Fairbanks, Morse Co. v. Miller , 80 Okla. 265 ( 1921 )

This cause is before the court upon a petition for rehearing filed by Fairbanks, Morse Company, plaintiff in error, and counsel in support of the petition for rehearing have, with much ability and earnestness, presented numerous reasons why the motion for rehearing should be sustained. This action was originally commenced in the district court of Kay county by the plaintiff in error against Joseph C. Miller et al. to recover upon a promissory note given in payment of the purchase price of a tractor engine sold the defendants in error in June, 1914, the contract of sale being in writing. The defendants, in their amended answer filed in this cause, pleaded a breach of warranty which they alleged was in writing, and in substance pleaded the warranty found in the written contract of sale. The contract of sale contained the following provisions:

"Kansas City, Missouri, Miller Bros., (hereinafter called buyer) of Bliss, Oklahoma, Fairbanks, Monse Company, (hereinafter called seller) hereby propose to furnish and deliver f. o. b. cars Beloit, Wisconsin, one 30-60 tractor complete with air starter, $2750 Engine.

"Warranty. "Seller hereby warrants that the engine named herein shall be tested at its factory before shipment and shall develop its rated horse power. That the engine shall be made of good material and in a workmanlike manner. That repairs required any time within one year from date of first starting will be furnished to the buyer f. o. b. Beloit, Wisconsin, without charge, provided investigation shows such repairs are made necessary by inherent defects of either material or workmanship of the machine furnished, but the seller assumes no liability nor will be responsible for damages or delays caused by such defective material or workmanship, nor will seller make any allowance for repairs or alterations made by others, unless same are made with its written consent."

The contract then, after providing for a warranty of the engine, has this further stipulation:

"Delivery to carrier consigned to buyer is a conditional delivery to buyer for the purposes hereof, and waives any claim that seller or its assigns has breached any warranty, or other stipulation hereof, except as to defect in material or workmanship."

It is insisted by counsel for plaintiffs that, the contract of sale being in writing, the mutual rights and obligations of the parties to it must be determined by the writing itself, and not by considerations de hors the writing; that the written contract is the criterion by which the obligations of the parties must be determined. We agree with counsel that the obligations of the parties to this controversy must be adjudicated according to the terms of the written contract of sale, but we cannot concur in the contention made by counsel that the warranty of the engine sold as being of good material and constructed in a workmanlike manner would be satisfied in case of a breach of such warranty by merely furnishing repairs for one year, whether the repairs served any useful purpose in making good the defect or not. According to the contention urged by counsel for the plaintiff in this cause it could have shipped any kind of a worthless tractor engine to the defendants and then furnished repairs for one year and thereby all of its obligations and responsibilities to the defendants by reason of having furnished the repairs for one year would be discharged. The warranty under consideration in unmistakable language obligated the plaintiff to furnish the defendants a tractor engine of 30-60 horse power, constructed of good material in a workmanlike manner. The plaintiff assumed the further obligation of repairing this engine for one year on account of inherent defects in material or workmanship. According to a respectable portion of the testimony in the case at bar, the repairs furnished did not remedy the defects of the engine. If the warranty in the case at bar is to be given the construction claimed by the plaintiff, the provisions of the contract of sale warranting the engine to be of good material and constructed in a workmanlike manner and that it would develop 30-60 horse power, would be meaningless.

The court will not permit parties to assume a solemn obligation under a written contract and then avoid it by some catch phrase or indefinite statement. In the case of Jones v. Penn. Casualty Co., 140 N.C. 262, 5 L. R. A. (N. S.) 932, the Supreme Court of North Carolina, in construing an insurance policy for an indemnity of $5 per week for 26 weeks, said:

"The policy, section 4, contains a definite stipulation for indemnity at $5 per week, not to exceed 26 weeks, in case of disability arising from certain specified diseases, blood poisoning being one expressly named. This disease being evidently the direct and controlling cause of the disability, as a matter of first impression the right of the plaintiff to recover would seem to be clear. The policy, however, having given this assurance of indemnity, then takes up the matter of provisos by way of restriction, and stipulates further: (1) That this policy shall not apply to any illness or disease whatever except those named. * * * There are many other limitations and restrictions in the policy, for, as my Lord Coke would say, the 'etc.' meaneth much; but those set out are enough to show that, if these provisos can prevail, blood poisoning is entirely withdrawn from the operation of the policy, and any and all stipulation for indemnity concerning it effectually removed. * * * As to this disease, therefore, these provisos remove every possible condition where the disease can occur and, if upheld, would, as stated, entirely set aside the definite contract for indemnity contained in a former clause of the policy. Such a result cannot be permitted, and is not sustained by authority."

