Sawyer v. Pioneer Leasing Corp., No. 5-4501

CourtSupreme Court of Arkansas
Writing for the CourtHARRIS; FOGLEMAN; BYRD
Citation244 Ark. 943,5 U.C.C.Rep. 453,428 S.W.2d 46
Docket NumberNo. 5-4501
Decision Date27 May 1968
Parties, 5 UCC Rep.Serv. 453, 5 UCC Rep.Serv. 841 Guy Dwight SAWYER d/b/a Sawyer's All Star Foods, Appellant, v. PIONEER LEASING CORPORATION, Appellee.

Page 46

428 S.W.2d 46
244 Ark. 943, 5 UCC Rep.Serv. 453, 5
UCC Rep.Serv. 841
Guy Dwight SAWYER d/b/a Sawyer's All Star Foods, Appellant,
No. 5-4501.
Supreme Court of Arkansas.
May 27, 1968.
As Amended on Denial of Rehearing Sept. 3, 1968.

[244 Ark. 944]

Page 47

McMillen, Teague, Bramhall & Davis, Little Rock, for appellant.

Rose, Meed, House, Barron, Nash & Williamson, Little Rock for appellee.

HARRIS, Chief Justice.

This case involves an ice machine. Appellant, Guy Dwight Sawyer, is an independent grocer, operating in Little Rock. Appellee, Pioneer Leasing Corporation, is a Delaware corporation, which instituted suit against Sawyer for the sum of 2,039.40, pursuant to a written instrument termed 'Master Lease Contract.' The instrument recites that the lessor is Pioneer Leasing Corporation and the lessee is Guy Dwight Sawyer d/b/a Sawyer's All Star Foods. The parties agreed that lessee was leasing a Linco Ice Station, and provided:

'This schedule is for a period of 60 months, at $45.32 per month beginning July 23, 1963. First and last 4 payments payable at time of signing this Schedule in the amount of $226.60.'

Section 5 of the agreement recites:

"No warranties or representations regarding the items herein leased or their

Page 48

condition, quality or suitability, or their freedom from latent defects, have been made or shall be deemed to be made by the Lessor, and Lessee has selected the items leased and the same have [244 Ark. 945] been delivered to Lessee at Lessee's sole risk and discretion."

Section 8 states:

'At the expiration of the term of this lease for any item(s) leased hereunder, Lessee shall immediately redeliver such item(s) at Lessor's place of business or such other reasonable place as Lessor may designate within the State where the item(s) was leased, in like condition as it was received, less normal wear, tear and depreciation; properly crated with freight prepaid.'

Section 9, a rather lengthy section provides, inter alia, that in case of default in payment for a period of ten days, lessor is authorized to take immediate possession of the leased property, and lessee shall remain liable for the payment of the total rental, all such rental being immediately due and payable. Both pages of the instrument provide, 'This lease cannot be cancelled.'

The contract commenced on July 23, 1963, and appellant made his down payment, and several monthly payments, the last payment being made in May, 1964. Upon default, the suit was filed, and Sawyer, in his answer, asserted that the performance of the machine had been misrepresented at the time he entered into the contract, and that it was not suitable for the purpose for which he desired to use it, though represented to be suitable, and that there had been an implied warranty of fitness upon which he relied; that such warranty had been breached, since the machine had ceased to operate, and was incapable of being repaired. On trial, appellee moved for a directed verdict at the conclusion of the evidence, which motion was granted, the jury returning its verdict for appellee in the amount of $2,039.40. From the judgment so entered, appellant brings this appeal.

Sawyer testified that he had a number of customers who desired that he acquire an ice maker, in order that [244 Ark. 946] they might obtain packaged ice. He made inquiry, and subsequently, a man named Don Barnett from Benton (evidently learning of Sawyer's inquiries) contacted him about a machine. Barnett showed appellant pictures of a Linco ice making machine, and advised that the machine would work either inside or outside of the building. They decided the best location would be the front porch. Sawyer further stated that Barnett told him that the machine would manufacture 400 pounds of ice per day, and appellant, in agreeing to take same, stated that he understood that he was purchasing the property. Subsequently, Barnett brought back the lease agreement, heretofore referred to, and when Sawyer inquired why he was being asked to sign a lease agreement, instead of a purchase agreement, was told, according to the witness, 'Well, it was just like buying a car, after you pay so many payments, it is your box.' Sawyer testified that he did not read the provisions of the contract in detail, and that he had only a sixth grade education.

