Wright v. Douglas Furniture Corp.
| Decision Date | 24 June 1968 |
| Docket Number | Gen. No. 51291 |
| Parties | John A. WRIGHT and Joseph T. Wright, Individually and doing business as Princeton Company, Plaintiffs-Appellees, v. DOUGLAS FURNITURE CORPORATION, a corporation, Defendant-Appellant. |
| Court | United States Appellate Court of Illinois |
Freeman, Freeman & Haas, Chicago, Kernal Freeman and Marvin G. Freeman, Chicago, of counsel, for appellant.
Frank J. Wiedner, John P. McAuliffe, Chicago, William J. Harte, Chicago, of counsel, for appellees.
This action was brought by the plaintiffs to recover rentals allegedly due by virtue of a vehicle lease agreement wherein the plaintiffs leased three trucks to the defendant. The case was heard without a jury which culminated in the court entering a judgment against the defendant and assessing damages in the sum of $12,854.00. The defendant appeals from this judgment.
The salient facts are undisputed. On December 28, 1960, the plaintiffs, John A Wright and Joseph T. Wright doing business as Princeton Company, and the defendant, Douglas Furniture Corporation, entered into a vehicle lease agreement. Joseph T. Wright signed the agreement in behalf of the plaintiffs. Under the terms of the agreement the plaintiffs were to provide the defendant with three 1961 Ford Vans at a monthly rental rate of $222.00 per van for a period of six years, from December 28, 1960 to December 28, 1966.
Paragraph 1(b) and 3(b)(c) of the agreement provide as follows:
1. Lessor agrees with respect to each leased motor vehicle, to:
(a). * * *
(b). Pay for all service, repairs and replacements for which Lessee is not required to pay by any other term or provision of this agreement.
3. It is further mutually agreed as follows:
(a). * * *
(b). With respect to each said motor vehicle:
(i) Lessee shall pay for any lubrication and oil changes not less frequently than every 2,000 miles.
(ii) Lessee shall pay for gasoline, oil added between changes and permanent antifreeze required for the operation and protection of the automobile.
(iii) Lessee shall pay for tire repairs.
(iv) Lessor shall pay all taxes, license, registration and other fees as may be required by any governmental authority.
(c). Any and all service, repairs, replacements and supplies shall be performed or supplied by such person as Lessor shall determine and Lessee shall pay for any and all service, repairs, replacements and supplies performed or supplied by other persons.
According to evidence offered by the defendant, the plaintiffs designated the J. J. Wright Motor Co., another company owned and operated by the plaintiffs, as the garage to provide the maintenance of the vehicles. In rebuttal to this testimony Joseph T. Wright, one of the plaintiffs, testified that he might have suggested to the defendant that they have their trucks repaired at J. J. Wright Motor Co. in that he would ultimately benefit because he was a shareholder in that corporation but he further testified that he was not authorized to direct the defendant as to a specific place to maintain their trucks.
By any means the defendant had the trucks serviced at the J. J. Wright Motor Co. from the inception of the contract until August of 1963. Also, from the inception of the contract on December 28, 1960 until August of 1963 the defendant paid the full rental as provided in the contract. Then by letter dated August 29, 1963, the defendant advised the plaintiffs that they wished to discuss certain 'contract violations' including 'your failure to provide full maintenance of the vehicles as provided in paragraph 1(b) and 3(c) * * *'. Later by a check dated September 5, 1963, the defendant paid the August rent. The check was in the amount of $82.56 which equalled the balance of the $666.00 rental minus four repair bills which totaled $583.44. Invoices evidencing those repairs were attached to the check. The first is dated 10--18--61 in the amount of $18.13; the second is dated 11--14--61 in the amount of $35.98; the third is dated 6--21--63 in the amount of $219.06; and the fourth is dated 2--25--63 in the amount of $310.27. All of the invoices were from the J. J. Wright Motor Co.
Upon receipt of the check and invoices, the plaintiffs advised the defendant that they would not pay for any repairs to the trucks. The plaintiffs' attorney by letter dated October 2, 1963, advised the defendant to the same effect, and directed that all repairs were to be made by the J. J. Wright Motor Company.
On October 30, 1963, the defendant informed the plaintiffs by letter of termination of the lease agreement testimony the parties had been at an impasse with reference to who was to pay for repairs during August and September.
The defendant then sought to return the trucks but the plaintiffs advised the defendant that they would not accept them. In response to this, the defendant drained the radiators of the trucks, parked them on their parking lot and advised the plaintiffs that they were holding the keys for their convenience. Thereafter the defendant entered into another leasing agreement with a different truck leasing organization.
The plaintiffs brought suit for damages for the rental due from August 1963. During the pendency of this action at the suggestion of the court and by agreement of the parties, the trucks were sold in July 1964, 'the purpose being in aid to possible mitigation of damages'. The court found in favor of the plaintiffs and entered judgment against the defendant in the amount of $12,854.00. The court arrived at this amount by multiplying the rental ($666.00) by 29 months which equalled $19,314.00. From this figure the court deducted the initial rental deposit of $666.00, the value of the three truck chassis of $4,200.00 and the value of the two truck bodies which were sold for $1,600.00 1. Even assuming plaintiffs were entitled to recover damages, we are unable to follow the court's determination of damages in view of the fact that the vehicles were sold in July 1964, which terminated lessors' obligations for taxes, licenses, insurance and replacement of the chassis after 36 months on each of the 3 vehicles.
In reaching the decision the court stated that when the plaintiffs proved their vehicle lease agreement and the discontinuance of rent by the defendant in September of 1963 the plaintiffs established a prima facie case. The court further stated that it was of the opinion that the defendant had failed to sustain the burden of coming forward with evidence of a substantial nature which showed a failure of consideration on the part of the plaintiffs to provide the type of services that the defendant contended it was entitled to.
The issues as we see them are which party to the Vehicle Lease Agreement was obligated to pay for the maintenance of the trucks and that if it were the plaintiffs' obligation did refusal constitute a material breach of the contract.
In our opinion it is evident that the lessor had the obligation to pay for service, repairs, replacements and supplies so long as the lessee defendant brought the trucks to such person as the plaintiffs designated. Paragraph 1(b) of the agreement provides that the lessor (plaintiffs) shall pay for all service, repairs and replacements unless otherwise provided by other provisions of the agreement. Paragraph 3(b) and particularly (i), (ii) and (iii) of paragraph 3(b) obligate the lessee to pay for specific costs and repairs and is in harmony with the last phrase of paragraph 1(b). By the same token there is nothing inconsistent with paragraph 3(b) of the agreement. This paragraph merely provides that the lessor shall have the prerogative of choosing who shall provide the maintenance of the vehicles and that if the lessee does not abide by this determination the lessee shall become obligated to pay the costs of maintenance.
By the provisions of paragraph 3(i) of the Vehicle Lease Agreement 2, the lessee defendant is barred from maintaining a suit for damages against the lessors in view of the exculpatory clause relieving the lessors of liability for failure to furnish or authorize repairs. To avoid the liability of providing for the service, repairs...
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