U.S. Hoffman Machinery Corp. v. Carlson
| Decision Date | 17 October 1961 |
| Docket Number | No. 50245,50245 |
| Citation | 111 N.W.2d 271,253 Iowa 304 |
| Parties | UNITED STATES HOFFMAN MACHINERY CORPORATION, a Corporation, Appellee, v. Gunnard D. CARLSON, d/b/a, Gunnard's Cleaners, Appellant. |
| Court | Iowa Supreme Court |
Deck & Johansen, Sioux City, for appellant.
Baron, Yaneff & Turek, Sioux City, for appellee.
This is an action in equity to recover the balance due on and to foreclose a conditional sale contract. Neither the contract nor the amount of the unpaid balance thereon is in dispute. Defendant relied on rescission and counterclaimed for damages.
Plaintiff is a manufacturer and vendor of dry cleaning mechinery and equipment. Defendant operates a dry cleaning business. Some time in 1953 defendant, through literature and trade journals, became interested in equipment manufactured and sold by plaintiff. Defendant contacted plaintiff. Defendant received brochures and a personal call from plaintiff's salesman. On February 16, 1954, plaintiff and defendant contracted in writing for the sale and purchase of an automatic machine with accessories designed to clean and dry clothes and reclaim the cleaning solvent. The machine used an expensive synthetic cleaning solvent so the efficient filtering and reclaiming of the solvent was important. The agreement was evidenced by a conditional sales contract in writing. After a trade-in allowance for used equipment, the balance of the purchase price, totaling $8,576.16, including finance charges, was to be paid in monthly installments. Payments totaling $2,172.06 were made between May 25, 1954, and February 28, 1955. No payments have been made since February 28, 1955.
About 30 days after the signing of the contract the machine was delivered, installed and put in operation. Defects in design or manufacture soon appeared. The pump leaked and the filtering screens failed to function properly. During the drying cycle solvent would fall on and spot the clothes. This was the most serious defect.
Defendant by letter and telephone repeatedly complained to agents and employees of plaintiff between April 1954 and June 8, 1955. He was asking for help and service and threatened to stop his payments. He asked for correction of the machine and for adjustments. He mentioned taking action to recover his losses. Plaintiff's servicemen made some repairs. Letters from plaintiff promised help and one letter dated December 23, 1954 guaranteed that the machine would be 'taken care of satisfactorily.' The machine has never been 'taken care of satisfactorily.' Repairs attempted by plaintiff's servicemen have not cured the defects. The machine does not perform as represented. Some of the defects have been corrected by defendant at his own expense. Defendant now reclaims the solvent in another machine bought at his own expense. Otherwise defendant continued use of the machine and was still using it at the time of trial of this case in August 1959. The trial court found that 'defendant never at any time prior to the filing of his answer and counterclaim herein on June 24, 1958, some four years from the date of delivery, intended, offered or attempted to rescind the contract sued on.' We agree with this finding by the trial court.
On November 20, 1957, plaintiff started this action to collect the unpaid balance on the contract and to foreclose its conditional sale contract. On June 24, 1958, defendant answered and counterclaimed and for the first time attempted rescission. Defendant in his counterclaim also sought damages for breach of warranty and false representations but at the close of the evidence dismissed all except his claim of rescission and damages incident thereto.
I. this is not a case for damages resulting from breach of warranty. Breach of warranty may be the foundation on which a rescission is based but in itself does not constitute a rescission. Neither do complaints and demands for service. Whether or not defendant would have been more successful with a claim for damages for breach of warranty is not before us. We merely hold that his claim of rescission is not tenable.
II. Defendant did not give notice of defects by registered mail within ninety days after delivery as required by the contract, but this failure is unimportant. Plaintiff knew of the complaints, promised help and attempted repairs up to June 1955. Plaintiff's actions waived the formality of notice required by the contract.
Briggs & Lucas v. Rumely Co., 96 Iowa 202, 64 N.W. 784, holds that a vendor by sending an agent to rectify defects in a machine sold by it waives a provision in the contract of sale providing that failure to give notice to the company in writing of a defect bars any claim for breach of warranty. See also Westbrook v. Reeves, 133 Iowa 655, 111 N.W. 11.
First National Bank of Webster City, Iowa v. Dutcher, 128 Iowa 413, 104 N.W. 497, 1 L.R.A.,N.S., 142, holds that where the warranty under which a machine was sold required the purchaser to notify the seller by registered letter of any defects within two days of its first use the continuous efforts of agents of the seller to make the machine work after the expiration of the two days and without objection that notice had not been given amounted to a waiver of the notice. But the case does not hold that the time for return of defective machinery is extended indefinitely after the vendor has ceased efforts to remedy the defect.
It is well settled that a requirement for the return of merchandise may be waived by a seller's agent in charge of correspondence or by a request from the seller that the purchaser continue to use the equipment.
We find no authority, however, for rescission after four years' use of the machinery and three years after the last effort of the vendor to remedy the defect.
III. Section 554.70 of the Code, I.C.A., being a part of the sales law, provides in part as follows:
'1. Where there is a breach of warranty by the seller, the buyer may, at his election:
'* * * d. Rescind the contract to sell or the sale and refuse to receive the goods, or, if the goods have already been received, return them or offer to return them to the seller and recover the price or any part thereof which has been paid.
'2. When the buyer has claimed and been granted a remedy in any one of these ways, no other remedy can thereafter be granted.
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