Rosenthal v. Rambo

• Decision Date: 07 December 1905
• Docket Number: 20,616
• Citation: 76 N.E. 404,165 Ind. 584
• Parties: Rosenthal v. Rambo et al
• Court: Indiana Supreme Court

76 N.E. 404

165 Ind. 584

Rosenthal v. Rambo et al

No. 20,616

Supreme Court of Indiana

December 7, 1905

From Superior Court of Marion County (56,415); Vincent G Clifford, Special Judge.

Action by Moses Rosenthal against George A. Rambo and others. From a judgment against plaintiff and a decree for defendants on their cross-complaint, plaintiff appeals. Transferred from Appellate Court under § 1337u Burns 1901, Acts 1901, p 590.

Affirmed.

William S. Christian and Gavin & Davis, for appellant.

Roberts & Vestal, for appellees.

OPINION

Hadley, J.

The material facts involved in this action, as disclosed by the special findings, are as follows: On June 18, 1896, Crouch & Son were engaged at LaFayette, Indiana, in the business of importing and selling stallions for breeding purposes. Appellees, residing in and about Noblesville, formed a partnership, under the name of the Noblesville German Coach Horse Company, for the purpose of buying and breeding a stallion. Crouch & Son, learning of their purpose shipped to Noblesville the imported coach horse Ferdinand, and there kept the horse at a livery barn for one week, when they sold him to the appellees. The sale was consummated on June 18, 1896, at the price of $ 2,000, payable in instalments, which were evidenced by three promissory notes, the first one maturing November, 1897, being the one in suit. As a part of the purchase agreement, Crouch & Son executed to appellees a written guaranty as follows: "LaFayette Stock Farm. Crouch & Son, Proprietors. Guaranty. We have this 18th day of June, 1896, sold the imported German coach horse Ferdinand, German No. 225, American No. 885. We guarantee said horse to be a satisfactory breeder to said Noblesville German Coach Horse Company, of Noblesville, Indiana, county of Hamilton, providing he has proper care and exercise. If said stallion should fail to be a satisfactory breeder to said company, we agree to take said stallion back, and said company are to take another stallion of equal value in his place. If said stallion should fail to be a satisfactory breeder to said company, said stallion must be returned to us here, at LaFayette, Indiana, April 1, 1897, in as sound and healthy condition as he now is. J. Crouch & Son.

"P. S. If said horse should fail to be a satisfactory breeder to said company, and we could not agree upon said horse, we agree to let them pick a man, and, if they could not agree, let them select a third man, and let them select said horse for said company. J. Crouch & Son."

Appellees took immediate possession of the horse, kept him in the same barn where he had been placed by Crouch & Son, and continued him in the care of the same veterinary who had been employed by Crouch & Son to attend and treat him after his arrival at Noblesville, and before his delivery to appellees. During the season of 1896 the horse was not a satisfactory breeder to appellees, and they so notified Crouch & Son before April 1, 1897. Thereupon Crouch & Son wrote appellees, proposing to extend the guaranty another year, as follows: "If you think he [said horse meaning] has not been as you like him, and would like to try him this season, we will extend our guaranty another year, or, if you think he won't we will exchange with you. Hope this will be satisfactory. We remain yours, J. Crouch & Son."

The offer was accepted by appellees, though they were at the time ready and able to return the horse. Under the extension agreement, appellees kept the horse through the season of 1897, during which time he was worthless and unsatisfactory to appellees as a breeder. After notifying Crouch & Son that the horse was still unsatisfactory, on November 24, 1897, appellees shipped the horse to LaFayette, and placed him in Crouch's barn without the latter's knowledge, where he remained until the commencement of this suit, without any agreement or understanding between Crouch & Son and appellees affecting the title and status of the horse or rights of the parties. When appellees returned the horse to LaFayette they demanded of Crouch & Son another stallion in his place, under the terms of the guaranty, which demand they failed and refused to comply with, giving as their sole reason that they could not accept a return of the horse in the condition he was in.

