Davis v. Vintage Enterprises, Inc. , 23 N.C. App. 581 ( 1974 )

209 S.E.2d 824 (1974) 23 N.C. App. 581

Ralph W. DAVIS
v.
VINTAGE ENTERPRISES, INC.
Ralph W. DAVIS
v.
COLONIAL MOBILE HOMES, INC.

Nos. 7423DC741 and 7423DC819.

Court of Appeals of North Carolina.

November 20, 1974.

Edmund I. Adams, Sparta, for plaintiff-appellant.

Arnold L. Young, Sparta, for defendant-appellant.

HEDRICK, Judge.

When the judge tries a case without a jury, he must find the facts specially and state separately his conclusions of law and thereby determine the issues raised by the pleadings and the evidence. G.S. § 1A-1, Rule 52, Rules of Civil Procedure. When this is done, the appellate court can review the case to determine whether there is competent evidence in the record to support the facts found and whether the judge correctly applied to those facts the appropriate legal principles. Suffice it to say, the findings and conclusions made by the trial judge in this case do not properly determine the issues raised by the pleadings and the evidence. In his complaint the plaintiff alleged the following:

"Plaintiff's damages have been caused solely and exclusively by defendant's breach of its said contract with plaintiff, defendant's actions in negligently damaging said mobile home, and defendant's breach of warranty. Plaintiff has tendered the return of said mobile home to defendant and demanded damages and immediate repayment of all funds paid by plaintiff to defendant, but defendant has failed and refused to do so."

The allegations in the complaint and the evidence require consideration of the Uniform Commercial Code. See Motors, Inc. v. Allen, 280 N.C. 385, 186 S.E.2d 161 (1972).

The ordinary purpose for which a mobile home is used is residential. Here, the mobile home was sold and purchased for that purpose. "Unless excluded or modified (§ 25-2-316), a warranty that the goods shall be merchantable is implied in a contract for their sale if the seller is a merchant with respect to goods of that kind. . . (2) Goods to be merchantable must be at least such as . . . (c) are fit for the ordinary purposes for which such goods are used . . . ." G.S. § 25-2-314(1), (2). Defendant is a merchant with respect to the sale of mobile homes, and the contract of sale executed by defendant contains no language, as permitted by G.S. § 25-2-316, excluding or modifying the implied warranty of merchantability. Hence, the sale under discussion carried with it an implied warranty that the mobile home was fit for the purpose for which such goods are ordinarily used, i. e., residential purposes.

While there is no implied warranty when the buyer, before entering into the contract, examines the goods as fully as he desires, G.S. § 25-2-316(3)(b), and has knowledge equal to that of the seller, Driver v. Snow, 245 N.C. 223, 95 S.E.2d 519 (1956), this principle is not applicable to the facts here because the contract of sale imposed on the seller the obligation to deliver the mobile home and set it up on plaintiff's lot. Until that was properly done, fitness or unfitness for use as a home could not be ascertained by the buyer's examination and inspection of the goods on the seller's premises. Unless otherwise agreed, "[w]hen the seller is required . . . to send the goods to the buyer, the inspection may be after their arrival," G.S. § 25-2-513(1); and the buyer is entitled to a reasonable time after the goods arrive at their destination in which to inspect them and to reject them if they do not comply with the contract. Parker v. Fenwick, 138 N.C. 209, 50 S.E. 627 (1905). Moreover, plaintiff's cash payment would not impair his right to inspect following delivery. G.S. § 25-2-512(2). Here, delivery was not accomplished until defendant set up the mobile home on plaintiff's lot.

What remedies are available to defendant for breach of implied warranty of fitness? The answer to this question turns on whether defendant accepted the mobile home. This requires consideration of the Uniform Commercial Code's concept of rejection, acceptance, and revocation of acceptance.

Acceptance is ordinarily signified, after a reasonable time to inspect the goods, by language or conduct of the buyer that the goods conform and that he will take them or that he will retain them despite the fact that they do not conform. G.S. § 25-2-606(1)(a). Acceptance may also occur by failure of the buyer "to make an effective rejection" after a reasonable opportunity to inspect. G.S. § 25-2-606(1)(b). Effective rejection means (1) rejection within a reasonable time after delivery or tender and (2) seasonable notice to the seller. G.S. § 25-2-602. Acceptance precludes rejection of the goods accepted and, if made with knowledge of a nonconformity, cannot be revoked because of it unless the acceptance was on the reasonable assumption that the nonconformity would be seasonably cured. G.S. § 25-2-607(2). Thus, the buyer may revoke his acceptance if (1) "the acceptance was on the reasonable assumption that the nonconformity would be seasonably cured," G.S. § 25-2-607(2), and (2) the nonconformity substantially impairs the value of the goods. G.S. § 25-2-608(1). Revocation of acceptance must be made within a reasonable time after the buyer discovers, or should have discovered, the ground for it, Hajoca Corp. v. Brooks, 249 N.C. 10, 105 S.E.2d 123 (1958), and it is not effective until the buyer notifies the seller of it. G.S. § 25-2-608(2). A buyer who so revokes his acceptance is no longer required to elect between revocation of acceptance on the one hand and recovery of damages for breach of implied warranty of fitness on the other. Both remedies are now available to him. G.S. § 25-2-608.

The pleadings and the evidence in this case raise an issue as to whether the plaintiff seasonably rejected the mobile home and notified the defendant of such rejection. While the plaintiff did not allege that he revoked his acceptance of the mobile home, the evidence raises this issue also; and, if the court should conclude that the plaintiff did not reject the goods, it then should consider whether the plaintiff justifiably revoked his acceptance. Evidence of the condition of the trailer at the time it was delivered to plaintiff's lot, failure of the defendant to deliver the keys for three (3) weeks so that plaintiff could inspect the trailer, the letter written by plaintiff's attorney to the defendant, the plaintiff's occupancy of the trailer for approximately ten (10) weeks with or without knowledge of the defects, defendant's failure to make timely repairs, plaintiff's refusal to let defendant make repairs, and plaintiff's abandonment—are some of the circumstances to be considered in determining whether plaintiff seasonably rejected the trailer or justifiably revoked his acceptance thereof.

If plaintiff (1) made an effective rejection of the mobile home or (2) justifiably revoked his acceptance of it, he has a right to recover "so much of the price as has been paid" plus any incidental and consequential damages he is able to prove. G.S. § 25-2-711(1); G.S. § 25-2-715; Motors, Inc. v. Allen, supra. If the court should conclude that the plaintiff did not reject and did not revoke his acceptance, it then would be necessary for the court to consider the final issue raised by the pleadings and the evidence, i. e., whether the defendant breached its implied warranty of fitness. The measure of damages in that event is "the difference at the time and place of acceptance between the value of the goods accepted and the value they would have had if they had been as warranted, unless special circumstances show damages of a different amount," G.S. § 25-2-714(2), plus incidental damages and such consequential damages as were within the contemplation of the parties. G.S. § 25-2-715; Motors, Inc. v. Allen, supra; Hendrix v. Motors, Inc., 241 N.C. 644, 86 S.E.2d 448 (1955); Harris v. Canady, 236 N.C. 613, 73 S.E.2d 559 (1952).

The parties may be permitted to amend their pleadings, if they so desire, to conform them to the evidence. G.S. § 1A-1, Rule 15, Rules of Civil Procedure.

Therefore, the judgment entered is vacated, and the cause is remanded to the district court for a new trial in accordance with this opinion.

Vacated and remanded.

MORRIS and BALEY, JJ., concur.