Gray v. Consolidated Ice-Mach. Co.

• Decision Date: 27 November 1897
• Citation: 29 S.E. 604,103 Ga. 115
• Parties: GRAY v. CONSOLIDATED ICE-MACH. CO.
• Court: Georgia Supreme Court

29 S.E. 604

103 Ga. 115

GRAY v. CONSOLIDATED ICE-MACH. CO.

Supreme Court of Georgia

November 27, 1897

Syllabus by the Court.

1. While it is true that where the vendee of chattels seeks to rescind the contract of purchase upon the ground that there has been a breach of the warranty upon the part of the vendor of the fitness of the thing sold for the purposes intended he is bound to make restitution and offer to restore the vendor to his original status; yet where, by the contract of sale, it is expressly stipulated that, in the event the thing sold shall not, upon a fair test, answer the requirements of the warranty, the vendor shall receive back the chattel, and repay to the purchaser the sum paid by him on the purchase price, the doctrine of restitution before absolution does not apply. But if the test has been so long delayed as that, in the ordinary use of the thing sold, its capacity for meeting such requirements has been so impaired as not to come up to the terms of the warranty, or if the claim of the right of rescission has been so long delayed as to raise in favor of the vendor a waiver on the part of the vendee of his right to return the thing sold, the latter would forfeit, not only the right of rescission under the contract, but also his right to maintain an action for damages as for a breach of the warranty.

2. There was no error in striking the original pleas filed by the defendant, as substantive defenses, but, under the principles above announced, the equitable plea, as amended presented issues which should have been submitted to the jury.

Error from superior court, Sumter county; Z. A. Littlejohn, Judge.

Foreclosure proceedings by the Consolidated Ice-Machine Company against Virginia H. Gray. The pleas of the defendant were stricken on demurrer, and she brings error. Reversed.

Defendant upon being sued for the price of certain machinery, alleged that she took the machinery subject to a warranty as to its capacity made by plaintiff to a prior vendee of plaintiff and also subject to a warranty made to her by plaintiff for a valuable consideration after she had purchased it. She alleged breach of warranty, and tender of the machinery back to plaintiff. Held, that the issues raised a question for a jury.

The following is the official report:

The Consolidated Ice-Machine Company brought its petition to foreclose a mortgage executed to it by Virginia H. Gray to secure the payment of her three promissory notes to the plaintiff dated December 3, 1888,--one for $1,000, due October 1, 1889; another for $735, due January 1, 1890; and another for $1,000, due October 1, 1890,--each bearing interest at 8 per cent. per annum from November 1, 1888, the petition alleging that the defendant had failed to pay the notes, except the first, for $1,000. Plaintiff also brought suit on the second and third notes. Both cases were by agreement of counsel consolidated and tried together as one case. The defendant pleaded the general issue; also that the consideration for which the note and mortgage were given had failed, in this: The consideration of the notes was the purchase of a fourth interest in said machinery for the manufacture of ice to be used and sold in ordinary trade. The purchase price was $4,735, and at the time of the purchase defendant paid plaintiff $2,000 in cash, and gave her three promissory notes for the balance of the purchase money. At the time of the purchase, plaintiff, by its duly constituted agent, J. L. Bye, warranted that the machinery would produce 15 tons of good merchantable ice per day, and agreed that, in the event it failed to produce that amount daily, plaintiff would take back the interest so bought, and refund the money paid and cancel the notes. It was further agreed, as a part of the contract of purchase, that the notes were not to be collectible until after a fair test had been made of the machinery, and not then, if the test did not show that the plaintiff had not made good its warranty. The test was to be made by an expert machinist to be employed by plaintiff, and was to show the capacity to be 15 tons of good merchantable ice daily. Defendant knew nothing of the nature and capacity of the ice machinery, and relied wholly upon the good faith of the plaintiff, and upon its aforesaid representations and promises. Relying upon said representations and contract, she paid $3,000 before any actual test had been made as agreed on. The test was made, and showed that the capacity of the machinery was only 12 tons, and not 15. This test was fairly made, and under very favorable conditions, and extended over a period of several weeks, and was made by an expert machinist employed and furnished by the plaintiff. By reason of the failure of the machinery to have a capacity of 15 tons, the consideration has failed to at least the extent of one-half the value of the machinery. Less than 15 tons daily would not make the business desirable and profitable, and did not suit her plans nor meet the demands of the trade, and the machinery was totally unsuited to the use intended. Further, the consideration has wholly failed, and she is entitled to recover the sum of $3,000, and interest, paid by her to the plaintiff, and prays judgment accordingly. Further, by reason of the failure of consideration as aforesaid, and by reason of the failure of the plaintiff to keep and observe its contract, and all its obligations as aforesaid, defendant has been injured and damaged in the sum of $5,000, which she prays she may be allowed to recoup. Further, prior to this suit defendant tendered to the plaintiff the property, and demanded the return of her money, and the same was refused.

The plaintiff demurred generally to the defendant's pleas, except the plea of the general issue. The court announced that he would sustain the demurrer, and the defendant thereupon offered, in connection with the pleas already filed, an amendment, hereafter set out. Plaintiff demurred generally to this amendment, and the court sustained the demurrer, and struck the pleas, except the plea of the general issue. The plaintiff introduced in evidence the mortgage and the notes sued on and closed. The defendant introduced no evidence, and the court directed a verdict for the plaintiff for the amount sued for. Defendant excepted, assigning as error the action of the court in sustaining the demurrer and striking the pleas and in directing a verdict for the plaintiff.

The amendment in question was, in substance, as follows: At the time of making the contract between the plaintiff and the defendant, a copy of which is attached marked "Exhibit A," it was contracted that the defendant should have the benefit of all the terms, stipulations, conditions, and guaranties made by the plaintiff in its contract with Bell & Sims, or with S. R. Sims, under which the original sale of the machinery was made by the plaintiff, a copy of which is hereto attached, marked "Exhibit B." The special guaranties set out in said contract were relied on by the defendant, and they were represented by plaintiff to inure to the benefit of defendant as purchaser, the same as to the original purchaser, said Sims, or Bell & Sims; said warranties and conditions including that as to the capacity of the engine and pumps being 15 tons per day, and also the five paragraphs, numbered first to fifth, inclusive, and embraced under the heading, "The party of the first part guaranties," and also all other covenants, conditions terms, and stipulations contained in the contract. Said terms, conditions, and guaranties were intended by...