Tiger Motor Co. v. McMurtry
| Decision Date | 05 June 1969 |
| Docket Number | 5 Div. 877 |
| Citation | 224 So.2d 638,284 Ala. 283 |
| Parties | , 6 UCC Rep.Serv. 608 TIGER MOTOR COMPANY, Inc., a Corporation v. Thomas E. McMURTRY. |
| Court | Alabama Supreme Court |
Brown & McMillan, Opelika and Auburn, for appellant.
Walker, Hill & Gullage, Opelika, for appellee.
Rushton, Stakely, Johnston & Garrett, Montgomery, amicus curiae.
Thomas E. McMurtry (appellee-complainant) filed a bill of complaint in the circuit court of Lee County, in equity, against Tiger Motor Company (appellant-respondent), and Ford Motor Credit Company (respondent) seeking to rescind the sale of a 1967 Ford Station Wagon which McMurtry purchased from Tiger Motor Company April 5, 1967, for breach of express or implied warranty made by Tiger Motor Company.
The bill alleges that as a portion of the agreed purchase price McMurtry executed and delivered to Tiger Motor Company his promissory note for $3,260.16, dated April 5, 1967, payable in 36 monthly installments of $90.56 each. To secure the note, McMurtry executed a chattel mortgage on the station wagon payable to Tiger Motor Company. Both note and mortgage were assigned by Tiger Motor Company to Ford Motor Credit Company. The bill alleges that in order for complainant McMurtry to have full and complete relief, i.e., cancellation of the note and mortgage, and refund of the purchase price, it is necessary to make the Ford Motor Credit Company a party to the suit.
In its answer, Tiger Motor Company admitted that the note and mortgage were transferred to Ford Motor Credit Company who, in its answer, admitted the assignment to it. Tiger Motor Company made its answer a cross-bill asking the court to decree that it is not liable to McMurtry for any breach of warranty, express or implied; and, that if the court should determine that it has been guilty of breach of warranty, the court will set off against McMurtry's claim for refund, the sum of $4,830.16, for use of the station wagon for 344 days.
In its final decree the court below found a breach of warranty, express or implied, and awarded McMurtry a money judgment in the amount of $2,923.95 as reimbursement for that portion of the purchase price which he had paid as of the time of the trial in the court below; decreed that the station wagon, upon the rescission of its purchase and sale, is the property of Tiger Motor Company, subject to the chattel mortgage or contract which was assigned to the Ford Motor Credit Company; ordered Tiger Motor Company to remove the station wagon from the premises of the complainant; ordered Tiger Motor Company to pay off the note and mortgage and satisfy the obligation in full; denied respondent Tiger Motor Company any recovery on its cross-bill; taxed all costs against Tiger Motor Company.
It is from this decree that Tiger Motor Company appeals. There are 22 assignments of error. Only 17 assignments are argued. We will treat them in the order in which they appear in brief.
Assignments of error 1, 2 and 3 are to the effect that the trial court erred in overruling demurrers to the amended bill of complaint which raise the point that McMurtry had a full, complete and adequate remedy at law.
Tiger Motor Company cites us several cases which suggest that a purchaser of a chattel is not entitled to maintain an action in equity to rescind the contract for breach of warranty because he has an adequate remedy at law--he may sue the seller to rescind or for damages, or he may wait for the seller to sue him for the purchase price in which case he may defend on the ground of breach of warranty. Thompson v. Harvey, 86 Ala. 519, 5 So. 825; Egan Company v. Johnson, 82 Ala. 233, 2 So. 302; Frith v. Hollan, 133 Ala. 583, 32 So. 494, 91 Am.St.Rep. 54. A reading of those cases discloses that in none of their factual situations was there a promissory note and mortgage transferred to a third party, not a party to the original contract of purchase and sale. We are of the opinion that the cases cited are inapposite.
We have said that equity alone may enforce recission of contracts and surrender and cancellation of instruments. Nicolopoolos v. Donovan, 221 Ala. 16, 127 So. 543. Our decisions do hold that equity jurisdiction cannot be invoked to cancel or rescind a contract when complainant's remedy at law, either by way of action or defense, is plain, adequate and complete. National Life & Accident Ins. Co. v. Propst, 219 Ala. 437, 122 So. 656. However, we are equally committed to the proposition that if the remedy at law is difficult or doubtful or inadequate, it is sufficient to give equity jurisdiction. Teague v. Russell, 2 Stew. 420; Prestwood v. Bagley, 227 Ala. 316, 149 So. 817.
