Opinion
November 5, 1957 —
December 3, 1957.
APPEAL from a judgment of the circuit court for Taylor county: LEWIS J. CHARLES, Circuit Judge. Reversed.
The cause was submitted for the appellant on the brief of Oscar Rademacher of Medford, and for the respondent on the brief of Clifford L. Curran of Medford.
Action by the plaintiff Elmer Ross to recover from the defendant Gene Faber the balance owing by Faber on the purchase price of a truck sold to him by Ross, and for an item of repairs to such truck made by Ross; and a counterclaim by Faber against Ross for breach of warranty.
Ross operates a garage in the city of Marshfield, and is an authorized dealer of the Ford Motor Company in the sale of the latter's cars and trucks. Under date of September 14, 1954, Ross sold a new Ford truck to Faber for the agreed sales price of $2,900. As part of the contract of sale, Ross supplied Faber with a printed "Dealer Warranty," the material parts of which read as follows:
"Dealer warrants to purchaser (except as hereinafter provided) each part of each Ford Motor Company product sold by dealer to purchaser to be free under normal use and service from defects in material and workmanship until such product has been driven, used, or operated for a distance of four thousand (4,000) miles or for a period of ninety (90) days from the date of delivery to purchaser. whichever event first shall occur. Dealer makes no warranty whatsoever with respect to tires or tubes. Dealer's obligation under this warranty is limited to replacement of, at dealer's location, or credit for, such parts as shall be returned to dealer with transportation charges prepaid and as shall be acknowledged by dealer to be defective. . . . This warranty is expressly in lieu of all other warranties, express or implied, and of all other obligations or liabilities on the part of dealer, except such obligation or liability as dealer may assume by its Authorized Ford Dealer's Service Policy or separate written instrument."
Such warranty appeared on the reverse side of a document entitled "Authorized Ford Dealer's Service Policy." One of the subdivisions of such service policy bore the heading "Warranty Service," and the clause thereunder, which is material to this litigation, provided:
"Should the replacement of any part become necessary under the warranty, we, the selling dealer, will make the replacement without charge to you for the part or labor required to replace the part. To obtain this service, you must bring your vehicle back to us before the warranty period expires."
A few days after delivery of the truck to Faber on the date of purchase it was discovered that there was a defect in the rear-axle housing. Such defect was due to the existence of some pinholes at the top of the housing through which grease was extruded when the truck was operated. These pinholes were due to an imperfection in the housing casting. Faber caused the truck to be returned to Ross' garage and Ross repaired the defect by use of an electric peening hammer which closed the pinholes, at least for the time being.
There is a sharp conflict in the testimony as to whether Ross also agreed to replace the housing. Faber testified that it was understood between Ross and himself that the repair made by use of the peening hammer was only a temporary repair, and that Faber had demanded that the housing be replaced with a new one which Ross agreed to do. According to Faber's testimony, Ross agreed to make such replacement as soon as he could order it. ross, on the other hand, testified that he only agreed to replace the housing in the event the repair made by use of the peening hammer "did not hold."
There is a further conflict in the evidence as to whether such repair did result in the permanent closing of the pinholes. Faber testified that it did not and that after a short time grease again oozed from such holes.
In the spring of 1955, Ross sent Faber a statement for the $100 balance still owing on the purchase price of the truck plus $15.29 for some other repair work performed on Faber's truck. Faber then came to Ross' place of business and an angry conversation between the parties ensued. Again there is a sharp divergence in the versions of such conversation testified to, the only agreement being that Faber demanded a new rear-axle housing. By that time the ninety-day-warranty period had expired, and Ross claims that he informed Faber that the matter would have to be presented to the Ford Motor Company. Ross further testified that he informed Faber that a representative of such company would be at Ross' garage the following Monday, and requested Faber to bring the truck in at that time so that such representative could pass on Faber's demand for such new housing. This Faber failed to do. Faber's account of the conversation is entirely different. According to Faber, after the original angry outburst between the parties, the conversation took a more friendly turn and Ross again renewed his promise to furnish a replacement of the housing, which promise was never fulfilled.
In March, 1956, approximately a year after such conversation had taken place, Ross commenced action in justice court against Faber to recover the $115.29 which Ross claimed was due him. Faber counterclaimed for breach of warranty. Judgment was awarded in favor of Ross, and Faber appealed to the circuit court. There a trial de novo was had before the court and a jury. A special verdict was submitted to the jury reading as follows:
"Question No. 1. What balance is due from the defendant to the plaintiff for repairs and for purchase price on the vehicle in question? Answer by the court: $115.29.
"Question No. 2. Did the plaintiff warrant the Ford truck purchased by the defendant on September 14, 1954, to be free of defects as to its axle housing? Answer by the court: Yes.
"Question No. 3. Did such axle housing, at the time of the sale of the truck, have a defect therein ? Answer by the court: Yes.
"Question No. 4. Was such defect of such a nature and extent as to require replacement of the housing? . . .
