Minneapolis-Moline Power Implement Co. v. Gatzki

• Decision Date: 10 February 1933
• Docket Number: No. 1065.,1065.
• Citation: 57 S.W.2d 593
• Parties: MINNEAPOLIS-MOLINE POWER IMPLEMENT CO. v. GATZKI et al.
• Court: Texas Court of Appeals

Page 593

57 S.W.2d 593

MINNEAPOLIS-MOLINE POWER IMPLEMENT CO. v. GATZKI et al.

No. 1065.

Court of Civil Appeals of Texas. Eastland.

February 10, 1933.

Appeal from District Court, Baylor County; Isaac O. Newton, Judge.

Suit by the Minneapolis-Moline Power Implement Company against F. Gatzki and another. From a judgment for defendants, plaintiff appeals.

Reversed and remanded.

Smithdeal, Shook, Spence & Bowyer, of Dallas, for appellant.

Wheat & Wheat, of Seymour, for appellees.

FUNDERBURK, Justice.

Minneapolis-Moline Power Implement Company brought this suit against F. Gatzki and Walter Gatzki to recover upon certain notes given by the latter for part of the purchase price of one model B combine, and to foreclose two mortgages given at different times to secure said notes. The defendants, conceding plaintiff's right to recover, except as same might be defeated by matters of defense alleged by them, averred that the sale of the combine to them and their execution and delivery of the notes had been procured by means of false representations made by the agents of the plaintiff, by reason whereof defendants had elected to rescind the transaction. They claimed the return of $125 paid as cash on the purchase price, and prayed for cancellation of the notes and mortgages.

The false representations, each of which were found by the jury to have been made by the agents of plaintiff, acting within the scope, or apparent scope, of their authority, and to have been untrue and relied upon by the defendants, were as follows: (1) That said combine was a good machine and would satisfactorily harvest all kinds of grain grown on defendants' farm; (2) that high speed chain idler bearings, canvas drive sprocket bearings, real drive sprocket bearings, and sickle drive shaft bearings were roller bearings of high type; (3) that said combine would harvest from 35 to 50 acres of grain per day with a minimum trouble; (4) that said combine would be fully equipped for use, equipped with a full set of tools, and an instruction book; (5) that the motor on said combine would not heat excessively to such an extent, under proper use, as to necessitate stops in the operation of said combine.

A part of the defendants' answer was as follows: "* * * That the agent Moore came to Westover * * * and the defendants * * * told Moore that the machine for which they had contracted was wholly unsatisfactory, and not as represented to them, and that they would not pay for same, and they then and there tendered the machine to the plaintiff company at Westover through Moore and sought to rescind their contract of purchase. But Moore then on behalf of the plaintiff company, prevailed upon these defendants to keep the said machine on the promise that all defective parts would be replaced, all defects repaired, all necessary parts and equipment supplied, and the machine put in perfect working order before the next harvesting season. * * * These defendants would further show that at sometime before the start of the 1931 season, one Lee, a representative of the plaintiff company, came to them and again represented and promised to the defendants that the machine would be repaired and properly equipped before time for harvest, and that Lee told F. Gatzki that it was necessary for his company to have `paper' in order to discount it and raise money, and that it was certain that his combine would be properly fixed before the season and F. Gatzki, relying upon the statements of Lee, executed the mortgage on 100 acres of wheat as described in the plaintiff's original petition," etc. (Italics ours.)

The appeal is from a judgment awarding defendants recovery of $125, and canceling the notes and mortgages, and denying plaintiff recovery upon the notes.

That part of the defendants' pleading above quoted shows, as a matter of law, a waiver on the part of defendants of any right that they may have had to rescind the contract of sale because of the alleged false representations. It is thus shown that, with full knowledge of the alleged fraud, and after defendants had given notice of their election to rescind, they agreed to keep the combine and one of the defendants gave a mortgage upon 100 acres of wheat as additional security for the purchase-money notes, all in consideration of certain promises. No facts were alleged to show that these promises were fraudulent. The most that was alleged concerning them was that they were not performed. The applicable rule of law is stated in Tex. Jur., as follows: "The right to rescind a contract or to sue for damages on account of fraud may be waived when the defrauded party, with full knowledge of the imposition practiced, has entered into and...