Charles F. Curry & Co. v. Hedrick, 49658

CourtUnited States State Supreme Court of Missouri
Citation378 S.W.2d 522
Docket NumberNo. 49658,No. 2,49658,2
PartiesCHARLES F. CURRY AND COMPANY, a Corporation, Appellant, v. Wyatt C. HEDRICK, Respondent
Decision Date01 May 1964

Page 522

378 S.W.2d 522
CHARLES F. CURRY AND COMPANY, a Corporation, Appellant,
Wyatt C. HEDRICK, Respondent.
No. 49658.
Supreme Court of Missouri, Division No. 2.
May 1, 1964.

Page 524

David R. Hardy, Frank P. Sebree, James H. Ottman, Mari W. Privette, Shook, Hardy, Ottman, Mitchell & Bacon, Kansas City, Wilbur L. Pollard, Williams, Norton & Pollard, North Kansas City, for appellant.

Page 525

Arthur R. Kincaid, William B. Waters, Robert E. Coleberd, Hale, Coleberd, Kincaid & Waters, Liberty, Howard M. Fender, Austin, Tex., for respondent.

BOHLING, Special Commissioner.

This is an action for damages instituted by Charles F. Curry and Company, a Missouri corporation, against Wyatt C. Hedrick of Fort Worth, Texas, arising out of the sale of a Lockheed Lodestar twin engine airplane (Identification mark N 555 H) to plaintiff. Service was by attachment, which was released when defendant entered his appearance. The airplane was officially 'grounded' as unairworthy by the Federal Aviation Agency (hereinafter referred to as FAA) about seven months after its purchase. It was later returned to defendant by plaintiff for correction of the discrepancies, which corrections defendant allegedly agreed to make without costs to plaintiff. The making of the corrections deprived plaintiff of the use of said airplane. Defendant, learning plaintiff was asserting a claim for said loss of use, refused, under circumstances hereinafter narrated, to surrender said airplane to plaintiff. The action went to trial on plaintiff's first amended petition, which was in three counts. At the close of the evidence plaintiff's Count II, in the alternative for breaches of implied warranties for loss of use of the airplane, was dismissed. Defendant's counterclaim to recover his costs ($13,815.58) in making the plane airworthy was also dismissed. They need not be developed. Count I of plaintiff's petition, for the loss of use of said airplane, was based upon alleged breaches of certain express warranties. Count III was trover for alleged conversion. Defendant's answer to Count I, so far as need be noted, denied the material allegations of plaintiff's petition. Defendant's answer to Count III, briefly stated, alleged defendant undertook the repair of the airplane as a pure accommodation; that plaintiff concealed his intention to make a claim for loss of use; that when plaintiff presented such claim, defendant refused to deliver said airplane until he was paid the reasonable value of his services, $13,815.58; and that, upon plaintiff's refusal to pay, defendant retained possession of the airplane under the Mechanics Lien Law of the State of Texas. Plaintiff's reply was in effect a denial of all affirmative matter pleaded by defendant, alleging defendant's answer failed to state a defense to plaintiff's petition. Defendant's separate motions for a directed verdict on Count I and on Count III, and to dismiss plaintiff's claim for punitive damages were overruled. The jury returned a verdict for defendant on Count I, signed by ten jurors, and a verdict for defendant on Count III, signed by nine jurors. We have appellate jurisdiction as plaintiff asked actual damages of approximately $115,000 and punitive damages of $100,000. Plaintiff questions rulings of the trial court with respect to the submission of issues to the jury, the refusal and giving of instructions, and the admission and exclusion of evidence.

The Federal Aviation Agency Act, applicable to this Lodestar, broadly stated, authorizes, in the interests of safety, the Administrator therein created to establish minimum standards governing the design, materials, workmanship, construction and performance of certain aircraft and their appliances, and reasonable rules and regulations and minimum standards for their inspection and certification as airworthy or unairworthy. 49 U.S.C.A. Sec. 1421. It is unlawful, for instance, to operate such aircraft without a current certificate of airworthiness in effect, or in violation of any rule, regulation or certificate issued under said authority. Id., Sec. 1430.

The Code of Federal Regulations (CFR), Title 14 CFR, Aeronautics and Space, Sec. 18.11 prohibits the return to service of any airframe, powerplant, propeller, or appliance subjected to major repair or alteration before the same has been examined, inspected and approved as airworthy by an authorized representative of the FAA.

Page 526

Records of every maintenance, repair, rebuilding or alteration of any airframe, powerplant, propeller or appliance are to be maintained in a logbook or other permanent record by the owner. Id., Sec. 18.20.

