Sol-o-Lite Laminating Corp. v. Allen

Citation353 P.2d 843,223 Or. 80
Decision Date06 July 1960
Docket NumberSOL-O-LITE
PartiesLAMINATING CORP., Appellant, v. Thos. W. ALLEN, dba The Thos. W. Allen Co., Respondent.
CourtSupreme Court of Oregon

Carlton R. Reiter, Portland, argued the cause for appellant. On the brief were Stern, Reiter, Day & Anderson, Portland.

C. Parker Gies, Salem, argued the cause for respondent. With him on the brief were Lawrence N. Brown and Asa L. Lewelling, Salem.

Before McALLISTER, C. J., and ROSSMAN, WARNER, GOODWIN and HOLMAN, JJ.

HOLMAN, Justice pro tem.

Plaintiff, Sol-o-lite Laminating Corp., brought this action against the defendant Allen for $7,787.25 which it claims is the balance due on the reasonable value of goods sold by plaintiff to defendant. Defendant counterclaimed for $26,825.51 damages for breach of implied warranty. The two issues were submitted to a jury which returned a verdict of $1,000 for plaintiff. From the entry of this verdict, plaintiff appeals.

The evidence, which will be viewed in the light most favorable to defendant, indicates plaintiff was in the business of supplying wholesalers with various items of plastic and plastic-treated materials which were used primarily as glass substitutes. Defendant was a wholesaler who sold to hardware stores, lumber yards and small general stores that were engaged in retail business. Defendant ordered from plaintiff several hundred rolls of 48"' clear vinyl plastic which was used by the ultimate consumer for the principal purpose of making storm windows. Part of the material was cloudy and not clear, and a very small portion of it was patched by being taped together or was smeared with ink. The material was packed in sealed containers by plaintiff and shipped to defendant's warehouse in Salem, where it remained the property of plaintiff until such time as defendant withdrew it for sale to customers. At that time defendant was billed by plaintiff for the amount so withdrawn. The defective material was delivered by defendant to his customers without knowledge by him of its condition. After some defective material was discovered by defendant's customers, defendant notified plaintiff and was assured by plaintiff that further material would be of good quality, but additional defective material was received and delivered to defendant's customers, again without defendant's knowledge of its condition. Defendant again notified plaintiff of the faulty condition. Defendant also sold identical 36"' clear plastic of good quality furnished by plaintiff to its same customers under defendant's own brand name, and this was known to plaintiff, as plaintiff furnished the literature proclaiming it to be 'Allen's' clear plastic.

Plaintiff's first assignment of error challenges the sufficiency of defendant's cross-complaint for breach of warranty. Omitting the immaterial paragraphs, defendant's cross-complaint is as follows:

'II

'Prior to June 5, 1957, Defendant purchased from Plaintiff from time to time, by description, rolls of vinyl plastic and coated fabrics and screens, which is the same merchandise erroneously described in Paragraph III of Plaintiff's complaint as 'rolls of wax cloth, Nu-V-Glass, Crystal Lite 36"', Glaz Screen, Crystal Lite 48"", and Defendant was charged by plaintiff for said merchandise in the sum of Twenty-three Thousand and Nine Hundred Forty-Six ($23,946.00) Dollars as alleged in Paragraph III of plaintiff's complaint.

'III

'Plaintiff knew that said merchandise was purchased by Defendant for resale and that principal use of the 48"' clear vinyl plastic described by Plaintiff as Crystal Lite 48"', was for storm windows.

'IV

'Defendant distributed the same in its original containers to his various customers in the State of Oregon, Washington and Western Idaho. After distribution of said merchandise to his customers as aforesaid, Defendant learned for the first time that one pattern of said merchandise, consisting of 48"' vinyl plastic, was defective in quality in that the same was not clear but cloudy and that many of the rolls were taped together and were otherwise defective and inferior. Up to this time Defendant has been notified of the defective condition of at least one hundred rolls.

'V

'Within a reasonable time after Defendant discovered said defects, Defendant notified Plaintiff of the defects in said merchandise and Defendant's business was damaged by said defects.

'VI

'As the result of said merchandise being defective and inferior in quality as aforesaid, Defendant was unable to realize anything from some of said merchandise and had lost and was still losing customers up to June 6, 1957.

