Opinion
12834
February 12, 1930.
Before BONHAM, J., Oconee, June, 1928. Affirmed.
Action by William M. Brown against Arthur Brown for settlement of partnership affairs of W.M. Brown Son, wherein W.D. Moss was appointed as receiver and the Empire Buggy Company filed its claim against W.M. Brown Son, which claim was contested by the receiver and William M. Brown. From a decree allowing the claim in part, the receiver and William M. Brown appeal.
The following is the decree of Judge Bonham:
This case has had a strange history, and it has traveled a circuitous route before it reached the Court in its present shape.
January 1, 1918, W.M. Brown and Arthur Brown formed a partnership, under the firm name of W.M. Brown Son, to do a mercantile business and to deal in live stock, buggies, wagons, harness, farm implements, etc.; its principal place of business being at Walhalla, S.C. January 27, 1920, this firm gave to Empire Buggy Company an order, in writing, for 26 buggies, which order is in evidence here. Pursuant to the option contained in the order, W.M. Brown Son closed the account by giving to Empire Buggy Company their note in the sum of $2,942.93, dated May 4, 1920, and due November 1, 1920. July 1, 1920, the partnership of W.M. Brown Son was dissolved by consent. W.M. Brown took over the live stock, vehicle, harness, and implements part of the business, and assumed the payment of the obligations of the firm which pertained to that part of the business. Arthur Brown took over the other part of the business, and assumed the payment of the obligation of the firm relating thereto.
November 1, 1920, the note of the firm to Empire Buggy Company was due, and was renewed in the sum of $2,993.30 by a note payable January 15, 1921. At maturity of this note it was renewed for $3,063.14, by note due May 1, 1921. On the due date of this note it was renewed in the sum of $3,243.14 by note due November 1, 1921. October 31, 1921, W.M. Brown paid on this note the sum of $500.00, and shortly thereafter — the date is uncertain — he paid on it the sum of $276.97, and the note was renewed for the balance in the sum of $2,500.00. This renewal note was dated November 9, 1921, and payable January 1, 1922. On December 31, 1921, W.M. Brown paid on this note the sum of $500.00, payable June 1, 1922. June 17, 1922, the interest on this note was paid, and it was renewed by note payable November 1, 1922. October 28, 1922, W.M. Brown brought his action in the Court of Common Pleas for Oconee County against Arthur Brown, seeking an accounting for the partnership assets taken over by Arthur Brown by the terms of the agreement of dissolution; asking the appointment of a receiver for the assets, properties, and business of the partnership, and that all the creditors of the partnership be enjoined from seeking to enforce their claims except in that action, and requiring them to prove their claims before the master. The relief sought was granted by an order of Judge Sease, of date November 28, 1922, which order also appointed W.D. Moss receiver. After the filing of the complaint, and before the order of Judge Sease appointing a receiver was signed, to wit, November 13, 1922, W.M. Brown paid $500.00 on the last renewed note, which was due November 1, 1922. This last renewed note, upon which the $500.00 payment just referred to was paid, purported to be signed "W.M. Brown." The original note, and all the other renewals, were signed "W.M. Brown Son, by W.M. Brown."
