Katz v. Exclusive Auto Leasing, Inc.

• Decision Date: 22 September 1971
• Citation: 282 A.2d 866
• Parties: Joel KATZ and International Magazine Service of Delaware, Inc., Appellants, v. EXCLUSIVE AUTO LEASING, INC., Appellee.
• Court: Delaware Superior Court

Page 866

282 A.2d 866

Joel KATZ and International Magazine Service of Delaware Inc., Appellants, v. EXCLUSIVE AUTO LEASING, INC., Appellee.

Superior Court of Delaware, New Castle County.

Sept. 22, 1971.

David Roeberg, Wilmington, for appellants.

Frederick Knecht, Jr., Wilmington, for appellee.

OPINION

MESSICK, Judge.

On December 23, 1968, Exclusive Auto Leasing, Inc., appellee, plaintiff below, sold and assigned ninety auto lease contracts then outstanding to Mainline Fleets, Inc. One of the contracts concerned a 1968 Cadillac De Ville convertible leased by Joel Katz and International Magazine Service of Delaware, Inc., appellants, defendants below, for a period of two years at $185.00 per month. The contract was executed on July 29, 1968. Appellee alleged that appellants made the monthly payments in accordance with the lease for fourteen months. Thereafter, appellants returned the Cadillac to Mainline Fleets, Inc. on October 4, 1969, and made no further payments. Appellee sued for the ten remaining installments plus interest. The Court of Common Pleas for New Castle County found for appellee in the sum of $1,850.00 plus interest from October 4, 1969. Appellants have brought this appeal pursuant to 10 Del.C. § 1373.

Appellants base their appeal on seven grounds, only three of which will be discussed. Appellants first contend that appellee is not the real party in interest under Rule 17(a), Ct.Com.Pleas Civ.R., Del.C.Ann., and that Mainline Fleets, Inc. is the real party.

Real party in interest is a matter of defense to be raised by affirmative allegation. Blau v. Lamb, 314 F.2d 618 (2nd Cir. 1963). Appellants in the instant case raised the matter in the pleadings by affirmative defense. They did not, however, raise the matter at trial either by way of objection or by way of formal proof. In order to avail himself of the defense of real party in interest, the defendant has the burden of proof of showing that the plaintiff has not such a right as to afford the protection of res judicata when the suit is terminated. Blau, Supra; Rosenblum v. Dingfelder, 111 F.2d 406 (2nd Cir. 1940). Defendant may waive the defense of real party in interest by failing to claim it. McLouth Steel Corp. v. Mesta Machine Co., 116 F.Supp. 689 (D.C.Pa.1953), affm'd other grounds 214 F.2d 608 (3rd Cir. 1954), cert. den. Hartford Acc. & Indemnity Co. v. Foster,348 U.S. 873, 75 S.Ct. 109, 99 L.Ed. 687; Fox v. McGrath, 152 F.2d 616 (2nd Cir. 1945), cert. den. 327 U.S. 806, 66 S.Ct. 966, 90 L.Ed. 1030; Rosenblum, Supra. Appellants having failed to present their defense to the Court have waived their right to it. ¹

Appellants next allege that the court below erred in refusing counsel for the appellants the right to question witness Haisfield concerning disposition of the leased automobile after its return to Mainline Fleets, Inc. Appellee contends that the law of landlord-tenant applies and that the lessor need only lie idle and collect his rent. Although the document by which appellants leased the automobile from appellee described the parties as lessor and lessee, the law of landlord-tenant does not necessarily apply. A real property lease is a contract whereby one person divests himself of and another party takes possession of lands for a term, whether long or short. Timmons v. Cropper, 40 Del.Ch. 29, 172 A.2d 757 (1961). The law of landlord-tenant, therefore, does not apply to the lease of a motor vehicle. Rather, in the view of the Court, contract law and contract damages must be applied to the instant relationship.

Under the common law of contracts the measure of damages has always been tempered by the rule requiring the injured party to minimize his losses, although the party causing the breach would pay for the cost of minimizing the injury. Wise v. Western Union Telegraph Co., 37 Del. 209, 181 A. 302 (1935). An additional rule regarding damages which may be considered as a corollary under certain circumstances is as follows:

'Gains made by an injured party on other transactions after breach are never to be deducted from damages otherwise receivable, unless such gains could not have been made had there been no breach.' 5 Corbin on Contracts, § 1041 at p. 256.

These two rules taken together, clearly indicate that the appellants were entitled to know what steps appellee had taken to minimize the injury and also whether their breach had caused appellee to make any gains. ² Added to these areas of investigation is the matter of determining the amount to be deducted from damages for money saved on depreciation, automobile insurance, motor vehicle registration, and repairs. Cement Distributors, Inc. v. Western Aggregates, 68 Wash.2d 640, 414 P.2d 789 (1966); Hanz Trucking Inc. v. Harris Bros. Co., Crestline Div., 29 Wis.2d 254, 138 N.E.2d 238 (1965). Inquiry into these matters would ordinarily require a remand for hearing on damages.

A remand for further hearing will be unnecessary however, due to the validity of the third ground for appeal pressed by appellants.

Appellants contend that the court below erred in not striking the testimony of Richard Haisfield, President of Mainline Fleets, Inc., with respect to the amount owed on the claim. The trial record indicates that Mr. Haisfield was aware of the accounts receivable procedure of Mainline Fleets, Inc. and that although he did not personally record money received, an accounts receivable clerk was employed. It further indicates that the witness, while on the stand, held a recent 'tear sheet' record for appellants' payments, but that appellee never offered it in evidence. The witness stated from memory, having looked at the company accounts on a prior date, that appellants had failed to make the final ten monthly payments. Appellee...