J. B. Colt Co. v. Harris

• Citation: 171 So. 695,177 Miss. 536
• Decision Date: 11 January 1937
• Docket Number: 32426
• Court: United States State Supreme Court of Mississippi
• Parties: J. B. COLT CO. v. HARRIS et al

171 So. 695

177 Miss. 536

J. B. COLT CO. v. HARRIS et al

No. 32426

Supreme Court of Mississippi

January 11, 1937

Division A

1 SALES.

In action on notes given as part of contract for purchase of lighting plant, defense that notes were induced by fraud of agent, in that he made representations not contained in written contract and that, when purchaser started to read contract, agent stopped him, saying contract did not amount to anything, held insufficient to constitute fraud, and hence contract was as binding upon purchaser as though he had read it. before signing.

2 EVIDENCE.

Where contract for sale of lighting plant procured by agent was to be sent to principal before it became a contract, and purchaser in written contract represented that no agent of company had made any agreements or statements modifying or adding to terms and conditions therein set forth, admitting evidence as to representations of agent held error as incompetent, in action to recover on notes given in payment under contract, since representations of agent were not binding on company.

3 SALES.

In action to recover on notes given in payment for light plant, where contract warranted plant and seller agreed to repair or ship another plant if it did not conform to warranty, provided purchaser notified seller within sixty days after discovering defect, evidence that plant, did not operate properly held insufficient to show plant was not as described in contract, where purchaser failed to return plant in accordance with contract and after fourteen months wrote a letter to seller giving other reasons for failure to pay notes, and hence purchaser could not avoid contract on ground of breach of warranty.

4. SALES.

Purchaser of light plant, under written contract warranting plant, after discovering defect and retaining plant, might have, in action against purchaser to recover on notes given in payment of plant, shown difference between value of plant which he bought under contract and its value at time it reached him, by plea of offset or recoupment.

HON. D. M. ANDERSON, Judge.

APPEAL from the circuit court of Newton county HON. D. M. ANDERSON, Judge.

Action by J. B. Colt Company against T. M. Harris and another. From a judgment of circuit court affirming judgment of county court, plaintiff appeals. Reversed and rendered.

Reversed, and judgment here.

Bozeman & Cameron, of Meridian, and Lester E. Wills, of Yazoo City, for appellant.

The contract provides that the sole obligation assumed by appellant is to repair or replace the generator when the same has been returned to its factory, all charges prepaid. There is no evidence that the generator was ever returned, and consequently appellees cannot be heard to insist that the warranty affords them any defense in this proceeding. This being true, there is nothing to support the plea of breach of warranty.

J. B. Colt Co. v. Mazingo, 141 Miss. 402, 106 So. 533; Industrial Finance Corp. v. Wheat, 142 Miss. 536, 107 So. 382.

As to the evidence of fraud, it is submitted that it is not shown that appellant had any notice or knowledge that any fraud had been practiced. The only evidence in the record tending in this direction is the testimony of the witness Ferguson. But Ferguson received his instructions from Jones, the agent who made this particular sale, a fellow servant with authority similar to his own. The contract here involved shows that Jones had no authority to speak for appellant, and the testimony of appellees shows that they did in fact accept Jones as their agent to deliver the order to appellant, when by the term of that order it was not to become a contract until accepted by the home office.

J. B. Colt Co. v. Odom, 136 Miss. 651, 101 So. 852; J. B. Colt Co. v. McCullough, 141 Miss. 328, 105 So. 744; J. B. Colt Co. v. Hinten, 143 Miss. 800, 109 So. 856; Planter Lbr. Co. v. Sibley, 93 So. 440, 130 Miss. 26; Cope County Savings Bank v. Given Lewis Grocery Co., 86 So. 275, 123 Miss 443; McCaskey Register Co. v. Swer, 122 So. 489, 753, 154 Miss. 396; Cresap v. Furst and Thomas, 105 So. 848, 141 Miss. 30.

The contract by its terms excludes such representations from consideration here. It not only appraises the purchaser of the lack of authority of the selling agent, but expressly provides that appellant will not be bound by any representation not contained therein. Appellant has done all in its power to protect the purchaser from fraud, and at the same time has protected itself from the expense of making the sale and performing, only to be met by a claim of a right to rescind for fraud.

Stevens v. Stanley, 153 Miss. 801, 121 So. 814, 122 So. 755; J. B. Colt Co. v. Mazingo, 140 Miss. 137, 106 So. 533.

There was no failure of consideration under this contract.

J. B. Colt Co. v. Mazingo, 141 Miss. 402, 106 So. 533; J. B. Colt Co. v. McCullough, 141 Miss. 328, 105 So. 744; J. B. Colt Co. v. Cooley, 107 So. 891.

