Peugeot Motors of America, Inc. v. Stout

• Court: Pennsylvania Superior Court
• Writing for the Court: PRICE
• Citation: Peugeot Motors of America, Inc. v. Stout, 456 A.2d 1002, 310 Pa.Super. 412 (Pa. Super. Ct. 1983)
• Decision Date: 11 February 1983
• Parties: , 36 UCC Rep.Serv. 34 PEUGEOT MOTORS OF AMERICA, INC. v. John STOUT, Appellant.

Page 1002

456 A.2d 1002

310 Pa.Super. 412, 36 UCC Rep.Serv. 34

PEUGEOT MOTORS OF AMERICA, INC. v. John STOUT, Appellant.

Superior Court of Pennsylvania.

Argued Dec. 1, 1980.

Filed Feb. 11, 1983.

Joseph R. Siegert, Philadelphia, for appellant.

Sarah Thompson, Philadelphia, for appellee.

Before PRICE, ^* WATKINS and MONTGOMERY, JJ.

PRICE, Judge:

On April 13, 1978, John Stout was preliminarily enjoined from selling, titling or transfering two cars which appellee, Peugeot Motors of America, Inc. ("Peugeot"), had sold to Mr. Stout allegedly for "parts only". On December 3, 1979, the Honorable Victor J. DiNubile entered a decree nisi in favor of Peugeot, permanently enjoining Stout from selling one of the cars and from titling the other automobile. On May 1, 1980, after hearing argument on Mr. Stout's exceptions and accepting additional briefs, Judge DiNubile dismissed Stout's exceptions and made the decree nisi final. Stout appeals from this decree.

The facts of the case are as follows: During November 1977, Peugeot received at its New Jersey port facilities three Peugeot vehicles which were damaged in ocean transit. Peugeot classified each of these three vehicles a "constructive total loss" ("CTL") after determining that the vehicles were unsafe and unfit for highway use. The serial numbers affixed to or stamped upon each car were removed or obliterated. Peugeot then telephoned several Peugeot dealerships, including the one owned by Stout, and suggested that each dealer inspect the vehicles and submit bids for them.

Mr. Stout denies ever having been told that the vehicles were to be sold for parts only; whereas Peugeot claims that this was made clear from the beginning. Mr. Stout inspected the cars and submitted bids. For the two cars in controversy, he bid $1,650 and, as this was the highest offer, Peugeot orally informed Mr. Stout on January 16, 1978 that his bids were accepted. Bank approval for Stout to draw on his line of credit was given on February 13, 1978. The accepted bid identified the subject vehicles, described them as "damaged vehicles", acknowledged Stout's inspection of them, specified the price and was dated January 13, 1977, (which was agreed to actually be 1978).

Stout admits that late in January a Peugeot employee informed him that the vehicles would have no warranties, serial number plates, or certificates of origin. (R. 83a.) Apparently Stout did not consider this information to be significant as he did not question Peugeot about this unusual occurrence. Without these safety certification plates, cars may not be resold to a consumer. ¹

On February 16, 1978, Peugeot drew up and mailed two invoices to Stout, spelling out thereon the date, dealer, year, model, type, serial number, exterior color, and price of the automobiles. The invoices also bore on their faces the following typewritten words: "Above car is a constructive total loss and is not to be restored or repaired. CTL vehicle is sold for parts salvage only." (R. 323a). Stout admits that he read the invoices and their terms, but again he apparently did not consider the language to be a problem and did not question Peugeot as to the restriction.

The vehicles were delivered in the middle of March. Peugeot discovered thereafter that Stout was in the process of restoring one of the cars for sale and ultimate use on the highway. Peugeot sent a telegram warning Stout that he was in violation of his contract by repairing the cars and that any sale would also be a violation. Stout sold one of the cars to a Delaware resident for $7,500 that same day, April 6, even though the car did not have title or an identification number. Stout was allegedly trying to obtain a reconstructed title. As Stout was repairing the second car, a preliminary injunction was issued prohibiting him from the sale or repair of the second car or from any further action in titling the first car. Stout agreed to the entry of this injunction without prejudice and the case went to trial in June 1979.

The lower court did not find Stout's version to be convincing and held that the agreement was that the cars were to be sold for parts only. Although much of Peugeot's evidence was circumstantial, such as the removal of the serial number and the invoices, the court found it to be credible and held that any further action by Stout to repair or title the automobile would cause Peugeot to suffer irreparable harm because of the potential liability in tort for a defective product.

The issues ² in this case are whether Peugeot proved that the oral agreement between the parties was that the cars were to be sold for parts only and whether the alleged harm was sufficient to necessitate an injunction. Stout also raises various evidentiary issues, including whether the invoices were properly admitted and if his direct evidence could be contradicted by circumstantial evidence, but all of these considerations concern the question of what was agreed to by the parties.

