Court Opinion

ID: 3832255
Source: CourtListenerOpinion
Date Created: 2016-07-06 08:02:55.7606+00
Date Added: 2024-06-11T10:52:42.190644
License: Public Domain

The question involved in this case is as to whether or not the plaintiffs in error are in a position under this record to avail themselves of the condition of warranty.
There is no dispute that the plaintiffs in error did not give the written notice to the defendant in error at its home office at Findlay, Ohio, by registered letter, or any written notice to the local or general agent through whom the machine was received (for it was not received through any local or general agent), stating particularly what parts were defective and wherein the warranty failed. But the question arises as to whether or not the actual notice that was brought to Schon, the admitted agent of the defendant in error, relieves the plaintiffs in error in that respect, and permits them to avail themselves of the conditions of warranty. The agent, Schon, in his deposition admits that, acting for the defendant in error under its instructions he went to Lawton to set up the machine, and operated it about two weeks. He testified that he was "experting" (meaning setting up and supervising and installing the machinery as agent), and that he was authorized by the defendant in error to accept notice of defects or breakages, and also was authorized by the company that, if he saw defects, to make the same right, but he stated that, after he had "experted" the same and gotten away from there, he was not authorized to receive notices. According to the evidence offered on the part of the plaintiffs in error, he had actual knowledge that the machinery did not comply with the contract; that the defendant Hale stated that he would send the notice required by the conditions of the contract of warranty to the home office, and Schon said that it *Page 33 
was not necessary; that he was agent for the company; and that notice to him was sufficient. He was there authorized to make settlement, to collect money, and to receive notice of defects, which could mean nothing more than the failure of the machinery to comply with the warranty.
In the case of Harrison et al. v. Russell   Co., 12 Idaho 625, 87, Pac. 785, the court, in construing a warranty clause substantially the same as that involved in this case, said:
"The only purpose of notice is to enable the vendor to examine the machinery and remedy any defects and put it in running order. When that purpose has been served, and the company's agents have taken charge of and examined and worked on the machinery, it becomes immaterial whether any notice at all has been given. Mass. Loan   Trust Co. v. Welch, 47 Minn. 183, 49 N.W. 740; Davis v. Robinson, 67 Iowa, 355, 25 N.W. 282;Nichols   Shepard Co. v. Wiedemann, 72 Minn. 344, 75 N.W. 208;Aultman-Talyor Co. v. Frazier, 5 Kan. App. 202, 47 P. 156;Baker v. Nichols   Shepard Co., 10 Okla. 685, 65 P. 100."
In this case, not only the expert mechanic, but also the general agent of the defendant in error, authorized to accept notice of defects, which would amount to failures of warranty, and to make allowances and deductions and collect money, was present and set up the machine, ran it and operated it for 14 days, and received notice from the plaintiffs in error of the defects, and that they stood on their warranty, he at the same time acting in such a way that they not only considered him as the general agent, but also treated him as such agent for the company; for, when he leaves within three or four days, they notify him of the failure of the ditcher to work according to his own testimony, and he advises them that he can come back only under the instructions of the defendant in error. At the same time the defendant in error was notified by the plaintiffs in error, and in January, under its instructions, Schon returns to repair the machine, and in March we find him back there again. Whilst he did not return that time under instructions from the company for this particular *Page 34 
work, he was still in its employ, and helped on the machine, which was then out of repair.
