Worthey v. Specialty Foam Products, Inc.

• Decision Date: 06 November 1979
• Docket Number: No. 10880,10880
• Citation: 591 S.W.2d 145
• Parties: 27 UCC Rep.Serv. 949 Howard WORTHEY et al., Plaintiffs-Appellants, v. SPECIALTY FOAM PRODUCTS, INC., Defendant-Respondent.
• Court: Missouri Court of Appeals

Page 145

591 S.W.2d 145

27 UCC Rep.Serv. 949

Howard WORTHEY et al., Plaintiffs-Appellants, v. SPECIALTY FOAM PRODUCTS, INC., Defendant-Respondent.

No. 10880.

Missouri Court of Appeals, Southern District, Division Two.

Nov. 6, 1979.

Motion for Rehearing and for Transfer Denied Nov. 29, 1979.

Application to Transfer Denied Jan. 15, 1980.

Arch M. Skelton, Ted Von Willer, Jr., Springfield, for plaintiffs-appellants.

William A. Wear, Sr., William A. Wear, Jr., Blythe Crist-Brown, Wear & Wear, Springfield, for defendant-respondent.

BILLINGS, Presiding Judge.

The pivotal issue in this appeal is whether or not the implied warranty of merchantability, created by the Uniform Commercial Code (Chapter 400, RSMo 1969), applies to the sale of used goods. In a bench trial the trial court concluded that the plaintiffs' sale of a used truck to defendant was governed by the Code. The trial court found against plaintiffs on their petition for the purchase price of the truck and entered judgment for defendant on its counterclaim for damages. We affirm.

Plaintiffs are in the used truck sales business in Springfield, Missouri. Defendant fabricates various polyurethane products at Ozark, Missouri, and began its operation in September 1976.

On November 10, 1976, Morris Dock and James Grundy, defendant's president and vice president, went to the plaintiffs' used truck lot in search of a truck. They informed Richard Wilson, a salesman for plaintiffs, of the business they were in and the purpose for which they were seeking to buy a truck. Wilson showed them a 1969 Ford truck with a twenty-two foot bed and dual axle, which he said was a "good old truck". After looking at the engine and giving the truck a test drive, Dock and Grundy decided to buy the truck, at the $4,500 price quoted by Wilson, if the plaintiffs would agree to replace two of the truck's tires, fix the speedometer, and install a stereo system. Wilson agreed to these requests, and on November 12, 1976, Dock and Grundy picked up the truck and gave the plaintiffs a company check for the purchase price. Dock drove the truck to a shop, which installed the stereo system, and then to a service station. After having the truck serviced at the station, Dock drove the truck to his house where it stayed overnight. The next day, the truck was driven to the defendant's plant where it remained idle until November 15, 1976.

On November 15, 1976, the truck was used twice. During each use, the electric tailgate lift was used without the engine running and as a result, the engine failed to start after each use. After the second use and failure of the engine to start, Wilson was called to help start the truck. The truck was started with "jumper cables" and was then driven to the plaintiffs' garage, where Wilson conducted a preliminary check of everything, including the battery and electrical system, and the oil level. Dock picked up the truck at midnight and drove it back to his house.

On November 16, 1976, Dock and Bob Woodworth, defendant's treasurer, left in the truck for a trip to St. Louis. Both Dock and Woodworth drove the truck en route to St. Louis and both testified that the truck was driven in the high range axle at all times during this trip and below the 55 mph speed limit. Dock drove the truck from Springfield until they reached a service station ten miles west of Lebanon, Missouri. Woodworth then drove the truck from this stop to their next stop between St. James and Rolla, Missouri. At both stops, the oil level was checked by Dock or an attendant, with a quart of oil being added at the second stop. Dock drove from the second stop to a point near Valley Park, Missouri, where a "clatter within the motor" caused Dock to pull off the highway. The engine was turned off and would not re-start. While Woodworth walked to a service station to get a tow truck, Dock checked the oil level and found it to be full.

The tow truck arrived and towed the truck to Brockway, a truck repair facility just west of St. Louis, Missouri. The engine was started, with the assistance of jumper cables, but was turned off because of a loud clatter. James Platter, Brockway service manager, testified that after the crankcase had been dropped and one or two rods pulled, he looked at the parts and determined it had damaged bearings and a bad crankshaft. He further testified that the truck could not be run in its present condition, and in order to determine the exact cause of the breakdown would require the engine to be pulled out, the head pulled from it, and the crankshaft pulled out.

Dock and Woodworth left the truck at Brockway. Dock called Wilson and advised him that the truck had broken down, and was "in St. Louis at a place named Brockway", and that payment on defendant's check would be stopped.

