West v. Prater

• Decision Date: 05 April 1937
• Docket Number: 6334
• Citation: 67 P.2d 273,57 Idaho 583
• Parties: WORT WEST, Respondent, v. E. F. PRATER, Sheriff of Twin Falls County, Idaho, and ALLIS-CHALMERS MFG. CO., a Corporation, Appellants
• Court: Idaho Supreme Court

67 P.2d 273

57 Idaho 583

WORT WEST, Respondent, v. E. F. PRATER, Sheriff of Twin Falls County, Idaho, and ALLIS-CHALMERS MFG. CO., a Corporation, Appellants

No. 6334

Supreme Court of Idaho

April 5, 1937

CONTRACT OF SALE-FRAUD-EVIDENCE-DELIVERY AND ACCEPTANCE-DAMAGES - CHATTEL MORTGAGES - ASSIGNMENT - FORECLOSURE - RIGHTS OF PARTIES.

1. Evidence held not to show confidential relationship between seller's agent and buyer of second-hand bean huller, or fraudulent representation as to huller, so as to justify avoidance of contract of sale.

2. Fraud is never presumed but must be established by clear and convincing evidence especially where integrity of written instrument is assailed.

3. To relieve one from responsibility for contract on ground that he was induced to sign it by false representations, it must be shown that representations were false and fraudulent and such as would be likely to deceive a person of ordinary prudence.

4. One may be estopped by his own negligence to deny liability on written instrument signed by him without having read it where he had opportunity to read instrument and was not fraudulently dissuaded or prevented from reading it.

5. Evidence held not to justify judgment holding notes and mortgage given to secure payment of second-hand bean huller void for fraudulent misrepresentations at time of execution of instrument.

6. Under contract for sale of bean huller, seller's recovery held not limited to reasonable value on date when "back beater" was installed on ground that seller had failed to deliver a complete huller on date of sale, where huller bought was a used one, buyer examined huller before purchase and at time of examination and purchase huller was not equipped with a "back beater" and buyer continued to use huller after learning that it had no "back beater," and did not return huller or offer to rescind contract.

7. Purchaser who concludes that article purchased is not what it was represented to be, or what he had right to believe it was, or should be, cannot after such discovery go on using article and thereafter refuse to pay agreed purchase price but purchaser after such discovery may repudiate contract return article, and demand return of consideration paid which is a "rescission," or purchaser may retain article and claim such damages as he has sustained through breach of contract by vendor.

8. Seller's failure to furnish "back beater" with bean huller when delivered to buyer did not release buyer from payment of consideration and did not create implied contract for sale of huller at reasonable market value, where it was contemplated that huller should be equipped with "back beater," lack of it was discovered before "back beater" was actually furnished and no rescission was ever claimed.

9. In action to foreclose chattel mortgage given to secure payment of second-hand bean huller, mortgagor held entitled to offset his indebtedness by amount of alleged damages which he sustained because of seller's failure to furnish a "back beater" with huller at time of purchase and delivery of huller.

10. Assignee of notes and chattel mortgage given to secure payment of second-hand bean huller could not escape liability for alleged damages sustained by mortgagor for seller's failure to deliver "back beater" at time of delivery of huller, on ground that assignee did not make sale, where assignee took over entire business and assets of seller, since assignee received notes and mortgage subject to any defenses that mortgagor might have against seller.

APPEAL from the District Court of the Eleventh Judicial District, for Twin Falls County. Hon. Adam B. Barclay, Judge.

Action to enjoin defendants from foreclosure of chattel mortgage on farm machinery and sale of same. Judgment for plaintiff restraining foreclosure, and for defendants, Allis-Chalmers Mfg. Co., for balance due on open account. Defendants appeal. Reversed and remanded with direction.

Reversed and remanded with direction. Costs awarded in favor of appellants.

Merrill & Merrill for Appellants.

The fact that a contract was signed without a party reading it or understanding the contents thereof is not sufficient to set it aside and constitutes nothing more than gross negligence upon the party in failing to read the contract or having someone read it to him, or to otherwise inform himself as to the nature, terms and conditions thereof. (Milner v. Earl Fruit Co., 40 Idaho 339, 232 P. 581.)

Failure or inability of party to read written contract before signing it is not ground for setting it aside. (Hampton v. Lee, 49 Idaho 16, 285 P. 1023; Constantine v. McDonald, 25 Idaho 342, 137 P. 531.)

