Autzen v. John C. Taylor Lumber Sales, Inc.

• Citation: 280 Or. 783,572 P.2d 1322
• Parties: , 1978 A.M.C. 2263, 23 UCC Rep.Serv. 304 Duane AUTZEN, Respondent, v. JOHN C. TAYLOR LUMBER SALES, INC., an Oregon Corporation, Appellant.
• Decision Date: 28 December 1977
• Court: Supreme Court of Oregon

Page 1322

572 P.2d 1322

280 Or. 783, 1978 A.M.C. 2263, 23 UCC

Rep.Serv. 304

Duane AUTZEN, Respondent, v. JOHN C. TAYLOR LUMBER SALES, INC., an Oregon Corporation, Appellant.

Supreme Court of Oregon, Department 1.

Argued and Submitted Oct. 7, 1977.

Decided Dec. 28, 1977.

David P. Templeton, of Martin, Bischoff, Templeton, Biggs & Ericsson, Portland, argued the cause for appellant. With him on the briefs was James C. Waggoner, Portland.

Mitchell C. Wall, of Wall & Wall, P. C., Portland, argued the cause and submitted the brief for respondent.

Before DENECKE, C. J., HOWELL and LENT, JJ., and GILLETTE, J. Pro Tem.

GILLETTE, Justice Pro Tem.

This is an action for damages for breach of an express warranty in the sale of a used boat. The complaint and the evidence offered to support it suggested four different express warranties: (1) a 1970 booklet proposed by the manufacturer and describing the boat when new; (2) a 1972 survey (the "Meadows" survey) describing the boat at the time Seller obtained it; (3) a 1975 survey (the "Huhta" survey) describing the boat's condition at the time of the transaction under review here; and (4) a statement to Buyer by Mr. Love, agent for Seller, at the time of the transaction under review here that the vessel was in "A-1 condition." Seller denied the existence of any express warranty. The jury returned a verdict for Buyer in the amount of $100,000 the purchase price of the boat and Seller appeals. We affirm.

Seller's sole assignment of error is the trial court's denial of its motion for a directed verdict. In support of this assignment, Seller makes four contentions: (1) there were no express warranties; (2) if made, the express warranties were not part of the basis of the bargain between the parties; (3) if made, the warranties were true at the time they were formulated; and (4) if made, the warranties were not made "by the Seller." Our review is limited to the question of whether there was evidence from which the jury could have found against Seller on each of the points raised with respect to any one of the four alleged express warranties. See Zeleny v. Karnosh, 224 Or. 419, 421, 356 P.2d 426 (1960).

THE FACTS

The subject of the controversy is a 50-foot wooden vessel, the Karinda K II. The boat was built in 1970. Defendant corporation (Seller here) bought the boat in 1972. In 1975, Seller decided to sell the boat. Mr. Autzen (Buyer) was interested and inquired about the boat. Phillip Love, who represented the Seller, suggested that Buyer and his wife visit the boat and examine it, which they did.

Mr. Love and Buyer then met at the Thunderbird Motel in Portland, Oregon, on Buyer testified that all during the course of negotiations, Love claimed that the boat was in "A-1 condition." Love insists that he never used the term "A-1 condition," but that at the September 8 meeting, after the purchase price was settled, he had told Buyer: "I believe the boat to be in good shape but let's get a survey on it." (A survey is an examination of the boat for conditions such as dry rot or insect infestation). Buyer replied that a survey would not be necessary, but Love stated that he would like to have one made anyway at his own expense. Buyer testified that Love first suggested having a survey made when they met on the boat the following day, September 9. Whatever the exact time of the statement, there is no dispute that Love volunteered to have a survey made of the boat, Buyer replied that it was unnecessary and Love stated he was going to obtain a survey anyway.

September 8, 1975, to discuss the sale of the boat. At this meeting, the parties agreed that the total purchase price would be $100,000 and the down payment of $20,000 would be paid at the time of transfer of possession of the boat.

On September 9, the day after the Thunderbird Motel discussion, Buyer and Love met at the boat for a demonstration ride. Love showed Buyer a brochure containing the manufacturer's specifications and a survey made of the boat by one Meadows when Seller purchased the boat in 1972. While there, Love inquired with the owner of the boat yard about having a new survey made. The owner of the boat yard arranged to have a survey of the boat made the following day, September 10, by Mr. Huhta.

Buyer and Love next met on September 12. Buyer again examined the manufacturer's specifications and the 1972 Meadows survey and was informed of the results of the Huhta survey. Mr. Huhta spent six hours inspecting the boat for dry rot and concluded that the hull of the boat was "very sound" and that the boat "should be well suited for its intended purpose." Buyer gave Love a check for $20,000 and took possession of the boat.

In November, 1975, Buyer discovered that sections of the flying bridge of the Karinda K II were weakened by dry rot. He immediately arranged to have the boat taken to Sells Marina for inspection and work; the earliest they could take the boat, however, was January, 1976. The Sells personnel discovered extensive damage an enormous amount of dry rot and insect infestation and informed Buyer that there was "a big problem with the boat." The extent of the damage was corroborated by Mr. Huhta who reexamined the vessel in February, 1976. In March, 1976, Buyer's attorney informed Seller that Buyer was revoking his acceptance of the boat.

THE UNIFORM COMMERCIAL CODE

The express warranty provisions of the Uniform Commercial Code, enacted in Oregon as ORS 72.3130, provides:

"(1) Express warranties by the seller are created as follows:

"(a) Any affirmation of fact or promise made by the seller to the buyer which relates to the goods and becomes part of the basis of the bargain creates an express warranty that the goods shall conform to the affirmation or promise.

"(b) Any description of the goods which is made part of the basis of the bargain creates an express warranty that the goods shall conform to the description.

" * * *

"(2) It is not necessary to the creation of an express warranty that the seller use formal words such as 'warrant' or 'guarantee' or that he have a specific intention to make a warranty, but an affirmation merely of the value of the goods or a statement purporting to be merely the seller's opinion or commendation of the goods does not create a warranty."

There are two prerequisites to the existence of alleged express warranties made by Mr.

Love on behalf of Seller. Initially, there must be an affirmation of fact or description of the goods, and second, the factual affirmation or description must be part of the basis of the bargain.

THE HUHTA SURVEY

Because there was evidence from which the jury could have found that the 1975 Huhta survey met these prerequisites, we do not reach the question of whether the 1972 Meadows survey, the 1970 manufacturer's specifications, or the Love statement that the boat was in "A-1 condition" could, either standing alone or taken together, also be express warranties. Zeleny v. Karnosh, supra.

The Huhta survey concludes that:

" * * * the cruiser is an excellently constructed heavy-duty type, where (sic) the best lumber and material selected. The vessel is clean, dry, and well ventilated. Owner has taken excellent care of the cruiser. As far as could be ascertained from hull inspection without taking test bores or opening up of areas ordinarily concealed, the hull appears to be very sound and cruiser should be well suited for its intended purpose.

Seller raises several arguments why the Huhta survey does not fall within the express-warranty-by-description provision of ORS 72.3130(...