April 27, 1936. Suggestion of Error Overruled, June 8, 1936.
Where buyer of automobile executed written contract stating that he had examined automobile and accepted it in its present condition, there was no failure of consideration for note given as part of contract price when defects necessitated repairs several times within first month and seller finally kept automobile.
Written contract may be modified by subsequent oral agreement, providing new oral agreement is supported by additional consideration.
That buyer returned automobile to seller for repairs and seller kept it held not consideration for seller's oral agreement, made subsequent to written sales contract, that automobile would give service for ninety days, and did not constitute defense to note.
Subsequent conversion cannot be treated as consideration for pre-existing contract.
APPEAL from circuit court of Lafayette county. HON. TAYLOR H. McELROY, Judge.
Jas. Stone Sons, C.A. Bratton and Samuel V. Pack, all of Oxford, for appellant.
The defense relied on by appellee to this suit of appellant on a promissory note was failure of consideration. Appellee contended that this failure of consideration arose through the breach of a warranty made by appellant to appellee. Appellant and appellee embodied the terms of their transaction into a written contract of conditional sale. The law presumes that this instrument was intended to become, and did become, the contract of the parties.
By expressly contracting that he accepted the automobile "in its present condition," appellee waived all defects, latent and patent.
Washington L.R. Co. v. Southern Iron Equipment Co., 28 Ga. App. 684, 112 S.E. 905; Bellville Supply Co. v. Dacey, 141 Miss. 569, 106 So. 818; Gerard Motor Co. v. McEachern, 150 Miss. 437, 116 So. 816.
A warranty, in addition to being incidental to a contract, is itself a contract, and the rules applicable to contracts generally apply to a warranty. We submit that it is elementary law that among these rules is the requirement that there must be a valid consideration for the promise of warranty.
55 C.J. 656, sec. 671.
The law supplies no means nor affords any remedy to compel the performance of an agreement made without consideration. Such an agreement is nudum pactum exquo non oritur actio.
13 C.J. 312, sec. 145.
It is a fundamental principle of the common law that a warranty, after the sale is complete, is not valid without a new consideration.
Morehouse v. Gomstock, 42 Wis. 626; Summers v. Vaughan, 35 Ind. 323; Towell v. Gatewood, 3 Ill. 22; Bloss v. Kittridge, 5 Vt. 28; 13 L.R.A. 679; 24 R.C.L., page 154; 55 C.J. 671, sec. 680; Edrington v. Stephens, 148 Miss. 583, 114 So. 387.
It is a general rule that the burden of proving a breach of warranty is on the buyer.
24 R.C.L. 162.
It is settled that the burden of proof is on the party holding the affirmative.
Mask v. Allen, 17 So. 82; Cain v. Moyse, 71 Miss. 653, 15 So. 115; 13 C.J. 756, sec. 927.
Viewing the record as a whole, we respectfully submit that it is clearly apparent that the court erred in overruling appellant's motion for a directed verdict at the conclusion of the appellee's evidence. Appellee relied upon breach of warranty as his defense. If there was a warranty, it must have been either implied or express. It could not have been implied, because the law of this jurisdiction implies no warranty in such a transaction as took place between appellant and appellee.
If it was an express warranty it must have been made before, contemporaneous with, or after the sale. It could not have been made before or contemporaneous with the sale, because the written contract between the parties not only did not contain any mention of such a warranty, but expressly denied such; appellee did not even attempt to prove an express warranty made before or contemporaneous with the sale. Upon no theory whatsoever can the defense which appellee relied on be availed of.
Falkner Falkner, of Oxford, for appellee.
Conceding for the sake of argument that there was no implied warranty as to the automobile at the time of the execution of the contract, there still remains the fact that an express warranty was made after the execution, and a further agreement that Pritchard and Hollowell would make the car stand up for the usual ninety days service or deliver to the appellee in its stead a new car. This promise was made after the execution of the contract and note.
155 Miss. 422.
Certainly the parties could make additional agreements after the execution of the written contract which could become as binding as the original contract.
Certainly it is well settled that one party may make an offer and the other party after the offer is made may act in reliance on that offer and the contract then becomes binding on the first party.
13 C.J. 311, sec. 144; Magee v. Catching, 33 Miss. 672.
The law says: "Loss or injury to one of the parties, or benefit to the other" is consideration. The testimony shows that the appellee was a rural mail carrier and that when the car was delivered into the possession of the appellant in reliance on his promise, that the appellant kept the car in his possession so long that the appellee was forced to buy another car to carry on his business. Is not that a loss or detriment moving to the promisee because of his reliance on the statement of the promisor?
Bankerson v. Hill, 98 So. 689.
Argued orally by C.A. Bratton, for appellant.
Appellant, Pritchard, brought suit against appellee, Hall, to recover three hundred dollars, balance due on a promissory note for five hundred forty dollars, payable on its face to Pritchard Hollowell, and by them assigned or endorsed, with recourse, to the C.I.T. Corporation, which, in turn, for value indorsed it to Pritchard, successor to the firm.
The evidence having been heard, the case was submitted to the jury. It returned a verdict for Hall. Judgment was entered accordingly, and Pritchard prosecutes an appeal here.
Attached to the declaration as exhibits were a copy of the note and conditional sales contract, and these exhibits were offered in the evidence.
