Centennial Ins. Co. v. General Elec. Co.

• Decision Date: 03 March 1977
• Docket Number: Docket No. 26439
• Parties: CENTENNIAL INSURANCE COMPANY, Subrogee of Detroit Edison Company, a Michigan Public Service Corporation, Plaintiff-Appellee, v. GENERAL ELECTRIC COMPANY, a Foreign Corporation, Port Huron and Detroit Railroad Company, and W. D. Gale, Inc., a Michigan Corporation, jointly and severally, Defendants- Appellants. 74 Mich.App. 169, 253 N.W.2d 696, 21 UCC Rep.Serv. 1088
• Court: Court of Appeal of Michigan — District of US

Page 696

253 N.W.2d 696

CENTENNIAL INSURANCE COMPANY, Subrogee of Detroit Edison

Company, a Michigan Public Service Corporation, Plaintiff-Appellee, v. GENERAL ELECTRIC COMPANY, a Foreign Corporation, Port Huron and Detroit Railroad Company, and W. D. Gale,

Inc., a Michigan Corporation, jointly

and severally,

Defendants-

Appellants.

Docket No. 26439.

74 Mich.App. 169, 253 N.W.2d 696, 21 UCC Rep.Serv. 1088

Court of Appeals of Michigan.

March 3, 1977.

Released for Publication June 2, 1977.

[74 MICHAPP 170] Butzel, Levin, Winston & Quint by John E. Jacobs, Detroit, for defendants-appellants.

Sullivan, Ranger, Ward & Bone by Maureen Holahan, Detroit, for plaintiff-appellee.

Before BRONSON, P. J., and BASHARA, and HORN, ^* JJ.

PER CURIAM.

Defendant appeals by leave granted from denial of its motion for accelerated judgment by the trial court. The Detroit Edison Company purchased from defendant General Electric a transformer which was shipped February 21, 1968 and arrived at the buyer's place of business March 4, 1968. Damage to the transformer was discovered on April 13, 1968, after it had been installed by defendant W. D. Gale, Inc., a contractor. Suit was begun March 13, 1972, by Centennial Insurance Company as subrogee. Defendant based its motion for accelerated judgment on the statute of limitations found in § 2-725 of the Uniform Commercial Code. M.C.L.A. § 440.2725; M.S.A. § 19.2725.

"(1) An action for breach of any contract for sale must be commenced within 4 years after the cause of action has accrued. By the original agreement the parties may reduce the period of limitation to not less than 1 year but may not extend it.

"(2) A cause of action accrues when the breach occurs, regardless of the aggrieved party's lack of knowledge of the breach. A breach of warranty occurs when [74 MICHAPP 171] tender of delivery is made, except that where a warranty explicitly extends to future performance of the goods and discovery of the breach must await the time of such performance the cause of action accrues when the breach is or should have been discovered."

It is clear that whether tender of delivery is deemed to be made at the time of shipment by the seller or at the time of receipt by the purchaser, suit was not commenced within four years. However, plaintiff relies on the language of the contract's express warranty in an attempt to bring this action within the stated exception of subsection 2-725(2). The warranty language is set out in the margin. ¹ We construe the language: "If it appears within one year from the date of shipment by the Company that the equipment * * * does not meet the warranties specified above * * *", not as a warranty for future performance, but rather, a specification of the remedy to which buyer is entitled should breach be discovered within the first year. At best, it could be argued that the clause is ambiguous. But any ambiguity must be resolved in favor of the construction we adopt here, that the language in question is not a warranty of future performance, since in order to invoke the exception the purported future warranty must be "explicitly" stated.

[74 MICHAPP 172] "Statutory use of the word has been construed in other jurisdictions. In Hvidsten v. Northern Pac. Ry. Co., 76 N.D. 111, 33 N.W.2d 615 (1948), the court found there had been insufficient compliance with a North Dakota statute requiring administrative agencies to 'make and state concisely and explicitly its findings of fact * * *.' The court incorporated the definition of explicit contained in Webster's International Dictionary 2d ed:

" 'Explicit is defined * * * as "Not implied merely, or conveyed by implication; distinctly stated; plain in language; clear; not ambiguous; express;...