O'Shea v. Hatch

• Decision Date: 19 January 1982
• Docket Number: No. 5274,5274
• Citation: 640 P.2d 515,1982 NMCA 13,97 N.M. 409
• Parties: , 33 UCC Rep.Serv. 561 John J. C. O'SHEA, Rita M. O'Shea and Kelley Ann O'Shea, Plaintiffs-Appellees, v. Pete HATCH & James E. Hatch, D/B/A Hilltop Ranch, Defendants-Appellants.
• Court: Court of Appeals of New Mexico

Page 515

640 P.2d 515

97 N.M. 409, 33 UCC Rep.Serv. 561

John J. C. O'SHEA, Rita M. O'Shea and Kelley Ann O'Shea, Plaintiffs-Appellees, v. Pete HATCH & James E. Hatch, D/B/A Hilltop Ranch,

Defendants-Appellants.

No. 5274.

Court of Appeals of New Mexico.

Jan. 19, 1982.

Wm. F. Brainerd, Roswell, for defendants-appellants

John J. C. O'Shea, O'Shea & Hall, P. C., Lubbock, Tex., for plaintiffs-appellees.

OPINION

DONNELLY, Judge.

Defendants appeal from a judgment awarding damages against them in the sum of $4,196.10. The trial court determined that defendants, in their sale of a quarter horse to plaintiffs, had breached an implied warranty of fitness under the Uniform Commercial Code (U.C.C.), that the animal was suitable as a show horse and of a temperament and disposition suitable for riding by children.

In mid-January 1976, plaintiffs purchased the horse as a colt from defendants for $3,250.00. At the time of the sale, plaintiffs, John and Rita O'Shea, informed defendants that they wanted a horse that could be used as a show horse, which could be ridden by their teen-age daughter and which would be suitable and safe around children. Defendants represented the horse to be a registered gelding and of gentle disposition, suitable for use by children. After plaintiffs took delivery of the horse at defendants' ranch, they sent the horse to a trainer to have the animal "green-broken" for saddle riding. When the horse was sufficiently saddle-broken, plaintiffs took the horse to their home at Lubbock, Texas, where they kept other horses. Shortly after the arrival of the horse at their stables, plaintiffs observed that the horse exhibited stallion-like characteristics, fought with stallions, and was aggressive and uncontrollable.

Plaintiffs had the horse inspected by a veterinarian who confirmed that the horse had not been properly gelded and was a ridgeling. In April, 1976, plaintiffs notified defendants of the unsuitability of the animal for the purposes for which it was purchased and demanded return of their purchase money and expenses incurred in training the animal. Defendants refused to rescind the sale, but offered to trade another horse for the animal. Plaintiffs, however, inspected the other horses offered but found them unsatisfactory. Defendants offered to pay the veterinary costs to have an undescended testicle surgically removed from the horse, but again refused to rescind the sales agreement.

In June, 1976, plaintiffs took the horse to a veterinarian who operated on him and confirmed that the horse was a ridgeling. According to testimony presented by plaintiffs, after the surgery the horse was a gelding, although it exhibited a lack of coordination and disposition for use as a show horse and as a riding horse for children.

Plaintiffs filed suit in January, 1980, against defendants, alleging three alternative causes of action: (1) breach of implied warranty; (2) breach of express warranties; and (3) fraudulent misrepresentation and concealment of the sexual condition and character of the horse. From a judgment awarding plaintiffs damages, defendants appeal. We affirm.

On appeal, defendants allege as error the trial court's refusal to adopt a number of requested findings of fact and conclusions of law submitted by them. Specifically, defendants seek reversal based upon the court's refusals (1) to adopt defendants' requested conclusion of law no. 3; (2) conclusion of law no. 6; and (3) defendants requested findings of fact no. 11, conclusions of law nos. 4 and 5; and on the ground that the court erred in adopting its finding of fact nos. 19 and 20, and conclusion of law no. 3.

Defendants' requested finding of fact no. 11, refused by the court, provided:

11. Since the operation in July 1976, Plaintiffs have continued to use the horse, entering him in various shows, in various classes, on numerous occasions.

The applicable requested conclusions of law of defendants, which were rejected by the court, were:

3. Plaintiffs' actions in having the horse repaired surgically bind them to their acceptance and bar any attempt to revoke their prior acceptance. Such action amounts to the exercise of dominion or ownership of the horse.

4. Continued use of the horse by plaintiffs for five (5) years bars any right by plaintiffs to revoke their acceptance of the horse.

5. Having the horse repaired or altered surgically and using him for five (5) years thereafter is inconsistent with any claim that plaintiffs intended to revoke their acceptance of the horse in the Spring of 1976. 6. After the operation in 1976, the horse was, in fact, a gelding and met the specifications agreed upon by the parties at the time of sale. Thereupon plaintiffs no longer had any grounds upon which to claim revocation of their prior acceptance of the horse.