The horse was imported from Germany by Crouch & Son a short time before his sale to appellees, and at some time before the sale had contracted a disease known as gangrenous dermatitis, which is very rare among native-bred horses, but not uncommon among horses bred in Germany. The disease manifested itself in sores, mostly on the legs and about the root of the tail. At the time of the purchase there was on the horse some small sores, but they were not recognized as indicating any disease. In other respects the horse was then sound and in good condition, except that he was a little thick-winded. Before the purchase Crouch & Son had the sores on the horse treated by a competent veterinary surgeon, and after the purchase appellees had the same surgeon continue his treatment as long as they kept the horse in their possession. The sores increased in number and size as the hot weather of 1896 advanced. In the fall and winter of 1896 and 1897 they healed, and showed very little in the early spring of 1897, but as warm weather came on they broke out again with more virulence than in 1896. Three of his colts begotten in 1896 were affected with the same disease.

The horse, while in the possession of appellees, received proper care and feeding for an American-bred stallion, but his food was not proper for a German-bred horse, and Crouch & Son, though informed of the condition of the horse, and requested to come and see him, had not at any time before the horse was returned to them at LaFayette in November, 1897, informed appellees that a German-bred horse required any different care and feeding from one American bred. In November, 1897, when the horse was lodged in Crouch & Son's barn in LaFayette, the diseases, gangrenous dermatitis and thick wind, which at the time of the purchase were in their incipiency, had fully developed, affecting his general condition, causing him to be poor in flesh and unsightly, and he had also become more thick-winded, and had the heaves. In these respects, only, the horse was not in as sound and healthy a condition as when delivered to appellees, and was and had been worthless as a breeder from the time he was delivered to appellees.

About two months after their execution, the notes were for value assigned by indorsement in writing to appellant, who is still the owner, and all are now in the hands of an attorney for collection, and, unless canceled, suit will be brought thereon by appellant, who claims the full amount thereof. Appellees had no notice or knowledge of the sale and transfer of said notes to appellant, or other person, at the time of the extension of the guaranty contract, nor did they receive any such notice or knowledge until one week before they returned the horse to Crouch & Son at LaFayette.

The complaint, in a single paragraph, is in the ordinary form of action on an assigned promissory note. Crouch & Son, the assignors, are not made parties. There are four answers and four paragraphs of cross-complaint, the several paragraphs of cross-complaint corresponding in substance to like-numbered paragraphs of the answers. The first paragraph of answer was want of notice of the assignment, worthlessness of the horse, and hence no consideration. The second was want of notice and breach of guaranty. The third included all in the second, and, in addition, stated that the horse was diseased, which condition was, at the time of the purchase, known to appellant's assignor, and was not known to appellees, whereby the latter were damaged to the amount of all the notes. The fourth covered the grounds of the two preceding, and counted on failure of consideration. The cross-complaint sought a cancelation of the notes. Demurrers having been overruled to the several paragraphs of answer and cross-complaint, the case was put at issue by replies to the answer and answers to the cross-complaint. There was a trial by the court, and a special finding and decree in favor of appellees.

In a former appeal to the Appellate Court (Rosenthal v. Rambo [1902], 28 Ind.App. 265, 62 N.E. 637), the judgment was reversed for insufficiency of each affirmative paragraph of the answer and also of the cross-complaint. Upon the return of the case to the lower court, each paragraph of said answer and cross-complaint was amended to conform to the opinion of the Appellate Court, and their sufficiency will therefore be considered as settled.

There is also some further controversy over the subsequent pleading, but as all the questions presented arise under the exceptions to the conclusions of law, we will give the pleadings no further notice. The conclusions of law were as follows: "(1) The note sued on in the complaint and notes set out in the cross-complaint and sought to be canceled are not negotiable by the law merchant, and are subject to any defenses the makers had against the payee. (2) The horse having proved unsatisfactory as a breeder, the defendants had a right at any time during the year for which the guaranty was extended to return him, and demand another stallion. (3) Upon the return of the horse by defendants, and the refusal by Crouch & Son to give to them another stallion, there was a total failure of consideration for the notes. (4) The remedy at law does not afford defendants adequate remedy, and they are entitled, as against the plaintiff, to the equitable relief prayed for in the cross-complaint." To each of which conclusions of law the plaintiff excepted.

The notes, though...