Forms ACA-337, supplied by the Federal Administrator and known as Forms 337 in the record, approving a major repair or alteration are to be executed in duplicate. The original is given to the aircraft owner for his permanent record and a copy is retained by the FAA. Id., Secs. 18.22, 18.22-1.

These aircraft and engine maintenance records are to be transferred to the new registered owner upon disposition of the aircraft or engine involved. Id., Sec. 43.23.

One logbook for each engine and a logbook for the airframe are to be kept on twin engine planes. The FAA regulations make provision for 100-hour inspections and for periodic or annual inspections, and require that airplanes, for their continuation in service, be certified airworthy at the periodic or annual inspection, with a copy of the certificate forwarded to the FAA.

Charles E. Curry, herein referred to as Mr. Curry, is president and managing officer of Charles F. Curry and Company, plaintiff, which is engaged in the real estate loan business in Missouri, Kansas, Oklahoma and Arkansas. Charles F. Curry, father of Charles E., is also interested in said business. All negotiations in this litigation on behalf of plaintiff were conducted by Mr. Curry.

Defendant is primarily engaged in the architectural and engineering business. He is also interested in ranching, real estate and insurance. He or his companies have owned airplanes since 1923 and many planes since 1945. He maintains an 'Aviation Division' at Meacham Field, Fort Worth, Texas. He is not a licensed pilot, has no substantial mechanical knowledge of airplanes, but has flown planes under the supervision of licensed pilots.

In 1960, Tom Stanley, a former business associate of defendant, and George Mulkey, defendant's office manager, described by defendant as his man 'Friday,' informed Mr. Curry of the availability at $125,000 of defendant's Lodestar airplane. By long distance telephone calls to Fort Worth on Saturday, February 6, 1960, Mr. Mulkey was informed plaintiff would be interested in purchasing the Lodestar at $90,000 subject to approval after an inspection and flight and an overhaul of the engines. This resulted in arrangements for Marvin Jenkins, pilot and public relations man for defendant, and Jack Keefauver, co-pilot for defendant, to meet and fly Mr. Curry in the Lodestar from Albuquerque, New Mexico, to Kansas City on Sunday, the 7th. On this trip Mr. Jenkins told Mr. Curry the Lodestar was an excellent plane and pointed out work done on it for defendant, stating this made the plane very desirable.

Mr. Curry arranged for Ed Frazier, plaintiff's pilot, to look at the airplane and report to him, and on Monday, February 8th, Mr. Frazier examined the entries in the Lodestar's logbook and was taken by defendant's pilots for a flight in the plane. Mr. Frazier reported to Mr. Curry that a periodic certification of September, 1959, in the logbook stated the airplane was 'airworthy,' and that the plane looked like a fine executive type airplane. Said certification of airworthiness was signed by Earl G. King, Jr., then in the employ of defendant, a fact not known to plaintiff.

Count I of plaintiff's petition was submitted on the theory defendant was liable for making one or more of the following untrue express warranties to induce plaintiff to purchase the aircraft, and that plaintiff relied thereon in purchasing the airplane, to-wit, that said Lodestar airplane was 'A-1 in every respect,' or was 'in first class condition,' or was 'airworthy.'

Mr. Curry and his father, following Mr. Frazier's report, talked with defendant over long distance telephone on February 8th. Mr. Curry's father did not testify at the

Page 527

trial. Mr. Curry testified that in said conversation defendant represented to him and his father that this Lodestar airplane 'was in A-1 condition'; was 'first class in every respect'; 'was ready to fly now'; and 'was as good a plane as money could buy.'

Defendant, a witness in his own behalf, testified that said telephone conversation was the only conversation he had with Mr. Curry concerning the sale of this aircraft to plaintiff; that theretofore he had never offered the Lodestar for less than $125,000; that he first asked Mr. Curry $100,000; that Mr. Curry offered $90,000; that while he was asking $100,000 and Mr. Curry was bidding $90,000: 'Q * * * [Y]ou represented to Mr. Curry that this plane was airworthy in every respect, did you not? A Yes, sir. Q And you represented to Mr. Curry that it was properly licensed with the FAA? A Yes, sir. Q And you represented to Mr. Curry that this plane was in first class condition, did you not? A Yes, sir. Q And that it was A-1 in every respect? A I'm sure that I did, sir, yes.'

Defendant, under date of February 9, 1960, wrote plaintiff, outlining the terms of their agreement and stated, in part: 'In conclusion, we would like to say that we have found this plane A-1 in every respect, for operational purposes, and as I told both you and your father, I believe you have as good a plane as money can buy and, I think, at an economical price.'

The parties agreed that plaintiff would pay $90,000 for the airplane; $80,000 cash and later $10,000 upon defendant overhauling the engines. This purchase price was timely paid.

Mr. Curry was not a licensed pilot and knew little...

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