"Question No. 5. If you answer question No. 4 `No' then answer this question: Were the repairs made on the housing by the plaintiff sufficient in nature and extent so as to place such housing in the condition in which it was warranted to be at the time of the sale? . . .
"Question No. 6. If you answer question No. 5 `No' then answer this question: At what sum do you assess the damages sustained by the defendant by reason of the failure to place such housing in the condition in which it was warranted to be at the time of the sale? Answer: $ _____."
The jury answered question No. 4 "No" and question No. 5 "Yes." Because of answering question No. 5 "Yes," question No. 6 was left unanswered.
Counsel for Faber moved after verdict in the alternative: (1) For judgment notwithstanding the verdict; (2) for changing of the jury's answers to questions No. 4 and No. 5, for answering question No. 6 in the sum of $150, and for judgment upon the verdict as so changed; and (3) for a new trial because of certain alleged errors committed in the trial. Such motions were denied, and under date of November 7, 1956, judgment was rendered in behalf of Ross and against Faber in the sum of $115.29 and costs. From such judgment Faber has appealed.
The indebtedness of Faber to Ross in the sum of $115.29 is not disputed, but it is contended by Faber that he is entitled as a matter of law to recover on his counterclaim the sum of $150, against which the $115.29 is to be offset. This is because Faber's testimony, that the value of the purchased truck with the admitted defect in the rear-axle housing was $150 less than the agreed purchase price, is not directly controverted in the record.
Sec. 121.69(7), Stats., provides that, where the buyer retains the goods, and sets up breach of warranty by way of recoupment in diminution or extinction of the purchase price, the measure of damages "in the absence of special circumstances showing proximate damage of a greater amount, is the difference between the value of the goods at the time of delivery to the buyer and the value they would have had if they had answered to the warranty."
Sec. 121.69, Stats., constitutes sec. 69 of the Uniform Sales Act. The measure of damages set forth in sub. (7) thereof has been held applicable to breach of a warranty given in the sale of a motor vehicle, where the warranty read similarly to the one before us on this appeal. Cannon v. Pulliam Motor Co. (1956), 230 S.C. 131, 94 S.E.2d 397, and Studebaker Corp. v. Nail (1950), 82 Ga. App. 779, 62 S.E.2d 198.
It was the position of the learned trial court that a jury issue was presented as to whether the dealer possessed the option to repair a minor defect instead of replacing the defective part with a new one. It was on this theory that question No. 4 was submitted in the special verdict. We cannot agree with such interpretation of the warranty.
It has been held that under an automobile warranty, which is similar in wording to the one now before us, the same is exclusive in nature in so far as precluding the purchaser from recovering on the theory of implied warranty. Wall v. Britton Stevens Motors Co. (1925), 251 Mass. 517, 146 N.E. 693, 43 A.L.R. 647; Kolodzcak v. Peerless Motor Co. (1931), 255 Mich. 47, 237 N.W. 41; and Runco v. Brockway Motor Co. (1949), 164 Pa. Super. 240, 63 A.2d 397. If such warranty is exclusive as to the rights of the purchaser, it would seem to follow that it is likewise exclusive as to the rights of the warrantor, which in the instant case is Ross, seller of the truck. Nowhere in such warranty is there any option given the warrantor to substitute the making of repairs in lieu of replacing the defective part. We reject any contention that such an option may be held to exist by implication.
Apparently the trial court based its interpretation, that Ross had the right to substitute a repair of a defective part in a situation where repairing the defective part would place it in the condition warranted, upon the word "necessary" appearing in the afore-quoted clause in the service policy which accompanied the warranty. The sentence in which such word was employed read, "Should the replacement of any part become necessary under the warranty, we, the selling dealer, will make the replacement without charge to you for the part or labor required to replace the part." It seems clear to us that whether it is " necessary" to replace a part is dependent entirely upon the provisions of the warranty, and such use of the word " necessary" in the service policy was not intended to limit further the liability of the dealer as stated in such warranty. Under the express wording of the warranty, the dealer was required to replace any defective part subject to certain exceptions stated therein. A defect which could be made good by repair is not included within such stated exceptions.
It, therefore, necessarily follows that the submission of question No. 4 in the verdict, and the giving of that portion of the charge to the jury with respect to such question, constituted prejudicial error.
A purchaser, in the position of Faber, may waive his right under the warranty, to have a defective part replaced by a new one, by accepting a repair of such part in lieu of such replacement. The testimony of Ross, as to what was said and done by the parties at the time the pinholes in the rear-axle housing were repaired by means of the peening hammer, would support a finding of waiver on the part of Faber. However, Faber's testimony in this respect negatives such a finding. Because of such conflict in the testimony a jury issue was presented on the issue of waiver. No question in the special verdict was directed to this issue, and this prevents us from reversing and remanding with directions that judgment be rendered on the counterclaim in behalf of Faber. We deem that because of the failure to submit such issue a new trial should be directed inasmuch as the real controversy has not been fully tried. Sec. 251.09, Stats.
By the Court. — Judgment reversed, and cause remanded for a new trial not inconsistent with this opinion.