To adhere to the contention urged by counsel for the plaintiff that the extent of the obligation on the part of the seller of the engine was to furnish repairs to satisfy the first part of the warranty under the contract of sale would in effect mean that if the engine would not develop any horse power whatever, or if in fact the engine would not move its own weight, the defendants would have no remedy whatever, except to ask for repairs. Such a conclusion is not founded upon reason, and no such construction can logically be placed upon the contract in question. If the contract means anything, the engine was to be one constructed in a workmanlike manner, of good material, useful for the purposes for which such articles are manufactured and placed upon the market.

Webster's New International Dictionary defines "workmanlike" as "skillful and well done." The Century Dictionary defines the word "workmanlike" to mean "like and worthy of a skillful workman; hence, well executed; skillful"; and "skillful" is defined as "having ability in a specified direction; experience, practice."

The Supreme Court of Oregon, in the case of Holland v. Rhoades, 106 P. 779, said:

"Good and workmanlike manner means in such a way that a workman of average skill and intelligence, the conscientious workman, would do the job. It is good, average work. What is considered the work of a man of good workmanlike ability."

Now, if the engine in question sold was not constructed in such a way as to make it useful for the purposes for which such machinery is ordinarily used, then the warranty was breached, and the furnishing of repairs until doomsday, without remedying the defects, would not be a compliance with the warranty.

The testimony which plaintiff complains of being admitted over its objections and exceptions was the statement of different mechanics furnished by the plaintiff to repair the tractor in controversy. This testimony was competent for the purpose of showing that the tractor was defective in material and construction, but could not be admitted for the purpose of establishing the obligation of the plaintiff, as that was controlled by the written contract of sale.

It is insisted, with great persistence, that a delivery to the carrier of the tractor in question consigned to the buyer constituted a waiver on the part of the buyer to insist on the warranty that the engine would develop its rated horse power. The effect of placing such construction on the contract of sale would lead us to the absurdity that if the tractor received by the defendants would not develop any power whatever, the defendants could not complain; or, in other words, if the tractor was useless for any purpose for the reason that it would not develop any power, then the defendants must abide by the contract and keep the tractor, although they would have to junk it the first day they received it.

The contract provides that the plaintiff shall furnish a 30-60 horse-power tractor engine. Now, before the plaintiff is entitled to recover the purchase price, it must furnish what it sold; and, disregarding any warranty whatever, it agreed to furnish a 30-60 horse-power tractor engine, and, in addition to agreeing to sell that kind of a tractor, it specifically warranted that it had tested the engine and that it would develop its rated horse power. To hold that the plaintiff was relieved from this solemn obligation on account of the provision of the contract that a delivery to the carrier of the tractor consigned to the buyer waived any claim that the defendants have by reason of the warranty would be to render that part of the contract of sale in which the plaintiff agreed to furnish an engine of 30-60 horse power a nullity. It would have been impossible for the defendants to receive the tractor at their place in Oklahoma from the seller without a delivery to the carrier, and if the construction is to be placed upon that part of the contract with respect to a delivery to the carrier as argued by the plaintiff, the same is in conflict with that part of the contract obligating the plaintiff to furnish a tractor of a certain rated horse power and warranting the same to have been tested, and the same could not be sustained.

It is a well-settled rule of law, where two clauses of a contract are so repugnant that they cannot stand together, the first is to be given effect and the latter rejected. 6 Rawle C. L., sec. 236; Henne v. Summers (Cal.) 116 P. 86. The Supreme Court of North Carolina, in Nelson C. Jones v. Pennsylvania Casualty Co., supra, said:

"Another principle applicable to the case before us, and equally well established, is that, while clauses in a contract apparently repugnant must be reconciled if it can be done by any reasonable construction, yet a proviso which is utterly repugnant to the body of the contract and irreconcilable with it will be rejected; likewise, a subsequent clause irreconcilable with a former clause and repugnant to the general purpose and intent of the contract will be set aside. Hawkins v. Goldsboro Lumber Co., 139 N.C. 160, 51 S.E. 852; Bishop on Contracts. secs. 386, 387; Devlin on Deeds, sec. 838; Beach, Modern Law Contracts, sec. 718."

If one construction would make a contract unreasonable, while another would do justice to both parties, the latter will be adopted. Every part of a contract must be taken to have been used for a purpose, and each provision must be considered in connection with others, and, if possible, effect given to all. The courts will look to the written instrument and, if possible, give such construction as will give some effect to each part of the contract, and at no time will the court place a construction upon a contract that will place the parties thereto in an absurd and unreasonable position. The existing and settled law becomes a part of every contract and must be read into it, and all contracts must be construed according to the rules and principles of law applicable to the subject-matter of the transaction, and in the case at bar there was an implied warranty that the tractor furnished by the plaintiff would correspond with the description, and that it would be suitable to perform the ordinary work which the described machine is manufactured to do. In the case of Davis Calyx Drill Co. v. Mallory, 137 Fed. 332, Judge Sanborn laid down the following rule:

"The extent of an implied warranty in such case is that the machine, tool, or article shall correspond with the description or exemplar, and that it shall be suitable to perform the ordinary work which the described machine is made to do."

