Troendly v. J. I. Case Co.

• Decision Date: 09 April 1931
• Docket Number: 5668
• Citation: 50 Idaho 506,297 P. 1103
• Parties: JOHN H. TROENDLY, Jr., Respondent, v. J. I. CASE COMPANY, Sometimes Called THE J. I. CASE THRESHING MACHINE CO., a Corporation, Appellant
• Court: Idaho Supreme Court

297 P. 1103

50 Idaho 506

JOHN H. TROENDLY, Jr., Respondent, v. J. I. CASE COMPANY, Sometimes Called THE J. I. CASE THRESHING MACHINE CO., a Corporation, Appellant

No. 5668

Supreme Court of Idaho

April 9, 1931

SALES-MISREPRESENTATION-RESCISSION-RESTORATION OF GOODS.

1. No action can be predicated upon oral representation, where warranty is exacted covering alleged fraudulent representations made before execution of contract, and evidence fails to show seller is guilty of artifice preventing buyer from examining for himself.

2. Buyer of harvesting machinery could not rescind, where he operated machinery for 80 days after he knew it was defective and did not offer to return machinery.

3. That buyer had not finished work contracted for was no excuse for not surrendering harvesting machinery for purpose of rescission.

APPEAL from the District Court of the Eleventh Judicial District for Twin Falls County. Hon. William A. Babcock, Judge.

Action to rescind contract. From judgment of rescission and damages defendant appeals. Reversed.

Judgment reversed. Costs to appellant.

H. R Turner, for Appellant.

Where an order contract for the purchase and sale of personal property provides that no agreements, conditions, or representations other than those contained in the order shall bind the seller, and without knowing of any oral representations, promises and agreements, made by the agent to the purchaser the seller was not bound by any such promises, representations and agreements. (Schuster v North American Hotel Co., 106 Neb. 672, 184 N.W. 136, 186 N.W. 87.)

"Where express warranty covers oral representations made by seller to the buyer inserted in a contract between them, the buyer is presumed to have relied on the warranty and not on the oral representations." (Advance-Rumley Thresher Co. v. Schawo, 126 Kan. 563, 268 P. 738; Bruner v. Kansas Moline Plow Co., 7 Ind. Ter. 506, 104 S.W. 816.)

"Buyer continuing to use defective tool to derive benefit therefrom waives rescission. "

"One seeking to reject article as not in accordance with sale contract must do nothing, after discovering its true condition, inconsistent with seller's ownership."

"Return of machinery in as good condition as when received was condition precedent to rescission, unless changed condition was result of breach of warranty." (Advance-Rumely Thresher Co. v. Stohl, (Utah) 283 P. 731; Mechem on Sales, at sec. 1387.)

J. H. Barnes, for Respondent.

Plaintiff's consent to the contract was procured by false and fraudulent representations as to existing facts made to him by defendant's agents acting within the scope of their employment, and plaintiff had a right to rely and to act upon such representations. (26 C. J. 1090; Detroit Fire etc. Co. v. Sargent, 42 Idaho 369, 246 P. 311; Turner Agency v. Pemberton, 38 Idaho 235, 221 P. 133; Pocatello Security Trust Co. v. Henry, 35 Idaho 321, 27 A. L. R. 337, 206 P. 175; Hillock v. Idaho Title & Trust Co., 22 Idaho 440, 126 P. 612, 42 L. R. A., N. S., 178; Keithley v. Mutual Life Ins. Co., 271 Ill. 584, 111 N.E. 503; Burroughs Adding Mach. Co. v. Scandinavian-American Bank, 239 F. 179; Pacific States A. & F. Corp. v. Addison, 45 Idaho 270, 261 P. 683.)

Where the execution of a contract is procured by false and fraudulent representations, the equitable rule of estoppel by recitals in the contract does not apply. (16 Cyc. 720, 721; 21 C. J. 1112; 12 Cal. Jur. 772; Pacific Corp. v. Whalen, 43 Idaho 15, 248 P. 444; Arnett v. Sanderson, 25 Ariz. 433, 218 P. 986, at 988; McCormick Harvesting Mach. Co. v. Williams, 99 Iowa 601, 68 N.W. 907; Wolf Co. v. Smith Mercantile Co., 189 N.C. 322, 127 S.E. 208.)

VARIAN, J. Lee, C. J., and Budge, Givens and McNaughton, JJ., concur.

OPINION

VARIAN, J.

Respondent brought this action to rescind a contract for the purchase of certain harvesting machinery and for damages, on account of certain alleged misrepresentations inducing him to enter into the contract. The cause was tried to the court with a jury sitting in an advisory capacity. From a judgment rescinding the contract and awarding damages defendant appeals.

The complaint alleges in effect that on or about July 17, 1929 plaintiff entered into a contract in writing with defendant whereby he agreed to buy a "Prairie Combine" grain harvester, rotating weed screen with grain bin, straw spreader, header truck, clover attachment, pick-up attachment and one 12-foot windrower with 3-foot extension; that all of said machinery except the windrower "were designed and furnished for use on and as a part of said combined grain harvester and thresher; that the windrower was a separate machine designed and furnished to cut the grain and place it in windrows preparatory to threshing"; that plaintiff made a down payment of $ 713.93 and executed two promissory notes to defendant, one for $ 1200 due November 1, 1929, and another for $ 1474.50 due November 1, 1930; that prior to the execution and delivery of the contract plaintiff had several conversations with defendant's agents wherein said agents represented "that said machinery was well made of good material and would prove durable with good care, and also that it would do as much and as good or better work than any other make of machinery, and promised that if plaintiff would agree to buy said machinery they would include said representations in the contract in the form of a warranty; that said representations were thereafter included in said written contract, and before the execution thereof by plaintiff"; that said warranty was a written confirmation of the representations made to plaintiff by defendant's agents during the negotiations for the sale of said machinery and was inserted in the contract as an inducement for plaintiff to enter into said contract; that said agents at the time promised plaintiff, as a further inducement, that if he purchased said machinery he would receive first-class service and expert advice in the care and operation of said machinery. The complaint further alleges the falsity of the representations made and specifies certain particulars in which the machinery, or parts thereof were defective; that upon delivery it was rigged and placed in operation under the supervision of an expert Case operator in the employ of defendant and of other operators sent out by the Case Company during the season of 1929; that because of the excessive cost of keeping the machinery in repair and operation plaintiff was damaged in the sum of $ 1138, the difference in the amount received for threshing and the cost of keeping the machine in repair and operation; that the windrower was not able to do the work required of it and on demand of plaintiff was taken back by defendant, who credited plaintiff with the purchase price thereof, $ 701.50, on the $ 1200 note; that plaintiff informed defendant's agents soon after said combine was placed in operation that it was not doing its work and did "not fulfill defendant's representations and warranty," and demanded that they take back said combine and attachments and return the down payment and notes; that defendant's agents refused to comply and represented that the combine could be adjusted and promised to have other experts in its employ aid in adjusting and testing the machine in an effort to fulfil the terms of said representations and warranty; that they "assured plaintiff he would get a 'square deal,' and that his losses would be made up by the good work of said machine when it had been properly adjusted to the local working conditions"; that, because of these assurances, plaintiff, who was obligated by a number of contracts for threshing grain grown by other farmers, continued to operate the machinery under protest; that he withdrew from as many of his threshing contracts as was possible for him to do, and after completing his other contracts, informed defendant that its combine was a failure and had not lived up to the representations and warranty made before the machine was purchased, that he would no longer be bound by said...