Pritchard testified that the note was for the balance due on a sales contract for an automobile, and was payable in twelve monthly installments of forty-five dollars each. Two payments had been made thereon, or ninety dollars. He also testified that the C.I.T. Corporation repossessed the car, sold it, under the sales contract, for one hundred fifty dollars, which, when credited on the note, left the balance sued for. The sales contract, among other things, provided that the purchaser, Hall, had examined said chattel (referring to the automobile) and accepted same in its present condition.
Hall pleaded, as a defense to the action, the general issue and notice of special matter thereunder as follows: "The plaintiff will take notice that the defendant will introduce evidence to show and will attempt to prove that there was a failure of consideration for the note sued on by the plaintiff. That the note sued on was given as part purchase price of an automobile, which said automobile was guaranteed to be free from mechanical defects by Pritchard Hollowell. That the automobile was, in fact, defective when delivered to the defendant. That after having the automobile in his possession for a few days, during which time the said automobile failed to perform and operate properly, the defendant returned same to Pritchard Hollowell and informed them of the defect. That Pritchard Hollowell accepted the automobile and later tendered it back to the defendant, informing him that the defect had been corrected, but, upon examination, defendant found the car to be still defective, and refused to accept it. That the automobile was never offered to the defendant free from defects, and that defendant actually paid to Pritchard Hollowell more than the actual value of the automobile in its defective condition."
Hall and his witnesses offered evidence to the effect that, prior to and contemporaneously with the delivery of the car and execution of the note and sales contract by Hall, Pritchard Hollowell agreed with him orally that the car was given the usual ninety-day agreement, and that "it would stand up and give service ninety days." None of this was in the written contract. Upon appellant's objection, the court held that evidence of such oral agreement made prior to the execution of the written contract was inadmissible, but that evidence of a subsequent contract would be admissible.
Thereupon, Hall testified that members of the firm made the same agreement with him right after the contract was executed, and on other subsequent occasions when he carried the car to them for repairs. He said that after he had been in possession of the car a few days it developed a knock, would not run satisfactorily, and consumed an excessive amount of oil. When he carried it back on these occasions for repairs, Pritchard Hollowell promised him they would make the car stand up for ninety days or give him a new car. After he had the car about a month, it would not run although they had attempted twice before to fix it; they took the car on the same promise; told him they had sent it to Memphis to be repaired, and that the car was not again delivered to him; he never saw it again; he bought a new car elsewhere, and never, so far as the record shows, made further demand upon Pritchard Hollowell for the car.
Pritchard denied any oral agreement with Hall; said when the car was brought back for repairs the cylinders were burned some, there was no water in the radiator, and the car had gotten too hot. He denied that they had repossessed the car, but said that the agent of C.I.T. Corporation, which then owned the note and the contract, repossessed the car from Hall and brought it to their place of business at Oxford where they were local dealers in automobiles. The record discloses that Hall must have had possession of the car for more than two months. Hall admitted that he knew of no other consideration for the subsequent agreements except the payment, by him, of the note here in suit.
The appellant, Pritchard, requested a peremptory instruction which was refused by the court.
On these facts, of course, there was no failure of consideration, for there was no contract of warranty, either expressed or implied. The written contract executed by Hall expressly stated that he had examined the car and agreed to pay the stipulated price therefor "in its present condition."
But the court submitted the case to the jury on the theory of a new or subsequent contract, and the jury have, by their verdict, accepted Hall's version of the facts. The jury was instructed that if they believed these facts, they should return a verdict for the defendant.
The effect of all this evidence, as found by the jury, is that about two months after the purchase and receipt of the car by Hall, he carried it to Pritchard Hollowell, on their oral agreement to make it stand for ninety days, or give him a new car. They did not comply with this agreement, but kept the car and never offered to deliver it to Hall.
A written contract may be changed or modified by a subsequent oral agreement, provided that the new oral agreement is supported by an additional consideration. Edrington v. Stephens, 148 Miss. 583, 114 So. 387; 24 R.C.L., p. 154, 55 C.J., sec. 680, p. 671. We have searched this record in vain for the new or additional consideration moving from Hall to Pritchard Hollowell, and find none. There remains nothing but the additional promise by appellant given in consideration of the original note.
Appellee advances the suggestion that although the consideration may be slight, or trivial, it is sufficient if it benefits one and is a detriment to the other party. Magee v. Catching, 33 Miss. 672. Therefore, he says he surrendered possession of his car to appellants who never returned it to him. This cannot be distorted into a consideration for a new or an additional contract. It may have constituted an unlawful conversion of the car by appellants, but a subsequent conversion cannot be treated as a consideration for a pre-existing contract. Hall might have a legal or equitable set-off or recoupment — the unliquidated damages occasioned by an unlawful conversion — but there is neither plea nor proof to sustain that, and the case was not so tried. Indeed, there is no plea of new contract for a consideration. Neither recoupment nor set-off was hinted or suggested in the lower court.
In our view, all the evidence offered constituted no defense to the note here sued on, and there being no express or implied warranty originally, the case is controlled by Bellville Supply Co. v. Dacey, 141 Miss. 569, 106 So. 818; Gerard Motor Co. v. McEachern, 150 Miss. 437, 116 So. 816.
We have dealt with this case on the pleadings and proof, and the theory upon which it was tried in the lower court, as demonstrated by appellee's instructions, and the theories upon which the case might have been tried are, therefore, not considered by us. Appellee filed no cross-appeal here.
The court below erred in refusing appellant a peremptory instruction for the amount sued for with six per cent interest from September 5, 1930, and an attorney's fee of fifteen per cent of the total amount of principal and interest, as provided in the note, and the judgment will be altered here accordingly.
Reversed, and judgment here for appellant.