International Harvester Credit Corp. v. Pioneer Tractor and Implement, Inc.

• Decision Date: 05 February 1981
• Docket Number: No. 16205,16205
• Citation: 626 P.2d 418
• Parties: INTERNATIONAL HARVESTER CREDIT CORPORATION, Plaintiff and Respondent, v. PIONEER TRACTOR AND IMPLEMENT, INC., Wayne A. Schoenfeld and Dora C. Schoenfeld, Defendants and Appellants.
• Court: Utah Supreme Court

Page 418

626 P.2d 418

INTERNATIONAL HARVESTER CREDIT CORPORATION, Plaintiff and Respondent, v. PIONEER TRACTOR AND IMPLEMENT, INC., Wayne A. Schoenfeld and Dora C. Schoenfeld, Defendants and Appellants.

No. 16205.

Supreme Court of Utah.

Feb. 5, 1981.

John L. McCoy, Salt Lake City, for defendants and appellants.

Philip C. Pugsley of Watkiss & Campbell, Salt Lake City, for plaintiff and respondent.

STEWART, Justice:

This action was brought by plaintiff to recover amounts alleged to be due from defendant Pioneer Tractor and Implement, Inc. ("Pioneer"), a former International Harvester dealer, and from defendants Wayne and Dora Schoenfeld, the owners of Pioneer and guarantors of the corporate obligations. Defendants denied any balance due and filed a third-party complaint against International Harvester Company. The trial court entered judgment for plaintiff. On appeal defendants raise numerous issues, including whether they were denied a jury trial which they contend is guaranteed by Article I, § 10 of the Utah Constitution.

In December 1975 an agreement was entered into between International Harvester Company ("IHC") and Pioneer, establishing Pioneer as an International Harvester farm equipment dealer. In connection with the establishment of the dealership, various agreements were signed which provided for financing arrangements with plaintiff, International Harvester Credit Corporation ("IHCC"). Personal guarantees of the corporate obligations were signed by the defendants Wayne and Dora Schoenfeld. The financing arrangements between IHCC and Pioneer included floor plan financing for new and used vehicles, open account financing on routine transactions with IHC, and IHC's purchasing of retail contracts on sales made by Pioneer.

Early in August 1976 representatives of IHC were notified of the intention of Pioneer to terminate the dealership. Termination procedures outlined in the dealer sales and service agreement were followed by IHC and IHCC in disposing of the parts and farm equipment inventory of Pioneer. Credits generated by the sale of Pioneer's inventory were applied to the obligations owed to IHCC. This suit was filed by IHCC to recover the remaining balance alleged to be due.

At trial there was conflicting evidence with respect to certain charges to the Pioneer account which were included in the amount claimed by IHCC. The district operations manager for IHCC, Delbert L. Homestead, testified concerning the termination procedures and the amounts claimed by IHCC to be due. Homestead was permitted, over defendants' objection, to summarize verbally the numerous bookkeeping entries and accounts underlying plaintiff's claim. The amount of the judgment was based on Homestead's testimony.

Defendants in a counterclaim against IHCC and a third-party complaint against IHC alleged that they had been misled in connection with the opening of the dealership and the subsequent ordering of inventory. The trial court found that defendants failed to meet their burden of proving actionable misconduct on the part of either IHCC or IHC and dismissed defendants' counterclaim and third-party complaint.

Defendants contend that the trial court erred with respect to the admission of evidence that established the amounts due plaintiff; that it was error to refuse to allow the amendment of defendants' answer to show a novation of the agreement with IHC; and that the trial court erred in denying the defendants a trial by jury.

In response to defendants' demand for a jury trial, plaintiff argued that defendants had no constitutional or statutory right to a trial by jury. The trial court granted plaintiff's motion to strike the jury trial demand. Plaintiff contends on appeal that the Utah Constitution guarantees a right to a jury trial only in capital cases, and that § 78-21-1, Utah Code Ann. (1953), as amended, is permissive rather than mandatory with regard to jury trials in civil cases.

The issue of whether Article I, § 10 of the Utah Constitution guarantees right to jury trial in civil cases has never been authoritatively decided by this Court. That provision of the Utah Constitution states:

In capital cases the right of trial by jury shall remain inviolate. In courts of general jurisdiction, except in capital cases, a jury shall consist of eight jurors. In courts of inferior jurisdiction a jury shall consist of four jurors. In criminal cases the verdict shall be unanimous. In civil cases three-fourths of the jurors may find a verdict. A jury in civil cases shall be waived unless demanded.

