Consolidated Wagon & Machine Co. v. Kay

• Citation: 81 Utah 595,21 P.2d 836
• Decision Date: 04 May 1933
• Docket Number: 5250
• Parties: CONSOLIDATED WAGON & MACHINE CO. v. KAY et al
• Court: Supreme Court of Utah

21 P.2d 836

81 Utah 595

CONSOLIDATED WAGON & MACHINE CO. v. KAY et al

No. 5250

Supreme Court of Utah

May 4, 1933

Appeal from District Court, First District, Box Elder County; M. C Harris, Judge.

Action by the Consolidated Wagon & Machine Company against Loren Kay and wife and another. From a judgment for plaintiff defendants appeal.

Affirmed as to defendant Loren Kay and George S. Cooke, and judgment as to defendant Zina Kay modified.

Thatcher & Young, of Ogden, for appellants.

H. D Moyle and R. C. Wilson, both of Salt Lake City, for respondent.

STRAUP, Chief Justice. FOLLAND and EPHRAIM HANSON, JJ., concur. MOFFAT, J., did not participate. ELIAS HANSEN, Justice, BATES, District Judge, dissenting.

OPINION

STRAUP, Chief Justice.

This action was brought to foreclose a chattel mortgage. Judgment went in favor of the plaintiff. The defendants appeal. By the complaint it in substance is alleged that on June 8, 1928, the plaintiff by a written contract, for the sum of $ 1,625, sold and delivered to the defendants Loren Kay and George S. Cooke what modestly was called "goods, wares, and merchandise," but as shown by a copy of the contract attached to the complaint, consisted of a secondhand gleaner-thresher for the sum of $ 1,000, and a Fordson tractor for $ 625, a total of $ 1,625, payable $ 100 in cash, $ 300 on delivery, $ 425 December 1, 1928, and $ 700 December 1, 1929, with interest at 8 per cent per annum on the deferred payments. The contract provided that the title to and the right to repossess the property remained in the plaintiff until the purchase price and interest were fully paid; that, on default of any of such payments, the plaintiff was given the right to repossess the property and sell it at public or private sale either with or without notice, and apply the proceeds of sale on the deferred payments, the purchasers to pay any balance remaining. By the contract it was further stipulated that no warranties either express or implied were given on secondhand machinery, and that such machinery was sold at greatly reduced prices without warranty or conditions; that no verbal or any agreement, warranty, guaranty, or representation whatever was binding on either party, except as contained in the written contract itself, and that the plaintiff was not to be held liable for any damage suffered or sustained in the use, operation, or handling of the machinery, nor for any implied warranty, nor for any loss of crops, profits, expenses, or damages resulting by reason of any delay or nonperformance of the machinery from any cause whatsoever.

It was further alleged that on July 1, 1929, in order to secure the payment of the indebtedness as evidenced by the contract, the defendants Loren Kay and Zina Kay, his wife, in the sum of $ 1, 183.48 (that being the amount then due and unpaid on the contract), executed and delivered to the plaintiff a chattel mortgage, by the terms of which they mortgaged to the plaintiff two cows, the gleaner-thresher combine, the Fordson tractor, and crops of wheat on 25 acres, all fully described in the mortgage.

It is further alleged that, notwithstanding frequent demands made on the defendants for payment of the indebtedness, no part thereof was paid, except $ 100 July 8, 1928, when the contract was entered into, $ 300 August 15, 1928, $ 64 October 7, 1928, $ 50 March 5, 1929, and $ 243.85 September 25, 1929 (after the mortgage was given), and that there remained due and owing on the indebtedness as evidenced by the contract and the mortgage the sum of $ 963.93, principal and interest.

