Neely v. Allis-Chalmers Mfg. Co

• Citation: 165 So. 114,174 Miss. 519
• Decision Date: 13 January 1936
• Docket Number: 32007
• Court: United States State Supreme Court of Mississippi
• Parties: NEELY v. ALLIS-CHALMERS MFG. CO

165 So. 114

174 Miss. 519

NEELY v. ALLIS-CHALMERS MFG. CO

No. 32007

Supreme Court of Mississippi

January 13, 1936

Division B

1 PLEADING.

Form of pleading is not material, if substance thereof constitutes defense which is available in action (Code 1930, sections 521, 531, 533).

2 PLEADING.

Denial of debt and set-off may be pleaded together, and manner of pleading in denying debt does not preclude filing of plea of set-off (Code 1930, sections 536, 537).

3. SET-OFF AND COUNTERCLAIM.

In action on open account for machinery and parts, pleas of recoupment for defective machinery and parts unsuitable for use held available, though unliquidated, since they grew out of demand sued on (Code 1930, sections 521, 531, 533, 536, 537).

HON THOS. H. JOHNSTON, Judge.

APPEAL from the circuit court of Monroe county HON. THOS. H. JOHNSTON, Judge.

Action by the Allis-Chalmers Manufacturing Company against F. S. Neely. Judgment for plaintiff, and defendant appeals. Judgment reversed, and cause remanded for a new trial.

Reversed and remanded.

Leftwich & Tubb, of Aberdeen, for appellant.

Will this appellant be permitted to prove and show and be allowed credit for, that damage and injury he suffered as a result of appellee's breach of warranty when sued for the parts and replacements purchased, some of which he was compelled to purchase to make the tractors fulfill the warranty of the manufacturer; the manufacturer, seller and appellee being one and the same, the appellee and defendant herein? The lower court sustained an objection to the proof so offered, and in so doing we say, in all earnestness, it erred.

The tractors purchased by appellant were purchased from appellee, the manufacturer, and the warranty implied from such a sale is that the articles so purchased are fit for the purpose for which they were purchased. Especially is this true when the sale is made by the manufacturer, and when that manufacturer knows the purpose for which the articles are bought and the use to which they will be put. This warranty is implied by law.

55 C. J., sec. 719, page 750; 24 R. C. L., sec. 464, sec. 192; 1 Williston on Sales (2 Ed.), sec. 235, page 457, sec. 232, page 447, and sec. 197, page 373; 42 C. J., sec. 320, page 780.

Appellant, upon a breach of warranty, could (a) rescind the sale and refuse to accept the goods; (b) accept the goods and set up against the seller the breach of warranty in diminution of the price; (c) accept the goods and maintain an action for the breach of warranty.

2 Williston on Sales, sec. 603, page 1510; Alig v. Lackey, 114 Miss. 392, 75 So. 139; J. B. Colt Co. v. Mazingo, 141 Miss. 402, 106 So. 533; J. B. Colt Co. v. Fuller, 144 Miss. 490, 110 So. 427; J. B. Colt Co. v. Odom, 136 Miss. 651, 101 So. 583; Stillwell v. Biloxi Canning Co., 78 Miss. 779, 29 So. 513; Christian & Brough Co. v. Goodman & Garrett, 132 Miss. 786, 96 So. 692.

In this instance appellant accepted the goods and elected to set up against the seller in this action a breach of the implied warranty and reduce its recovery herein. The right of appellant to do this is, we contend, provided by statute.

Section 537, Code of 1930; AEtna Ins. Co. v. Robertson, 126 Miss. 387, 88 So. 883.

Mutual indebtedness existing, the defendant may plead and set off against the demand of the plaintiff any debt or demand which he may have against the plaintiff.

18 C. J. 479; Wilkinson v. Searles, 70 Miss. 392, 13 So. 470; Postal Telegraph-Cable Co. v. W. C. Craig & Co., 106 Miss. 279, 63 So. 573.

The case at bar is almost exactly parallel to the Craig case. There, as here, the counterclaim grows out of the very business and dealings which form the basis for the action, mutual dealings, and the counterclaim could be used in defense of the action brought.

Miller v. Bank, 76 Miss. 84, 23 So. 439; Weil Bros. v. Wittjen, 116 Miss. 514, 77 So. 308.

This is certainly a case of a mutual indebtedness and one which comes clearly within the statute.

Shapleigh Hardware Co. v. Brumfield, 159 Miss. 175, 130 So. 98; 57 C. J., sec. 71, page 418, and sec. 82, page 432; Weil v. Wittjen, 116 Miss. 514, 77 So. 308; Wilkinson v. Searles, 70 Miss. 392, 13 So. 470; Cobb v. Wilson, 60 Miss. 343.

