Wildman Mfg. Co. v. Davenport Hosiery Mills

• Decision Date: 03 March 1923
• Parties: WILDMAN MFG. CO. v. DAVENPORT HOSIERY MILLS.
• Court: Tennessee Supreme Court

249 S.W. 984

147 Tenn. 551

WILDMAN MFG. CO. v. DAVENPORT HOSIERY MILLS.

Supreme Court of Tennessee.

March 3, 1923

Appeal from Chancery Court, Hamilton County; W. B. Garvin Chancellor.

Suit by the Wildman Manufacturing Company against the Davenport Hosiery Mills, with cross suit by defendant. From the decree both parties appeal. Modified and affirmed.

Bachman J., dissenting.

Cantrell Meacham & Moon, of Chattanooga, for appellant.

Allison, Lynch & Phillips, of Chattanooga, for appellee.

MALONE Special Judge.

The original bill in this case was filed by the Wildman Manufacturing Company, a foreign corporation, to collect the sum of about $4,000, being the balance due on certain knitting machines sold to the Davenport Hosiery Mills.

That company filed a cross-bill, claiming more than $60,000 damages because of the alleged failure of the Wildman Company to deliver the machines on time.

A jury having been demanded by the cross-complainant, the following issues were framed and submitted by the chancellor:

"I. Was it a part of the original contract between the parties that the time for the delivery of the machines was subject to delays due to unavoidable causes or conditions over which the complainant had no control?

II. Subsequently to the making of the original contract, did the parties modify the contract so as to extend the time within which said machines should be delivered?

III. Did complainant deliver the machines within the time required by the original contract or within the time required by the modification of the contract, if there was a modification as to the time of delivery? IV. If you answer the last question 'No,' then did the defendant in accepting and retaining the machines and by its conduct waive any claim for damages for the delay?

V. If you find that complainant did not deliver the machines within the time it should have delivered them, and that the defendant did not waive damage for the delay, then state what amount of recoverable damages, if any, the defendant sustained by the delay in delivery."

Proof was introduced by the parties, and each side moved for a directed verdict. The chancellor directed the jury to answer the first four issues "No," and submitted the last issue to be answered under the evidence and the charge of the court. The jury, responding to this issue, fixed the damages at $13,224.37.

On motion for a new trial, the chancellor filed a memorandum opinion, sustaining the eleventh ground of the motion, which was that:

"The verdict of the jury was so excessive as to evince passion, prejudice, and caprice on the part of the jury."

Whereupon the cross-complainant asked the chancellor to express his views as to the amount of damages, and the chancellor, upon this invitation, estimated that the damages should have been fixed at about one-third of the amount found by the jury, or $5,875. He stated that, if cross-complainant would enter a remittitur reducing the damages to this amount, a new trial would be refused; otherwise granted. This remittitur was accepted under protest, and cross-complainant, having admitted liability for the balance due on the machines, was given a decree for the difference between this amount ($4,046.98) with interest and the amount of the damages ($5,875) with interest--that is to say, the net sum of $1,671.94.

From this decree both parties have appealed and assigned errors, the Wildman Company complaining of the chancellor's action in directing a verdict on the first four issues in favor of cross-complainant, and in refusing to direct a verdict for complainant, also of various rulings on evidence, as well as alleged errors in the charge of the court; the Davenport Hosiery Mills Company of his action in reducing the damages.

Before discussing the chancellor's action in directing a verdict for cross-complainant, it is well to recall the rule of this court governing directed verdicts, viz. that the trial judge should take the most favorable view of the evidence supporting the rights asserted by the party against whom the motion is made, and discard all countervailing evidence. Walton v. Burchel, 121 Tenn. 715, 121 S.W. 391, 130 Am. St. Rep. 788; Railroad v. Williford, 115 Tenn. 108, 88 S.W. 178; Knoxville Traction Co. v. Brown, 115 Tenn. 323, 89 S.W. 319; Kinney v. Railroad, 116 Tenn. 450, 92 S.W. 1116; Norman v. Railroad, 119 Tenn. 401, 104 S.W. 1088; Railroad v. Morgan, 132 Tenn. 1, 175 S.W. 1148; Mayor & City Council v. Reese, 138 Tenn. 471, 197 S.W. 492, L. R. A. 1918B, 349; Johnston v. Ry. Co., 146 Tenn. 135, 240 S.W. 429.