Moreover, any defense appellees might have acquired were lost to appellees, by their failure to return the property as specified in the contract.

Rose Drug Co. v. Columbia Scale Co., 164 Miss. 640, 146 So. 297.

Even if it were true that some little part of the articles ordered had not been delivered, then it becomes the duty of the defendants to discover within a reasonable time whether all of the articles had or had not been delivered. If they elected to accept the quantity delivered, then defendants' only redress would be to counterclaim for the value of the single article not delivered. The burden of proof of the value of that missing article would be upon appellees.

Colossus Co. v. D. L. Fair Lbr. Co., 136 So. 919, 161 Miss. 267; Cherokee Mills v. Conner, 145 So. 735, 164 Miss. 704; Alig v. Lackey, 75 So. 139, 114 Miss. 392; J. B. Colt Co. v. Cooley, 107 So. 891.

C. E. Johnson, of Union, for appellees.

The question presented to this court is, as we understand it, did the circuit court, sitting as an appellate court, err in not finding there was prejudicial error in the record of proceedings in county court, and in rendering judgment affirming the judgment of the county court. Section 704, Miss. Code, as amended by chapter 140, Laws of Mississippi, 1932, page 422. The finding of fact by the county court should not have been disturbed by the circuit court unless manifestly wrong, and we submit the circuit court was justified in not disturbing the county court's finding of fact in this case.

Ellis v. S. Pellegrini, Inc., 141 So. 273, 163 Miss. 385; Aaron v. Citizens' Ins. Co. of Mo., 110 So. 120, 144 Miss. 480; Kemp v. Turman, 61 So. 548, 104 Miss. 501; Brooks-Scanlan Co. v. Stogner, 75 So. 596, 114 Miss. 736.

On the pleadings in this case, especially on the plea of fraudulent procurement or inducement of giving order and notes, the range is wide, and we submit all that was admitted was competent on the issue made by the pleadings. To hold otherwise would pave the way for pernicious frauds, and license their commitment whenever and wherever the scheme adopted by this plaintiff be used or any other scheme or plan having its essential elements.

Henry v. W. T. Rawleigh Co., 120 So. 188, 152 Miss. 320; Ganley Bros., Inc., v. Butler Bros. Bldg. Co., 56 A.L.R. 1, 4; Hirshburg Optical Co. v. Jackson, 63 Miss. 21; Howies v. Platt, 83 Miss. 15, 35 So. 216; Patton-Worsham Drug Co. v. Planters' Mercantile Co., 86 Miss. 423, 38 So. 209; Sistrunk v. Wilson, 98 Miss. 672, 54 So. 89; Hawkins v. Shields, 100 Miss. 739, 4 A.L.R. 760, 57 So. 4; Blair v. Russell, 120 Miss. 108, 81 So. 785; Lundy v. Hazlett, 147 Miss. 808, 112 So. 591; Elliott v. Connell, 5 S. & M. 91; Wren v. Hoffman, 41 Miss. 616; Cocke v. Blackbourn, 57 Miss. 689.

A party to a contract who was induced to enter into it by fraud of the other contracting party has two separate and distinct routes to follow: to accept the situation created by the fraud and seek to recover damages, or he may repudiate the contract entirely and seek to be placed in statu quo.

U. S. Trust Co. v. Chicago Terminal R. R. Co., 188 F. 292.

If he elects to retain whatever he has taken by the transaction, he must pay the actual value of whatever has come into his hands by reason of the contract, and in the case at bar it was defendant's duty to restore, upon discovery of the fraud, or offer to restore, the property to plaintiff.

13 C. J., sec. 680, page 621; 65 Miss. 369, 4 So. 293, 7 A. S. R. 663.

Argued orally by Lester, E. Wills, for appellant.

OPINION

McGowen, J.

The appellant, J. B. Colt Company, brought an action at law to recover the amount of two promissory notes, one for two hundred seventy-six dollars, due November 1, 1930, and the other for ninety-one dollars and sixty cents, due November 1, 1931, from T. M. Harris and his wife, Mrs. Nellie Harris. Both notes were dated September 12, 1929, and provided for eight per cent. interest per annum after maturity and ten per cent. attorneys' fees for collection.

The appellees filed a plea of the general issue and three special pleas. Special plea No. 1 set up a breach of the warranty contained in the contract of sale; special plea No. 2 alleged that the contract and notes were obtained by fraudulent misrepresentations; and special plea No. 3 alleged that there was no consideration for the notes and contract, because the purchase made thereby was of a light and cooking outfit, and that certain parts of the light and cooking outfit were not delivered, and therefore the outfit was useless and worthless. Issue was joined on these pleas, and the county judge heard the evidence without the intervention of a jury and entered a judgment in favor of the appellees. From that judgment an appeal was prosecuted to the circuit court, where the case was affirmed, and the...