Hooper v. . Story

This action was brought to recover the purchase price of a varnishing machine, made by the plaintiffs for, and delivered to, the defendants. The defendants, in their answer, allege a warranty and representation on the part of the plaintiffs with respect to the machine and set up a counterclaim for damages resulting from the failure of the machine to conform to the warranty. The alleged warranty was that the machine should be of a capacity sufficient to varnish 10,000 sheets of labels or advertisements per day and that it should be complete in all its parts, and be made in a good, substantial and workmanlike manner. The trial was had before a referee, who reported in favor of the plaintiffs, and, upon appeal from the judgment entered on the report of the referee to the General Term of the Supreme Court, in the fifth department, the judgment was there affirmed. The record contains none of the evidence and the review of the case is confined to the correctness of the legal conclusions reached by the referee upon the facts as found by him.

The referee found the express warranty as to the capacity of the machine and as to its fitness for use by the defendants, and found that there was a breach of the warranty, in that the machine delivered was not of the capacity agreed upon and was not perfect and complete in all its parts, or made in a good, substantial and workmanlike manner. As a conclusion of law, he found that the defendants, because they retained possession of the machine, using it and deriving profit therefrom, with knowledge of its imperfections and incapacity, had accepted it and had become liable to pay therefor. The General Term, in the opinion delivered upon the affirmance of the judgment, did not agree with the referee in his legal conclusion, but held that, in the condition of the record, the judgment upon the referee's report must, nevertheless, be affirmed. It was held that the express warranty survived the acceptance of the machine and that the liability of the plaintiffs for damages was the difference in the value of the machine as it was and the value which it would have had if in accordance with the warranty; but, as there was no finding upon the subject of the actual value of the machine and as no other basis of estimating damages appeared by the facts as found, there could be no inferences other than such as arose from the facts as found, and the judgment must, therefore, stand.

The General Term has laid down the correct rule in this case. The plaintiffs' contract was executory, and upon the delivery of the machine it was not necessary, if it proved not to satisfy the agreement of warranty, that the defendants should return it. They had the right to rely upon the agreement of the plaintiffs and, upon discovering the breach on their part, to recover damages therefor. The measure of those damages would be the difference between the value of the machine if it had corresponded with the warranty and its actual value. (Muller v. Eno, 14 N.Y. 597;Parks v. Morris, etc., Co., 54 N.Y. 586.) This is the well-settled rule and the defendants had the right to avail themselves of their remedy under the plaintiffs' agreement of warranty, by way of counterclaim when sued for the price. But they were bound to give evidence of the actual value of the machine and that is their difficulty in the case as presented by this record.

There was no finding as to the value of the machine which was delivered; and there appears to have been no request to find that value. Hence, there was nothing in the record to establish a basis for the recovery of those damages to which, under the rule, the defendants might have been entitled.

It is argued by the appellants that because the machine would varnish only 6,000 sheets a day, whereas it was warranted to varnish 10,000, its value might be fixed at six-tenths of the contract price. That, however, would be pure speculation, in the absence of any evidence going to show that the value of such a machine is in proportion to its capacity for varnishing sheets. It may or may not be true; but there is no way of ascertaining the truth without the aid of evidence. It was a case, where, in the absence of data furnished by witnesses competent to testify upon the subject, a referee or jury would not be able to determine the difference in value. The defendants were bound to give that evidence. If it was given, there should be a finding.

Nor do the findings of the referee that the defendants paid out, for repairs on the machine and for work spoiled, certain sums of money, help out the appellants' case. When, or for what cause, moneys were paid for repairs the record does not inform us; whereas we do know by a finding that all the work spoiled occurred more than three years after the machine was delivered. Whether the items of spoiled work, or of moneys paid out for repairs, were attributable to the plaintiffs' breach of warranty does not appear. We do not know, and we cannot suppose, that these payments of moneys had anything to do with the non-conformity to the agreement, or the difference in size of the machine as furnished. To the contrary, we see that the referee refused to find, when requested by the defendants, that the amount of money paid out for work spoiled was by reason of the imperfect construction of the machine; or that the defendants had expended large sums of money in getting the machine to operate at all. The defendants' claim for damages rests solely upon the breach of the warranty accompanying the contract to make a particular machine. The referee, also, has denied their request to find that the amount of their profits would have been greater had the machine been as warranted. His conclusion of law that the defendants had failed to show any legal claims for damages in this action must, therefore, be accepted as true and I see no way by which the General Term could have come to a different conclusion than the one they reached and which led to their affirmance of the judgment below.

The judgment should be affirmed, with costs.

All concur, except HAIGHT, J., not sitting.

Judgment affirmed.