Advance-Rumely Thresher Co. v. Geyer
| Decision Date | 03 June 1918 |
| Docket Number | 1915 |
| Citation | 168 N.W. 731,40 N.D. 18 |
| Court | North Dakota Supreme Court |
Petition for rehearing denied June 19, 1918.
Appeal from the District Court of Towner County, North Dakota Honorable C. W. Buttz, Judge.
Judgment of the trial court modified, with costs.
Judgment modified, with costs.
H. R Turner and Barnett & Richardson, for appellant.
Every holder of a negotiable instrument is deemed prima facie to be a holder in due course, unless the title of the holder is shown to be defective, as defined by the Code.
There is no claim here tat the title of plaintiff is defective. Civ. Code, §§ 6940, 6944.
In the purchase of machinery where there is a written warranty and also provisions as to giving notice by the purchaser, upon which the warranty is based, his failure to give the notice as required by the contract is conclusive against his right to rely on the warranty. Fahey v. Machinery Co., 3 N.D. 220; Case Co. v. Ebbinghausen, 11 N.D. 466; Gould Co. v. Herold, 26 N.D. 287, 292; Nichols v. Knowles (Minn.) 18 N.W. 413; Murray v. Russell, 67 P. 421.
Notice to the agent from whom the machine was received is not notice to the company, as provided in the contract, and does not constitute a compliance with its provisions in such respect. Fahey v. Machinery Co., 3 N.D. 220, 224; Case Co. v. Ebbinghausen, 11 N.D. 466; Gould Co. v. Herold, 26 N.D. 287.
Where the agent sends out experts of his own selection, and without authority from the managing office so to do, such acts do not constitute a waiver of the stipulation as to giving notice. Mfg. Co. v. Lincoln, 4 N.D. 410.
Flynn & Traynor, for respondents.
A failure to give notice of defect in machinery bought or that it fails to work as required by the contract or order for the machinery does not constitute a waiver of the warranty contained in the contract. 50 L.R.A. (N.S.) 754.
"One who manufactures an article under an order for a particular purpose warrants by the sale that it is reasonably fit for that purpose." Comp. Laws 1913, § 5980.
Under the sale of such property with a warranty, the purchaser has a reasonable time after such purchase to ascertain whether or not the property complies with the warranty, and whether there are defects or breaches of the warranty, and what is a reasonable time is always a question for the jury, under the circumstances of each case. Comp. Laws 1913, §§ 5991-5993.
"It is a well-settled rule that an agent having power and authority to sell a machine under a contract which contains conditions for the benefit of the seller has authority to bind his principal by a waiver of such conditions." First Nat. Bank v. Dutcher (Iowa) 104 N.W. 197; McCormick v. Brower, 88 Iowa 614, 55 N.W. 537; Osborne v. Bavker, 81 Iowa 375, 47 N.W. 70; Peterson v. Machine Co., 97 Iowa 148, 59 Am. St. Rep. 399, 66 N.W. 96; Harrison v. Russell & Co. (Idaho) 87 P. 784.
Appellant was not a holder of the note, for value, in due course and without notice. All defenses are still available.
