Court Opinion

ID: 6759028
Source: CourtListenerOpinion
Date Created: 2022-07-21 00:29:47.554289+00
Date Added: 2024-06-11T16:01:59.306148
License: Public Domain

Douglas, J.,
concurring in part and dissenting in part. I respectfully concur in part and dissent in part. For the reasons that follow, I concur with the majority with regard to the sale and purchase of the forty-seven-foot boat but dissent from the majority opinion with regard to the two thirty-one-foot boats. I would reverse the court of appeals and reinstate in its entirety the well-reasoned judgment of the trial court.
This case was filed by appellant on June 30, 1978. Appellant sought to collect on a promissory note signed by the appellees. Subsequently, appellees filed an answer and counterclaim asserting that a certain forty-seven-foot boat sold by appellant to appellees was defective. The sale and purchase of these boats had been consummated in August 1977. After the pleading process between the parties had been completed and a motion for summary judgment made by appellant was denied by the trial court, the court scheduled a pretrial in December 1979. It was at this point, a year and one-half after the filing of the original complaint, that appellees amended their counterclaim and alleged defects in the two thirty-one-foot boats.
The matter came to trial, on April 26 and 27, 1980 before the court, appellees having waived a jury. The appellees stipulated that the amount due on the note in question was $50,000 with interest at nine percent. Appellant’s claim having been stipulated, the case proceeded with appellees presenting evidence in an attempt to prove their counterclaim. The basis of appellees’ counterclaim (Counts I and IV of the amended complaint) is that appellant breached alleged warranties given to appellees.
By this claim, and the arguments and citations given to this court by appellees as well as appellant, the case falls squarely under the Uniform Commercial Code and more specifically under the “Sales” article as adopted by Ohio in R.C. Chapter 1302. When Ohio became the tenth state to adopt the Uniform Commercial Code,3 the adoption was hailed as a major accomplishment which resulted after years of study and effort by the bar and other interested persons in Ohio. As such, it is the law of this state and thus governs the commercial transactions between parties. I write now because I believe that the majority has not applied the law that I think is clearly pertinent and controlling in this case.
There can be no question that the boats in question herein are “goods” as defined in R.C. 1302.01(A)(8). As such, the transaction between the parties is one which is covered by R.C. Chapter 1302.
Next to be considered is R.C. 1302.04. From the record it is determined that the sale was one of $500 or more and that there is a “writing sufficient to indicate that a contract for sale has been made between the parties and signed by the party against whom enforcement is sought * * Pursuant to R.C. 1302.14, then, it is the obligation of the seller to *98transfer and deliver the goods and that of the buyer to accept and pay in accordance with the contract. Here the goods were delivered by the appellant and accepted by appellees.
Acceptance of goods occurs when the buyer takes and retains the goods or when the buyer fails to make an effective rejection of the goods as provided in R.C. 1302.61(A). See R.C. 1302.64. In the case before us the boats were delivered by appellant, accepted by appellees and, more specifically, were not rejected by appellees as provided in R.C. 1302.61. In fact, appellees not only did not reject the goods, they accepted the goods, sold the two thirty-one-foot boats and still retain the forty-seven-foot boat.
Considering the foregoing, we must then look to R.C. 1302.65 which provides in subdivision (A) that a buyer must pay at the contract rate for any goods accepted. More importantly, in the case before us, R.C. 1302.65(C) provides that “[w]here a tender has been accepted: (1) the buyer must within a reasonable time after he discovers or should have discovered any breach notify the seller of breach or be barred from any remedy.” (Emphasis added.) In this case we have no notification by appellees to appellant of any breach until appellant sought to recover the amount still due on the contract. Even then the appellees did not claim in their original answer and counterclaim that there was any problem with the two thirty-one-foot boats. Appellees did not make any claim concerning these boats until nearly two and one-half years after the sale. Certainly under these circumstances, the operative language of R.C. 1302.65(C)(1) must come into play and appellees should be barred from “any remedy.”
Since appellees did not reject the goods in conformance with the statute, the other option open to them under the code is that of revocation. When a buyer finds that goods are non-conforming and the non-conformance substantially impairs the value of the goods to the buyer, then the buyer may, pursuant to R.C. 1302.66, within a reasonable time after acceptance, revoke that acceptance and the buyer then has the same rights with regard to the goods as if the goods had been properly rejected. Here the appellees not only did not revoke their acceptance, they retained the goods, sold two of the boats and used and continued to hold for resale the forty-seven-foot boat. Even under these circumstances, appellees might have properly exercised their rights of revocation had they chosen to do so. See McCullough v. Bill Swad Chrysler-Plymouth, Inc. (1983), 5 Ohio St. 3d 181.
