Beck v. Spindler

• Decision Date: 20 November 1959
• Docket Number: No. 37736,37736
• Citation: 99 N.W.2d 670,256 Minn. 543
• Parties: James M. BECK et al., Respondents, v. Herbert SPINDLER, sole trader, d.b.a. Herb Spindler Company, Defendant, Ventoura Corporation, Appellant.
• Court: Minnesota Supreme Court

Page 670

99 N.W.2d 670

256 Minn. 543

James M. BECK et al., Respondents, v. Herbert SPINDLER, sole trader, d.b.a. Herb Spindler Company, Defendant Ventoura Corporation, Appellant.

No. 37736.

Supreme Court of Minnesota.

Nov. 20, 1959.

Syllabus by the Court.

1. The test now applicable in determining whether a foreign corporation is amenable to suit in this jurisdiction is that 'due process requires only that in order to subject a defendant to a judgment In personam, if he be not present within the territory of the forum, he have certain minimum contacts with it such that the maintenance of the suit does not offend 'traditional notions of fair play and substantial justice."

2. Whether the requisite minimal contacts with this state exist depends on the quality and nature of the business which gives birth to the litigation.

3. Where a manufacturer located in a foreign state sells its products through a dealer located here and enters into an express warranty with a purchaser; joins with the dealer in filing documents required by law to enable the dealer to obtain a dealer's license under M.S.A. c. 168; reimburses the dealer for advertisements advertising its products; and sends its own employees here in an effort to remedy defects in the chattel sold, sufficient contacts with this state exist under the applicable rules so as to make the foreign corporation amenable to suit here.

4. M.S.A. § 303.13 is not unconstitutional for failure to require multiple acts by a foreign corporation in order to subject it to suit in this state.

5. Service of process, under § 303.13, upon a foreign corporation by the secretary of state by mail sufficiently satisfies the requirements of due process.

6. A cause of action for breach of an implied warranty arises when there is a failure on the part of the defendant to perform.

7. Section 303.13, subd. 1(3), became effective on April 20, 1957. Where a cause of action arose subsequent to that date, the act is applicable even though the contract out of which the cause of action arose was entered into prior to the effective date of the statute.

8. An implied warranty is imposed by law for the protection of the buyer and does not depend upon the affirmative intention of the parties.

9. The doctrine of implied warranty is favored by this court, and such warranties should be given effect when it is possible to do so.

10. In this state a manufacturer of a chattel may become liable to a person injured by use of the chattel for negligence in its manufacture even though there is no privity of contract between them.

11. Under the facts in this case the purchaser of the chattel may recover for a breach of an implied warranty of fitness, whether or not privity of contract is required.

12. Waiver is a voluntary relinquishment of a known right. Whether waiver exists ordinarily is a question of fact for the jury.

13. The reasonable time within which a purchaser could rescind for breach of an implied warranty of fitness does not run during the time in which defendants were engaged in an effort to correct defects existing in a chattel.

14. Ventoura was sufficiently connected with the sale so that rescission lies as to it. Gannon & Dahle, Hibbing, for appellant.

Stein & Stein and David Naughtin, Hibbing, for respondents.

KNUTSON, Justice.

This is an appeal from an order of the trial court denying a motion of defendant Ventoura Corporation for judgment notwithstanding the verdict or for a new trial.

Defendant Ventoura Corporation is a manufacturer of house trailers and is located at Elwood, Indiana.

Defendant Herbert Spindler, sole trader, doing business as Herb Spindler Company, referred to hereinafter as Spindler, is a dealer in house trailers of various makes, including Ventoura house trailers, and is located at Duluth, Minnesota.

On October 3, 1956, Spindler sold a new 1957 Ventoura house trailer to plaintiffs on a conditional sales contract. As a downpayment, plaintiffs paid $100 in cash, and they were given a credit of $3,000 on an old trailer which they traded in on the new purchase. The balance of the purchase price of the new trailer was to be paid in 60 monthly payments of $143.09 each. The contract thereafter was sold by Spindler to Michigan National Bank.

The new house trailer was delivered to plaintiffs at Hibbing, Minnesota, on October 10, 1956, where it was to be used by plaintiffs as their home. The construction of the trailer was such that during cold weather water collected in large quantities in the ceiling and walls thereof due to condensation, causing the panels and other parts of the interior of the trailer to warp and water to drip from the ceiling of the trailer. There seems to be no doubt that the insulation and ventilation of the trailer made it unfit for use in a climate such as exists in Hibbing.