The wording of Article I, § 10 lends itself to argument over the intended meaning as to noncapital criminal cases and civil cases. ¹ A careful reading, however, of the proceedings of the constitutional convention, Official Report of the Proceedings and Debates of the Convention, 1895, Vol. I, Pages 258-62, 274-97, 492-95, discloses a virtually unanimous intention on the part of the framers of the Constitution to preserve a constitutional right to trial by jury in civil cases and in noncapital criminal cases. Although there was dispute in the convention over the number of jurors, and the degree of concurrence necessary for a verdict, there is repeated reference to the intention to insure the underlying right of trial by jury. The whole tenor of the discussion in the constitutional convention, the preliminary drafts, and the final language of Article I, § 10, indicates no intention to limit the constitutional right to a jury to capital criminal cases.

The word "inviolate" as used in the first sentence was intended to provide for the continued use of the common law jury composed of twelve persons who could convict only by a unanimous verdict. Use of that term in connection with capital cases does not imply an intention not to preserve a right to a jury trial in other cases. On the contrary, the constitutional designation of the number of jurors to be used in courts of original jurisdiction and in courts of inferior jurisdiction presupposes the existence of the basic right itself. It is not plausible that the framers would mandate the number of jurors to be used in a jury, and the number of jurors required to return a verdict, without intending to secure the basic right itself.

Further support for this conclusion is found in the final sentence of Article I, § 10, which states that "(a) jury in civil cases shall be waived unless demanded." It is axiomatic that for there to be a waiver there must be an existing legal right which may be waived. American Sav. & Loan Ass'n. v. Blomquist, 21 Utah 2d 289, 445 P.2d 1 (1968); Phoenix Insurance Co. v. Heath, 90 Utah 187, 61 P.2d 308 (1936).

The jury historically has been an integral part of the Anglo-American legal system. It would require the clearest language to sustain the conclusion that there was an intention to abolish an institution so deeply rooted in our basic democratic traditions and so important in the administration of justice, not only as a buffer between the state and the sovereign citizens of the state, but also as a means for rendering justice between citizens. We refuse to give a strained meaning to the terms of our Constitution which would result in dispensing with an institution that has the sanction of the centuries.

There are those who profess disillusionment as to the competency of juries in the fact-finding process and as to the jury's ability to apply legal principles to the facts, but we are not among them. The framers' establishment of juries as a foundational part of our judicial system rested on sound propositions as to the importance of participation of lay persons in the judicial decision-making process. Juries may provide a degree of protection against an overbearing state. As a fact-finding body, they provide an important and useful alternative to a single individual's resolving disputed issues of fact. In this regard the accumulated experience and the combined cognitive powers of jurors may produce more accurate fact finding than a single person, no matter how learned in the law.

The contention that § 78-21-1 supports the conclusion that the Legislature considered there to be no constitutional right to a civil jury trial has no merit. That section provides:

Right to jury trial. In actions for the recovery of specific real or personal property, with or without damages, or for money claimed as due upon contract or as damages for breach of contract, or for injuries, an issue of fact may be tried by a jury, unless a jury trial is waived or a reference is ordered.

The permissive term "may" is used simply to make clear that a jury trial may be waived and is not mandatory.

Finally, we note that this Court has, on a number of occasions, referred in dictum to a right to a jury trial. In State v. Black, Utah, 551 P.2d 518, 520 (1976), this Court referred to such a right in a noncapital criminal case. Numerous civil cases have also referred to the right of a jury trial, e. g., Wold v. Ogden City, 123 Utah 270, 258 P.2d 453 (1953); Creamer v. Ogden Union Railway & Depot Co., 121 Utah 406, 242 P.2d 575 (1952); Raymond v. Union Pacific Railroad Co., 113 Utah 26, 191 P.2d 137 (1948); Petty v. Clark, 102 Utah 186, 129 P.2d 568 (1942); Norback v. Board of Directors of Church Extension Society, 84 Utah 506, 37 P.2d 339 (1934). Indeed, the Court has, over the years, carefully guarded against intrusion by judges into jury prerogatives by such means as summary judgments, e. g., Stickle v. Union Pacific R. Co., 122 Utah 477, 251 P.2d 867 (1952). Of the Justices of this Court who have expressed a view on the subject, only Mr. Justice Wade, insofar as we have been able to determine, has been of the view that the Utah Constitution might not guarantee a right to a jury trial in civil cases. See Valley Mortuary v. Fairbanks, 119 Utah 204, 233, 225 P.2d 739, 754 (1950) (Wade, J., concurring and dissenting).

Today we squarely hold that the right of jury trial in civil cas...