A.C. Morris & Co., Incorporated, v. Heaton

• Decision Date: 20 June 1930
• Parties: A.C. Morris & Company, Incorporated, v. Heaton.
• Court: United States State Supreme Court — District of Kentucky

Page 66

235 Ky. 66

A.C. Morris & Company, Incorporated, v. Heaton.

Court of Appeals of Kentucky.

Decided June 20, 1930.

1. Sales. — Title to milking machine passed to purchaser notwithstanding purchase-price note stating title remained in seller.

2. Chattel Mortgages. — Effect of reservation of title of milking machine in purchase-price note held to create lien on machine to secure purchase price.

3. Sales. — Right of buyer to rescind for breach of warranty exists for reasonable time after discovery of fact respecting defective performance.

4. Sales. — Rescission of sale is accomplished by return of property at place of delivery.

5. Sales. — Buyer's attempted rescission of sale of milking machine for defective performance seven months after sale held not within reasonable time.

Evidence disclosed that milking machine was delivered to buyer on November 10, 1926, that it was then set up and put in service, that note was given for purchase price payable in six months, and that note was renewed on May 10, 1927, for another six months. No effort at rescission was made by buyer until a month or more after note was renewed.

6. Sales. — Illness of buyer did not relieve him from obligation to rescind sale of milking machine for defective performance within reasonable time.

Appeal from Franklin Circuit Court.

CARROLL & CARROLL and JOHN S. CARROLL for appellant.

POLK SOUTH, Jr., for appellee.

OPINION OF THE COURT BY JUDGE WILLIS

Reversing.

A.C. Morris & Co. sued H.L. Heaton upon a promissory note to recover $375 with interest. The Circuit Court rendered a judgment for the defendant, and the plaintiff has entered a motion for an appeal.

The defense to the action was rested upon the ground that the note was given to pay for a De Laval Milking Machine which was represented and guaranteed to milk cows better than could be done by hand, to increase the production of milk, to save time and labor for defendant, and to satisfy defendant in the respects stated. It was alleged that the machine had failed in all particulars covered by the warranties. It was further alleged that the title to the machine was to remain in plaintiff until the note was paid, or until defendant was satisfied with the operation of the machine; and that defendant was to have a reasonable time to try out the machine and to determine whether he desired to keep it. If the machine did not prove as represented, it was to be returned and the note canceled. It was further alleged that a few days after the machine was installed the defendant became ill and was compelled to go to Florida for his health, where he was detained for about six months. He then returned and tried the machine, found it a failure, and told the plaintiff to take it back. It appeared that the note sued upon was a renewal of a similar note given six months earlier. There was a conflict in the evidence respecting the circumstances of the renewal, and in many other particulars, but the case turns on facts which are not in dispute. It will be noted that no counterclaim to recover damages for breach of warranty was pleaded. Cf. Cantrell v. Dotson, 221 Ky. 494, 299 S.W. 181, and Glover Machine Works v. Cooke-Jellico Coal Co., 173 Ky. 675, 191 S.W. 516. The defendant relied entirely upon a right of rescission based upon an agreement conferring that right if the machine failed to prove satisfactory in certain particulars. Notwithstanding the provision of the note respecting title to the machine, the transaction constituted a sale and the title passed to the purchaser. The effect of the reservation was to create a lien on the property to secure the purchase price evidenced by the note. Montenegro-Riehm Music Co. v. Beuris, 160 Ky. 557, 169 S.W. 986, L.R.A. 1916C, 557; U.S. Cast Iron Pipe Co. v. Henry Vogt Machine Co., 182 Ky. 473, 206 S.W. 806; Fry Bros. v. Theobold, 205 Ky. 146, 265 S.W. 498; General Motors Acceptance Corp. v. Sharp Motor Sales Co., 233 Ky. 290, 25 S.W. (2d) 405.

The defense depends upon the asserted right of defendant to rescind the contract. If machinery, or other personal property, be sold under a guaranty that it will serve some purpose, or, in certain particulars, prove satisfactory to the purchaser, the right of rescission exists for a reasonable time after discovering the facts respecting defective performance, and a rescission is accomplished by a return of the property at the place of delivery. The right must be exercised, however, without unreasonable delay in discovering the defects, or deciding upon that course of conduct. 35 Cyc. 151; Paducah Hosiery Mills v. Proctor & Schwartz, 210 Ky. 806, 276 S W. 803, 807; Dick v. James Clark Electric Co., 161 Ky. 622, 171 S.W. 198; Meek Coal Co. v. Geo. D. Whitcomb Co., 164 Ky. 833, 176 S.W. 354; Church v. Wright Machine Co., 190 Ky. 561, 227 S.W. 1003. It is established that the milking machine was delivered to defendant on November 10, 1926. It was then set up and put in service, and a note was given for the purchase price payable in six months. No complaint was made during the period the first note was running, and it was renewed on May 10, 1927, for another six months. Plainly the defendant did not act promptly, or within a reasonable time. He admits that the machine could be tested in a few weeks, and necessarily action should be taken before serious deterioration in the value of the property had resulted. International Harvester Co. v. Brown, 182 Ky. 435, 206 S.W. 622. There is no intimation in the record that six months' time was necessary to test the merits of the machine. Indeed, it appears from defendant's own testimony that he had time after his recovery of health...