The case of Champion Machine Company v. Lawson Mann,42 Kan. 372, 22 P. 417, appears to be in point. The warranty clause in that instance required that notice must be given to the machine company at its home office in Springfield, Ohio, the machine to be subject to a second trial in their presence and under their direction, and, if the failure was not found to have arisen from any defect in the machine when properly adjusted and used, the machine would be considered as filling the warranty and be kept by the purchaser, but, if upon second trial said machine does not work properly, it might be returned and the payments would be refunded. J. P. Quigley, the manager of the Western branch office of the Champion Machine Company, and a man in his employ, went to the farm of Mann and set up the machine, and a day or two thereafter the vendee executed two notes to the company and delivered them to Quigley. The court instructed the jury:
"It was also provided in the contract of warranty that, if the machine did not perform properly, then immediate notice should be given to the Champion Machine Company, Springfield, Ohio, subject to a second trial in their presence and under their direction. When, if the failure should be found not to have arisen from any defect in the machine when properly adjusted and used, and the machine filled the warranty, then it should be kept by the purchasers. If, however, you find that the machine was set up and operated under the directions of J. P. Quigley, the general agent and manager of the defendant's branch house in St. Joseph, and the workmen whom he sent, and that the same failed to do good work, or was defective as charged in the petition of the plaintiffs, and that the said J. P. Quigley and his workmen knew of such failure, and the plaintiffs expressed dissatisfaction with the machine, and that said J. P. Quigley and his workmen continued to direct the operation of the machine until its use was abandoned by the plaintiffs, this would be sufficient notice to the defendant of the plaintiffs' claim that the machine did not comply with the terms of said warranty." *Page 35 
This instruction was approved in the case of Baker v. Nichols Shepard Co., 10 Okla. 690, 65 P. 102, the court said:
"Even if it had appeared to the jury that the written notice required by the warranty had not been strictly complied with, they should yet have found for the defendant, if they were satisfied upon the evidence, as it was adduced to them, that the plaintiff company had thus taken charge of the machine for the purpose of repairing and trying to put it in order. These acts dispense with that provision of the warranty which requires written notice of the failure of the machine to work in a satisfactory manner. It is provided in the warranty that: 'No general or special agent or local dealer is authorized to make any change in this warranty. Workmen or experts are not agents, and have no authority to bind the company by any contract or statement.' Such provisions as this are uniformly considered to be limitations upon the capacity of the corporation for further action which it cannot impose upon itself, and that such provisions cannot operate to prevent waiver by the corporation of the conditions of the contract which would, except for the prohibition, legally result from acts of its authorized agents with reference to the machinery. * * * In response to the notification of the defendant, the plaintiff took charge of the machine by these various agents and workmen, and attempted to put it in order. The attempt was subsequently and frequently repeated by persons representing the plaintiff from time to time. If the conditions of the printed warranty were binding upon the plaintiff, they were, at any rate, waived and thus fulfilled. * * * But we see no reason why the defense in this case should be put upon narrow grounds. The warranty in this case was mutual. It was signed by the defendant, but it was accepted by the plaintiff, and it was binding upon both, and it contained the warranty and agreement on behalf of the plaintiff that the 'said machinery is well made, of good materials, and, with proper management, capable of doing well the work for which the machines respectively are made and sold,' as well as the condition, 'that, if in five days from its first use it shall fail to fill this warranty, written notice shall be immediately given by the purchaser to Nichols   Shepard Company, at Battle Creek, Mich., stating particularly what parts and wherein it fails to fill the warranty.' The contract was mutual. The plaintiff was bound to remedy the defect, and, if possible, to make the machinery a practical success. It failed to do so. A number of experts working *Page 36 
in behalf of the company through a series of days, extending over almost the whole of a month, endeavored by repairing to get the machine into some kind of working shape. The evidence shows that their efforts were a failure, and the defendants ought to have been released from any liability.Aultman-Taylor Co. v. Frazier, 5 Kan. App. 202, 47 P. 157."
The contract provides:
"Ditcher to be constructed and warranted in compliance with letter of August 27th to J. O. Severns of Guthrie, Oklahoma Territory, and letter of John R. Hale of Lawton, Oklahoma Territory, of September 7th, 1904. Final settlement to be made on acceptance of machine."
Immediately thereafter we find the following provisions of warranty:
"The machinery furnished under the above order shall be made of good material, well constructed, and with proper use and management will do more and better work than any machine of its class. If inside of six days from the day of its first use it shall fail in any respect to fill this warranty, written notice shall be given immediately by the purchaser to the Van Buren, Heck   Marvin Co., at its home office, Findlay, Ohio, by registered letter, and written notice also to the local or general agent through whom the same was received, stating particularly what parts and wherein it fails to fill the warranty, and a reasonable time allowed the company to get to the machine with skilled workmen and remedy the defects, if any there be," etc.
