Oden & Sims Used Cars, Inc. v. Thurman

Decision Date22 February 1983
Docket NumberNos. 64871,64872,s. 64871
Citation301 S.E.2d 673,165 Ga.App. 500
CourtGeorgia Court of Appeals

James F. Stovall III, Atlanta, for appellant (case no. 64871).

Thomas J. Cullen, C. Lawrence Jewett, Jr., Atlanta, for appellant (case no. 64872).

Thomas J. Cullen, C. Lawrence Jewett, Jr., Michael J. Gorby, Atlanta, for appellee (case no. 64871).

Gene A. Major, James F. Stovall III, Michael J. Gorby, Atlanta, for appellees (case no. 64872).

POPE, Judge.

These appeals arise out of the same lawsuit in which plaintiff Thurman filed an action against defendants Martin Burks Chevrolet, Inc. and Oden & Sims Used Cars, Inc. Plaintiff sought to recover damages against Oden & Sims on a contract claim and against both defendants on a tort claim. The trial court directed a verdict in favor of both defendants as to the tort claim, and the jury returned a verdict of $2,000 in favor of plaintiff against Oden & Sims on the contract claim. The parties adversely affected by these rulings bring these appeals.

Case No. 64871

1. Oden & Sims enumerates three errors, the first of which concerns the trial court's denial of its motion for directed verdict and subsequent motion for judgment notwithstanding the verdict. Three grounds are asserted in support of this enumeration. Since our decision as to the first ground is dispositive of this case, we do not reach the merits of the remaining grounds and other enumerations.

Oden & Sims asserts that plaintiff did not meet his burden of proof as to the giving of notice pursuant to Code Ann. § 109A-2-607(3)(a) (now OCGA § 11-2-607(3)(a)), to wit: "Where a tender has been accepted (a) the buyer must within a reasonable time after he discovers or should have discovered any breach notify the seller of breach or be barred from any remedy...." We agree with Oden & Sims that this provision of the Uniform Commercial Code is applicable to this case. See 67 Am.Jur.2d 658, Sales, § 486. But see W.S. Maxwell Co. v. Southern Oregon Gas Corp., 158 Or. 168, 74 P.2d 594; 114 A.L.R. 697 (1937), decided under the Uniform Sales Act (pre-UCC), for the proposition that notice of breach of warranty of title is unnecessary.

Between a buyer and a merchant seller of goods there is a warranty of title. Code Ann. § 109A-2-312 (now OCGA § 11-2-312). Plaintiff's contract action against Oden & Sims was for damages for breach of this warranty. A condition precedent to bringing this action was that plaintiff must have notified Oden & Sims of the breach within a reasonable time thereof. Code Ann. § 109A-2-607(3)(a); see Jones v. Cranman's Sporting Goods, 142 Ga.App. 838(1), 237 S.E.2d 402 (1977). The content of the notification needed merely to have been sufficient to have informed Oden & Sims that the transaction was " 'still troublesome and must be watched.' " Jones v. Cranman's Sporting Goods, supra at 840, 237 S.E.2d 402. Such notification did not need to have been in writing. See Warren's Kiddie Shoppe, v. Casual Slacks, 120 Ga.App. 578(2), 171 S.E.2d 643 (1969). The record discloses, however, that plaintiff gave no notice whatsoever to Oden & Sims regarding the breach of warranty of title. Plaintiff argues on appeal that even if notice were not given, Oden & Sims had actual knowledge of the breach.

"Section 2-607 [of the UCC] expressly requires notice of 'any' breach. [Official] Comment 4 says that notice 'need only be such as informs the seller that the transaction is claimed to involve a breach.' The express language of the statute and the official comment mandate notice regardless whether either or both parties had actual knowledge of breach. [Cit.]

