381 F.2d 441 (9th Cir. 1967), 20745, Wagner Tractor, Inc. v. Shields

Docket Nº:20745, 20758.
Citation:381 F.2d 441
Party Name:WAGNER TRACTOR, INC., and FWD Wagner, Inc., Defendants-Appellants, v. W. E. SHIELDS, Trustee in Bankruptcy for Frost Machinery Company, Ltd., Plaintiff-Appellee. W. E. SHIELDS, Trustee in Bankruptcy for Frost Machinery Company, Ltd., Plaintiff-Appellant, v. WAGNER TRACTOR, INC., and FWD Wagner, Inc., Defendants-Appellees.
Case Date:July 11, 1967
Court:United States Courts of Appeals, Court of Appeals for the Ninth Circuit
 
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Page 441

381 F.2d 441 (9th Cir. 1967)

WAGNER TRACTOR, INC., and FWD Wagner, Inc., Defendants-Appellants,

v.

W. E. SHIELDS, Trustee in Bankruptcy for Frost Machinery Company, Ltd., Plaintiff-Appellee.

W. E. SHIELDS, Trustee in Bankruptcy for Frost Machinery Company, Ltd., Plaintiff-Appellant,

v.

WAGNER TRACTOR, INC., and FWD Wagner, Inc., Defendants-Appellees.

Nos. 20745, 20758.

United States Court of Appeals, Ninth Circuit.

July 11, 1967

Page 442

Marshall Cheney, Jr., Mize, Kriesien, Fewless & Cheney, Portland, Or., for appellants.

William Campbell, Freed & Campbell, Portland, Or., Walter N. Newman,

Page 443

Queen's Commissioner, Winnipeg, Manitoba, Canada, for appellee.

Amended Opinion

Before CHAMBERS, BARNES and DUNIWAY, Circuit Judges.

BARNES, Circuit Judge:

This is a consolidation of two appeals from the United States District Court for the District of Oregon. The trial court's jurisdiction was based upon 28 U.S.C. § 1332. This court has jurisdiction under 28 U.S.C. § 1291.

Wagner Tractor, Inc. (hereinafter 'Wagner') is a manufacturer of construction and farm machinery. Shields is the trustee in bankruptcy for Frost Machinery Company, Ltd. (hereinafter 'Frost'). Frost was a dealer in Wagner products.

In April of 1959, Wagner sold a Wagner Tractor Model IND-14, Serial No. 2019, to Frost, f.o.b. Portland, Oregon. Delivery was taken by Albert Ferec, a retail customer of Frost, who took it to St. Rose DuLac, Manitoba, to be used in his road construction business. The machine did not perform properly. It was agreed that the machine, No. 2019, would be returned to Frost and Ferec would purchase a different machine.

In May of 1959, Frost purchased from Wagner a Wagner Tractor Model IND-14A, Serial No. 2033, f.o.b. Portland, Oregon. Delivery was again taken by Mr. Ferec as Frost's retail customer. Mr. Ferec used the machine in his road construction business, with minor repairs being made to the tractor. In August of 1959 a serious malfunction (after about 650 hours of work) necessitated certain major repairs which were done by Frost. Work with the machine continued until October when the weather prevented further work. In the spring of 1960, Ferec again used the No. 2033, but after only 12 hours of operation the transmission failed. Frost refused to repair it and Ferec returned the machine to Frost. Ferec was in default on his payments for the machine, but no demand for payment was made to him. There is no evidence that Ferec's contract with Frost was ever rescinded.

As to the first machine, No. 2019, a new engine was installed to provide more power. Frost paid the cost of installing the new engine as it had agreed. During 1960 it was leased on two occasions and, apparently, performed satisfactorily, the rentals being in excess of $5,000.

The dealership agreement between Frost and Wagner was terminated by Wagner according to its terms on August 7, 1959. Later, Frost became bankrupt, and the machines were repossessed and sold by the finance company, Industrial Acceptance Corporation.

On March 22, 1963, Frost, by its trustee in bankruptcy, filed suit against Wagner and its successor for breach of warranty. After trial, the court found that Wagner had breached its warranties as to each machine and awarded damages of $4,350.14 as to No. 2019 and $32,500.00 as to No. 2033. Wagner appeals from the judgment of breach of warranty and the amount of damages. Shields, as trustee for Frost, appeals the amount of damages contending they are inadequate.

As the court's jurisdiction was based on diversity of citizenship, the case is to be determined by the law of the state where the court sits, in this case Oregon, Erie R.R. Co. v. Tompkins, 304 U.S. 64, 58 S.Ct. 817, 82 L.Ed. 1188 (1938). See also, Byrd v. Blue...

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