Jackson v. Advance-Rumely Thresher Co. , 62 N.D. 143 ( 1932 )

Plaintiff brought this action for rescission of a contract under the terms of which the plaintiff purchased from the defendant a certain harvester-combine. In his complaint he alleges that on or about August 13, 1928, he purchased from the defendant a certain harvester-combine and that in payment thereof he executed and delivered to the plaintiff three certain promissory notes; that said machine was purchased for the personal use of the plaintiff in the harvesting and threshing of grains on farm lands in this state, all of which was known to the defendant; that the machine was unfit, and did not properly perform the work, for which it was purchased; that it was defective in workmanship and material and could not be made to operate successfully; that on or about September 5, 1928, plaintiff rescinded the purchase and gave notice of such rescission to the defendant and the agent who had negotiated the sale and that the machine had been placed at the disposal of the defendant as its property, and demanded a return of the promissory notes; that the defendant rejected the offer and refused to surrender the notes or to accept redelivery of the machine; that by virtue of the provisions of chapter 238 of the Session Laws of North Dakota for the year 1919 plaintiff had a reasonable time after the delivery of the machine to inspect and test the same; that it was so inspected and tested within a reasonable time after delivery and proved unfit for the purpose for which it was purchased and that the sale was duly rescinded in conformity with the provisions of said chapter 238, Laws 1919 and that plaintiff is entitled to a return and redelivery of said promissory notes. The defendant interposed an answer wherein it is asserted that chapter 238, Laws 1919, is unconstitutional in this, that it interferes with the freedom of contract; imposes an arbitrary and unreasonable burden upon business; deprives the defendant of its property and its right to contract without due process and denies to it the equal protection of the laws, all in violation of the guarantees of the Fourteenth Amendment to the Constitution of the United States.

The answer further alleged: "The plaintiff contracted and agreed that said machine was purchased without warranty of any kind, with respect to material or workmanship, fitness for the purpose of purchase, or otherwise, and that plaintiff as such purchaser would and did waive any and all warranties of every kind, express, implied or statutory, and all right to claim or demand any remedy for the breach thereof, and did agree unconditionally to pay the purchase price of said machine as represented by the promissory notes described in the complaint."

The plaintiff demurred to this answer. The demurrer was sustained and judgment was entered in favor of the plaintiff.

Chapter 238, Laws 1919, so far as material here, provides:

"Sec. 1. Any person . . . purchasing any gas or oil burning tractor, gas or steam engine, harvesting or threshing machinery for their own use shall have a reasonable time after delivery for the inspection and testing of the same, and if it does not prove to be reasonably fit for the purpose for which it was purchased the purchaser may rescind the sale by giving notice within a reasonable time after delivery to the parties from whom any such machinery was purchased, or the agent who negotiated the sale or made delivery of such personal property or his successor, and placing the same at the disposal of the seller.

"Sec. 2. Any provision in any written order or contract of sale, or other contract which is contrary to any of the provisions of this Act is hereby declared to be against public policy and void."

The objects sought to be accomplished by the enactment of this statute are clearly enunciated in the statute itself. They are to obtain for the purchaser of machinery of the kind described in the statute "a reasonable time after delivery for the inspection and testing of the same;" and if it did "not prove to be reasonably fit for the purpose for which it was purchased," to afford the purchaser the right to "rescind the sale by giving notice within a reasonable time after delivery to the parties from whom any such machinery was purchased, or the agent who negotiated the sale or made delivery of such property or his successor and placing the same at the disposal of the seller." At the time of the enactment of the statute, and during the entire history of the state prior thereto, the production of grain was and had been the basic industry of the state. Contracts for the purchase of machinery to be utilized in the production of grain were in a very real sense the most important contracts in the state. All machinery so purchased and used in this state was manufactured outside the state, — the different manufacturers and distributors maintaining offices and employing sales agents within the state. The sales contracts were prepared by the seller. As a rule there was no opportunity for the purchaser to inspect the machinery at the time the contract was signed by him. Generally the contracts were in the form of an order containing extended provisions having a tendency to restrict the rights of the purchaser and the liability of the seller. In some cases such contracts contained provisions waiving all warranties, in others the warranties were so limited as to be of little or no value, such, for instance, as providing that the machinery was "warranted only against breakage caused by manifest defects in material" and thus excluding all other warranties, both expressed and implied. Of course, tractors, harvesting and threshing machinery could be tested only during the proper season, that is harvesting machinery could be tested only during the harvest season and threshing machinery could be tested only during the threshing season. It was of vital importance to the people of the state that farm machinery should be fit for the purpose for which it was sold. If it failed to work and other machinery must be obtained it was essential that the purchaser should be in position to do so at once as the delay of only a few days might result in the loss of the entire crop. While the farmers in purchasing machinery dealt with agents in this state, the contracts frequently, if not generally, contained provisions to the effect that in the event the machinery failed to comply with the warranties, written notice of this fact must be given directly to the seller at its head office within a stipulated number of days or hours after the delivery of the machine. The records of this court show that in many cases purchasers of machinery, finding it to be defective, in good faith notified the agent from whom they purchased it, or the general agent, or both, but failed to notify the head office within the time stipulated in the contract and, consequently, lost the right to assert the breach of warranty.

