Boehck Const. Equipment Corp. v. O'Brien

• Decision Date: 01 February 1966
• Citation: 29 Wis.2d 649,139 N.W.2d 650
• Parties: BOEHCK CONSTRUCTION EQUIPMENT CORP., a corporation, Respondent, v. Harold O'BRIEN et al., a/b/a Racine Excavating and Sewer Contractors Partnership, Appellants.
• Court: Wisconsin Supreme Court

Page 650

139 N.W.2d 650

29 Wis.2d 649

BOEHCK CONSTRUCTION EQUIPMENT CORP., a corporation, Respondent, v. Harold O'BRIEN et al., a/b/a Racine Excavating and Sewer Contractors Partnership, Appellants.

Supreme Court of Wisconsin.

Feb. 1, 1966.

On April 27, 1964, appellants Harold O'Brien and Michael Glaub, who were excavating contractors, entered into a conditional sales contract with respondent Boehck Construction Equipment Corporation to purchase a Lima 34 crawler with a backhoe attachment for $6,000 plus $720 in financing charges, the total price to be paid in 20 monthly installments. Respondent repossessed the crawler June 12th, when appellants failed to make any payments and a foreclosure sale was held July 7th. A representative of respondent was the only person present at the sale and his bid of $4,000 for the crawler was accepted. Respondent brought suit against appellants for the deficiency of $2,264.60, which was arrived at by deducting $590.40 in unearned finance charges and the $4,000 bid from the sum of the contract price, $6,720, and $135 in sale expenses. Appeal is taken from a judgment in respondent's favor.

Konnak & Constantine, Racine, for appellants.

Thomas J. Bergen, Milwaukee, for respondent.

WILKIE, Justice.

The major issue presented on this appeal is whether $4,000 is the reasonable value of the crawler within the meaning of sec. 122.221(1), Stats. ¹ Although this section has been on the books since 1943, this court has not yet had the opportunity to consider what is meant by 'reasonable value.' The trial court recognized three possibilities--the price bid at the sale, the wholesale price, and the retail sales value--and concluded that the reasonable value is 'that value received from the sale at the time of the auction, unless upset by testimony.'

The trial court's view of how reasonable value should be determined is sound. The court must start somewhere. The wholesale price and the retail sales price are not trustworthy indicators since they obviously reflect prices which, by definition, are either favorable to the original seller or buyer. Since the price received at the sale should theoretically be more neutral, particularly if bidding has been brisk, this figure should be used as a starting point. ²

Thus, the next consideration is whether the appellants presented evidence demonstrating that the bid price of $4,000 was unreasonable. Relying on testimony of John Dykstra, who was also in the excavating business, that the machine was worth $5,000 to $6,000, and pointing out that the machine was bought on April 27th for $6,000, that it had been used for a total of only 30 hours before repossession on June 12th, and that it had been properly maintained, appellants contend that the foreclosure sale price of $4,000 on July 7th, some 80 days after the actual delivery on April 18th, is patently unreasonable. However, the test is whether the trial court's finding is against the great weight and clear preponderance of the evidence. ³

The respondent's evidence countered that of appellants:

First, there was testimony by Thomas Pares, vice-president of respondent, and Harrison Duffy, one of respondent's salesmen, that the crawler was worth $4,000.

Second, there was testimony to the effect that the value of excavation equipment in any given July would be less than in the spring when the demand for such machines is the greatest.

Third, there was testimony that the addition of a backhoe attachment, at appellants' request,...