In this case there was more than the usual warranty. In the letter of August 27, 1904, the machine is specifically described to have 75-inch traction wheels with heavy steel gear rims riveted to the inside of the tires, tires to be 3/4 inches thick, 24 inches wide, boiler to be of the Scotch-Marine type 60 inches by 104 inches, engines to be duplex slide valve 8 1/4 inches by 8-inch cylinders, crank shaft to be a steel forging, differential pinion and gear to be steel, machine to be equipped with No. 124 chain throughout, excepting on the feed, which will be either No. 88 or No. 103, excavating wheel to be constructed with heavy steel bucket tops, each armed with rooters, made entirely from tool steel, machine to have coal bunker and water tank beneath the *Page 37 
engine, elevator to be driven with steel bevel gearing, gear segments and sprockets which drive excavating wheel to be steel castings, machine guaranteed to cut 60 lineal feet of trench per hour in ordinary earth at the depth of 12 feet, machine to have low speed, 9 inches per minute, high speed of 8 feet per minute with engines running at their regular speed, excavating frame to be constructed of steel, as will also the standards connecting the excavating frame with the machine. Machine to be heavily and thoroughly braced throughout and to be first class in every respect, ground wheels to be constructed with removal and cleats, also front lugs, tiller wheels to be constructed with removable holding tire for the purpose of moving over asphalt pavement, machine to be a strong and powerful puller so that it can be used as a road locomotive when required.
The representations of the letter of September 7, 1904, are in part as follows:
"You want a 12' machine. We have one that has put in about a thousand feet of extremely hard material. In fact, there was no earth at all. It was all shale, most of which could be picked, interspersed, however, with flinty ledges which were impossible to excavate except by blasting, that is, with the ordinary method. The machine went thru it. The machine was worn somewhat. We are replacing all worn parts and will have the machine in readiness for shipment in about two weeks. Equipment as follows: Boiler is horizontal, Scotch-Marine type 66" in diameter 9' 7" depth, furnace 34" in diameter, shell 3/8", heads 1/2", furnace 1/2", tubes 68-3", length 96", boiler is equipped with a dry pipe instead of dome to allow for the stack being topped backward and passing under trolley wires. Engine is duplex, 8 3/4"x10" cylinders, coupled with forged steel crank shafts 4" in diameter; tiller wheels 54" in diameter, 24" tire with removable center rings; traction wheels 75" in diameter, 24" in width, rear axle 6" in diameter. Excavating wheel is equipped with a heavy steel top and rooters similar to the 24" machine described. This wheel cuts to an actual width of 30" and to a depth a little in excess of 12 feet, it being our 28" wheel. This machine is built to carry a larger wheel so that when necessary any size larger wheel up to 54" can be purchased for this machine. The machine, *Page 38 
of course, is equipped with a more powerful traction than is our 24" of the same type, it being a much heavier machine is capable of pulling a much heavier load, when used as a road locomotive. All worn parts having been replaced on this machine, it is guaranteed in every way same as a new machine. * * * Machine in ordinary earth and at a depth you describe should open up an average of 1200 feet a day. * * * The machine is built for hard and continuous service and is first-class in every particular. * * *"
From the letters of August 27th to J. O. Severns, and September 7th to John R. Hale, we get the exact description of the machine to be furnished, and the specific work for which it may be used. In the first excerpt of the contract it is so warranted. In the latter warranty clause it is provided that the "machinery furnished under the above order shall be made of good material, well constructed, and with proper use and management will do more and better work than any machine of its class." This contract shows upon its face that there was more than the ordinary warranty contemplated. The plaintiffs in error desired this machine within a definite time for a definite purpose, and that it should be of a character to do a specific work, as set out in the letters of August 27th and September 7th, and there is a specific warranty that it will so comply.
