Despatch Oven Co. v. Rauenhorst

• Decision Date: 02 December 1949
• Docket Number: No. 34894,34894
• Citation: 229 Minn. 436,40 N.W.2d 73
• Parties: DESPATCH OVEN CO. v. RAUENHORST et al.
• Court: Minnesota Supreme Court

Page 73

40 N.W.2d 73

229 Minn. 436

DESPATCH OVEN CO. v. RAUENHORST et al.

No. 34894.

Supreme Court of Minnesota.

Dec. 2, 1949.

Syllabus by the Court.

1. A clause providing that the seller 'assumes no liability for consequential damages,' following in the same paragraph of a sales contract containing express warranties of the goods sold another clause providing that the seller 'shall not be liable' in certain other cases, means that the seller shall not be liable for consequential damages.

2. A buyer is not entitled to recover for such damages for breach of contract of sale as arise directly in the usual course of things where there was neither allegation nor proof thereof and the only allegations and proofs related to consequential damages, which were not recoverable under the terms of the contract.

3. A party is not negligent where the act complained of involved no danger of harm and he had no knowledge or notice that through the intervention of others it might be made so.

Lauerman & Pfeiffer, Olivia, for appellants.

Freeman, King, Larson & Peterson, Minneapolis, for respondent.

PETERSON, Justice.

Plaintiff sues to recover $4,185.50, the unpaid balance of the purchase price of a Seed-corn 'dryer' sold by it to defendants. Defendants asserted (a) a defense of no indebtedness based on allegations of breach of warranty as to the dryer's capacity and of damages resulting from a fire caused by alterations made in the drayer by plaintiff in an effort to make it conform to the warranty; and (b) a counterclaim for over $38,000 for breach of warranty and for negligence. The reply denied the breach of warranty and negligence, but admitted that defendants were entitled to an additional credit of $464. The trial court denied defendants' motion for a new trial and granted a motion by plaintiff for judgment notwithstanding the verdict as to the parts of defendants' counterclaim asserting a right of recovery for (a) loss of profits which would have been derived from the sale of seed corn if it had not germinated because of the lack of warranted capacity of the dryer; (b) for the value of the crib house used for drying feed corn and the contents thereof, which it was alleged were destroyed by fire caused by plaintiff's negligence; and (c) for loss of profits from the use of the crib house and dryer in conducting a Feed-corn dryer business. The jury returned a verdict for defendants of $500. Thereafter defendants moved for a new trial, and plaintiff moved for judgment notwithstanding the verdict. Plaintiff's motion was granted, and defendants' was denied. Defendants appeal from the order denying their motion for new trial and from the judgment for plaintiff notwithstanding the verdict entered pursuant to the court's order.

The questions for decision are:

(1) Whether a clause providing that the seller 'assumes no liability for consequential damages,' following in the same paragraph of a sales contract containing express warranties of the goods sold another clause providing that the seller 'shall not be liable' in certain other cases, means that the seller shall not be liable for consequential damages;

(2) Whether a buyer may recover for such damages for breach of contract of sale as arise directly in the usual course of things, where there is neither allegation nor proof thereof and the only allegations and proofs related to consequential damages, which were not recoverable under the terms of the contract; and (3) Whether a party was negligent where the act complained of involved no danger of harm and he had no knowledge or notice that through the intervention of others it might be made so.

In August 1945, the parties entered into a written contract whereby plaintiff sold the 'dryer' to defendants to be used for drying Seed corn and warranted that it would do so under specified conditions. The purchase price was $4,356. While the apparatus is referred to as a 'dryer,' it really is a heater to heat air to be used in a crib house for the purpose of drying seed corn in bins therein. The dryer is a metal structure 20 feet long, 8 feet 6 inches wide, and 11 feet 6 inches high, in which there is at one end an oil burner and a combustion unit and at the other a fan operated by a 25-horsepower motor. In the burner-combustion unit, oil was burned, mixed with air, and combusted, and then forced toward the fan, which forced the heated-combusted mixture out of the dryer into ducts in the crib house, where it traveled to the bins to be used for drying seed corn therein.