McFarland & Holmes, of Aberdeen, for appellee.

This court has held repeatedly that set-off is not available where defendant denies in toto plaintiff's right of action.

Canal-Commercial Trust & Savings Bank v. Brewer, 143 Miss. 146, 108 So. 424, 431; 47 A.L.R. 45; 3 R. C. L., par. 219; Griffith's Chancery Practice, par. 521; Shewalter v. Ford, 34 Miss. 417; Hoover v. Humphries, 107 Miss. 810, 66 So. 214; Henry v. Hoover, 6 S. & M. 418; General Motors Acceptance Corp. v. Trull, 166 Miss. 490, 148 So. 390.

Set-off cannot avail where there is no mutuality of indebtedness and where the defendant denies plaintiff's debt.

General Motors Acceptance Corp. v. Trull, 166 Miss. 490, 148 So. 390.

It is a well settled rule of law in Mississippi that unliquidated damages cannot be used as a set-off in a suit for debt.

McCune v. Commercial Publishing Co., 148 Miss. 164, 114 So. 268; 24 R. C. L., par. 53, page 850, sec. 59, pages 855 and 856, and sec. 60, page 856; 57 C. J., page 434, sec. 84, and note 54.

Counsel for appellant insists now in their brief that the case at bar is one of mutual indebtedness and one clearly within the statute, but apparently overlooked the fact that when they filed their pleas in this cause, appellant denied under oath the account sued on in toto and undertook to recover by way of set-off unliquidated damages arising out of an alleged breach of contract, different and disconnected from the contract sued on; and this court, in the cases cited by us in our brief, has held that this cannot be done; that there cannot be mutual dealings where the defendant denies in toto the indebtedness sued on and at the same time undertakes to recover by way of set-off unliquidated damages arising out of breach of contract, different and disconnected from the contract sued on. Such pleas are insufficient in law and constitute no defense and any evidence offered in support of such pleas is certainly incompetent and should be excluded by the trial court.

Adams Machine Co. v. Thomas, 87 Miss. 391, 39 So. 218; Whittaker v. Robinson, 8 S. & M. 349.

OPINION

Ethridge, P. J.

The Allis-Chalmers Manufacturing Company was plaintiff in the court below and brought suit against F. S. Neely upon an open account for seven hundred nineteen dollars and forty cents, the balance due, with six per cent interest from April 6, 1934. To the declaration was attached an account consisting of many items, and it was agreed, at the trial, that they were proper charges, but it was contended that same was not due because certain parts had been exchanged for new parts on account of defects, and certain other parts did not fill the purpose for which they were bought and had to be repaired by a mechanic at great expense.

The defendant, appellant here, pleaded the general issue, and then filed a special plea, No. 1, reading as follows:

"Comes the defendant, F. S. Neely, and for plea to the declaration exhibited against him in the above styled and numbered cause says that the account attached to the declaration is not true and correct in the following particulars, to-wit;

"A That the plaintiff has deducted the sum of

$ 5.70 as a handling charge from credit memoran-

dum No. 122-R

$ 5.70

"B. Plaintiff has made the same deduction

from credit memorandum No. 131-R for

23.16

"C. Plaintiff has deducted the sum of $ 22.50

from credit memorandum No. 284-R for hub and

gear, which was returned for credit the same being

25 per cent

22.50

"D. Plaintiff has failed to credit the sum of

$ 56.60 to the account of defendant and which

should be credited for parts and supplies returned

56.60

"E. Plaintiff has failed to give credit for sup-

port roller brackets which as originally sold were

defective, not well made and not suitable for the

purpose for which manufactured

118.75

"F. Plaintiff has not given credit for ten mis-

cellaneous items consisting of timing gear parts

and governor parts, and other miscellaneous items

and which were defective in manufacture and not

well made and not suitable for the purpose for

which supplied

117.45.

Total

$ 344.16

"Wherefore defendant says that said account, Exhibit A to the declaration, is not true and correct in the foregoing particulars, and that the same should be credited with the additional and further sum of $ 344.16, and all of which he is ready to verify."

He also filed special plea No. 2 in which he alleged that he should have credit and judgment against the plaintiff for the full account of the sum shown and itemized in his special plea No 1, and that no sum should be deducted or charged against him as a handling charge, and that said parts returned were new and not used and could be and were accepted by the plaintiff at cost or list price without expense to the plaintiff. He filed special plea No. 3 in which he said that the plaintiff should not recover because the plaintiff sold him certain tractors which were warranted to be well made, but that certain parts, as set out in special plea one, were defective and he was compelled to purchase new parts, and he was damaged thereby in the sum of two hundred thirty six dollars and twenty cents, and, in addition thereto, he expended for the labor of mechanics in making repairs the sum of two hundred fifty dollars, and that ...