Spindler had purchased this trailer from Ventoura. He had an exclusive franchise to sell Ventoura trailers within St. Louis County. When Spindler obtained an order for a Ventoura trailer, he would order it from Ventoura and pay down ten percent of the wholesale price, and the balance of the purchase price would be financed with Michigan National Bank. The trailer then would be delivered to Spindler. In reselling it, Spindler would set the price, although Ventoura had a recommended price list.

When a trailer was delivered to Spindler, it would be accompanied by an 'Owner's Warranty Policy' prepared by Ventoura. As the trailer was sold, this policy or warranty was forwarded to Ventoura by Spindler and sent by Ventoura direct to the buyer. That was done in this case. Among other things, this warranty policy contains the following provision:

'4. Factory Service Adjustments: If for any reason defects in materials, construction and/or workmanship in this Ventoura Home should occur within the ninety day Warranty period, owner is entitled to factory service on such items providing written request for such service is received, confirmed and approved by the Service Department of the Ventoura Corporation; and that owner returns mobile home to the Ventoura Corporation in Elwood, Indiana for such service with all charges (including transportation) prepaid.

'5. Inspection: During the Warranty Period, owner is invited to have his Ventoura Home inspected by any Authorized Ventoura Dealer.'

After it developed that the trailer was unsatisfactory, plaintiffs complained to Spindler. Spindler sent his men out to look at it and to attempt to correct the defects complained of, but they were unsuccessful. Spindler then wrote Ventoura on January 21, 1957, as follows:

'As we discussed via phone I am writing you in regard our recent problems on 10 wide Ventouras, # P48T2--HNOO401, and # P48T2--KN00539. The first is at Hibbing, Minnesota and was the first 10 received and sold.

'This particular model has been a source of trouble from the start. First we had great condensation problems, after adjustments the condensation on the windows was eliminated. Next gallons of water came through the back bedroom ceiling up over the Revalvex windows, we Kool-Sealed the roof suspecting it was a leak. We have repeatedly checked the mobile home and found enough heat. Saturday the people called again and once again a great deal of water was coming down the side walls and through the ceiling. The mahogany on the back Revalex is in bad shape plus some of the panels. We have asked the woman to cut down on the use of water in cooking, which she has done. The washer and dryer are not in use as they were not hooked up. This party has cancer and her doctor has advised her that with water falling on the bed, it is not healthy for her to be in the trailer. They are using a great deal of fuel to keep warm. They have followed our instructions on windows and other means of ventilating. To date no success.

'The other Ventoura, # KN0-0539, has been checked and rechecked. We have made inumerable trips and have paid heating men to check all three places.

'We no longer can cope with these problems and feel that your organization must move in and do so immediately.

'With suits in the offering we cannot afford to give promises of future corrections. All the corrections possible by our organization have been done.

'The future sales of two or three Ventouras on at stake. In one case a party drove to Grand Rapids, Minnesota to see the Ventoura. Mr. Booth, the owner, treated them cordially, but their observations were no good.

'I don't think we can wait a month or more for your men to get to these mobile homes, the weather here will get worse as we go along. The need is immediate!'

On August 26, 1957, Spindler wrote Mrs. Belancic, one of the plaintiffs, as follows:

'We were informed as of this morning that the Ventoura, factory representative was on his way to check your mobile home and that he was going to do everything possible to full fill the factory guarantee. The Ventoura plant was also informed that he may not have all the necessary equipment. The factory will express any thing that is needed. Our suggestion is that all cooperation be extended the factory representative to aid in his work. Remember please that he must at least try to full fill all that the guarantee calls for. Your cooperation greatly appreciated.'

As a result of correspondence between Spindler and Ventoura, servicemen from Ventoura called at Hibbing and inspected the trailer and attempted to correct the defects existing therein.

As early as February 1957, Mrs. Belancic told representatives of Ventoura that they should take the trailer back. However, plaintiffs continued to make their monthly payments until November 1957, apparently in the hope that the trailer would be put in a satisfactory condition.

An action was commenced in September 1957 in which plaintiffs sought to recover what they had paid. This action was dismissed as to Ventoura upon its motion on the ground of insufficiency of service of process. The propriety of that...