Childers & Venters, Inc. v. Sowards

• Decision Date: 04 December 1970
• Citation: 460 S.W.2d 343
• Court: United States State Supreme Court — District of Kentucky
• Parties: 8 UCC Rep.Serv. 433 CHILDERS & VENTERS, INC., Appellant, v. B. F. SOWARDS, Appellee.

Page 343

460 S.W.2d 343

8 UCC Rep.Serv. 433

CHILDERS & VENTERS, INC., Appellant, v. B. F. SOWARDS, Appellee.

Court of Appeals of Kentucky.

Dec. 4, 1970.

O. T. Hinton, Hinton, Hall & Todd, Pikeville, for appellant.

Francis Dale Burke, Pikeville, for appellee.

PALMORE, Judge.

The appellant, Childers & Venters, Inc., an automobile dealer, sold a used coal truck to the appellee, B. F. Sowards, for which Sowards executed a $3,060 promissory note due in 120 days and a conditional sales contract calling for the payment of $8,790.30 in 18 monthly installments. Childers & Venters negotiated the note to a local bank and the contract to General Motors Acceptance Corporation, both with recourse. Sowards made no payments on either obligation, the truck was sold by G.M.A.C., and Childers & Venters, after paying off the $3,060 note and a deficiency balance of $3,559.64 to G.M.A.C., brought this suit against Sowards. In his answer and counterclaim Sowards demanded that the complaint be dismissed and that he be awarded damages of $2,500, all upon the ground that the truck was defective and not as represented by Childers & Venters. The case was submitted to a jury, which returned the following verdict:

'From the evidence that the truck sold to the defendant was not as represented by the plaintiff, to the defendant, B. F. Sowards, at the time of the sale. We wish to relieve both parties of all indebtedness in this case.'

Childers & Venters appeals from a judgment dismissing the complaint and counterclaim pursuant to this verdict. Its chief contention is that its motion for a directed verdict at the close of the evidence should have been sustained. We agree.

The evidence leaves no doubt that Sowards got a bad bargain. However, he neither pleaded nor proved fraud on the seller's part, but relies on breach of warranty.

The conditional sales contract is on a printed form which begins as follows:

'The undersigned seller hereby sells, and the undersigned buyer or buyers, jointly and severally, hereby purchase(s), subject to the terms and conditions set forth below and upon the reverse side hereof, the following property * * *.'

The words, 'and upon the reverse side hereof,' are in darker print than the remainder thus quoted.

The signatures of Childers & Venters as the seller and Sowards as the buyer appear below on the face or front sheet of the agreement. The reverse side of the form is headed by the word 'PROVISIONS' in capital letters, followed by 11 numbered paragraphs. These 11 paragraphs are in the same size and color of print as the first line on the face of the contract except for paragraph 8, which is in larger and heavier type. Paragraph 8 appears at about the middle of the page. It provides, in pertinent part, as follows:

'It is mutually understood and agreed that: (a) there is no implied warranty of merchantability, no implied warranty of fitness for particular purpose and no implied warranty which extends beyond the description of said property on the face hereof * * *.'

The contract does not contain any express warranty of fitness.

Under KRS 355.2--315 there was an implied warranty of fitness (the seller knew the buyer's purpose was to use the truck for hauling coal) unless excluded under KRS 355.2--316. The latter section provides that 'to exclude or modify any implied warranty of fitness the exclusion must be by a writing and conspicuous.' Sowards takes the position 'that exclusionary language can never be conspicuous within the meaning of the Uniform Commercial Code when it is printed on the back of the contract.'

According to KRS 355.1--201(10), a 'term or clause is conspicuous when it is so written that a reasonable person against whom it is to operate ought to have noticed it. * * * Language in the body of a form is 'conspicuous' if it is in larger...