Nu-Way Ice Cream Mach. Co. v. Pig'n Whistle

• Decision Date: 28 April 1933
• Parties: NU-WAY ICE CREAM MACH. CO., Inc., v. PIG'N WHISTLE.
• Court: Tennessee Supreme Court

Page 575

65 S.W.2d 575

NU-WAY ICE CREAM MACH. CO., Inc., v. PIG'N WHISTLE.

Court of Appeals of Tennessee, Western Section.

April 28, 1933.

Certiorari Denied by Supreme Court December 9, 1933.

Appeal from Chancery Court, Shelby County; M. C. Ketchum, Chancellor.

Suit by the Nu-Way Ice Cream Machine Company, Incorporated, against Pig'N Whistle, in which defendant filed a cross-bill. From the decree, defendant appeals.

Decree modified and, as modified, affirmed.

Ewing, King & King, of Memphis, for appellant.

M. O. Herring, of Memphis, for appellee.

SENTER, Judge.

This is a suit by complainant, Nu-Way Ice Cream Machine Company, to recover of defendant, Pig'N Whistle, the unpaid balance on an installment note executed by defendant in connection with a conditional sales contract in the purchase of certain ice cream freezing machinery sold and delivered to defendant by complainant on May 19, 1931. The contract price for the machine was $2,016.20, of which $465 was paid, or to be paid, as a cash payment and the balance payable in twenty-four monthly installments of $64.63 each. The first, or cash, payment, was not paid until several weeks after the machine was installed, and two of the monthly installments were paid, including the July and August installments.

The contract provided on its face that: "Above equipment to be placed on fifteen days trial, and should purchaser decide not to accept same, seller will be reimbursed $45.00 plus cost of electric connection, by purchaser."

The machinery was installed in defendant's plant about May 30, 1931, and the initial payment was made about thirty days later. The first two installment payments, which were due and payable on June 30 and July 30, were paid on August 7 and September 1, 1931, respectively. The contract further provides that in the event of a default in the payment of the respective installments as they become due and payable, the seller may, at its option, declare all the installments due and payable as of the date of the default.

The original bill alleged default in the payment of the installments, except the first two, and the bill was filed on November 18, 1931. The installment note contains a provision whereby reasonable attorney's fees would be paid in the event the note was placed in the hands of an attorney for collection, and complainant also seeks to recover attorney's fees as provided in the note in addition to the unpaid balance due and owing on said note.

The defendant filed an answer and a cross-bill. By the answer it admits the execution of the note and the purchase of the machinery, but denies that it is indebted to the complainant for any amount under said contract. The answer avers that the contract under which the ice cream machinery was purchased contained certain written stipulations and conditions and certain warranties and guaranties; that the guaranties, stipulations, and conditions contained in the conditional sales contract had been breached by the complainant; that the machine has not operated as represented and guaranteed; that the temperature has not been maintained as guaranteed; that the freezing and hardening properties of the machine have not been as guaranteed; and that the representations and guaranties made wholly failed, and have failed to that extent that the defendant could no longer use the machine and had so advised the complainant, and that it had so advised the complainant from time to time in keeping with the terms of the contract of the failure of the machine to operate, and that complainant had done nothing to remedy the same or to bring the same within the warranties in the conditional sales contract and note.

The answer is also made a cross-bill, and is as follows:

"And now relying upon the facts set forth in the answer hereinbefore and assuming the role of cross-complainant, your cross-complainant would show to the Court that by virtue of the breach of warranty of the cross-defendant it is entitled to recover of the cross-defendant the sum of $465.00, the amount of cash payment upon the execution of the contract for the purchase of this machine.

"Your cross-complainant prays that process issue requiring the cross-defendant to answer this bill, but its oath to its answer is expressly waived under the statute.

"That your cross-complainant have a decree against the cross-defendant in the sum of $465.00, and costs.

"That your cross-complainant have all such, other, further and general relief to which it may be entitled by virtue of the premises herein."

