Merchants' Nat. Bank v. Grigsby
| Decision Date | 28 November 1914 |
| Docket Number | 29283 |
| Citation | 149 N.W. 626,170 Iowa 675 |
| Parties | MERCHANTS NATIONAL BANK, Appellee, v. G. W. GRIGSBY, Appellant |
| Court | Iowa Supreme Court |
REHEARING DENIED TUESDAY, JUNE 22, 1915.
Appeal from Boone District Court.--HON. R. M. WRIGHT, Judge.
ACTION at law upon a promissory note for $ 1,000. The payee of the note was J. Crouch & Son, who endorsed the same to the plaintiff before maturity. The defendant admits the execution of the note, but sets up in defense a breach of warranty and false representations, and failure of consideration, and that the plaintiff is not a good-faith holder in due course. At the close of the evidence, there was a directed verdict for the plaintiff. The defendant appeals.
Reversed.
Harpel & Cederquist, for appellant.
Read & Read, for appellee.
The note in question was given on September 28, 1909, and was one of a series of three notes of $ 1,000 each, representing the purchase price of an imported stallion sold by the payee to the defendant upon such date. Delivery of the horse was made sometime in December, 1909. A written bill of sale was delivered to the purchaser, including a guaranty as follows:
Taking the evidence offered on behalf of the defendants as true, which we must do for the purpose of this appeal, the above warranty was breached, and the horse proved to be worthless. The horse was not a sure foal getter. Only a very small percentage of his service resulted in foals. On or about July 1, 1910, the defendant discovered that the horse was infected with a disease called in this record "summer sores." This was manifested by the breaking out of certain sores upon various parts of the body at this time. The disease is one which was wholly unknown to the defendant prior to that time. Veterinary surgeons were called to the treatment of the horse. This disease is a progressive, incurable disease, running a course of a few years. It is made outwardly manifest upon the afflicted horse by the breaking out of sores in the summer time. These, in the early stages, may be temporarily cured or dried up during cold weather. During the first summer of such attack, such sores are usually small and may pass unnoticed by a person unfamiliar with the disease. They increase in virulence with every succeeding summer. Such was the course of the disease alleged in this case. The horse died therefrom on August 24, 1912. From the time the defendant received the horse, he gradually lost weight and so continued until his condition was very emaciated. This was consistent with the course of the disease.
The defendant pleaded not only breach of warranty but false representations, based largely upon the same state of facts and upon the further fact that the seller knew that the horse in question was not sound and healthy and was not a good breeder, and yet represented him to be such. The pleas of breach of warranty and false representations are somewhat mixed. Defendant's answer, as to the plea of false representation, is quite indefinite. In the absence of attack, we treat it as sufficient. The question submitted for our conclusion is that of the sufficiency of the evidence in support of the affirmative defenses. Was there sufficient evidence to go to the jury on the questions: (1) Of breach of warranty. (2) If there was breach of warranty, was the condition of the warranty waived by the seller? (3) Was the horse infected with the disease in its incipient stage at the time of the purchase? (4) Did the plaintiff acquire the note in good faith and in due course?
1. The evidence of breach of warranty as to the failure of the horse as a sure foal getter is abundant, and we need not recite it. Appellee does not contend otherwise.
The condition of the warranty, however, was never actually performed by the defendant, in this, that he never returned the horse to La Fayette, Indiana. His contention is that such return was waived by the conduct of the seller. In June, 1910, he wrote the following letter to the sellers:
The sellers replied to this letter stating that they were entirely sold out of Belgian horses, but would have some more in the ensuring fall.
In view of this correspondence, it would have been an idle proceeding for the defendant to go through the form of returning his horse to La Fayette and demanding in exchange another Belgian stallion of equal value at that time. His letter was a fair request for an adjustment under the conditions of the guaranty. Crouch & Son had put it out of their power to perform their guaranty, for the time being. They were doubtless entitled to reasonable time and opportunity, but the defendant was certainly entitled to go to the jury on the question whether he could reasonably be required to lose the entire season and wait until fall for the exchange. If not, then the sellers must be held to have waived the condition contained in the guaranty, and they thereby rendered their guaranty absolute.
On March 17, 1911, however, the written guaranty was by another writing extended to May 1, 1912. We think the effect of this writing was to extend the condition, likewise. The previous waiver of the condition, therefore, is no longer available to defendant, unless the extension was entered into through the fraud of Crouch & Son, as contended by defendant.
It was arranged between the parties at that time that the defendant should give the horse further trial and treatment. In December, 1911, the defendant again visited Crouch & Son and sought an adjustment. They told him at that time that under no consideration would they receive back the horse in his then condition, because of the sores upon his body. This refusal was based upon the contention that under the conditions of the warranty, the horse was to be returned in as "sound and healthy" condition as when received. This is a pivotal point in the defense. The defendant could not require Crouch & Son, under the conditions of the warranty, to take back the horse in his diseased condition unless such disease was already upon him in its incipient stage at the time the defendant purchased him. The burden was upon the defendant not only to prove breach of warranty, but to prove also a waiver of the condition as to returning the horse. If, in December, 1911, the defendant was legally entitled to return the horse in his then condition, and offered to do so, then the declaration of Crouch & Son was sufficient as a waiver of a formal return of the horse. The burden, therefore, was upon the defendant, to prove that the diseased condition of the horse, which formed the basis of the sellers' objection to his return, was already upon the horse in its incipient stage at the time of the sale to the defendant. This being proved, the seller had no right to base objection to his return upon the ground of this disease.
The defendant introduced considerable testimony tending to prove that the horse must have been infected with the disease, and must have had it in its incipient stage before it was purchased by him. The disease is rather an infrequent one in this country. It is frequently found in Belgium and France and other European countries. When found here, it is usually in imported horses. Crouch & Son were extensive importers. They were more or less familiar with the disease and had had experience with it. They had purchased this horse in Belgium about two months before he was sold to the defendant. The horse was a fine individual, and would weigh, in ordinary flesh, between 2,100 and 2,200 pounds. He was somewhat thin, however, when he was sold to the defendant. The defendant was never able to improve his condition as to flesh. He gradually lost weight until such loss amounted to over 500 pounds.
The defendant examined veterinary surgeons as witnesses. Their testimony all tended to show that the horse must have been in the incipient stages of this disease in 1909. One of these surgeons treated the horse in 1910. He testified to the apparent condition at that time. He also testified to his opinion that the sores upon the horse in 1910 were second or third year sores. They were too large for first year sores. None of this testimony was directly disputed. It is not incredible that an experienced veterinary surgeon could form reliable judgment as to the approximate time a progressive disease had run at the time of his observation of it.
There is evidence also by the defendant of various symptoms and scars observed by him...
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