The dryer was warranted by plaintiff to produce sufficient air having a temperature of 110 degrees Fahrenheit when the outside temperature was not less than 40 degrees Fahrenheit to dry during 24 hours 1,500 bushels of Seed corn having not more than 26 percent moisture. The contract contained a provision: 'Contractor (plaintiff) Shall not be liable for any losses, damage, detention or delays caused by fire, civil or military authority, insurrection, riot or any other causes beyond its reasonable control. Contractor Assumes no liability for consequential damages of any kind which result from the use or misuse of the equipment supplied hereinunder by the Purchaser, his employees or others.' (Italics supplied.)

The dryer was set so that it was in physical contact with the crib house. Defendants commenced using it about October 1, 1945, and continued seed-corn drying operations thereafter for about six weeks, or until about November 15. The seed corn which defendants dried contained from 30 to 40 percent moisture, which was much more than the 26 percent stipulated in the warranty. At first, there was some trouble with the oil burner in the combustion unit, consisting of its turning off when it was not supposed to do so. Plaintiff, through two of its employes, remedied this trouble by adjusting the air-control switch, by which the operation of the burner was controlled, and by installing a new oil pump. Defendant Clayton Rauenhorst testified that one of the employes inserted a piece of fiber board in the air-control switch, with the consequence that the switch would not turn off automatically as it was intended that it should do. He also testified that except for lack of capacity the dryer 'with the switch plugged' ran 'perfectly proper.' Because of the excessive amount of moisture in the seed corn to be dried and perhaps also because the air ducts in the crib house had some right-angle bends which interfered with the travel of the heated air, defendants were able to dry only about 300 bushels of seed corn in 24 hours. As a consequence, almost 3,400 bushels of seed corn, which if it had contained no more moisture than specified in the warranty and had been dried under the conditions therein specified could have been dried, germinated, causing defendants damage from loss of sales thereof in the sum of $16,910.

Shortly after the Seed-corn operations were completed, defendants converted their plant into one for Feed-corn drying. While Seed corn must be dried at a temperature of not over 110 degrees Fahrenheit in order to preserve its germinating qualities, Feed corn is dried at a temperature of from 180 to 200 degrees Fahrenheit. The conversion necessitated an increase of production of heated air. For this purpose, defendants wanted to install a larger fan and a larger fan motor, and to increase the amount of combustion. Plaintiff increased the amount of combustion by cutting off about 30 inches of the combustion chamber and furnished a larger fan motor--a 40-horsepower motor to take the place of the 25-horsepower one originally supplied; but it refused to furnish a larger fan, for the reason that to do so would have been attended with danger of fire because of the special design of the dryer. By shortening the combustion unit, about 90 percent of the combustion took place outside the unit but immediately adjacent to it. The combusted mixture was forced toward the fan. Between the combustion unit and the fan there was a cone-shaped baffle plate attached to a screen extending across the interior of the dryer. The distance from the end of the combustion unit to the baffle plate was 5 feet 6 inches, and to the line of the fan about 11 feet 6 inches. The dryer was equipped with five safety controls which could be set to control the heat at the temperature desired for the particular drying operations, and which could be adjusted so as to increase the heat to 600 degrees. There was a so-called 'high limit thermostat' located on the outside of the building which controlled the heat in the dryer even if the air-flow switch, which controlled the operation of the oil burner, was plugged and did not work. The high limit thermostat was set originally to control the heat in the dryer at 110 degrees Fahrenheit. If does not appear whether this temperature was changed when the dryer was converted for drying feed corn; but it does appear, however, that the defendants knew how to operate the thermostat and that it could be set so as to control the heat for feed-corn drying at the proper temperature, namely, 180 to 200 degrees Fahrenheit.

The crib house was destroyed by fire at about 4:30 on the morning of January 25, 1946. The larger fan motor supplied by plaintiff was destroyed by a fire which occurred a few days previously. The fan motor in use at the time of the fire was a secondhand one procured and installed by defendants without plaintiff's participation. Defendants' claim was that the fire was caused by excessive heat produced by the change made in the combustion unit and the larger fan motor which plaintiff supplied, even though the latter had been destroyed a few days previously and another motor substituted by defendants for it. The evidence showed that, when the dryer was operated to produce heat of a temperature of 110 degrees Fahrenheit under the conditions stated in the warrantly, flames from the combustion unit extended only about 3 feet beyond the end...