Accordingly, it is clear that the appellees have not exercised either option as provided to them by the law of sales.
Appellees argue, however, that the appellant has breached certain warranties given to appellees. The warranty sections of the code are R.C. 1302.25, 1302.26, 1302.27 and 1302.28. The mandated warranty in R.C. 1302.25 is a warranty of title. This section is clearly not applicable herein. Express warranties, by affirmation, promise, description or sample, are provided for in R.C. 1302.26. There is no evidence in the record nor do ap*99pellees contend in their argument and/or proposition of law before this court that appellant ever gave any express warranties with regard to these three boats.
This then leaves us with an implied warranty of merchantability pursuant to R.C. 1302.27 or an implied warranty that the goods were fit for a particular purpose pursuant to R.C. 1302.28. For goods to be “merchantable,” they must satisfy the requirements of R.C. 1302.27(B). There is no showing in the record that these boats did not meet the required qualifications. Quite the contrary, .the forty-seven-foot boat is still being held for sale by appellees (if it has not already been sold) at a price of $250,000 — $80,000 in excess of the purchase price to appellees, and the other two boats have already been sold by appellees to other purchasers. Clearly appellees cannot be heard to contend that any warranty of merchantability has been breached. Likewise, would the same be true for the same reasons of any warranty alleged under R.C. 1302.28? If appellees contend that the boats are (were) not fit for the particular purpose for which the goods were required, then appellees should not have sold the two smaller boats nor should they be holding out for sale the larger boat.
In addition to the foregoing, the record includes the purchase order and the invoice for the forty-seven-foot boat. Both documents are clearly marked “WHERE IS AS IS” in conspicuous (see R.C. 1301.01[J]) print. Such notation clearly meets the required standards of R.C. 1302.29(B) and (C)(1) for purposes of excluding any implied warranty with regard to the forty-seven-foot boat. Appellees argue, however, that there is a difference of interpretation in the boating business as to the meaning of such words when a boat is being sold and purchased. This contention is easily refuted when we note Official Comment No. 7 to R.C. 1302.29 which indicates that the term “as is” is understood to mean that the buyer takes the entire risk as to the quality of the goods involved.
Assume, however, for purposes of argument, that appellees’ warranty allegations are correct. What remedies are available to appellees absent any rejection or revocation by them? A buyer’s remedies under the code are found in R.C. 1302.85, 1302.87, 1302.88 and 1302.91. Appellees have cited us only to R.C. 1302.85 and appellant has not cited us to any section concerning a buyer’s remedy for breach by a seller.
Appellees’ reliance on R.C. 1302.85 for remedy is misplaced. In their brief appellees say “[t]here is no dispute that a buyer has a right of recovery for damages (due to the failure of the goods sold). R.C. 1302.85.” This may be true if a buyer conforms his or her actions to the requirements of the code. Appellees have not done so. To avail themselves of the R.C. 1302.85 remedies, appellees must show that appellant failed to make delivery or has repudiated the contract, or that appellees rightfully rejected or justifiably revoked acceptance. Absent any of these conditions existing, R.C. 1302.85 does not apply. In the case before us we have seen that appellant (seller) has delivered, and appellees (buyers) have not re*100jected or revoked their acceptance. Therefore, R.C. 1302.85 relief is not available to appellees. Likewise, R.C. 1302.87 is not available for use by appellees as those conditions do not exist.
Appellees might have a stronger argument under R.C. 1302.88. However this section requires that a buyer give notification, within a reasonable time, of any breach and such notification must be given in conformance with R.C. 1302.65(C). Appellees have clearly not done so.
This leaves R.C. 1302.91 which provides for a deduction of damages resulting from any breach of the contract from any part of the price still due under the same contract. Even absent rejection or revocation by appellees, the trial court allowed a portion of appellees’ counterclaim that the facts before the court supported. This was entirely proper as an amount was still due appellant under the contract. However, the trial judge, as the trier of fact, found that the other allegations of damage by appellees were not proven and in fact were refuted by the evidence. These findings should not be disturbed absent an abuse of discretion and there is certainly nothing in the record before us to indicate even a hint of abuse of discretion.
Some may find this a harsh result. However, the Uniform Commercial Code was promulgated and enacted by the legislature to be fair to sellers as well as buyers. Parties seeking to come under its umbrella must conform to its dictates. Appellees have failed to proceed in accordance with the law. In addition, they have failed to prove their case and, in fact, their very actions as to the two smaller boats and the documents in evidence as to the larger boat clearly dictate a judgment for appellant.
Accordingly, I would reverse the judgment of the court of appeals and reinstate the judgment of the trial court. Hence, I concur in part and dissent in part.

 Am. S. B. No. 5 was passed by the 104th General Assembly. The Governor signed the bill on May 18, 1961 and the Uniform Commercial Code became the law of Ohio on July 1, 1962.