Moosbrugger v. McGraw-Edison Co.

CourtSupreme Court of Minnesota (US)
Citation284 Minn. 143,170 N.W.2d 72
Docket NumberGRAW-EDISON,Nos. 40284,41449,s. 40284
PartiesCharles O. MOOSBRUGGER, Appellant, v. McCOMPANY et al., Defendants, McGraw-Edison Company, American Laundry Machinery Industries, Small Equipment Sales Company and Equipment Acceptance Corporation, Cross-Appellants.
Decision Date18 July 1969

Syllabus by the Court

1. Although not an express claim for damages, under Kopet v. Klein, 275 Minn. 525, 148 N.W.2d 385, and Inland Products Corp. v. Donovan Inc., 240 Minn. 365, 62 N.W.2d 211, plaintiff's letter was both sufficient and timely notice of breach of warranty for the purposes of Minn.St. 1961, § 512.49.

2. An implied warranty is imposed by law for the protection of the buyer and does not depend upon the affirmative intention of the parties. The doctrine of implied warranty is to be liberally construed since the rule is an equitable one.

3. Since the claimed errors of law in defendants' motion for a new trial are not with respect to fundamental law or controlling principle, defendants were required to raise such objections before the jury retired, stating distinctly the matter to which they objected and the grounds for such objection. They did not do so and therefore cannot assign such claimed errors in their motion for a new trial. Rule 51, Rules of Civil Procedure.

4. Considering the instructions of the court as a whole, we reach the conclusion that the jury was adequately instructed upon the evidence and the theory under which defendants presented their case.

5. Evidence of similar difficulties in identical machines is admissible at the discretion of the trial court in a breach of warranty case in this state.

[284 Minn. 144] 6. Where the amount of liability has not been ascertained, there is no liability for interest thereon prior to the time of its ascertainment. The right to interest here is governed by Minn.St. 549.09.

Stringer, Donnelly & Sharood, and Henry H. Cowie, Jr., St. Paul, for appellant.

Dorsey, Marquart, Windhorst, West & Halladay, and William A. Whitlock, Minneapolis, Malcolm D. Young, Omaha, Neb., for respondents.

Heard before KNUTSON, C.J., and NELSON, OTIS, ROGOSHESKE, and PETERSON, JJ.

OPINION

NELSON, Justice.

The action involved on this appeal was commenced in Ramsey County District Court by plaintiff, Charles O. Moosbrugger, against McGraw-Edison Company, American Laundry Machinery Industries, Small Equipment Sales Company, Equipment Acceptance Corporation, Ellis and Watts Products, Inc., and Econ-O-Wash, Inc., seeking damages founded on claims of negligent manufacture of six coin-operated dry-cleaning machines and breach of express and implied warranty.

Plaintiff on July 26, 1961, entered into a contract with the seller, Econ-O-Wash, Inc., for the purchase of six Econ-O-Crest coin-operated dry-cleaning machines and related advertising and other items for a total purchase price of $18,602.40, of which $17,422.40 was paid as a cash down-payment, the balance of $1,180 to be paid in installments of $33 per month. In this action plaintiff sought recovery of his investment, installation costs, loss of profits, and other expenses. After trial the jury returned a verdict in favor of plaintiff on December 20, 1965, and assessed his damages in the sum of $17,170.

Plaintiff appealed from an order denying his motion to correct the verdict by adding thereto interest at 6 percent per annum from and after October 4, 1961, the date on which plaintiff allegedly purchased the machines. Defendants McGraw-Edison Company, American Laundry Machinery Industries, Small Equipment Sales Company, and Equipment Acceptance Corporation (hereinafter collectively referred to as the defendants) appealed from an order denying their motion for judgment notwithstanding the verdict or, in the alternative, for a new trial. The manufacturer of the machines and the ultimate retail seller of the machines, Ellis and Watts Products Company, Inc., and Econ-O-Wash, Inc., respectively, were named as defendants but were not represented during the trial of this action and were found in default.

Plaintiff in his complaint made the following allegations:

'That said machines were designed and manufactured by or on behalf of the defendants McGraw-Edison Company, Ellis and Watts Products Inc., American Laundry Machinery Industries and Small Equipment Sales Company, who together with defendant Econ-O-Wash, Inc. expressly and impliedly represented and warranted to plaintiff that said machines were suitable and fit for the purposes for which they were sold and intended to be used and plaintiff could earn substantial profits from their operation, and that plaintiff relied thereon in making said purchase and entering into said financing arrangements.

