Nationwide Mut. Ins. Co. v. Don Allen Chevrolet Co., 245
| Decision Date | 02 November 1960 |
| Docket Number | No. 245,245 |
| Citation | 253 N.C. 243,116 S.E.2d 780 |
| Court | North Carolina Supreme Court |
| Parties | NATIONWIDE MUTUAL INSURANCE COMPANY v. DON ALLEN CHEVROLET COMPANY. |
Kennedy, Covington, Lobdell & Hickman and Mark R. Bernstein, Charlotte, for plaintiff, appellant.
Helms, Mulliss, McMillan & Johnston and Larry J. Dagenhart, Charlotte, for defendant, appellee.
The demurrer tests the sufficiency of the modified amended complaint. The rules applicable in a hearing on demurrer have been often stated and are well settled. Pressly v. Walker, 238 N.C. 732, 78 S.E.2d 920; Buchanan v. Smawley, 246 N.C. 592, 595, 99 S.E.2d 787. Our task is to determine whether the facts alleged, liberally construed in plaintiff's favor, state a cause of action.
Plaintiff, as subrogee, acquired only such rights against defendant as Jo Ann Glenn, its insured, possessed; and plaintiff's action is subject to all defenses defendant might have invoked if the action had been instituted by Jo Ann Glenn. 46 C.J.S. Insurance § 1211; 29A Am.Jur., Insurance § 1720; Burgess v. Trevathan, 236 N.C. 157, 160, 72 S.E.2d 231, and cases cited.
Hereafter Jo Ann Glenn will be referred to as the buyer.
Plaintiff asserts the allegations of the modified amended complaint 'state alternative causes of action against the defendant, any one of which will support a recovery. ' These alternative causes of action, so plaintiff contends, are (1) for breach of express warranty, (2) for breach of implied warranty, and (3) for negligence.
Our decisions are in accord with the provision of the Uniform Sales Act that 'any affirmation of fact or any promise by the seller relating to the goods is an express warranty if the natural tendency of such affirmation or promise is to induce the buyer to purchase the goods, and if the buyer purchases the goods relying thereon. ' (Our italics.) Potter v. National Supply Co., 230 N.C. 1, 7, 51 S.E.2d 908, 912, and cases cited; Underwood v. Coburn Motor Car Co., 166 N.C. 458, 82 S.E. 855.
Plaintiff's allegation is that the seller 'assured' the buyer 'that if any defects in materials or workmanship in said automobile should develop, or appear within ninety (90) days after purchase or prior to the same having been driven four thousand (4,000) miles, that such defects would be made good' by the seller and 'without cost' to the buyer. It is not alleged that that the seller made any other affirmation or promise. Compare Hill v. Parker, 248 N.C. 662, 104 S.E.2d 848. Moreover, there is no allegation as to implied warranty.
Plaintiff alleges that, when the car was delivered to the buyer on January 15, 1957, there were defects (1) in the electric wiring and ignition system and (2) in the fuel supply system; that the buyer took the car to defendant on February 16, 1957, for inspection and for correction of said defects; and that the buyer, after defendant returned the car to her, discovered said defects had not been corrected. The word 'negligence' does not appear in plaintiff's allegations; and, unless implied from the allegations referred to above, there is no allegation that defendant failed to exercise due care to perform any legal duty it owed the buyer.
Upon breach of warranty as to quality, a buyer, at his election, may rescind unless he is barred by retention and use of the article of personal property after he discovers or has reasonable opportunity to discover the defect. Hendrix v. B & L Motors, Inc., 241 N.C. 644, 86 S.E.2d 448. Here, it is alleged the buyer discovered said defects immediately after receiving the car on January 15, 1957, but retained possession and continued to use the car until the fire (caused by said defects) on February 22, 1957. These facts barred any right of the buyer to rescind. See Hill v. Parker, supra, 248 N.C. at page 667, 104 S.E.2d at page 851, and cases cited. Moreover, the buyer did not at any time, either before or after the fire, purport to rescind the sale. Indeed, plaintiff's allegations do not disclose the purchase price paid by the buyer. They do disclose that, incident to the settlement with its insured, plaintiff acquired the damaged automobile.
A buyer's alternative remedy is to sue for damages; and, in such case, the measure of damages ordinarily recoverable for breach of warranty is the difference between the reasonable market value of the article as warranted and as delivered, with such special damages as were within the contemplation of the parties. Hendrix v. B & L Motors, Inc., supra, and cases cited; Underwood v. Coburn Motor Car Co., supra, and cases cited. Here, assuming plaintiff has sufficiently alleged warranty and breach thereof, there are no allegations as to the reasonable market value of the car as warranted or as delivered. Hence, under plaintiff's allegations, the damages recoverable, if any, must fall in the category of special (consequential) damages.
If it be conceded that plaintiff's allegations are otherwise sufficient to state a cause of action either for breach of warranty or for negligence, we are confronted by the fact plaintiff has affirmatively alleged that, immediately after the car was delivered to her on January 15, 1957, the buyer 'experienced serious difficulty in starting the motor of said automobile and immediately observed a strong odor of gasoline fumes in and about said automobile,' and 'upon examining the motor and other parts of said automobile under the hood thereof, it was discovered that the motor and other areas of said automobile under the hood were saturated with gasoline,' and that she operated the automobile continuously with knowledge of these conditions from January 15, 1957, until the fire on February 22, 1957. It is noted: Plaintiff did not allege that the buyer, apart from inspection made by defendant on February 16, 1957, made any effort whatever to have the defects corrected by defendant or otherwise.
As to warranty, it is our opinion, and we so hold, that damages caused by the buyer's continued use and operation of the automobile with knowledge that the ignition system was defective or maladjustd and that the motor and other parts under the hood were saturated with gasoline cannot be considered damages within the contemplation of defendant and the buyer. Indeed, it is inescapable that damages caused by the continued use and operation of the automobile under these circumstances must be attributed to...
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