Our scope of review on appeal is limited. "The trial judge sitting in equity as a chancellor is the ultimate fact finder." Balin v. Pleasure Time Inc., 243 Pa.Superior Ct. 61, 68, 364 A.2d 449, 453 (1976). It is well recognized that a chancellor's findings of fact, when supported by competent evidence, have the weight of a jury verdict. Fascione v. Fascione, 272 Pa.Superior Ct. 530, 416 A.2d 1023 (1979). ³ "The chancellor's findings are entitled to particular weight in a case in which the credibility of the witnesses must be carefully evaluated because he has had the opportunity to hear them and observe demeanor on the stand." Vento v. Vento, 256 Pa.Superior Ct. 91, 95, 389 A.2d 615, 617-18 (1978), quoting Stauffer v. Stauffer, 465 Pa. 558, 567, 351 A.2d 236, 240 (1976). ⁴ The findings of fact of the chancellor should not be set aside unless the error is manifest. Van Schoiack v. United States Liability Ins. Co., 390 Pa. 27, 133 A.2d 509 (1957). "Therefore only if it is plain that ... the rule of law relied upon was palpably erroneous or misapplied will we interfere with the decision of the chancellor." Cardamone v. University of Pittsburgh, 253 Pa.Superior Ct. 65, 384 A.2d 1228 (1978).

The chancellor found that the "credible evidence demonstrates that the cars were sold for parts only." Slip op. at 6. We accept this finding and hold that it is adequately supported by the voluminous record. The determination of the contents of a mixed written and oral contract is for the factfinder unless there is no conflicting evidence. 8 P.L.E. Contracts § 177 (1971). ⁵

The evidence in support of the chancellor's findings was circumstantial in nature. Stout admitted that he was told from the outset that the serial numbers would be removed from the cars and that no certificate of origin would be issued. (R. 41a). The procedures followed in bidding on and receiving the cars differed from the ordinary procedures in the case of "used cars" to be repaired (R. 104a-110a, 200a to 204a). Stout purchased the cars for a fraction of the normal price even for damaged cars. ⁶ (R. 300a-308a). Peugeot's business records indicated that they intended to sell the cars for parts only (R. 92a-94a, 97a-107a), and there was a business custom of classifying damaged cars in this way (R. 128a). As mentioned previously, Stout failed to respond to the invoices which clearly set forth the restrictions, (R. 81a-87a), although he did read them. (R. 321a-322a). Peugeot had little to gain from changing its story and advanced a strong reason for not having the cars resold, i.e., the potential of strict liability lawsuits.

A party may establish its entire case on circumstantial evidence. In Deaver v. Miller, 260 Pa.Superior Ct. 173, 177-178, 393 A.2d 1209, 1211 (1978), we stated:

Although a jury may not be permitted to reach its verdict merely on the basis of speculation or conjecture, but must have evidence upon which logically its conclusion may be based, circumstantial evidence may be adequate to prove a plaintiff's case. It is not necessary that every fact or circumstance be established unerringly. Winkler v. Seven Springs Farm, Inc., 240 Pa.Superior Ct. 641, 359 A.2d 440 (1976), affd. 477 Pa. 445, 384 A.2d 241 (1978).

All of this evidence, though circumstantial, is more than sufficient to support the chancellor's findings concerning the contents of the oral contract.

Stout, on the other hand, relied primarily on his direct testimony to prove his case, although he also offered much evidence concerning the alleged safe condition and easy repairability of the cars. Stout contends that his direct testimony could not be contradicted by Peugeot's circumstantial evidence. This is simply incorrect. It is up to the factfinder to judge the credibility of evidence, whether it be circumstantial or direct testimony. In Stack v. Wapner, 244 Pa.Superior Ct. 278, 368 A.2d 292 (1976), the court held that circumstantial evidence (the absence of any entry on a medical chart) was sufficient to contradict the defendant's direct testimony. In that case, we reaffirmed the principle that:

... [W]here a litigant calls his adversary as for cross-examination ... the testimony thus obtained is conclusively taken to be true if it is not rebutted by other evidence [citation omitted].... Again, this general rule that a party calling his opponent as for cross-examination is [bound] by this testimony is subject to the exceptions that there may be such a degree of improbability in the statements themselves as to deprive them of credit, or that the circumstances themselves may constitute sufficient contradiction [citations omitted].

Id., 244 Pa.Superior Ct. at 284, 368 A.2d at 295 [emphasis added]. Thus, it was within the discretion of the chancellor to find that Stout's testimony was not credible.

Stout also takes exception to the fact that the Peugeot employee to whom he originally spoke did not testify at trial. Stout's conclusion is that a negative inference must be...