The defendants Loren Kay, Zina Kay, and George S. Cooke filed a joint answer, wherein they admitted the purchase and delivery of the machinery, the execution of the contract and of the mortgage and the payments made as alleged in the complaint; but denied that there was due and owing the plaintiff the sum of $ 963.93 as alleged in the complaint or that any sum was due the plaintiff. It then is alleged that the mortgage was given without consideration; that false and fraudulent representations were made with respect to the gleaner-thresher when purchased in the particulars that it was represented that the thresher would cut heavy irrigated grain; that it would handle grain in which weeds, sweet clover, cokleburrs, and sunflowers were growing; that the gleaner was suitable for threshing alfalfa and clover seed; that it would cut all kinds of grain growing in the vicinity in which the gleaner-thresher was purchased; that it had a capacity of cutting 15 acres per day; that the gleaner had theretofore been sold to L. D. Haws at Holbrook, Idaho, and that he operated it successfully for the season of 1927, but the plaintiff was compelled to repossess it because Haws failed to make the purchase payments as he had agreed to do; that such representations were relied on by the defendants in the purchase of the machinery, but that they were false and were made to deceive the defendants and induce them to purchase the machinery; that the gleaner was so constructed as not to be suitable for cutting or harvesting heavy irrigated grain or any other kind of grain; that it would not cut grain in which sweet clover, or sunflowers, or cockleburrs or other weeds were growing, and could not be operated to cut 15 acres a day; that the plaintiff did not repossess the gleaner from Haws for nonpayment of the purchase price, as represented, but, on the contrary, Haws operated the gleaner for approximately only a week, and found it would not operate satisfactorily, and for such reason returned the gleaner and machinery to the plaintiff at Malad, Idaho, and refused to pay for it, which facts were fraudulently concealed from the defendants in order to induce them to enter into the contract to purchase the machinery.

It was further alleged on information and belief that during the year 1927 the plaintiff sold other gleaners to farmers in various parts of Utah and Idaho prior to the purchase of the defendants; that such prior purchasers notified the plaintiff that the gleaners were not as represented, and were valueless for the purpose for which they were sold, which facts also were withheld by the plaintiff from the defendants; that the gleaner, when it was purchased by the defendants, was of no value whatever, and, because of the false and fraudulent representations and concealments, the defendants were damaged in the sum of $ 1,000, which amount they prayed be offset against whatever amount might be found due and unpaid on the contract or on the mortgage.

To the answer the plaintiff filed a reply in which it specifically denied the affirmative defenses alleged in the answer, and averred that by the contract it was stipulated that no verbal or any agreement, warranty, or guaranty or representation whatsoever was binding on either party, except as contained in the contract itself; that by the terms of the agreement it was stipulated that the defendants were required to give five days' notice after delivery if the machinery failed to operate or was defective, and give the plaintiff a reasonable time to remedy whatever difficulty there might be, but that the defendants failed to give any notice whatsoever within such five days or at any other time; that, the machinery being secondhand, it by the terms of the contract was stipulated that the plaintiff was not to be held liable for any damages sustained in the use or operation of the machinery, nor for any implied warranties, nor for any delay or nonperformance of the machinery from any cause whatsoever; that the terms of the contract provided that the machinery or parts claimed to be defective were required to be returned to the plaintiff, or the plaintiff given notice thereof, but no such notice was given nor was there any return or offer of return made; that the defendants used and operated the machinery for more than two years without making any claim or giving any notice of defect; and that the defendants were thus guilty of laches, and were estopped and barred from now making any such claim.

Upon such issues the case came on for trial before the court and a jury. At the conclusion of the evidence, the court, holding that the case was one in equity to be tried by the court and not by a jury, dismissed the jury, and made findings and conclusions upon which judgment was rendered ordering a foreclosure of the mortgage and sale of the mortgaged property as by law in such case made and provided.

Among other things, the court found that on June 8, 1928, the defendants entered into a contract in writing with the plaintiff whereby they, for the sum of $ 1, 625, purchased the gleaner-thresher and Fordson tractor, as in the complaint alleged and as shown by the written contract attached to the complaint; that on July 1, 1929, to secure the payment of the indebtedness as evidenced by the contract, the defendants Loren Kay and Zina Kay, for a good and valuable consideration, mortgaged the property described in the mortgage and in the complaint; and that the payments made on the indebtedness and the amount due and unpaid were as alleged in the complaint.

The court further found:

"That when the plaintiff sold and delivered to the defendants, the goods, wares and merchandise set out in the contract sued upon, there were no fraudulent of false representations made to the defendants by the plaintiff; that the gleaner which the plaintiff sold to the defendants was a second-hand gleaner, and had been returned to the company by one L. D. Haws of Holbrook, Idaho, for the reason that said gleaner was not adapted for use on Haws' particular farm that the plaintiff told the defendants that the gleaner was secondhand, and that it had been returned by Mr. Haws, and that the plaintiff to...