The clause of guaranty or warranty referred to by the defendant in its answer and cross-bill is as follows:

"The seller guarantees that the aforesaid refrigerating machinery and equipment will, upon completion of the installation thereof, be of ample capacity to produce the temperatures as herein specified, when machine is supplied with sufficient condensing water of reasonable temperature, and power of proper electrical characteristics, and operated in a manner approved by the seller; and the seller agrees to produce the aforesaid temperatures upon completion of the installation during a test and demonstration. Thereupon, the purchaser shall immediately make known to seller, in writing, any objection which he may have, and permit seller to make necessary corrections; failure to report objections within two days shall constitute a final acceptance."

The contract did not specify the temperatures to be produced, and in the absence of such a stipulation, reasonable temperatures such as are necessary and proper for the proper operation of the machinery to produce proper results and refrigeration would be the measure of the seller's undertaking in that respect.

Both in its answer and by its proof, it is the contention of the defendant that the machine has never met the requirements of this warranty; that it would not freeze the ice cream hard and keep it hard; that the frozen mixture was icy and flaky, or that the cream would, to use the expression of some of the witnesses, "go sandy," because it had to stay in the ice chamber too long in order to freeze it sufficiently.

The complainant, by its evidence, admits that when the machine was first installed certain adjustments and corrections had to be made in order to produce the proper temperatures and proper freezing of the cream. But it is the contention that after a few days these adjustments and corrections were made, and with the result that the machine did produce temperatures lower enough for the satisfactory freezing of ice cream; that tests were made and satisfactory temperatures were obtained.

We find a decided conflict in the evidence with reference to the quality of ice cream produced by this equipment. According to the evidence of the defendant and its witnesses, the machine never at any time produced a good quality of merchantable ice cream, and that with the best attention in the operation of the machine the cream, when frozen, was not of smooth texture, as required by the trade, but was streaked with ice, and otherwise of poor quality.

It is the contention of appellee, under its evidence, that after adjustments were made a few days after the installation, satisfactory results were procured; that the machinery was serviced by its agent and employee; that it had sold and had in operation in the city of Memphis several hundred of these machines which were being operated satisfactorily and without complaint; and that these other machines were serviced and inspected by its employee, employed for that purpose. It is further contended by appellee that whatever failure the defendant experienced in producing satisfactory ice cream, if any, was not due to any fault in the machine, but was due to negligent and careless operation and inattention while the ice cream mix was being frozen, and because of the failure of the employees of defendant to carry out and follow instructions given in the operation of the machine.

As above stated, there is a decided conflict in the evidence on this question; but we are of the opinion that when all the facts are considered, this particular machine did not produce a first-class quality of ice cream. We are also of the opinion that this was due, in part at least, to the lack of skill of those intrusted with the operation of the machine.

The machine had been in operation for about thirty days before defendant made the cash payment of $465. The defendant paid the first two installments; the last installment paid was September 1, 1931, about three months after the machine had been installed and in operation, and during all that time the defendant was using the machine and making all the ice cream that it sold to its customers during that period. The defendant never made any written complaint until November 5, 1931, more than five months after the machine had been installed. Some complaints had been made soon after the machinery was installed, and from time to time. On one occasion complainant's inspector, while visiting the place of business of defendant, who operated a sandwich, etc., shop, in Memphis, found that the thermostat had been broken. At another time it was found that the defendant had put a spoon in the freezing machine that damaged the blades of the machine to some extent. The defendant continued to use the machine in its business and made ice cream which it supplied to its customers all the time up to a short time before the suit was tried. According to the testimony of one of defendant's witnesses, an employee of defendant who operated the machinery the greater part of the time, they continued to use the machine until about three weeks before his deposition was taken, and his deposition was taken on February 23, 1932. On November 5, 1931, defendant wrote the complainant the following letter:

"In reply to your letter of November 4, 1931.

"We have called your attention to the fact that the Ice cream machine at the Pig'n Whistle, 1579 Union...