Feeney & Bremer Co. v. Stone

• Decision Date: 19 March 1918
• Citation: 89 Or. 360,171 P. 569
• Parties: FEENEY & BREMER CO. v. STONE.
• Court: Oregon Supreme Court

171 P. 569

89 Or. 360

FEENEY & BREMER CO. v. STONE.

Supreme Court of Oregon

March 19, 1918

Department 1.

Appeal from Circuit Court, Tillamook County; George R. Bagley Judge.

Action by the Feeney & Bremer Company against C. F. Stone. From judgment for defendant, plaintiff appeals. Reversed and remanded for new trial.

The plaintiff Feeney & Bremer Company, a corporation, operates a metal foundry and manufactures machinery. The defendant has a gravel bar and since August 1, 1915, has been engaged in the business of selling gravel. The complaint alleges that between July 1, 1915, and January 26, 1916, the plaintiff delivered certain materials and performed services for the defendant of the reasonable value of $591,43; that $301 has been paid; and that $290.43, the unpaid balance, is due. Among the items appearing in the itemized statement attached to the complaint is a drum hoist valued at $450. The controversy between the litigants relates to the hoist, and consequently no further notice will be given to the other items mentioned in the pleadings.

For a defense the answer avers that on or about July 1, 1915, the defendant was negotiating with manufacturers for an electric hoist to be used in hoisting gravel into bunkers, and that at the same time he was negotiating with the Coast Power Company of Oregon for electricity with which to operate such a hoist that while the defendant was negotiating the plaintiff approached the defendant and requested him to purchase a hoist from the plaintiff and--

"offered and agreed to construct for the defendant such a hoist as defendant required in his said business, and agreed that if the defendant would give the plaintiff an order for the said hoist the plaintiff would construct such a hoist, and expressly guaranteed that if such order were given to plaintiff the hoist which the plaintiff would construct and deliver to defendant would be a hoist which would stand up to the work and accomplish the purposes of the defendant in that behalf in carrying on his business, and that if said hoist did not work plaintiff would make the same do so, and if the machine would not work that plaintiff would charge the defendant nothing therefor."

The defendant alleges that:

"In consideration of the representation and guaranty of the plaintiff as aforesaid, the defendant agreed to purchase from plaintiff the drum hoist referred to, at the agreed price of $450, but in consideration of the said representations, agreement, and warranty of the plaintiff in regard thereto as aforesaid."

It is averred in the answer that the plaintiff constructed and delivered an electric hoist, but that it was faultily constructed; "that the same would not stand the work required to be done thereby by the defendant and which was contemplated by the parties;" and that "the reasonable value of said hoist so furnished was no more than the sum of $100," although it would have been worth $450 if it had been built in full compliance with the agreement.

The defendant also pleads a counterclaim. He avers that the hoist was first delivered to him in July, 1915; that he began using it on August 1, 1915, and, although the "machine frequently gave way," he continued to operate it until August 24, 1915, when it "completely broke down" that he "thereupon requested plaintiff to repair the same so that it would work as had been agreed, but the plaintiff delayed repairing the same until on or about the 1st day of September, and by reason of said delay of the plaintiff the defendant was compelled to rent other equipment in order to operate his plant." Continuing, the defendant alleges "that plaintiff did thereafter overhaul and put in repair the said hoist and redeliver the same to defendant," but that it has never been capable of doing the work contemplated by the agreement.

The defendant then avers:

"That in order to carry on the defendant's operations, on account of the failure of the said machine so furnished by plaintiff to do the work represented to be done and guaranteed to be done by said machine, the defendant has been compelled to procure other machinery to operate his plant, and has necessarily expended on account thereof the following sums: For rent of donkey engine, $120; for labor in moving engine, $59; for fuel for operating donkey engine, $124.95; for extra labor for operation of donkey engine, $100."

It is also alleged that because "of the incapacity of the said hoist to properly perform" during the month of August he lost a profit of 50 cents per yard on 500 yards of gravel which he could have sold to the Arenz Construction Company and a profit of 20 cents per yard on 340 yards of gravel which he could have sold to Tillamook county.

There was a verdict and judgment for the defendant for $355, and the plaintiff appealed.