"We also note that this same result would take place under § 2-607's predecessor, section 49 of the Uniform Sales Act. Judge Learned Hand's oft-quoted words applying section 49 are equally applicable here: 'The plaintiff replies that the buyer is not required to give notice of what the seller already knows, but this confuses two quite different things. The notice "of the breach" required is not of the facts, which the seller presumably knows quite as well as, if not better than, the buyer, but of buyer's claim that they constitute a breach. The purpose of the notice is to advise the seller that he must meet a claim for damages, as to which, rightly or wrongly, the law requires that he shall have early warning.' American Mfg. Co. v. United States Shipping Board E.F. Corp., 7 F.2d 565, 566 (2d Cir.1925), cited with approval in Columbia Axle Co. v. American Automobile Ins. Co., 63 F.2d 206 (6th Cir.1933). [Cits.]

"An examination of the policy reasons which underlie 2-607 further support our view. Notice of breach serves two distinct purposes. First, express notice opens the way for settlement through negotiation between the parties. [Cits.] Second, proper notice minimizes the possibility of prejudice to the seller by giving him 'ample opportunity to cure the defect, inspect the goods, investigate the claim or do whatever may be necessary to properly defend himself or minimize his damages while the facts are fresh in the minds of the parties.' Note, Notice of Breach and the Uniform Commercial Code, 25 U.Fla.L.Rev. 520, 522 (1973)." Standard Alliance Indus. v. Black Clawson Co., 587 F.2d 813, 825-6 (6th Cir.1978), cert. den. 441 U.S. 923, 99 S.Ct. 2032, 60 L.Ed.2d 396 (1979); see Clow Corp. v. Metro Pipeline Co., 442 F.Supp. 583(3) (N.D.Ga.1977).

Since there was no conflict in the evidence as to plaintiff's failure to give notice pursuant to Code Ann. § 109A-2-607, the trial court erred in denying Oden & Sims' motion for directed verdict and subsequent motion for judgment notwithstanding the verdict. Clow Corp. v. Metro Pipeline Co., supra; Cotner v. Int'l Harvester Co., 260 Ark. 885, 545 S.W.2d 627 (1977). Cf. Gordon v. Carter, 126 Ga.App. 343(1), 190 S.E.2d 570 (1972). Therefore, the judgment of the trial court is reversed with direction that judgment be entered in accordance with said motions.

Case No. 64872

2. Defendants' motion to dismiss this appeal is denied.

3. Plaintiff's first two enumerations of error challenge the correctness of the trial court's directing a verdict in favor of the defendants as to his tort claim. Plaintiff contends that his evidence set forth a cause of action for malicious arrest and/or malicious prosecution against both defendants.

The evidence showed that in November of 1977 defendant Oden & Sims picked up a 1970 Volkswagen from the premises of defendant Martin Burks. On December 15, 1977 Martin Burks reported this vehicle as stolen to the Forest Park Police Department. The Forest Park police then entered the vehicle as stolen into the national and state computer systems. On January 7, 1978 plaintiff purchased the subject vehicle from Oden & Sims for $700 plus title and documentary fees and sales tax of $38. Plaintiff paid $700 in cash at the time of sale but did not pay any of the other charges. At this time plaintiff received a bill of sale and was told that the certificate of title would be mailed to him at a later date.

At approximately 2:30 a.m. on January 23, 1978 plaintiff was arrested by two police officers in Forsyth, Georgia. The reason he was arrested was that he was in possession of the subject vehicle which had been reported as stolen by Martin Burks. He was eventually released from custody at approximately 9:00 a.m. that same day after the Forsyth police had been informed by the Forest Park police that there was insufficient cause to continue holding him. This conclusion by the Forest Park police was based on their investigation which was instigated when the Forsyth police related that plaintiff had a bill of sale for the vehicle from Oden & Sims. Martin Burks advised the Forest Park police that Oden & Sims might have picked up the subject vehicle by mistake.

Harold R. Oden, co-owner of Oden & Sims, testified that he picked up the subject vehicle from Martin Burks in November of 1977 and that he did not speak with anyone at that time. He explained that the keys were in the automobile at that time and that it was likely parked on the back line with the other wholesale merchandise. He testified that he had given Martin Burks a sight draft in payment for the vehicle a day or two before he picked it up. He was told sometime thereafter by his co-owner...

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