Tharp v. Allis-Chalmers Mfg. Co.

• Decision Date: 16 July 1938
• Docket Number: No. 4344.,4344.
• Citation: 42 N.M. 443,81 P.2d 703
• Parties: THARPv.ALLIS-CHALMERS MFG. CO.
• Court: New Mexico Supreme Court

42 N.M. 443

81 P.2d 703

THARP

v.ALLIS-CHALMERS MFG. CO.

No. 4344.

Supreme Court of New Mexico.

July 16, 1938.

Appeal from District Court, Curry County; Harry L. Patton, Judge.

Action by N. L. Tharp against Allis-Chalmers Manufacturing Company to recover for breach of an alleged implied warranty of certain machinery manufactured by defendant. Judgment for plaintiff for $2,415.85, and defendant appeals.

Reversed and remanded with instructions to dismiss.

Where contract of sale of farm machinery stated that the express warranty to repair was the only warranty either express, implied, or statutory, warranty of fitness for the purpose could not be implied, since parties can contract against implied warranties.

Hervey, Dow, Hill & Hinkle and Ross L. Malone, Jr., all of Roswell, for appellant.

Otto Smith and Mayes & Rowley, all of Clovis, for appellee.

HUDSPETH, Chief Justice.

This is an appeal from a judgment entered on an implied warranty. Twelve farmers bought listers manufactured by appellant for cash at $190 per machine prior to Mch. 4, 1935. The first offer to return the listers was made during the trial Feb. 10, 1937. They spent $135.85 for repairs and labor and assigned their claims to plaintiff in whose favor judgment was entered for $2,415.85 against appellant. Appellant introduced no testimony, but entered into stipulations under which the contract between appellant and the local dealer in farm machinery and the written orders for the listers were admitted in evidence. The court found that appellant sold and delivered to the farmers a certain type of lister; that the listers were worthless; that the local seller of the machinery, referred to in the contract as “dealer”, was the agent of defendant, appellant, at the time of the sale of the machines, and that each of the purchasers of the listers signed an order form which contained the following:

“Warranty. The said machinery is sold by the Dealer with the following warranty, and no other:

“Allis-Chalmers Manufacturing Company warrants that it will repair F. O. B. its factory, or furnish without charge F. O. B. its factory, a similar part to replace any material in its machinery which within one year after the date of sale by the Dealer is proved to the satisfaction of the Company to have been defective at the time it was sold, provided that all parts claimed defective shall be returned, properly identified, to the Company's Branch house having jurisdiction over the Dealer's territory, charges prepaid.

“This warranty to repair applies only to new and unused machinery, which, after shipment from the factory of the Company, has not been altered, changed, repaired or treated in any manner whatsoever, and does not apply to trade accessories, attachments, tools, or implements not manufactured by the Company, though sold or operated with the machinery.

“This warranty to repair is the only warranty either express, implied or statutory, upon which the undersigned purchases said machinery; the Company's liability in connection with this transaction is expressly limited to the repair or replacement of defective parts, all other damages and warranties, statutory or otherwise, being expressly waived by the undersigned.

“No representative of the Company has authority to change this warranty or this contract in any manner whatsoever, and no attempt to repair or promise to repair or improve the machinery covered by this contract by any representative of the Company shall waive any consideration of the contract or change or extend this warranty in any manner whatsoever.”

The court's conclusions of law contain the following:

“This case, in my opinion, can be and is decided more upon a question of fact than of law. I have heretofore found that Plaintiff was the agent of Defendant at the time of the sale of these various listers, although it is contended by Defendant that Plaintiff was a dealer, and that these sales were made outright to him as such dealer. I refer to Paragraph Sixth of the Dealer's contract which refers to “resales” made by him. Obviously this term applies to sales made by him to the purchasers, *** Again, the only warranty appearing in any of these contracts is the limited warranty in the retail purchase order executed in case of each sale, and that warranty is by the Allis-Chalmers Company. From this it follows that these purchasers, if dealing with the agent of the Defendant Company, were dealing with the Company, and that Defendant was bound by the implied warranty that the listers sold were suitable to perform the ordinary work for which they were constructed and sold, and that they were free from defects in material, design and workmanship under normal use, and that they would do the work for which they were purchased. *** It is argued in the excellent brief of attorney for Defendant that the implied warranty appearing in the sales contract limits the warranties made, and is exclusive of all other warranties. This question has been decided by our Supreme Court, in the two cases of J. B. Colt Company v. Gavin, 33 N.M. 169, 262 P. 529, and J. B. Colt Company v. Chavez et al., 34 N.M. 409, 282 P. 381, in which it was held, in substance, that implied warranty of fitness for intended use is not excluded by express warranty as to materials and workmanship. In my opinion this would apply to the present case, where limited or express warranty appeared in the sales contract, and that by implication, it would not exclude the implied warranty that the machines were free from defects in material, design and workmanship and for general fitness. ***”

