescind. Appellant’s notice of rescission on April 9,1958, was timely under these circumstances.

The judgment is reversed, and the cause remanded with instructions to vacate the judgment of dismissal and proceed. in conformity with the views herein expressed, applying equitable principles to the issues as they are now joined or may be joined.

Costs shall abide the final determination of the cause.

Finley, C. J., Mallery, Hill, Donworth, Weaver, Rosel-lini and Foster, JJ., concur.