Or, as stated in the last-named authority:

"It has been established by repeated decisions of this court that, upon a motion for peremptory instructions, the entire evidence must be looked to, and that it must be given the construction most favorable to the adversary party, and all reasonable inferences allowed in his favor, and that, if there is then seen to be a dispute as to any material determinative evidence, or any doubt as to the conclusion to be drawn from the whole evidence, the motion should be denied."

It is also the rule of this court (contrary to the federal practice) that, where both parties move for a directed verdict, this does not submit the whole case to the court, but that each motion should stand "as if made and remaining alone, and should be disposed of on its own merits;" that, upon appeal, each party "may attack the action of the trial judge, in overruling his motion and in sustaining that of his adversary, and may put forward his contention of the facts and assail that of his adversary; and the appellate court will for itself ascertain the facts, and will determine whether the trial judge should have sustained the one motion or the other, or should have submitted the case to the jury." Hardware Co. v. Hodges, 126 Tenn. 370, 378, 149 S.W. 1056, 1058.

Pursuant to the practice above indicated, counsel have, in their briefs and in the argument, fully discussed the evidence relating to each of the issues above set out, and also that relating to the question of damages.

After carefully studying this record and the excellent briefs of counsel, we are of opinion that one of the issues submitted is decisive of the case.

Assuming, as contended by the cross-complainant, that the contract was unconditional, that the time for delivery was not thereafter extended, that there was a breach of the contract on the part of the Wildman Manufacturing Company in failing to deliver the machines on dates fixed by the contract, and that the Davenport Hosiery Mills suffered, by reason of this breach, substantial recoverable damages, yet, if the chancellor was in error in directing a verdict in favor of cross-complainant Davenport Mills on the question of waiver, the decree must necessarily be modified.

This question requires a consideration of section 49 of the Uniform Sales Act (chapter 118 of the Acts of 1919), which reads as follows:

"In the absence of express or implied agreement of the parties, acceptance of the goods by the buyer shall not discharge the seller from liability in damages or other legal remedy for breach of any promise or warranty in the contract to sell or the sale. But, if, after acceptance of the goods, the buyer fail to give notice to the seller of the breach of any promise or warranty within a reasonable time after the buyer knows or ought to know of such breach, the seller shall not be liable therefor."

This section has not been heretofore construed by this court, but has been before the courts of other states, especially the courts of New York; the questions considered having arisen not so much with regard to its meaning as to its application to a given state of facts.

The purpose of this section, indeed, seems apparent, viz. to prevent the buyer from interposing belated claims for damages (too often a mere afterthought) as an offset to a suit begun by the seller for the purchase price.

As stated in the case of Regina Co. v. Gately Furniture Co. (Sup. 1915) 154 N.Y.S. 888, 889, affirmed (1916) 171 A.D. 817, 157 N.Y.S. 746:

"It is very evident that the purpose of this statute is to prevent the very condition that seems to exist here, viz. the buyer retaining the goods and using them, failing to give any notice of any breach of the original agreement to the seller until it has been sued for the purchase price, and then setting up affirmatively a defense by which it is sought to wipe out all of the original purchase price and demand an affirmative judgment for an additional sum against the plaintiff."

In the case of Maggioros v. Edson Bros. (Sup. March 1917) 164 N.Y.S. 377, 379, it was said:

"This provision is intended for the protection of the seller. The design of it is to give the seller an early notice of the alleged defects. * * * The purpose of the statute was to give the seller notice, before suit, and not by suit."

Obviously, the questions which most often arise are:

(a) Whether sufficient "notice" has been given to the seller.

(b) Whether this was given "within a reasonable time."

1. While many of the cases, discussing this section of the Sales Act, deal with breaches of warranty as to the quality or condition of goods sold, it seems to be well settled that a counterclaim for damages due to the seller's failure to deliver at the time specified in the contract also comes within its terms. Trimount Lumber Co. v. Murdough (1917) 229 Mass. 254, 118 N.E. 280; Mason v. Valentine Souvenir Co. (1917) 180 A.D. 823, 168 N.Y.S. 159; Pennel v. N. J. Brass Corporation (Sup. 1921) 186 N.Y.S. 606. And see Shearer Co. v. Kakoulis (Co. Ct. 1913) 144 N.Y.S. 1077, 1081.

2. Ordinarily the questions arising under the last clause of section 49 (whether "notice" has...