Opinion
No. 32007.
January 13, 1936.
1. PLEADING.
Form of pleading is not material, if substance thereof constitutes defense which is available in action (Code 1930, sections 521, 531, 533).
2. PLEADING.
Denial of debt and set-off may be pleaded together, and manner of pleading in denying debt does not preclude filing of plea of set-off (Code 1930, sections 536, 537).
3. SET-OFF AND COUNTERCLAIM.
In action on open account for machinery and parts, pleas of recoupment for defective machinery and parts unsuitable for use held available, though unliquidated, since they grew out of demand sued on (Code 1930, sections 521, 531, 533, 536, 537).
APPEAL from the circuit court of Monroe county; HON. THOS. H. JOHNSTON, Judge.
Leftwich Tubb, of Aberdeen, for appellant.
Will this appellant be permitted to prove and show and be allowed credit for, that damage and injury he suffered as a result of appellee's breach of warranty when sued for the parts and replacements purchased, some of which he was compelled to purchase to make the tractors fulfill the warranty of the manufacturer; the manufacturer, seller and appellee being one and the same, the appellee and defendant herein? The lower court sustained an objection to the proof so offered, and in so doing we say, in all earnestness, it erred.
The tractors purchased by appellant were purchased from appellee, the manufacturer, and the warranty implied from such a sale is that the articles so purchased are fit for the purpose for which they were purchased. Especially is this true when the sale is made by the manufacturer, and when that manufacturer knows the purpose for which the articles are bought and the use to which they will be put. This warranty is implied by law.
55 C.J., sec. 719, page 750; 24 R.C.L., sec. 464, sec. 192; 1 Williston on Sales (2 Ed.), sec. 235, page 457, sec. 232, page 447, and sec. 197, page 373; 42 C.J., sec. 320, page 780.
Appellant, upon a breach of warranty, could (a) rescind the sale and refuse to accept the goods; (b) accept the goods and set up against the seller the breach of warranty in diminution of the price; (c) accept the goods and maintain an action for the breach of warranty.
2 Williston on Sales, sec. 603, page 1510; Alig v. Lackey, 114 Miss. 392, 75 So. 139; J.B. Colt Co. v. Mazingo, 141 Miss. 402, 106 So. 533; J.B. Colt Co. v. Fuller, 144 Miss. 490, 110 So. 427; J.B. Colt Co. v. Odom, 136 Miss. 651, 101 So. 583; Stillwell v. Biloxi Canning Co., 78 Miss. 779, 29 So. 513; Christian Brough Co. v. Goodman Garrett, 132 Miss. 786, 96 So. 692.
In this instance appellant accepted the goods and elected to set up against the seller in this action a breach of the implied warranty and reduce its recovery herein. The right of appellant to do this is, we contend, provided by statute.
Section 537, Code of 1930; AEtna Ins. Co. v. Robertson, 126 Miss. 387, 88 So. 883.
Mutual indebtedness existing, the defendant may plead and set off against the demand of the plaintiff any debt or demand which he may have against the plaintiff.
18 C.J. 479; Wilkinson v. Searles, 70 Miss. 392, 13 So. 470; Postal Telegraph-Cable Co. v. W.C. Craig Co., 106 Miss. 279, 63 So. 573.
The case at bar is almost exactly parallel to the Craig case. There, as here, the counterclaim grows out of the very business and dealings which form the basis for the action, mutual dealings, and the counterclaim could be used in defense of the action brought.
Miller v. Bank, 76 Miss. 84, 23 So. 439; Weil Bros. v. Wittjen, 116 Miss. 514, 77 So. 308.
This is certainly a case of a mutual indebtedness and one which comes clearly within the statute.
Shapleigh Hardware Co. v. Brumfield, 159 Miss. 175, 130 So. 98; 57 C.J., sec. 71, page 418, and sec. 82, page 432; Weil v. Wittjen, 116 Miss. 514, 77 So. 308; Wilkinson v. Searles, 70 Miss. 392, 13 So. 470; Cobb v. Wilson, 60 Miss. 343.
McFarland Holmes, of Aberdeen, for appellee.
This court has held repeatedly that set-off is not available where defendant denies in toto plaintiff's right of action.
Canal-Commercial Trust Savings Bank v. Brewer, 143 Miss. 146, 108 So. 424, 431; 47 A.L.R. 45; 3 R.C.L., par. 219; Griffith's Chancery Practice, par. 521; Shewalter v. Ford, 34 Miss. 417; Hoover v. Humphries, 107 Miss. 810, 66 So. 214; Henry v. Hoover, 6 S. M. 418; General Motors Acceptance Corp. v. Trull, 166 Miss. 490, 148 So. 390.
Set-off cannot avail where there is no mutuality of indebtedness and where the defendant denies plaintiff's debt.
General Motors Acceptance Corp. v. Trull, 166 Miss. 490, 148 So. 390.
It is a well settled rule of law in Mississippi that unliquidated damages cannot be used as a set-off in a suit for debt.
McCune v. Commercial Publishing Co., 148 Miss. 164, 114 So. 268; 24 R.C.L., par. 53, page 850, sec. 59, pages 855 and 856, and sec. 60, page 856; 57 C.J., page 434, sec. 84, and note 54.