S. S Johnson, of Tillamook (T. B. Handley, of Tillamook, on the brief), for appellant. H. T. Botts, of Tillamook, for respondent.

HARRIS, J. (after stating the facts as above).

Briefly stated, the defendant contends that he is entitled to have the price of the machine reduced to $100 and that he is also entitled to special damages (1) for the expense of the donkey engine; (2) for profits which he lost by reason of his inability to furnish gravel in the month of August to the Arenz Construction Company and to Tillamook county. There is no claim of any loss of profits except for the month of August.

The plaintiff contends that the judgment should be reversed because: (1) The answer does not contain an affirmative allegation that the defendant relied upon the warranty pleaded by him; (2) the warranty is limited to and extends no further than the stipulation that the "plaintiff would charge the defendant nothing" if the hoist did not work; (3) partial failure of consideration was the only defense available to the defendant; and (4) the damages mentioned in the counterclaim were not within the contemplation of the parties and are too remote and speculative and therefore not recoverable.

In order to maintain an action for a breach of warranty it must be shown that the warranty was relied upon, and, although the warranty need not have been the sole inducement, it must have been an operative cause (35 Cyc. 376; 2 Mechem on Sales, §§ 1234, 1235), and therefore in an action for a breach of warranty the purchaser of personal property must allege that he relied upon the warranty and was thereby deceived ( Abilene National Bank v. Nodine, 26 Or. 53, 55, 37 P. 47; 35 Cyc. 450). The defendant insists that this rule of pleading is satisfied by the following allegation appearing in the answer:

"In consideration of the representation and guaranty of the plaintiff as aforesaid, the defendant agreed to purchase from plaintiff the drum hoist referred to, at the agreed price of $450, but in consideration of the said representations, agreement, and warranty of the plaintiff in regard thereto as aforesaid. * * *"

It is intimated in Lincoln v. Ragsdale, 7 Ind. App. 354, 356, 31 N.E. 581, that the quoted allegation would be sufficient. While the averment lacks directness and positiveness, nevertheless it might possibly be adequate after a verdict and judgment, since, so far as the record discloses, the objection was not made in the lower court, but is made here for the first time. The judgment should be reversed for other reasons, however, and all doubts concerning the sufficiency of the pleading may be removed by the filing of an amended answer.

The answer avers that the plaintiff "expressly guaranteed" that if the hoist "would not stand up to the work and accomplish the purposes of the defendant" and that if the hoist did not work "plaintiff would make the same do so, and if the machine would not work the plaintiff would charge the defendant nothing therefor." The plaintiff argues that the parties have, by the agreement alleged in the answer, limited the defendant's remedy for a breach of the warranty to the right to decline to pay for the machine, and that therefore Stone is not entitled to recover damages for a breach of the warranty. If by the stipulation "the plaintiff would charge the defendant nothing therefor" is meant that the defendant could refuse to accept the hoist, then the stipulation added nothing to the rights of the defendant, since the law gave him the right to rescind the contract and return the machine within a reasonable time after delivery, for it must be remembered that the parties contracted for a machine which was not yet in existence when they made the agreement. Steiger v. Fronhofer, 43 Or. 178, 183, 72 P. 693; Lenz v. Blake, 44 Or. 569, 76 P. 356. If, on the other hand, the parties intended to agree that the defendant could keep the hoist without paying for it if it did not work, it constituted an additional rather than an exclusive remedy. Generally speaking, the parties to a contract for the sale of personal property have a right to agree that a defined remedy shall be exclusive, but in the absence of language evidencing an intention to make a given remedy, like the one in question here, exclusive of all others, it is treated as cumulative and permissive rather than exclusive and mandatory; and hence the buyer is usually permitted to avail himself of the special remedy, or, if he chooses, he may accept the property and recover damages for a breach of the warranty. There is nothing to indicate that the parties intended that the right not to pay should be the exclusive remedy. It is not necessary to determine whether Stone could have returned the property and also recover damages for a breach of the warranty, for the reason that he elected to keep the hoist, and as ruled in Douglass Axe Mfg. Co. v. Gardner, 10 Cush. 88:

"The buyer has, if not a double remedy, at least

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