W. D. Sessums Motor Co. v. White , 239 S.W. 329 ( 1922 )

So far as the representations were actionable, they were express warranties, and as such became a part of the contract between the parties; and we think the suit should have been predicated on them as warranties, and not as misrepresentations of fact constituting fraud. But if it had been appellee would not have been entitled to a rescission on the case made by the testimony, for there was no provision in the contract authorizing appellee to rescind it if the car was found to be defective in respects covered by the warranties. The representations having been made in good faith, and not fraudulently, and the parties having failed in their contract to provide for a rescission thereof if the warranties were breached, the case in its facts was within the rule adopted by the Supreme Court in Wright v. Davenport, 44 Tex. 164. In that case the buyer of an engine sought a rescission of the contract on the ground that the seller had guaranteed the engine to saw 4,000 feet of lumber a day, whereas it was not capable of sawing more than 2,000 feet a day, and for that reason was wholly useless to the purchaser. In reversing a judgment rescinding the contract as prayed for by the buyer, the Supreme Court approved, as correctly announcing the rule it adopted, the statement in Sedgwick on Damages, 286, that:

"Where there is no fraud and no agreement to return the vendee cannot, at his own option, rescind the contract, but has only an action on the warranty"

— the statement in Stovey on Contracts, § 850, that:

"If the warranty goes to the degree of fitness or to quality, and it proves to be of an inferior quality or fitness, the goods cannot be returned, and the remedy is by action for damages, the measure of which is the difference between the value of the article as it is and as it was represented to be. Thus, if a machine is sold for a particular purpose, and it will perform none of the functions, it may be returned; but if it only perform them badly the remedy is by action for damages"

— and the statement in 2 Smith's Leading Cases, 276, that:

A "mere breach of warranty, unattended by fraud, does not entitle the vendee to rescind the contract or return the goods."

And see Organ Co. v. Thomas, 36 Tex. Civ. App. 78, 80 S.W. 1063; Fetzer v. Haralson (Tex.Civ.App.) 147 S.W. 290; Silo Co. v. Alley (Tex.Civ.App.)180 S.W. 621; 1 Black on Rescission and Cancellation, §§ 23, 185, 212; 5 Elliott on Contracts, § 5110.

Other questions presented by assignments are not likely to arise on another trial, and need not be determined.

The judgment is reversed, and the cause is remanded for a new trial.

On Motion for Rehearing. The theory on which this court held that the case was within the rule applied in Wright v. Davenport, 44 Tex. 164, was not sufficiently stated in the opinion disposing of the appeal. It should have been stated that the conclusion of the court was based on testimony of appellee as a witness in his own behalf which showed, the court thought, that appellant's liability (if any) was not for fraud practiced on him, but for breach of a contract of warranty. The court was of the opinion, and is still, that it conclusively appeared from said testimony that appellee did not rely upon the representations as statements by Boone of facts within his knowledge, but relied upon them as warranties that the automobile was as represented. The testimony of appellee referred to was as follows:

"Every day Mr. Boone would stop in and see me, and he would tell me that this car was built out of absolutely the best material in the world, and that it had the best workmanship that could be done on a car, and he went over their prospectus with me and showed me the stunts it would do in pulling sand and pulling mud, and he represented the car to be first-class in every particular, so I finally traded with him on those representations, provided he would give me his personal guaranty: that the factory guaranty only guaranteed to replace the parts; and Boone gave me his personal additional guaranty that I should be out no expense on the car for six months, and I traded with him on that basis. * * * I did not buy the car on the factory warranty. I bought it on the W. D. Sessums Motor Company's warranty. Yes; I knew that the factory made this warranty, and that is just the reason I demanded from Mr. Boone an additional warranty. * * * I reckon the warranty set out in the petition is the warranty that went with this car. I will say that I knew it, but Boone told me that the factory would guarantee all the parts of the car, and I said, `Well, that don't get you anything. I want a warranty from you that the car will be replaced, and be a first-class automobile.' * * * He guaranteed it for six months. * * * That is the main thing I bought the car on, that he would make the car go for six months. * * * I bought the car upon his personal guaranty to me that he would guarantee it for six months. * * * I do not say that he guaranteed to keep the car good for six months. I said he guaranteed to give me a first-class automobile; he guaranteed the car to be first-class in every respect, and that he would make that good for six months. * * * Boone guaranteed it to be first-class in every respect, first-class workmanship, first-class material, and all, and that is the representation I bought the car on."

