J. I. Case Threshing Machine Co. v. Barnes, &C.

• Decision Date: 24 March 1909
• Court: Kentucky Court of Appeals
• Parties: J. I. Case Threshing Machine Co. v. Barnes, &c.

Page 321

133 Ky. 321

J. I. Case Threshing Machine Co. v. Barnes, &c.

Court of Appeals of Kentucky.

March 24, 1909.

Appeal from Wayne Circuit Court.

M. L. JARVIS, Circuit Judge.

Judgment for defendants, plaintiff appeals. — Affirmed.

HARRISON & HARRISON and O. H. WADDLE & SON for appellees.

C. C. BAGBY, attorney for appellant.

STONE, WALLACE and JOSEPH BERTRAM of Counsel.

OPINION OF THE COURT BY JUDGE CARROLL — Affirming.

On July 10, 1905, the appellant company sold to the appellees a threshing outfit, consisting of an engine and separator, for $1,863. For this sum the appellees executed three notes due, respectively, in September, 1905, and August and September, 1906. As security for the payment of the notes, the appellees on the same day executed and acknowledged before the proper officer a mortgage upon the machinery purchased. When sued upon the notes, the appellees filed an answer and counterclaim setting up various defenses. In one paragraph they averred, in substance: That the agent of the company who negotiated the sale agreed with them that he would remove the machinery to a place where it could be tested on the day the notes were executed, and further agreed that, as they were at a place convenient for the execution of the notes and mortgage, they should be then executed and taken possession of by the agent to be held by him, and in the event the machinery fulfilled the representations made by the agent, the notes and mortgage were to be delivered to the company and become binding upon the purchasers; but, if the machinery failed in the test to do the work it was represented it would do, then and in that event the notes and mortgage were to become null and void and not binding upon the purchasers. That in pursuance of this agreement they did make a test, and found that the machinery was not of the character and quality represented and would not do the work it was guaranteed to do, and upon making this discovery they at once notified the agent that they would not accept the machinery, and demanded the return and cancellation of the notes and mortgage and return to the local agent of the company the machinery. They further averred that the agent to whose keeping the notes and mortgage had been committed without their knowledge and consent delivered the same to the company in violation of his agreement.

In a reply all the allegations of the answer were denied, and it was averred that the agent had no authority to make any agreements or representations concerning the machinery or the work it would perform, and that the entire contract between the parties was in a writing, which provided in part that "the machinery is purchased upon and subject to the following mutual and interdependent conditions, and no other, viz.: It is warranted to be made of good material and durable, with good care to do as good work under same conditions as any made in the United States of equal size, and rate and capacity, if properly operated by competent persons, with sufficient steam or horse power, and the printed rules and directions of the manufacturers intelligently followed. If by so doing after trial of ten days by the purchaser said machine shall fail to fulfill the warranty, written notice thereof shall at once be given to J. I. Case Threshing Machine Company, at Racine, Wis., and also to the agent through whom received, stating in what parts and wherein it fails to fulfill the warranty, and reasonable time shall be given to said company to send a competent person to remove the difficulty, the purchaser rendering necessary and friendly assistance; said company reserving the right to replace any defective part or parts; and if then the machinery cannot be made to fulfill the warranty the part that fails is to be returned by the purchaser free of charge to the place where received, and the company notified thereof; and at the company's option another substituted therefor that shall fill the warranty, all the notes and money for such part immediately returned and the contract rescinded to that extent and no further claim made on the company. Failure so to make such trial or give such notice in any respect shall be conclusive evidence of due fulfillment of warranty on the part of said company, and that the machinery is satisfactory to the purchasers, and the company hereby released from all liability under the warranty." This contract also contains a stipulation that: "No person has any authority to waive, alter or enlarge this contract or to make any new or substitute or different contract, representation or warranty." As a part of its reply, and in connection with the conditions contained in this contract, the company averred that it was at all times able, ready, and willing to fully satisfy the conditions of the contract, but that through no fault on its part the purchasers declined to accept the terms of the contract, and therefore could not defeat a recovery upon the note.

It will thus be seen that the issues raised between the parties may be resolved into two propositions. The purchasers' contention is that they only made a conditional purchase, and that under it they were not obliged to take or pay for the machinery unless it fulfilled the representations made before the writings were executed, and that, pending the test to be made for the purpose of ascertaining whether or not the machinery was satisfactory, the notes were to be held by the agent of the company, and if the machinery proved satisfactory were to be delivered by him to the company; if it did not prove satisfactory, they were to be returned to the purchasers. On the other hand, the company's contention is that no agreement of this kind was made, and that the only contract was the written one upon which it relied to defeat the claim asserted by the purchasers, and, furthermore, that the agent had no authority to make the agreements relied on by the purchasers. After the pleadings were made up the action on motion of the defendants was transferred to the ordinary docket for trial of the legal issues presented. Upon a trial before a jury, a verdict was returned in favor of the defendants, now appellees. A reversal is asked for errors in the admission and rejection of evidence, in the instructions given and refused, and because the court failed to give a peremptory instruction to find for the company.

The evidence upon the principal issue was very conflicting; but if no other error was committed, there is not sufficient disparity between the evidence and the finding of the jury to justify us in holding that the verdict was not supported by the evidence, so that we will proceed to consider the legal questions raised by counsel for appellee.

In Wisdom v. Nichols & Shepard Co., 97 S. W. 18, 29 Ky. Law Rep. 1128, and the cases therein cited, it was held that, under a contract similar to the written contract relied on by the company in this case, the rights and remedies of the parties were to be determined by the contract; the court saying: "Contracts similar to this have been before this court in a number of cases, and it has uniformly been ruled that, when the parties to a contract have agreed upon the warranties and remedies that accrue upon a breach of them, these remedies constitute the only relief in this particular that the purchaser has, and he must look to his contract and be governed by its stipulations." But the principle laid down in this and the other cases is not involved in this one. There is no pretense that the agent who sold the machine altered the written contract, or that he had any right to make any changes in it, or any representations or warranties as to what the machine would do if it had been accepted under contract. The validity or integrity of the written contract that was executed in connection with the notes and mortgage does not enter into this case. The defense was not an attack on the contract, or an effort to avoid its conditions, but was whether or not the written contract became effective or binding upon the purchasers at all. In other words, the contract upon which the purchasers relied was made before the written contract upon which the company depends was executed. If there was a valid prior contract between the parties, upon the faith of which the written contract was entered into, it follows that the validity of the written contract depends upon the prior contract. The purchasers staked their whole case upon the prior verbal contract under which the notes and mortgage were delivered, and, when the trial judge came to instruct the jury, he said: "You will find for the plaintiff, J. I. Case Threshing Machine Company, unless you shall believe from the evidence that prior to the signing of the order, notes, and mortgage introduced in evidence, the plaintiff by its agent, Carter, represented to the defendants that the boiler and engine in controversy was of sufficient horse power to pull the...