'That notwithstanding the foregoing, said machines were carelessly and negligently designed, manufactured, sold and delivered by said defendants; that the representations and warranties made by them to plaintiff in Minnesota were false and fraudulent, and that said machines were in fact and are defective and inoperable.

'That timely notice of defendants' breach of warranties has been duly given by or upon behalf of plaintiff herein.'

It appears that at the trial defendants admitted that plaintiff's machines did not operate properly. They contended that the improper operation was attributable to faulty installation and to the poorly supported floor upon which plaintiff had placed the machines. 1

The machines were installed by one Walton Lindquist, whom the jury found not to be an agent of defendants. The evidence revealed that installation was effected without referring to the installation manual and was improper in many respects, the machines having been set on a wooden floor which was supported by jacks placed in the basement.

Defendants also moved for a dismissal of the action or a directed verdict on the ground that plaintiff had failed to prove timely and proper notice of the alleged breach of warranty. The court denied the motion. Defendants then submitted requested instructions on timely and proper notice of the alleged breach, which were refused. Here defendants claim that the trial judge failed to give any instructions on notice and that the jury was not given the opportunity of considering that question.

If all conflicts in the evidence are resolved in favor of plaintiff as the prevailing party below, the facts appear to be as follows: Plaintiff, an advertising manager for Minnesota Mining and Manufacturing Company who had no technical or mechanical training, became interested in purchasing coin-operated dry- cleaning equipment from defendants as an investment in the spring of 1961, after seeing advertisements in the Wall Street Journal and Business Week, directed at people who were seeking investment opportunities. These advertisements, which plaintiff introduced into evidence, emphasized the vast experience and skill of defendant American Laundry Machinery Industries in the laundry industry, stating that it was the world's largest manufacturer of professional laundry and dry-cleaning machinery. Defendant McGraw-Edison's name also appeared in the advertisements. The advertisements represented that no specific experience would be necessary to operate the machines; that they would run unattended; and that trained representatives of defendant American Laundry would assist in setting up and operating the machines. The advertisements promised exceptional, high-profit returns on an investment in the machines. The advertisements first appeared in the Wall Street Journal March 29, 1961, and on at least 25 later occasions. A prime inducement to plaintiff's subsequently entering into the contract for the purchase of the machines was the representation contained in such advertising that these machines would run 'unattended.' However, Charles M. King, manager of American Laundry's engineering department, testified that the machines were not in production until October 1961, 6 months after the advertisements began. Defendants had a prototype model which was tested in May and June of 1961, 2 months after the first advertisements appeared in the Wall Street Journal.

Plaintiff was not aware that these machines were in a primitive stage of development but was convinced by the advertisements, brochures, sales materials, and other materials provided by defendants that they were experienced, sound, and stable corporate enterprises, and that the machines would run 'unattended' as advertised. Thus, plaintiff entered into a conditional sales contract on July 26, 1961, to purchase six machines. The contract form bore the following:

'* * * Distributor for Small Equipment Sales, American Laundry Machinery Industries, Division of McGraw-Edison Company * * *.'

The insurance certificate furnished plaintiff which covered the machines referred to McGraw-Edison as vendor. In view of these facts, plaintiff contends that the seller under this sales contract was not Econ-O-Wash, Inc., as defendants have claimed, but instead defendants themselves. The machines arrived by truck in late December of 1961. Their installation was supervised by Wally Lindquist, who had been trained by defendant American Laundry. Lindquist had been hired to work on the machines by John E. Whelan, who at that time was selling coin-operated dry-cleaning and laundry equipment and related items and had been hired by Econ-O-Wash, Inc. There was no evidence that the 'trained representative' referred to in the Wall Street Journal was anyone other than Lindquist.

Installation was completed January 16, 1962. Defendants had failed to ship with the machines the installation manual. Plaintiff encountered many difficulties immediately which defendants claimed were due to piping that was too long and of the wrong type and to a poorly supported floor. To prove that this was not the case, plaintiff introduced the testimony of three other owners of identical...

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