In the instant case if McMurtry had proceeded with an action at law, such suit would not have afforded him complete relief in view of the fact that Ford Motor Credit Company was ostensibly a holder in due course 1 of the note and mortgage, which contained the following language:
'Buyer (McMurtry) understands and agrees that Buyer will settle with the Original Seller all claims, setoffs, counterclaims, and other defenses there may be against the Original Seller and that Buyer shall not set up any such claim, set-off, counterclaim or other defense against any such subsequent holder.'
In an action at law he could neither have joined Ford Motor Credit Company nor sought relief to cancel the note and mortgage nor sought damages recoverable here.
Likewise, it would appear McMurtry could not risk stopping payment on the station wagon, and wait to be sued by Ford Motor Credit Company because under the language of the contract he would have no defense against it for breach of warranty.
Thus, although we conclude the trial court correctly overruled the demurrers in question, we cannot agree that it gave the correct reasons for its decision. In a very well written and thorough decree overruling demurrers, the trial court relied on a number of cases which hold that equity has jurisdiction to rescind transactions induced by fraud. In the instant case there were neither allegations nor evidence to establish fraud. Nevertheless, a correct decision will not be disturbed because the court gave a wrong or insufficient reason therefor. Gulf American Fire & Casualty Ins. Co. v. Gowan, 283 Ala. 480, 218 So.2d 688; Cherokee County v. Cunningham, 260 Ala. 1, 68 So.2d 507.
Assignments of error 8 and 9 raise the point that the action of the trial court in overruling demurrers to the amended bill of complaint denied Tiger Motor Company the right to a 'trial by jury in a cause cognizable only on the law side of the court.'
Without conceding Tiger Motor Company was entitled to a trial by jury, in the absence of a demand therefore it cannot now complain that it has been deprived of that which it did not request nor demand in the court below. Title 7, § 322, Code of Alabama, 1940. We find no merit in the contention that the action of the trial court in overruling Tiger Motor Company's demurrers to the amended bill deprived it of a jury trial.
In assignments 4--6 (complaining of overruling of demurrers) Tiger contends that a money judgment at law would give McMurtry all the relief he is estitled to, assuming he proves his case. We are cited to Merchants' National Bank of Mobile v. Roche, 227 Ala. 639, 151 So. 591, and Lee v. Gaines, 244 Ala. 664, 15 So.2d 330, in support of the proposition that courts of equity will not assume jurisdiction where the only relief sought is the recovery of a money judgment.
While this may be a correct statement of that principle of law, a reading of the bill of complaint discloses that it not only seeks a money judgment, but other equitable relief (i.e., rescission of the contract of sale, cancellation of the note and mortgage and refund of the purchase price). A court of equity will grant full relief when it has jurisdiction on any equitable ground to grant relief. Owens v. Owens, 281 Ala. 239, 201 So.2d 396; Coleman v. Estes, 281 Ala. 234, 201 So.2d 391; Winslett v. Rice, 272 Ala. 25, 128 So.2d 94. Consequently, we find no merit in assignments of error 4, 5 and 6.
The gist of assignments 12, 13 and 15 is that the trial court erred in rendering a money judgment against Tiger Motor Company, and directing it to pay off McMurtry's obligations to Ford Motor Credit Company. It is argued that if the appropriate relief was a money judgment, then the cause should have been heard on the law side, and should have been submitted to a jury. But, the relief granted by the trial court included more than a mere money judgment. We have already pointed out that the granting of a money judgment was incidental relief, and therefore a judgment on the law side would not give complete relief. Owens v. Owens, supra; Coleman v. Estes, supra; Winslett v. Rice, supra.
Assignments 19--22 raise the point that the evidence is insufficient to prove a breach of warranty by Tiger Motor Company, but to the contrary the evidence shows that it has performed every warranty made by it or Ford Motor Company (assuming Tiger made any warranty which it denies).
Tiger Motor Company contends that the provisions of Title 7A, § 2--316, Code of Alabama (Recompiled 1958), which permits a seller to exclude or modify any warranty of fitness or of merchantability by express language, has application to the instant case in view of the following language contained in Owner's Manual for 1967 Ford Cars and Light Trucks, viz:
'The warranties herein are expressly IN LIEU OF any other express or implied warranty, including any implied WARRANTY of MERCHANTABILITY or FITNESS, and of any other obligation on the part of the Company or the Selling Dealer.'
Under the provisions of Title 7A, § 2--316, supra, language of such a 'disclaimer' is designed and intended to permit a seller to limit...
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