In this action, plaintiffs brought suit for the purchase price of the truck. Defendant, by way of answer and counterclaim, alleged that plaintiffs had breached an implied warranty of merchantability and an implied warranty of fitness for a particular purpose under § 400.2-314 ¹ and § 400.2-315. ² In support of the trial court's ruling, that the sale of the used truck was governed by the Uniform Commercial Code and an implied warranty of merchantability arose, defendant reviews the Code provisions which it deems applicable and cites a host of cases from other jurisdictions that have ruled that the sale of second-hand goods is subject to implied warranties under the Code, including the implied warranty of merchantability as contained in § 400.2-314.

Plaintiffs contend that no implied warranty of merchantability arises in the sale of used or second-hand goods and that the instant sale is governed by pre-code law. We are referred to pre-code Missouri decisions by plaintiffs in support of their conclusion that, absent a statement of fact by a seller, or proof of fraud, there are no implied warranties for used goods. By way of further support, plaintiffs point to the holding in Chaq Oil Company v. Gardner Machinery Corporation, 500 S.W.2d 877 (Tex.Civ.App.1973), which ruled the Texas Business and Commercial Code § 2.314 (identical to our § 400.2-314) did not create an implied warrant of merchantability in the sale of second-hand goods and that Texas pre-code law governed. ³

Our review of this court tried case is governed by Rule 73.01, V.A.M.R., as delineated by our Supreme Court in Murphy v. Carron, 536 S.W.2d 30 (Mo. banc 1976). Thus, the judgment is to be sustained unless there is no substantial evidence to support it, unless it is against the weight of the evidence, unless it erroneously declares the law, or unless it erroneously applies the law.

Initially, we observe that, prior to the adoption of the Uniform Commercial Code of Missouri, the law concerning implied warranties in the sale of new or used goods was somewhat unclear and riddled with confusing distinctions. The late Professor Lee-Carl Overstreet pointedly observed this in "Some Aspects of Implied Warranties in the Supreme Court of Missouri", 10 Mo.L.Rev. 147 (1945), and noted that Missouri was one of the few jurisdictions which had not enacted the Uniform Sales Act despite efforts by the Missouri Bar for its adoption.

In 1963 Missouri adopted the Uniform Commercial Code, including Article 2 on Sales. The Code calls for a liberal construction of its terms and seeks, inter alia, uniformity in commercial transactions among the various jurisdictions (§ 400.1-102). It makes substantial changes in the law of sales, and seeks to revise and modernize the law of sales as it existed under the Uniform Sales Act ⁴ (Comments, § 400.2-101). The scope of the Code's Article on sales is set forth in § 400.2-102 and provides for its application to transactions in goods. "Goods" are defined by § 400.2-105 to mean "All things . . . which are movable at the time of identification to the contract for sale . . . ." (Emphasis added). Neither § 400.2-102 nor § 400.2-105 distinguish between transactions involving new or used goods.

Under the Code, § 400.2-314 is the statute that creates an implied warranty of merchantability. It states, in part, as follows:

"(1) Unless excluded or modified (§ 400.2-316), a warranty that the goods shall be merchantable is implied in a contract for their sale if the seller is a merchant with respect to goods of that kind. Under this section the serving for value of food or drink to be consumed either on the premises or elsewhere is a sale.

(2) Goods to be merchantable must be at least such as

(a) pass without objection in the trade under the contract description; and . . .

(c) are fit for the ordinary purposes for which such goods are used; . . ."

The Code Comment to this statute states: "A contract for the sale of second-hand goods, however, involves only such obligation as is appropriate to such goods for that is their contract description."

We are of the opinion that the sale of used or second-hand goods is covered by the provisions found in § 400.2-102, § 400.2-105, and § 400.2-314 and carries an implied warranty of merchantability. If the framers of the Code had intended to exclude used or second-hand goods from any implied warranties, merchantability or otherwise, they could have easily done so. As the court in Testo v. Russ Dunmire Oldsmobile, Inc., 16 Wash.App. 39, 554 P.2d 349 (1976) stated: "The Code does not distinguish between new and used goods, the sale of which gives rise to implied warranties. We hold that 'unless excluded or modified' a warranty of merchantability arises in the sale of a used automobile". We agree with Testo and the overwhelming weight of authority from other jurisdictions that have interpreted and applied similar or identical Uniform Commercial Code provisions to the sale of used or second-hand cars and trucks. See, e. g., Moore v. Burt Chevrolet, Inc., 563 P.2d 369 (Colo.App.1977) (used truck); Roupp v. Acor, 253 Pa.Super. 46, 384 A.2d 968 (1978) (used truck); Rose v. Epley Motor...