When Empire Buggy Company was apprised of the order of Judge Sease, it sent this note to attorneys, who filed it with the master for proof. For some reason the Empire Buggy Company became dissatisfied with the progress being made in the matter of proving its claim and withdrew it from the hands of the attorneys to whom it was first sent, and placed it in the hands of the attorneys who represent it in this proceeding. These attorneys, for their client, petitioned the Court to be allowed to withdraw the claim from the master, and to dismiss the answer and counterclaim which W.M. Brown had interposed to the petition to prove the claim before the master. The prayer of the petitioner was granted in an order by the resident Judge of the circuit. Thereupon an action was brought in the Court of Common Pleas for Oconee County by Empire Buggy Company against W.M. Brown on the note purporting to have been signed by "W.M. Brown." To this action the defendant interposed an answer, which sets up, in substance, the defenses and counterclaim which are contained in the answer in the proceeding now before me. The case was heard by Judge Shipp at October, 1925, term of Court, with a jury. Judge Shipp held that the execution of the note sued on had not been proven; whereupon he granted an order withdrawing the case from the jury and continuing it beyond the term. At the October, 1926, term of the Court the case came on to be heard by Judge Grimball, with a jury. Plaintiff's counsel conceded that the note purporting to be signed by W.M. Brown had not been signed by the defendant W.M. Brown; but they contended that the defendant had, by his course of conduct, and by making payments on the note, and renewing it from time to time, adopted and accepted the note as his own, and was estopped to deny its validity. Judge Grimball denied these contentions, and held that the execution of the note had not been proved; accordingly he granted an order of nonsuit, but gave to plaintiff leave to withdraw that suit and to file its claim before the master in the case of W.M. Brown v. Arthur Brown. In accordance with that order the plaintiff filed its petition to be allowed to prove its claim, which petition sets out the history of the transactions hereinabove set forth. For answer thereto the respondent, W.M. Brown, sets up these defenses: (1) A general denial, with admission of certain undisputed facts. (2) That the buggies sold to W.M. Brown Son by the petitioner were defective in material and workmanship, and practically worthless, and that the petitioner had been paid more than the buggies were worth. (3) That the buggies were defective in workmanship and material, and the customers of defendant to whom they were sold, returned some of them, and some of them were abandoned after short usage, and defendant's customers became dissatisfied with defendant; in consequence of all of which things defendant lost large sums of money, and suffered injury in his reputation as a business man, all in the sum of $2,000.00. He prays that the petition be dismissed and that he have judgment on his counterclaim for $2,000.00.
In the hearing to prove the claim, the master took the testimony; some of it orally, some of it by deposition, and some of it by exhibits of documents. He has filed his report, and the matter is before me on exceptions thereto made by the petitioner, whose claim is disallowed by the master.
The material findings of fact by the report are: That when the buggies were sold to W.M. Brown Son they were represented by the salesman of Empire Buggy Company to be "first class, and equal in quality to High Point buggies," which he finds to be buggies of a very high class; that this representation was the inducement which moved W.M. Brown Son to purchase, and that the representation was false and fraudulent; that the buggies were defective in workmanship and material, and that W.M. Brown Son lost large sums of money and were injured in their reputation as business men thereby; that W.M. Brown Son have paid Empire Buggy Company more than the buggies were worth, and now owe petitioner nothing; that W.M. Brown Son promptly notified Empire Buggy Company of the defects in the buggies and were repeatedly promised that an adjustment of their claims would be made; which promises were not kept. He entertains a doubt whether he can, in this proceeding to prove claim, consider the defense set up by way of counterclaim, and proceeds thus: "Be that as it may, while I have no doubt that W.M. Brown Sons have suffered great injury to their reputation as business men, the evidence is not definite enough for me to make a finding as to the matter of such damages."
As conclusions of law: He recommends that the claim of the petitioner be disallowed; that the petition be dismissed, and that the receiver have judgment against the petitioner for the costs of the action.
I shall not undertake to consider the exceptions severally, but my conclusions will, in effect, cover them.