* * *

* * *

'VIII

'Subsequent to said settlement date as foresaid, Defendant has continued to lose customers and his business has continued to suffer up to this time.

'As the result of said merchandise being defective and inferior in quality as aforesaid, Defendant has been damaged up to this time in the sum of Twenty-nine Thousand Eight Hundred Twenty-five and 51/100 ($29,825.51) Dollars as follows:

                Damages accruing in connection with replacements of 59 rolls of
                   defective merchandise less 14 1/2 rolls heretofore paid for
                   by Plaintiff ...................................................... $901.25
                Cash paid to two salesmen as the result of damages for defec-
                   tive materials ................................................... --------
                Loss of profits up to March 31, 1958 ................................ 9,924.26
                Damages to business and good will estimated at ..................... 16,000.00
                                                                                   -----------
                                                                                   $26,825.51"
                

Defendant in his brief states his position relative to his cause of action as follows:

'Defendant never has contended, nor does he contend now, that the cause of action set forth in his answer and counterclaim, as amended, purported to state anything other than a cause of action for breach of implied warranty of merchantable quality resulting from a sale by description.'

This would indicate that he is depending on § 15, subsection (2), of the Sales Act, a part of ORS 75.150, which states as follows:

'(2) Where the goods are bought by description from a seller who deals in goods of that description (whether he be the grower or manufacturer or not), there is an implied warranty that the goods shall be of merchantable quality.'

Even though defendant has alleged that the goods were purchased for a particular purpose known to plaintiff, he cannot depend on subsection (1) of the same statute because he has not alleged reliance upon plaintiff's skill or judgment. This subsection is as follows:

'(1) Where the buyer, expressly or by implication, makes known to the seller that particular purpose for which the goods are required, and it appears that the buyer relies on the seller's skill or judgment (whether he be the grower or manufacturer or not), there is an implied warranty that the goods shall be reasonably fit for such purpose.'

For the same reason, that is, that there is no allegation of reliance, defendant is prohibited from contending that he is entitled to recover on an express warranty. Feeney & Bremer Co. v. Stone, 89 Or. 360, 171 P. 569, 174 P. 152; Wells v. Oldsmobile Co., 147 Or. 687, 35 P.2d 232.

Defendant is attempting to make a statement of his position more difficult than is actually necessary. His position would appear to be that he agreed with plaintiff for plaintiff to sell him clear vinyl plastic, as a result of which there was an implied warranty that the goods would fit the description; i. e., that they would be clear. Such an implied warranty is imposed by § 14 of the Sales Act, it being the same as ORS 75.140, which states in part as follows:

'Where there is a contract to sell or a sale of goods by description, there is an implied warranty that the goods shall correspond with the description, * * *.'

In other words, he contends that he bargained for clear vinyl plastic and he received cloudy material instead. It is true that he alleges the plastic was broken and taped together, but the evidence indicates that the deficiency of this kind was so minimal that it did not justify submitting to the jury any question of damages. As a result, it is essential to defendant's cause of action that the plaintiff be obligated to deliver to him 'clear vinyl plastic.' This is true whether he is depending on an implied warranty that the goods would fit the description or an implied warranty of merchantable quality in a sale by description. Plastic of other than absolute transparency is not per se of unmerchantable quality. Defendant appears to recognize this when he says in his brief:

'A reading of the transcript of defendant's evidence adduced before this motion was made shows abundant evidence * * * that defendant ordered the 48 inch plastic from plaintiff by description as 'clear vinyl plastic,' * * *.'

We will now proceed to examine defendant's cross-complaint to see if he alleges facts sufficient to state a cause of action for breach of an implied warranty in a sale by description. It will be noticed in paragraph II of defendant's cross-complaint that he alleges he purchased 'by description.' This is a conclusion of law and is a nullity. See Kelley et ux. v. Mallory et ux., 202 Or. 690, 697, 277 P.2d 767, and cases there cited. If we omit the words 'by description,' this leaves defendant alleging he purchased rolls of vinyl plastic. The only mention in the entire complaint of 'clear vinyl plastic' is the recitation in paragraph III that the principal use of the '48 [inch] clear, vinyl plastic' was for storm windows. This does not constitute an affirmative allegation that defendant purchased 'clear vinyl plastic.' Defendant contends that his cross-complaint identifies the vinyl plastic he purchased as being the same as the merchandise erroneously described by plaintiff as...

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