Many authorities sustain the rule that an implied warranty on sales of machinery that does not contradict the terms of an express warranty may be established, and especially it is permissible to show that the machinery is fit for the purpose for which it was purchased. Blackmore v. Fairbanks, Morse Co., 79 Iowa, 282, 44 N.W. 548; Loxtercamp v. Lininger Implement Co., 147 Iowa, 29, 125 N.W. 830.

The Supreme Court of Tennessee, in the case of Southern Brass Iron Co. v. Exeter Machinery Works et al., 70 S.W. 614, said:

"One who sells machinery for a special use, communicated to him at the time, impliedly warrants that it is reasonably suitable for the use intended, whether it was in stock or specially manufactured to fill the particular order."

In the case of Michael Seitz v. Brewers' Refrigerator Machine Co., 141 U.S. 510, 35 L. Ed. 837, the Supreme Court of the United States, speaking through Mr. Chief Justice Fuller, said:

"In the case at bar the machine purchased was specifically designated in the contract, and the machine so designated was delivered, put up, and put in operation in the brewery. The only implication in regard to it was that it would perform the work the described machine was made to do, and it is not contended that there was any failure in such performance."

Now, in the case at bar the tractor to be furnished under the written contract of sale was described as a 30-60 tractor. Undoubtedly by that statement the plaintiff meant that it would furnish to the defendants a tractor that would develop 30-60 horse power. If the tractor sold would develop its rated horse power, it necessarily follows that it would be useful for the ordinary purposes of operating a threshing machine, binders, and plows; so we believe the rule to be well founded and supported by authorities that in a sale of machinery there is an implied warranty that it will perform the ordinary work which such machinery is manufactured to do.

It was competent in the case at bar to admit the testimony of the different witnesses as to how the tractor operated and the result obtained from the operation of the machine. It was, therefore, competent for the witnesses to testify as to the horse power developed by the engine.

The plaintiff in error, in its motion for rehearing, says it is not true that on the date of the execution of the note in question the defendants refused to settle for the tractor and that the plaintiff agreed that it would make its contract of warranty good and remedy the defects in the machine; and contends that Mr. Erskine, the traveling salesman of the plaintiff, had no authority to make any contract binding the plaintiff. We find in the record, at page 90, the following statement by the witness George L. Miller:

"Mr. Erskine came down to make settlement for the Fairbanks-Morse business; we had an irrigating pump and stationary engine and a small tractor and this tractor, and had a great deal of business with the Fairbanks-Morse Company that year. I don't know how much our account was, but it was considerable. On the settlement of this machine, I complained considerable to him; he says: 'We have our men in this territory and they will be with you any time you want them. This machine will be made good.' I complained to him about the crank-case; we never could keep it on; the men said the bolts kept breaking off. * * * That is how I came to give him the note."

Now, the plaintiff will not be heard to say that Mr. Erskine could not bind the plaintiff in this transaction. It accepted the note executed by the defendants and thereby ratified any agreement made by Mr. Erskine; and the reply filed by the plaintiff to the answer of the defendants pleaded the written contract of sale, which fixes the price of the tractor at $2,750, and a second-hand separator at $400, making a total of $3,150; and the reply filed admits that on September 14, 1914, defendants paid to the plaintiff $400, and on January 1, 1915, $750, leaving a balance due to the plaintiff of $2,000. The witness George L. Miller testified that the $2,000 represented the balance due on the purchase price of the tractor sold to the defendants. This was competent testimony supporting the verdict of the jury that the note was executed in settlement of the purchase price of the tractor in question, and his testimony upon this proposition was competent for the purpose of showing that the plaintiff had notice of the defects of the tractor sold, and to explain why the defendants executed the note and that their action in executing the note under the circumstances did not constitute a waiver of the warranty contained in the written contract of sale.

We have examined the record, and find that the court in his instructions to the jury fairly submitted the question of a breach of the written warranty to the jury, and there is competent testimony sustaining the verdict of the jury. The question of the waiver of the defects or a breach of the warranty by giving the note and securing a renewal thereof was properly submitted to the jury under the testimony, and the evidence shows that the defendants, on more than one occasion, tendered the property back to the plaintiff; that the same was retained at the solicitation of the agents of the plaintiff and that the plaintiff attempted, on different occasions, to repair the engine so that it would perform the service for which it was purchased.

It is therefore ordered that the petition for rehearing herein be denied.

All the Justices concur.