OPINION
This is an action to recover the balance claimed to be due upon a promissory note by the plaintiff, which claims to be the holder in due course of such note, and also to foreclose a chattel mortgage given to secure such note. The complaint is in the ordinary from and alleges cause of action on the note, and contains proper allegations asking for the foreclosure of the chattel mortgage given to secure such note. Answer admits the execution of the note and mortgage referred to in the complaint, and further, by way of defense, alleges that the note was given for the purchase price of certain plows and equipment, and sets out a warranty by the seller upon which defendants allege they relied. Answer further sets forth that the plows were unfit for plowing, and that said warranty had never been fulfilled. The breach of warranty is fully pleaded in the ordinary way. Answer further sets out that the plaintiff and the seller and all the assignors and indorsees mentioned in the complaint are one and the same person or party, and that said Rumely organization under its various names is one and the same concern, and its reorganization under its various names is and has been accomplished in part at least for the purpose and with a view to defeat the legitimate defenses and claims of the defendants and others in like circumstances who have had dealings with the said organizations; and defendants specifically allege that said note was not in the usual course of business and for value duly sold and indorsed to M. Rumely Company before maturity, and that said M. Rumely Company had not become the owner and holder of said note before maturity thereof in the usual course of business for value, and without notice, and that the same is true with reference to the plaintiff's ownership, and that all of the obligations of the seller were, at all times, assumed by the plaintiff and their assignors; and defendant pleads a total failure of consideration of said note, and makes a tender of the property described in the complaint to the plaintiff, and also alleges that the plows and machinery so purchased were wholly worthless. Defendant further alleges with reference to the two payments made upon such note of $ 100 each, that they were made under a promise and agreement that the plaintiff would make good the warranty, and that this plaintiff has failed and refused to do, and defendant demands payments for $ 200, with interest. Facts in the case are as follows:
Hansboro Hardware & Implement Company, located in Hansboro, North Dakota, are engaged in the hardware and implement business, and sold to the defendants the plows and plowing outfit, under consideration for which, on the 22d day of May, 1912, the defendants executed and delivered to the Rumely Products Company the note in question for $ 810, with interest at 8 per cent, and at the same time the defendants, Peter Geyer and Victor Geyer, executed to the Rumely Products Company the chattel mortgage upon the following property: One 10-bottom, 14-inch Oliver engine gang plow with stubble bottoms; five 14-inch breaker bottoms, ten 14-inch stubble shares, and five 14-inch breaker shares.
M. Rumley Company was an Indiana corporation organized in 1887 and was a manufacturing corporation. The Rumely Products Company was organized under the laws of New York in 1912 for the purpose of selling the manufactured products of the M. Rumely Company and others. The Advance Rumely Thresher Company was incorporated in September, 1915, and was a New York corporation, and took over or purchased $ 6,000,000 worth of the assets of the M. Rumely Company, which had become insolvent and went into the hands of a receiver, and the assets of the insolvent company were largely taken over or purchased by the Rumely Products Company from M. Rumely Company and its receiver, and with the property taken over or purchased was the note upon which suit is brought.
One payment of $ 100 was made on December 5, 1912, and another payment of $ 100 was made November 25, 1914. Each payment was made to a collector of the M. Rumely Company. Defendants claim that payments were made with the understanding had and promise made at the time the payments were made that the plows would be made good. Defendant testifies that he would not have made the $ 100 payments except for the promise to make the plows good, and the same condition is claimed as to the execution of the last chattel mortgage in March, 1915.
Among other findings of fact which the court made, there is the following:
"That during all of said negotiations the said Rumely Products Company, M. Rumely Company, Advance-Rumely Thresher Company, and Finley P. Mount, as receiver of M. Rumely Company, was designated in all conversations by such terms as "the Rumely concern," and the said defendants were not, during said times, apprised of any change in the corporation or corporation name, but dealt, at all times, with the Rumely people or Rumely Company or Rumely concern with the understanding and belief that they were dealing with the same people at all times, and the said Rumely Products Company, M. Rumely Company, Finley P. Mount as receiver of the M. Rumely Company, and the Advance-Rumely Thresher Company, were each and all of them responsible for the impression given to the defendants that they were, at all times, the same concern and, at all times, each and all of said corporations and said receiver through their duly authorized agents assumed the position that it or he was the first original seller and entitled to all rights of the original seller and assuming all liabilities thereof; that the said last-mentioned chattel mortgage, dated March 30, 1915, was under date of August 14, 1916, assigned by Finley P. Mount, receiver of M. Rumely Company, to Advance Rumely Thresher Company, incorporated."
The foregoing finding of fact means that the Rumely Products Company, M. Rumely Company, and Advance-Rumely Thresher Company, so far as the rights of defendant are concerned, are to be considered the same concern. We are of the opinion that the finding of fact is correct, at least as to the Rumely Products Company and M. Rumely Company being, in effect, one and the same corporation; for if the Rumely Products Company was organized for the purpose of purchasing and marketing the products of the M. Rumely Company, even though it purchased and marketed the products of other concerns, the Rumely Products Company and the M. Rumely Company were, in effect, one concern. The M. Rumely Company manufactured certain article...
To continue reading
Request your trial