When the testimony was offered by the respondent, Brown, tending to prove that the salesman of the petitioner, as an inducement to W.M. Brown Son to purchase the buggies, had represented them to be of first class quality and equal to High Point buggies, that Brown Son relied on these representations, and were thereby induced to purchase, counsel for the petitioner objected to the testimony on the ground that the written contract of sale and purchase contained the terms of the contract; that it contained no express warranty, and it was incompetent to show by parol an implied warranty, or a verbal warranty, that the written contract contains this provision: "No agreements, conditions or stipulations, verbal or otherwise, than those herein mentioned, will be recognized by Empire Buggy Company, and the same is recognized by the purchaser." That to admit the testimony objected to would be to vary the terms of a written instrument by parol testimony, and would interpolate into the contract a condition not agreed on by the parties to the contract; in other words, that to admit such testimony would violate the "parol evidence rule." I think the master was correct in admitting the testimony. It does not vary the terms of the written contract by introducing a new element into it; it merely shows the inducement which led to the making of the contract. The question is settled by the decisions of our Supreme Court. In Palmetto Bank Trust Company v. Grimsley, 134 S.C. 497, 133 S.E., 437, 438, 51 A.L.R., 42, this is said: "Such contemporaneous agreements may have been obnoxious to the `parol evidence rule,' if unaccompanied by any circumstances of deception; but if those promises were made to induce the execution of the mortgage, with the concealed purpose to disregard them, the `Parol Evidence Rule' cuts no figure." There are citations of authorities in support of the opinion. In the case of Yancey v. Southern Wholesale Lumber Co., 133 S.C. 369, 131 S.E., 32, 36, this occurs: "The authorities cited by counsel for the defendant appear to settle the question in this State, contrary to the impressions of the writer of this opinion that, where the contract of sale contains no express warranty, oral evidence of representations constituting a warranty, is admissible," citing authorities. In a North Carolina case, Swift Co. v. Meekins, 179 N.C. 173, 102 S.E., 138, 139, it is said: "It is not necessary that the language should be intentionally false, or that there should have been any purpose to deceive. The positive representation by a vendor that the article sold possesses a certain value and certain qualities amounts to a warranty, and by counterclaim the defendant may set up the breach of the warranty, and reduce the sum claimed by the difference between the contract price and the actual value, although there was no deceit in the sale." There is evidence that the salesman for Empire Buggy Company represented to W.M. Brown Son that the buggies he offered to sell them were first class and equal in quality to the High Point buggies; that the High Point buggies were known to Brown Son to be of a high grade; and that these representations induced Brown Son to purchase. I am clear that they were entitled to show these facts by parol evidence, and to show whether or not the representations were true; and if proved to be untrue to recover such damages, or loss, as they may prove they have suffered in consequence thereof.
The petitioner contends strenuously and ably that W.M. Brown Son have waived the right to rely on alleged defects in the buggies and are estopped to set up that defense by their course of conduct in making payments on the debt, and repeatedly and continuously renewing the notes after discovery of the defects.
In order that waiver may work an estoppel, it must be an act or acts, which evince an intentional relinquishment of a known legal right. The proof must be clear that the party against whom the doctrine of waiver and estoppel is invoked knew what his rights in the premises were, and purposely, intentionally, relinquished them; surrendered them. If the person continue to demand his rights, or is led by promises of settlement or adjustment to continue his dealings with the other party, he cannot be held to have waived his rights, even though his acts be apparently inconsistent with the assertion of them. In the case of Griffith v. Newell, 69 S.C. 300, 48 S.E., 259, it was said, in substance, that one cannot be held to have waived his rights under a contract if he continues to demand them, while performing his part of the contract under the compulsion of necessity. The question is asked and answered in the majority of opinion of the Court in the case of Stewart v. Smith, 138 S.C. 138, 135 S.E., 801, 805, in this wise: "Does buyer waive right of action on the implied warranty by continuing to make payments, after notifying seller that piano was `shot' and would not play satisfactorily, and offering to rescind the contract, which seller refuses to do?" The answer of the Court is in the negative. The question in this proceeding turns upon whether the Empire Buggy Company had prompt notice of defect in the buggies; whether it recognized such defects and promised to make adjustment therefor; and whether it ever did so. The evidence thereabout is conflicting and somewhat confused; but I think the legitimate deduction from it is that while W.M. Brown continued to make payments on the notes, and to renew them, he had assurance from Empire Buggy Company that adjustment would be made for the defects in the buggies. There is evidence that repairs were made by the buggy company from time to time, and that some adjustment was made. Brown denies that any adjustment was ever made, and asserts that he continued to pay and renew the notes because of his reliance on the promises of the buggy company to make adjustments. He may well have thought that on the final settlement between them a final adjustment of their differences would be made. The evidence does not warrant the conclusion that there was such voluntary relinquishment of the right to demand adjustment for defects in the buggies as will amount to waiver, and which will estop the respondent from setting up claim for such injury as he can show he has sustained.