The court's adopted findings nos. 19 and 20, were as follows:

19. The conduct of the Plaintiff John J. C. O'Shea phoning Mr. Hatch on two separate occasions amounted to effective revocation of the sale and demand for the return of the funds and recoverable damages.

20. The Plaintiffs revocation of acceptance was timely within the terms of the Uniform Commercial Code.

The court's conclusion of law no. 3, challenged by defendants, stated:

3. Plaintiff effectively revoked acceptance as authorized by the Uniform Commercial Code.

1) Refusal to Adopt Conclusions of Law:

Defendants' first point on appeal alleges as error the refusal of the trial court to adopt defendants' requested conclusion of law no. 3, supra. Defendants' second asserted claim of error argues that the trial court erred in not adopting defendants' requested conclusion of law no. 6, supra. We discuss defendants' first and second points, jointly.

Defendants assert that plaintiffs' action in having the horse operated upon and engaging in the continued use of the horse and exhibition of it at several horse shows after ascertaining the horse was not a gelding, and after making demand for revocation of the sale, amounted to acts of dominion and ownership, which bar revocation of their prior acceptance of the animal under § 55-2-606, N.M.S.A.1978. The U.C.C. is determinative of the legal issues involved in this case. The term "goods" as used in the U.C.C., § 55-2-105(1), N.M.S.A.1978, includes livestock since they are frequently intended for commercial sale. See Fear Ranches, Inc. v. Berry, 470 F.2d 905 (10th Cir. 1972); Grandi v. LeSage, 74 N.M. 799, 399 P.2d 285 (1965). Section 55-2-606 provides in applicable part:

(1) Acceptance of goods occurs when the buyer:

(a) after a reasonable opportunity to inspect the goods signifies to the seller that the goods are conforming or that he will take or retain them in spite of their nonconformity; or

(b) fails to make an effective rejection * * *; or

(c) does any act inconsistent with the seller's ownership; but if such act is wrongful as against the seller it is an acceptance only if ratified by him. * * *

A buyer of goods who, after having a reasonable opportunity to inspect them and with full knowledge of any defect in them, makes further payments, performs acts of dominion, or other acts inconsistent with any intention to rescind, may be deemed to have accepted the goods or ratified the sale. Southern Union Gas Co. v. Taylor, 82 N.M. 670, 486 P.2d 606 (1971); Woods v. Van Wallis Trailer Sales Co., 77 N.M. 121, 419 P.2d 964 (1966). Similarly, a material alteration of goods by a buyer will void a prior revocation of acceptance. Butcher v. Garret-Enumclaw Co., 20 Wash.App. 361, 581 P.2d 1352 (1978); see also Can-Key Industries, Inc. v. Industrial Leasing Corp., 286 Or. 173, 593 P.2d 1125 (1979).

Defendant, James E. Hatch, testified that, after gelding the horse and prior to the sale of the animal to plaintiffs, he took the horse back to a veterinarian to have him checked because he noticed the colt was aggressive with other colts. He also testified that, at the time of the sale of the horse, he represented to plaintiffs that the horse was a gelding, and that, after the plaintiffs demanded that the sale be rescinded and a veterinarian had informed plaintiffs that the horse was possibly a ridgeling, defendant told plaintiffs,

"Well, if he is sure of it, have him operated on and I will pay for it."

Defendants, having suggested and consented to the operation upon the horse to insure that the animal was not a ridgeling cannot under the facts of this case use the operation as a bar to plaintiffs rescission of the sale.

Defendants' contend that the trial court erred in refusing to adopt their tendered conclusion of law no. 3, to the effect that plaintiff's actions in having the horse operated upon barred any attempt to revoke their prior acceptance and amounted to an exercise of dominion or ownership of the horse. The contention is without merit.

A "conclusion of law" is a decision of the court stemming from the ultimate factual issues which determine the result of the dispute in a non-jury trial. C.I.T. Corp. v. Elliott, 66 Idaho 384, 159 P.2d 891 (1945); State ex. rel. Oregon State Board of Higher Education v. Cummings, 205 Or. 500, 288 P.2d 1036 (1955). A conclusion of law must find support in the findings of fact. Watson Land Co. v. Lucero, 85 N.M. 776, 517 P.2d 1302 (1974); House of Carpets, Inc. v. Mortgage Investment Co., 85 N.M. 560, 514 P.2d 611 (1973). Ultimate facts are the facts which are necessary to determine the issues in the case, as distinguished from the evidentiary facts supporting them. Galvan v. Miller, 79 N.M. 540, 445 P.2d 961 (1968).

The trial court's conclusion of law no. 3, determining that plaintiffs effectively revoked acceptance of the horse under the provisions of the U.C.C. was supported by the court's findings of fact nos. 19 and 20, supra. Defendants requested conclusion of law no. 6, supra, was inconsistent with the court's finding of fact no. 17:

17. The horse recovered from its surgery and exhibited a lack of coordination and...