To permit a party to defend against what was signed on the grounds that he did not read it, and therefore did not know the contents of what he signed, would absolutely destroy the value of all contracts. To avoid the signing, something must have prevented reading. (Crim v. Crim, 162 Mo. 544, 63 S.W. 489, 85 Am. St. 521, 54 L. R. A. 502.)

Acceptance of goods by buyer after time of delivery expired is a waiver of the seller's failure to deliver in required time in so far as the seller's right to recover the purchase price is concerned. (Tweedie F. Corp. v. Roberts-Schofield Co., 48 Idaho 777, 285 P. 476; Reichbart v. Smith Eisemann Corp. of America, 213 A.D. 178, 210 N.Y.S. 214; 23 R. C. L., p. 1374, sec. 197; R. C. L. Perm. Supp., p. 5392; White v. T. W. Little Co., 118 Wash. 582, 205 P. 186, 187; Minneapolis Threshing Machine Co. v. Hutchins, 65 Minn. 89, 67 N.W. 807.)

Chapman & Chapman for Respondent.

The obligations created by the signing of an instrument in writing may be avoided and set aside by the signer who has relied not unreasonably upon the false representations or misleading conduct of the other negotiating party, even though the signer has not read the instrument in writing or had it read to him before signing. (Massachusetts Mut. Life Ins. Co. v. Brun, 187 Ark. 790, 62 S.W.2d 961; Dusbabek v. Bowers, 173 Okla. 53, 43 P.2d 97, 47 P.2d 141; Vermont Farm Mach. Co. v. Ash, 23 N. M. 647, 170 P. 741.)

If the theory of partial failure of consideration were adopted by the respondent, then he is entitled to a deduction from the amount of the original agreed or reasonable purchase price to the extent that the consideration has failed, and the measure of the amount of the deduction is the difference between the agreed price and the actual value received. (Antrim Lumber Co. v. Daly, (Mo. App.) 190 S.W. 971; Mollerup v. Daynes-Beebe Music Co., 82 Utah 299, 24 P.2d 306.)

AILSHIE, J. Morgan, C. J., Holden, JJ., Budge and Givens, JJ., concurring.

OPINION

AILSHIE, J.

--In July, 1930, at the request of respondent, Harley Williams negotiated a deal for a second-hand bean huller, for which respondent was to pay the Advance-Rumely Thresher Co. $ 950, to be evidenced by two promissory notes. Respondent signed an order specifying "One S. H. Rumely Bean Huller complete; this machine second hand accepted present location, present condition." Two promissory notes, each for $ 475, dated August 19, 1930, were executed by respondent, one due November 1, 1930, and the other November 1, 1931; the first one was paid "6-5-31" and was returned to respondent in a letter dated February 14, 1934.

According to testimony of respondent, he called at Williams' office and Williams told him he had "them papers there ready to sign," and that he signed the notes and what purported to be a contract; he says Williams informed him that it was "just a contract." Being without his glasses, respondent did not read the papers. He testified that he had worn glasses for ten or twelve years; his eyesight was impaired and he could not read fine print without his glasses. The receipt signed by respondent August 19th covers "one S. H. Rumely Bean Huller # 9" and specifies "that the notes given by the undersigned to the company for said goods and the mortgage securing said notes were examined and read before they were executed, and the same are delivered in fulfillment of said written agreement." A chattel mortgage covering the bean huller and a Do-All tractor was signed by respondent on the same date; he testified that he did not learn until about two years and a half afterward that this mortgage covered the Do-All tractor. In the meanwhile, and in October, 1930, respondent paid the purchase price, note and mortgage given in October, 1929, for the Do-All tractor and the original mortgage was released.

Subsequent to the execution of the notes and mortgage, the Allis-Chalmers Mfg. Co., one of the appellants herein, purchased the business and assets of the Advance-Rumely Thresher Co., Inc., retaining Williams as its agent, and took an assignment of these notes and the mortgage. The bean huller was purchased to be used for threshing beans for hire. It was furnished to respondent without a back beater, a second cylinder, running at a different speed and located just behind the back cylinder of the huller and is designed to pull the bean straw away from the cylinder and throw it out on the straw stack. There is divergent testimony in regard to the necessity of using a back beater with a bean huller An agent for the company testified that back beaters were first placed in the hullers in 1926; that they were "put in there . . . . for sales talk" and that there was not a dollar's difference between the two kinds of machines. In the fall of 1931, after having used the machine one year, respondent made demand on the company for a back beater, or, as he stated it: "a fully equipped bean huller." The company then furnished respondent with a back beater, as hereinafter more particularly stated.

June 15, 1934, appellant proceeded, by affidavit and notice under the statute,...