I agree with the master that the evidence in relation to the injury which W.M. Brown Son claim to have suffered in their reputation as business men "is not definite enough for me to make a finding as to the matter of such damages." And I think the evidence was too indefinite to warrant the finding by the master that W.M. Brown Son had already paid to the petitioner, Empire Buggy Company, more than the value of the buggies, in addition to freight, express, and repairs, and owed petitioner nothing more on the purchase price of the buggies. The evidence of W.M. Brown and Arthur Brown, and some other witnesses, as to the condition of the buggies as to material and workmanship, and as to their value, is too general and indefinite, except as to some eight or nine witnesses, whose testimony relates to specific buggies bought by some of them. The respondent offers proof of the defective condition of a few buggies, asserts generally that all of them were defective. One Blackwell testifies that he bought one of these buggies, and that it was defective in the various particulars he enumerates. He has a curious memory; when he is brought to cross-examination he "disremembers" everything. He "disremembers" whether he paid all, or any part, of the price of the buggy. Mr. Brown says he did not pay anything, and the price of his outfit was $210.00. Ellison is but little more definite. The best that I can make of his testimony is that he paid a part of his debt for buggy and harness, and now owes about $100.00. Mr. Brown himself testified that two of the complainants whom he produces as witnesses to prove the defects of the buggy, and respondent's losses thereon, had paid in full of their purchases. These men were Deaton and Chastain. It is admitted that Medlin paid nothing and owes $225.00. Abbott contends that he has about paid up, but may owe a small amount; I put it, rather arbitrarily, at $50.00, in the desire to be as favorable as possible, because of the wholly unsatisfactory character of the evidence, from which it is practically impossible to deduce an entirely accurate statement. It appears, then, that specific cases of defects can only be shown in some seven or eight buggies. What became of the other eighteen or nineteen? Mr. Brown testifies that they were all sold. If none of them were paid for, in whole or in part, it would have been the easiest thing in the world to produce the purchasers to say that they had not paid, and Mr. Brown had not sought to make them pay because the buggies were worthless. The books of the firm were competent evidence to prove these accounts, but they were not offered in evidence. It seems that there has been paid to the petitioner on this debt some $1,911.00, but a considerable part of this is for interest on the notes, and was paid by the respondent for the continued indulgences granted to him by the petitioner. The evidence does not warrant the finding by the master that the losses on the buggies more than paid the balance due on the purchase price thereof. I think the evidence does show that W.M. Brown Son have suffered loss on some of these buggies, and I have tried to figure, as best I could from this meagre testimony, what the loss is. The following table is, in my judgment, a liberal estimate of what the amount is:
Loss on Blackwell ............................. $ 210.00 Loss on Medlin ................................ 225.00 Loss on Abbott ................................ 50.00 Loss on Robinson .............................. 150.00 Loss on Ellison ............................... 100.00 _________ $ 735.00 For this amount W.M. Brown Son are entitled to credit on their debt to Empire Buggy Company.Wherefore, it is ordered, adjudged, and decreed that, in so far as the report of the master coincides with the views hereinabove expressed, it be confirmed. In so far as it does not conform to these views, it be overruled and reversed.
Ordered, further, that the master calculate the amount due on the claim of Empire Buggy Company against W.M. Brown Son, offered in proof before him, according to the terms thereof, and that he deduct from the aggregate of the amount thus found to be due the sum of $735.00, which is the amount I have found to be due to W.M. Brown Son on their claim for loss by reason of defects in the buggies sold to them by Empire Buggy Company. The amount thus found is hereby decreed to be the sum due to the Empire Buggy Company by W.M. Brown Son.
Ordered, further, that W.D. Moss, receiver for W.M. Brown Son, pay from the funds of that estate in his hands as such receiver, the costs of this action, and the sum thus decreed to be due Empire Buggy Company, if there be sufficient funds. If there be insufficient funds to pay this amount in full, then he shall pay as far as such funds extend.
Messrs. Herndon Thompson, for appellants, cite: As to damages: 74 S.C. 202; 2 Sutherland on Damages, 422; 2 Sedgwick on Damages, 474; 75 S.C. 342; 88 S.C. 572; 44 L.R.A., 438; 79 S.C. 205; 24 R.C.L., 240, 351; 127 S.C. 508; 3 L.R.A. (N.S.), 465; 2 Meacham Sales, 1837; 5 L.R.A. (N.S.), 1151; L.R.A., 1918-A, 110; 128 S.C. 151; 133 S.C. 377; 128 S.C. 154; 37 S.C. 7; 40 S.C. 111.
Messrs. Allen Doyle, for respondent, cite: Measure of damages: 122 S.E., 858; 16 S.E., 194.
February 12, 1930. The opinion of the Court was delivered by
This Court is satisfied with the decree of his Honor, Judge Bonham, and it is accordingly affirmed.
MR. CHIEF JUSTICE WATTS and MESSRS. JUSTICES BLEASE, STABLER, and CARTER concur.