Case Name: The Aultman & Taylor Company vs. Hetherington and others
Court: Wisconsin Supreme Court
Jurisdiction: Wisconsin
Decision Date: 1877-08
Citations: 42 Wis. 622
Docket Number: 
Parties: The Aultman & Taylor Company vs. Hetherington and others.
Judges: 
Reporter: Wisconsin Reports
Volume: 42
Pages: 622–625

Head Matter:
The Aultman & Taylor Company vs. Hetherington and others.
Sale op Chattels : Warranty: Counterclaim. (1) Measure of damages for breach of warranty. (2) Sow far recoverable in suit on one of several notes for price. (3) Remedy against the other notes.
1. The measure of damages for breach of the vendor’s warranty is the difference between the actual value of the article and the value which it would have possessed if it had been as warranted; and the price paid, or contracted to be paid, is merely evidence of the latter value.
2. Notes given for a part of the contract price are not payment, in this state, unless it is expressly so agreed; in a suit upon one of several such notes, it will be presumed, in the absence of evidence, that those not yet due or paid are still in the vendor’s hands; and it is error to render judgment for the defendant for the excess of his damages, for breach of warranty, over the note in suit. Aultman <& Co. v. Jett and others, ante, p. 488.
8. Whether the trial court, in such a suit, can require plaintiff, as a condition of recovery, to surrender the outstanding notes, is not here decided.
APPEAL from tlie Circuit Court for Pierce County.
Action to recover the amount of a note for $277, executed to the plaintiff by defendants, together with two other notes payable at a later date; the three notes being for an aggregate of $750, with interest, and having been given for the price of a threshing machine sold by the plaintiff, either to the defendant Hethermgton alone, or to him and one Gilmore. Hetherirngton’s codefendants signed the notes as sureties. The answer alleged breaches of certain warranties given upon the sale of the machine, to defendant’s damage $650. Defendants had a verdict and judgment for $51, and plaintiff appealed from the judgment. '
The errors relied upon for a reversal, so far as they are important here, will sufficiently appear from the opinion.
The cause was submitted on the brief of J. 8. WMte for the appellant, and that of Smith d? Hale for the respondent.
Por the respondent it was contended, among other things, that the measure of defendants’ damages for breach of war ranty was correctly stated by tbe court to be tbe difference between tbe value of tbe machine as it was, and wbat its value would bave been bad it corresponded with tbe warranty {Giffert v. West, 33 Wis., 617; Bonnell v. Jacobs, 36 id., 59; Merrill v. Nightingale, 39 id., 247, 250; Sedgw. on Dam., 6tb ed., 347, and cases cited in notes); but that the price paid wras evidence of tbe latter value {Chaplain v. Warner, 23 Wis., 448; Nish v. Hides, 31 ET. H., 535; Pwrlcer v. Brown, 15 id., 176); and that, there being no controversy as to tbe fact that tbe machine would bave been worth tbe price paid if it bad been as warranted, tbe court did not err in charging that the measure of defendants’ damages was tbe difference between tbe price paid and tbe actual value.

Opinion:
Oole, J.
There would seem to be some inconsistency, as claimed by tbe plaintiff's counsel, between that portion of tbe charge wherein tbe jury were told that, if they found there was a breach of warranty, tbe measure of damages would be the difference between tbe actual value of the machine and tbe value it would have possessed if it bad conformed to the warranty, and tbe instruction which was given at tbe request of tbe defendants, to tbe effect that the defendants bad a right to rely upon the warranty, and were entitled to a deduction of tbe difference between the cost price of tbe machine and wbat it was actually worth at tbe time tbe contract was made. Tbe contract price of tbe machine was $750, while all tbe evidence on tbe part of the defendants bearing upon tbe point fixed its value, if a good machine, at $600. It is certainly true that both these rules, when tbe evidence is considered, could not be correct; and tbe inconsistency was well calculated to mislead tbe jury as to tbe proper measure of damages. Tbe rule is now well settled, that a warranty binds a vendor, in case of a breach, to repay tbe difference between the actual value of tbe article sold, and its value as it would bave been bad it been as warranted, tbe price paid being merely evidence of that value. Sedgw. on Dam., 287; Benj. on Sales, § 913, and cases cited in note (d).
But, without dwelling upon this inconsistency in the charge in respect to the measure of damages, it is plain the judgment must be reversed under the rule laid down in G. Aultman & Co. v. Jett et al. [ante, p. 488]. That case, like this, was an action upon one of several promissory notes, given by the defendants for a machine. And the court there charged, as the court charged in this case, that if a breach of warranty was established, the defendants might recover from, the plaintiff the difference between the actual value of the machine as it was, and its value had it corresponded to the warranty, and, if this difference exceeded the amount of the note sued on, the defendants were entitled to a judgment for the excess. The radical error in that view of the case was held to be this: that the transaction was treated as though the vendees had paid for the machine, and the defendants recovered damages upon that basis; whereas they had only given their promissory notes for it, which in this state does not operate as payment, unless it is so expressly agreed by the parties at the time. There were two other notes given by the defendants for the machine, which are unpaid, besides the note in suit. We must presume that these notes are still held by the plaintiff, as there is nothing to show that they have ever been transferred. Now, such'being the fact, it would seem unjust to allow the defendants to recover full damages for the breach of warranty, the same as though they had paid for the machine, when those damages largely exceeded the amount of the note sued upon. Under the rule just referred to, the mere giving of the notes did not operate as payment, nor was it attended with the legal consequences of payment. If it appeared that the notes had been negotiated, a different question would be presented; but it does not appear that they have been, and we must assume that they are still held by the plaintiff. The defendants have seen fit to keep the machine, which is not worthless. Now, suppose the machine had been bought on credit, no notes having been given. In an action brought for the purchase money, if the defendants had set up a breach of warranty in diminution of the contract price, it is very evident that they would have been charged with the actual value of the machine. The effect of the charge is to give them the damages for the entire breach, though they have paid nothing. This, it seems to us, is clearly incorrect; and for that reason there must he anew trial.
To prevent further litigation it may possibly be in the power of the circuit court to require the plaintiff to surrender the outstanding notes as a condition of recovery in this action. That question is not before us on this record, and we therefore do not decide it; but, for the reasons above given, the judgment must be reversed and a new trial ordered.
By the Gourt. — So ordered.