The assignments of error follow:

“1. The court erred in finding that the plaintiff was the agent of the defendant in making the sales of the defective listers to the various assignors of the plaintiff. II. The court erred in finding that there was any implied warranty of any character between defendant and plaintiff's assignors in the sale of the listers described, because: First, for the reason that there was no privity of contract between them and without privity of contract no such warranty can exist; Second, for the reason that the written contract of sale or so called order blank executed by the purchaser and dealer in each and every sale, expressly negatived the existence of an implied warranty and such warranties will not be implied by law contrary to the expressed intention of the parties.”

[1] Assuming without deciding that the so called dealer was the agent of appellant the question for decision is whether or not the contract against implied warranties, quoted above, is valid.

The trial court referred to the J. B. Colt Cases, supra. We held in J. B. Colt Co. v. Gavin, supra, that (262 P. page 530):

“It is not doubted that if a machine is sold for a particular use, there is an implied warranty of suitability. Nor do we doubt that an express warranty as to suitability will exclude any implied warranty thereof. *** The question therefore is whether an express warranty as to one subject excludes the ordinarily implied warranties as to others. While many cases can be found in which it is broadly said that the presence of express warranties excludes all warranties by implication, and some cases have actually applied such rule, we think that the better reasoning and the great weight of authority support the proposition that the ordinarily implied warranties are not excluded by the mere presence of express warranties relating to different subject-matter, and not inconsistent therewith. See 2 Mechem on Sales, § 1260; 1 Williston on Sales, § 239; 23 R.C.L. ‘Sales,’ §§ 227, 228; 35 Cyc. 392, and the following case notes: 15 L.R.A.,N.S., 862; 33 L.R.A.,N.S., 501; 102 Am.St.Rep. 609.

“The English Sale of Goods Act provides: ‘An express warranty or condition does not negative a warranty or condition implied by this act unless inconsistent therewith.’ Benjamin on Sale, (6th Ed.) 746.

“The Uniform Sales Act, § 15, subsec. 6, is in exactly the same language. While these Codes are not in effect in New Mexico, they represent a consensus of able opinion as to what the law ought to be. So this contention is overruled.”

The question for decision here is whether or not one can contract against implied warranties and not whether express warranties exclude implied warranties. The language of the contract signed by the purchasers is clear, and the following clause is capitalized: “This warranty to repair is the only warranty either express, implied or statutory, upon which the undersigned purchases said machinery;”. The case is similar to that of Minneapolis Threshing Mach. Co. v. Hocking, 54 N. D. 559, 209 N.W. 996, where that court said (page 999):

“Neither do we think that there is any merit to the contention that the contract as contained in the order is void and unenforceable because unfair, unreasonable, and contrary to public policy. There is nothing inherently vicious about the terms set forth in the contract. The plaintiff was selling a threshing machine. The defendant was buying one. Certainly a proper and legitimate business transaction. The parties were dealing at arm's length. Both had the right to contract as they saw fit with reference to such subject-matter, and, having done so, neither can, because subsequently he thinks the terms of his contract are unduly harsh, ask relief on that ground alone. Neither can we believe that there is anything in the provisions complained of inherently tending to be injurious to the public, or subversive of the public good or contrary to good morals. *** The contract, in the instant case, expressly excludes and negatives all statutory or implied warranties excepting as to title, and further expressly provides that in no event shall the company (the plaintiff) be subject to any other or further liability, except such as may be expressly given and provided for in the contract itself, and only on the conditions stipulated in the contract. The cases...