The general warranty clause being contained for the protection of the vendee, and the provision for notice for vendor, that it might have a reasonable opportunity to make examination, it appears that without any request or notice on the part of the vendee the defendant in error, the vendor, on its own motion had a specially authorized and experienced agent who was an expert on the ground to set up and superintend the operation of this machinery. And, when he was there to make inspection, authorized to receive notice of defects, it would be an unreasonable rule laid down here to prevent the plaintiffs in error from availing themselves of the consideration of warranty that they were careful to secure, realizing the character of work that they were going to do and the machine that was needed, if we should construe this *Page 39 
contract so as to cause them to forfeit, or not be able to avail themselves of, the conditions of warranty, when the defendant in error, through its agent, examined and operated the machine twice under general directions of the company, and examining the machine the third time whilst acting as its agent. When, under these facts, we hold that the plaintiffs in error may avail themselves of the warranty, that will not necessarily conclude the defendant in error, unless the facts upon the trial before the court or jury show that it was not the character of machine as warranted; and, if in fact it was not, the ends of justice are thereby subserved. If it was the character of machine as warranted, and same was unsatisfactory on account of careless and unskilled operators, the plaintiffs in error are the victims of themselves, and should not be relieved by penalizing the defendant in error.
In this case it appears that Schon traveled under the direction of the defendant in error; that he was present and saw the machine, and, if he found any defects, he had authority to remedy the same, or, if he was notified of any defects, it was his duty to remedy them. He had authority to make settlements, to make deduction, and to receive payments. As stated in the Idaho case, the object of notice is to permit the company to have an opportunity to make investigation, and to make repairs and determine for itself whether or not the machine complied with the warranty. In this case the vendor was specifically advised as to the kind of ditcher desired, and for what purpose it was to be used, and the vendor specially undertook that it should be such a ditcher. The stipulations for notice are not to be presumed to have been inserted in such a manner and with a view of releasing the vendor from its undertakings, but that the machine should be tested in apt time, and, if there was any contention or intimation on the part of the vendee that the ditcher did not fill the terms of the warranty, that the vendor might have notice thereof, and by its own specially selected experts careful examination might be made so as to repair and make good the ditcher, if reasonably practicable, or of determining whether or not the contention on the part *Page 40 
of the vendee that the ditcher did not fill the terms of the warranty was well founded and in good faith. In this instance, the specially constituted and authorized agent, and, also equipped expert is there within the specified time, examining the ditcher and machinery, and operating it, and within the prescribed time he ascertains the defects, and the statement is made to him that the plaintiffs in error would give the written notice as prescribed in the contract, and such agent said: "No; it is not necessary. I am here representing the company. The actual notice to me is sufficient." And, when he leaves, notice is sent to him immediately after the machine again fails to do the work and appears defective. He replies: "I cannot return except under instructions from the vendor." The vendor at that time is also notified, and there is no intimation from it that the vendee by not having given notice in apt time, as specially prescribed in the written contract, has waived his right under the terms of warranty; the vendor sending the same expert back. It appears to us that the vendor ought not to be permitted to say now that vendee cannot avail himself of the provisions of the contract of warranty. The rule is well stated that where notice is given to the local agent, not in the manner as prescribed in the conditions of warranty, no notice at all being given to the principal, but it sending an expert after such notice to the local agent to examine the machinery, constitutes a waiver; the purpose of the notice and of the contract being that the vendee shall have the machinery of the character that he contracts for, and that the vendee shall have an opportunity to make its inspection thereof in a certain time, if it appears to be defective, and, when that is accomplished, the purpose of the conditions of the contract in favor of the vendor has been carried out. Dean v. NicholsShepard Co., 95 Iowa, 89, 63 N.W. 582. In this instance we think that the defendant in error is not in an attitude to be permitted to say that the plaintiffs in error should not be permitted to offer evidence as to whether or not the machinery complied with the warranty. For the purpose of this case, we have assumed the proof hypothetically *Page 41 
as offered by the plaintiffs in error. Upon the trial of the case, upon the issues joined, the proof may appear different.
The judgment of the lower court is reversed, with instructions to grant a new trial and proceed in accordance with this opinion.
Dunn, Hayes, and Turner, JJ., concur; Kane, C. J., dissents.