Still further, according to the witness, the machine, after being installed, worked satisfactorily for about six months, in fact, until 'the first cold spell came.' It then ceased to function. Appellant called Barnett to get the name of the mechanic for the company, and was advised that the company did not have one, and that Sawyer should call any refrigeration company. Ralph Henderson, a refrigeration man, was contacted, and the witness related that Henderson worked for over a month on the machine, and was paid 'around $100.00 for his work,' but Henderson was unable to get the machine to produce more than fifty pounds of ice per day. Nothing further was done until spring, when a man named Byers was contacted; Byers, too, was unable to get the machine in any better working order, and only charged around $100.00 for his work, instead of the original intended charge of $150.00. After the unsuccessful efforts of Byers, appellant testified:

'Well, I called Mr. McCoy * * * well, I first call Mr. Barnett and in

Page 49

turn called Mr. McCoy, then I called Mr. [244 Ark. 947] Carter from Memphis and I called a fellow from Warren, then I called the ice making company itself, down in Texas * * * tried to get all of them to do anything about the box, tried to get it to operate. * * * None of them would do anything.'

Thereafter, Sawyer quit making payments, and the suit followed.

C. H. Turner of Memphis, Treasurer of Pioneer Leasing Corporation, and in charge of all the records of the company, testified that Pioneer Leasing Corporation is in the equipment leasing business. He stated that his company buys equipment after it has been selected by the lessee, and he has signed lease agreements; that all items are delivered to a lessee at the latter's sole risk, and that the company only purchased the ice making machine because Sawyer had selected it. Turner testified that he had no idea what Sawyer was told at the time he signed the lease; that Barnett had never been an employee of appellee, but rather, was a sales agent for the supplier of the equipment; that the machine had been purchased from the Tri-State Ice Machine Company, and Sawyer had paid a total of $679.80. The company official said that the expected life of the machine was eight or ten years, and at the end of the five-year lease period, Pioneer 'more than likely would have offered to sell it to Mr. Sawyer' for a price that would have to be negotiated. He stated that appellee had had no leases on ice machines that had expired.

John P. McCoy, who had been employed by Pioneer in 1964, 1965, and 1966, stated that prior to the transaction, he had never met Sawyer or Barnett; that he did not write up the agreement and did not know who did write it. The witness had directed a letter to Turner, relating that Sawyer was very unhappy with the machine, had spent money endeavoring to have it repaired, and had expressed the thought that Pioneer should 'put the pressure on Tri-State to get the machine working. [244 Ark. 948] He claims he is not going to make any more lease payments until the machine is fixed. I told him that maintenance was not our problem.' McCoy had no idea what Barnett might have told Sawyer about his relationship with the company. These were all of the witnesses who testified.

Of course, the only question before this court is whether appellant offered sufficient evidence to warrant the submission of the case to the jury. There are no express warranties, and the appellant relies upon alleged misrepresentation by Barnett, and a breach of implied warranty. The testimony of Sawyer relative to Barnett's statements has heretofore been set out. Appellee's first answer to this argument is that Barnett was not an agent of Pioneer. The testimony of Turner (that Barnett was never an employee of Pioneer) is pointed out, as well as the fact that Sawyer never did testify that Barnett said he was an agent or employee of Pioneer. Nonetheless, it is undisputed that Barnett was the man who presented the contract to Sawyer, and obtained his signature thereto. In fact, it appears that all proceedings in connection with the execution of the lease by appellant were handled by Barnett--who did not testify. Certainly, the obtaining of the lease was called to the attention of appellee company, for the instrument was subsequently executed by the president of the company, Barclay McFadden--evidence that the contract was thus ratified. More than that, the company accepted payments from Sawyer of over $600.00. In Mark v. Maberry, 222 Ark. 357, 260 S.W.2d 455, we held that when one accepts the fruit of another's agency in the sale of property, he cannot subsequently be heard to disclaim such agency. That case involved real estate, but the principle applies likewise to the sale of personal property. We think the testimony on the question of agency was certainly sufficient to make a jury question.

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Appellee calls attention to the fact that the 'spec sheet' describing the features of the Linco machine, and [244 Ark. 949] prepared by the C. M. Lingle Company, maker of the machine, is stamped at the bottom as showing the distributor of this machine to be Arkansas Ice Making and Vending Equipment Company of Benton. However, we consider this only a circumstance to be presented for the jury's consideration in reaching its verdict.

This brings us to the question of the implied warranty. Sawyer stated that Barnett told him that the machine would make four hundred pounds of ice per day, and it would operate either on the inside or outside of a building. The literature which was...

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