It is matter of common knowledge that machinery of the kind enumerated in the statute, much of it wholly experimental in character, was sold in large quantities in North Dakota and that in numerous cases the purchasers, on account of provisions in the sales contracts of the nature alluded to above, were required to pay for machinery that was wholly useless. In many instances farmers who purchased such machinery lost their farms as a result of the financial obligations assumed by them under the contracts. The members of the legislature were, of course, fully aware of this situation. They were confronted with a condition and not with a theory and so in order to remedy that condition they enacted chapter 238, Laws 1919, so as to assure to every purchaser of machinery of the kind described in the statute, a reasonable opportunity to test the same, coupled with a right to rescind the contract if, upon such test, the machinery was found to be unfit for the purpose for which it was purchased. And, further, to permit such purchaser to give notice of the defects in the machinery and of the rescission of the contract to the representative of the company from whom the machinery had been purchased or his successor. The legislature recognized the necessity of legislation of this nature long before the enactment of chapter 238, Laws 1919. See chapters 218, 219, Laws 1913.

Viewed from a practical as distinguished from a legalistic standpoint it is apparent that chapter 238, Laws 1919 has not imposed any conditions upon the purchase and sale of farm machinery that seriously interfere with such business in this state. The law became effective July 1, 1919 and since that time has affected all contracts for the purchase and sale in this state of machinery of the kind described in the statute. Minneapolis Threshing Mach. Co. v. Hocking, 54 N.D. 559,209 N.W. 996. And, although there apparently has been a substantial decrease in litigation concerning farm machinery, cases have arisen involving the construction and application of the statute (See Minneapolis Threshing Mach. Co. v. Hocking, 54 N.D. 559,209 N.W. 996; Palaniuk v. Allis-Chalmers Mfg. Co. 57 N.D. 199,220 N.W. 638; Allis-Chalmers Mfg. Co. v. Frank, 57 N.D. 295,221 N.W. 75; Dwinnell v. Boehmer, 60 N.D. 302, 234 N.W. 655; Bratberg v. Advance-Rumely Thresher Co. 61 N.D. 452, 238 N.W. 552, 78 A.L.R. 1338; Holden v. Advance-Rumely Thresher Co. 61 N.D. 584,239 N.W. 479; Jesperson v. Advance-Rumely Thresher Co. 61 N.D. 494, 240 N.W. 876); but the validity of the law was first drawn in question in Bratberg v. Advance-Rumely Thresher Co. 61 N.D. 452,238 N.W. 552, 78 A.L.R. 1338, supra, which involved a contract made more than eight years, and litigation which arose more than ten years, after the law had become effective.

It is undisputed that the machinery involved in this case is a gas and oil burning harvesting and threshing machine and, hence, falls within the class of machinery covered by the statute.

The defendant contends that the statute infringes rights guaranteed to it by the Fourteenth Amendment to the Constitution of the United States in the particulars heretofore enumerated and that, consequently, the legislature transcended its power and that the enactment is void. This question was considered at length in the recent case of Bratberg v. Advance-Rumely Thresher Co. 61 N.D. 452, 238 N.W. 552, 78 A.L.R. 1338, supra. Apparently the contract involved here is the same as that which was involved and considered in that case and the machinery involved is also of like character. We deem it unnecessary to restate at length in this opinion the reasons for the conclusions announced by us in Bratberg v. Advance-Rumely Thresher Co. to the effect that the statute does not infringe upon any of the constitutional guaranties invoked by the appellant. It is sufficient to say that we still adhere to the views there expressed.

It follows therefore that the trial court was correct in holding that the plaintiff was entitled to reasonable opportunity to try the harvester-combine and that the provisions in the contract waiving the right to test the machine and to rescind the contract were not binding upon him. The judgment appealed from is affirmed.

CHRISTIANSON, Ch. J., and BURKE, NUESSLE and BURR, JJ., concur.