The testimony set out plainly, and, as before stated, we think conclusively, shows that it was not reliance on Boone's knowledge of the car and the truth of the statements he made about it that induced appellee to buy it, but it was Boone's warranty or guaranty that the car was as represented. In other words, appellee was in the attitude of saying to Boone:

"You may have knowedge of the car sufficient to justify you in making the statements you save made to me, and those statements may be true, but I don't know that you have such knowledge nor that your statements are true, and am not willing to rely on them; therefore, before I will buy the car you must agree that, if it is not as you have represented it to be you will reimburse me for any loss I sustain because it is not."

So construing the testimony, and giving effect to the finding of the trial court that the representations by Boone were made in good faith, there was no fraud in the transaction, and the case on its facts is clearly within the rule adopted in Wright v. Davenport; for there is no doubt when Mr. Sedgwick said that "where there is no fraud and no agreement to return the vendee cannot, at his own option, rescind the contract, but has only an action on the warranty," he meant actual fraud. And we think there is as little reason to believe the Supreme Court meant anything else when they approved Mr. Sedgwick's statement as correctly interpreting the law.

If, in addition to the fact that the representations made by Boone were false, as determined by the trial court, it appeared that appellee was induced by his reliance on the truth of same to buy the automobile, we think his right to relief on the ground of fraud would not be affected by the fact that Boone made the representations in good faith. It is the fact, as appears from his testimony, that he did not rely on the truth of the representations that causes us to think he has no right to relief on that ground, but must look for relief to the warranty he exacted, which he did rely upon. Trans. Line v. Trans. Co., 129 Mich. 209, 88 N.W. 473, 56 L.R.A. 989, 24 R.C.L. 339. In the case cited the vendor, in negotiating the sale of a steamer, stated it would make 15 miles an hour, and the contract of sale warranted the boat to have such speed. It turned out the boat could not run so fast. The court held that the vendee, having insisted upon and relied on the warranty, was not entitled to relief because the representation was false, it not appearing it was fraudulently made. The court said:

"Whatever may have been the rights of the parties before the contract was entered into, we think it is clear that, having insisted upon and relied upon the warranty being embodied in the contract, the complainant's reliance must be upon the written warranty."

If, however, we thought the testimony warranted a finding that appellee was induced to buy the car by reliance he placed on the truth of Boone's representations, we would not think the appeal could properly be disposed of otherwise than it was; for we think it appeared from testimony referred to in the opinion that, if appellee ever had a right to rescind the contract for fraud practiced on him, he waived it. Car Co. v. Brashear (Tex.Civ.App.) 158 S.W. 233.

The fact that the testimony showed and the trial court found that appellant had possession of the car after August __, 1920, and at the time of the trial, was not, as appellee suggests it was, overlooked in determining that it appeared that he was not entitled to the rescission of the contract granted by the trial court. The testimony did not show and the trial court did not find that appellant's possession was based on either a claim on its part of a right to rescind it or on agreement between it and appellee to rescind the contract. The finding of the trial court was that the car was "turned over" (presumably by appellee) to appellant August __, 1920, but for what purpose he did not say, except so far as it may be inferred from his finding that appellant "again had it worked over" and tendered it to appellee. And it appeared from the testimony that appellant was entitled to the possession of the car by the terms of a mortgage given by appellee to secure the payment of his note due June 15, 1920, as stated in the opinion reversing the judgment.

The motion is overruled.