195 Mo. App. 21 | Mo. Ct. App. | 1916
Lead Opinion
Plaintiff obtained a directed verdict in an action on a promissory note executed by defendant to the Rumely Products Company and by it endorsed before maturity to M. Rumely Company. The defendant has appealed.
The note was given for cream separators purchased by defendants from the Rumely Products Company and it was contended by defendant in the trial court that the separators were not as warranted and were wholly worthless and that the M. Rumely Company became the endorsee of said note with notice of these facts. It is also \said that there is such a unity of stockholders and directors and mutuality of purposes for which the two corporations were organized as to lead to the conclusion that the Products Company
The contract between the Products Company and the Rumely Company contained, among many other
“2. (a) The Rumely Company warrants all goods which the Products Company may purchase hereunder to be made of good materials, and that with good care, proper nse and management the same will be capable of doing as good work under the same conditions as any other machinery of the same size and rated capacity, made for the same purpose; written notice shall be given the Rumely Company at its La Porte office by the Products Company within six days from the time of the first use of any such machinery, of any failure thereof to fully perform this warranty, particularly specifying wherein the same fails to fill the same.
“6. The Products Company agrees to sell or accept orders for goods it purchases of the Rumely Company only upon standard printed order forms and upon the usual terms and conditions of the trade in similar lines; that it will not permit any goods to be sold or any orders therefor accepted on credit until such orders shall have been submitted to the Products Company at its La Porte office and duly approved by it there; that will sell all goods subject to the warranty set forth in paragraph 2 hereof and upon no other warranty, and the Rumely Company shall at all times have the right to examine into the financial responsibility and credit of the Products Company’s customers before the latter accepts orders on credit, and may at any time refuse to fill any order or orders, if in its judgment such customer or customers is or are not entitled to the credit proposed or that the security offered the Products Company for deferred payments is inadequate; but orders the Products Company may receive in foreign countries for filling there need may not be first submitted to the Products Company at its La Porte office, the Rumely Company, however, shall at all times have the right to examine into and be reasonably satisfied with the manner the
“14. The Products Company shall endorse and deliver to the Rumely Company notes and securities it receives in settlement for goods sold hereunder when such notes are received, ... ” •
It will be observed from reading paragraph 6 that upon all sales on credit the orders therefor were accepted only after the same had been submitted to the Products Company and it was restricted in its sales and required to warrant the goods sold as provided in paragraph 2, so it is evident that the Rumely Company was fully aware that all notes taken upon sales made by the Products Company were based upon a transaction in which this warranty was contained. The Rumely Company was the controlling factor in all sales' made by the Produets Company and if the Products Company was not the agent of the Rumely Company yet we are impelled to hold that there is evidence that the Rumely Company knew of the details of the transaction in which the note in controversy was given and was fully advised that therein was contained the warranty, the breach of which is relied upon by defendant in this case. [Bank of Chillicothe v. Orndorff, 126 Mo. App. 654, 105 S. W. 664, and Bank of Freeport v. Cape Girardeau and Chester R. Co., 172 Mo. App. 662, 672, 155 S. W. 1111.] The defendant sought in the trial to inject this defense and the trial court held that there was no evidence tending to sustain it.
The trial court should have, as a matter of law, held that the plaintiff took the note involved with notice of its infirmities and submitted to the jury the defense -of want or failure of consideration. This question of notice is a conclusion justified by an interpretation of the contracts and it is the duty of the court to tell the jury the legal effect thereof. [State Bank of Freeport v. Cape Girardeau and Chester R. Co., 172 Mo. App. 662, 678, 155 S. W. 1111.]
The appellant cites numerous authorities in support of the agency contention and if upon a retrial the question is raised in an effort to sustain the counterclaim they may prove of some value to the trial court in construing the contract, hence wre cite them as follows: State Bank of Indiana v. Mentzer, 100 N. W. 69; Wilcox & Gibbs Sewing Machine Co. v. Ewing, 144 U. S. 627; Watkins v. Donell, 192 Mo. App. 640, 179 S. W. 980; Handlan Buck Mfg. Co. v. State Electrical Co., 184 Mo. App. 247, 168 S. W. 785; Zachra v. American Mfg. Co., 179 Mo. App. 683, 162 S. W. 1077; Barrie v. United Rys. Co., 138 Mo. App. 557, 119 S. W. 1020, and Vandagrift v. Bates County Inv. Co., 144 Mo. App. 77, 128 S. W. 1007.
Prom what has been said it is evident that the court erred in holding that the Rumely Company took this note without notice of the alleged warranty and its breach and for this reason the judgment is reversed and the cause remanded.
Concurrence Opinion
(concurring.) — In concurring in the result reached, I wish to say this: The Rumely Products Company was organized to sell the products manufactured by the M. Rumely Company. Practically all the products manufactured by the Rumely Company were sold to and then by the Products Company, and all the business of the Products Company was selling the products manufactured by the Rumely Company. Such was the contract between them, and the cream separators now in question were manufactured by the Rumely Company and sold by the Products Company. The contract further provided that the Rumely Com