Counsel for appellant insists now in their brief that the case at bar is one of mutual indebtedness and one clearly within the statute, but apparently overlooked the fact that when they filed their pleas in this cause, appellant denied under oath the account sued on in toto and undertook to recover by way of set-off unliquidated damages arising out of an alleged breach of contract, different and disconnected from the contract sued on; and this court, in the cases cited by us in our brief, has held that this cannot be done; that there cannot be mutual dealings where the defendant denies in toto the indebtedness sued on and at the same time undertakes to recover by way of set-off unliquidated damages arising out of breach of contract, different and disconnected from the contract sued on. Such pleas are insufficient in law and constitute no defense and any evidence offered in support of such pleas is certainly incompetent and should be excluded by the trial court.
Adams Machine Co. v. Thomas, 87 Miss. 391, 39 So. 218; Whittaker v. Robinson, 8 S. M. 349.
The Allis-Chalmers Manufacturing Company was plaintiff in the court below and brought suit against F.S. Neely upon an open account for seven hundred nineteen dollars and forty cents, the balance due, with six per cent interest from April 6, 1934. To the declaration was attached an account consisting of many items, and it was agreed, at the trial, that they were proper charges, but it was contended that same was not due because certain parts had been exchanged for new parts on account of defects, and certain other parts did not fill the purpose for which they were bought and had to be repaired by a mechanic at great expense.
The defendant, appellant here, pleaded the general issue, and then filed a special plea, No. 1, reading as follows:
"Comes the defendant, F.S. Neely, and for plea to the declaration exhibited against him in the above styled and numbered cause says that the account attached to the declaration is not true and correct in the following particulars, to-wit;
"A. That the plaintiff has deducted the sum of $5.70 as a handling charge from credit memorandum No. 122-R $ 5.70
"B. Plaintiff has made the same deduction from credit memorandum No. 131-R for 23.16
"C. Plaintiff has deducted the sum of $22.50 from credit memorandum No. 284-R for hub and gear, which was returned for credit the same being 25 per cent 22.50
"D. Plaintiff has failed to credit the sum of $56.60 to the account of defendant and which should be credited for parts and supplies returned 56.60
"E. Plaintiff has failed to give credit for support roller brackets which as originally sold were defective, not well made and not suitable for the purpose for which manufactured 118.75
"F. Plaintiff has not given credit for ten miscellaneous items consisting of timing gear parts and governor parts, and other miscellaneous items and which were defective in manufacture and not well made and not suitable for the purpose for which supplied 117.45 _________ "Total $344.16
"Wherefore defendant says that said account, Exhibit A to the declaration, is not true and correct in the foregoing particulars, and that the same should be credited with the additional and further sum of $344.16, and all of which he is ready to verify."
He also filed special plea No. 2 in which he alleged that he should have credit and judgment against the plaintiff for the full account of the sum shown and itemized in his special plea No. 1, and that no sum should be deducted or charged against him as a handling charge, and that said parts returned were new and not used and could be and were accepted by the plaintiff at cost or list price without expense to the plaintiff. He filed special plea No. 3 in which he said that the plaintiff should not recover because the plaintiff sold him certain tractors which were warranted to be well made, but that certain parts, as set out in special plea one, were defective and he was compelled to purchase new parts, and he was damaged thereby in the sum of two hundred thirty-six dollars and twenty cents, and, in addition thereto, he expended for the labor of mechanics in making repairs the sum of two hundred fifty dollars, and that defendant should recover from plaintiff the sum of four hundred eighty-six dollars and twenty cents. He filed special plea No. 4 alleging that he purchased from the plaintiff certain tractors warranted to be well made, but which were defective, to the damage of the defendant in the sum of two hundred thirty-six dollars and twenty cents. There was also filed a further special plea in substantially the same effect, though couched in different language.
Defendant filed an affidavit denying the correctness of the account sued on.
The parties agreed in the trial of the case that the account sued on is correct as to items and prices, but the defendant, appellant here, denies that he owes or should be charged for the items covered by the plea.
The defendant testified that he bought a tractor from the appellee and that certain parts were returned as being defective, and certain other parts used were defective and had to be repaired.
The court below excluded the testimony as to the defective parts as being unliquidated damages because in breach of an implied warranty, and counsel for the defendant then made the following statement into the record: "We shall prove by the witness, Mr. Neely, that the tractors referred to, when received, proved defective, did not perform well, and were not suitable and fit for the purpose for which they were purchased, and he was compelled, because of defects, to purchase certain parts as described in the pleadings and at a cost of two hundred thirty-six dollars and twenty cents, and was compelled to install these parts in the tractors purchased at an expense of two hundred fifty dollars, in order to bring them up to what they should be, and so that they would perform well and be suitable and fit for the purpose for which they were purchased." The court, in excluding this proffered evidence, proceeded upon the theory, we gather from the briefs and the record, that the amounts claimed by the defendant were unliquidated amounts, and that the pleading constituted a set-off, and that the defendant could not set off unliquidated amounts.
The form of a pleading, either a declaration or subsequent pleading, is not material, if the substance thereof constitutes a defense which is available in the action. This is provided in section 521, as to the declaration, and in section 531, as to pleas and replications, in the Code of 1930, and by section 533, Code of 1930, it is provided that certain pleas may be pleaded together without leave of court, among which are the plea of the general issue, denial of debt, set-off, and the others there mentioned. By section 536, under the plea of the general issue, the plaintiff may prove, at the trial, a set-off. Section 537 provides for set-off with judgment over in favor of the defendant. It is unquestionably true that denial of debt and set-off may be pleaded together, and the manner of pleading in denying a debt would not preclude the filing of a plea of set-off. Of course, a set-off when pleaded, must be established according to law as to what is a set-off.
An examination of the pleadings shows that they grew out of the same transaction, and are, in effect, pleas of recoupment, which, though unliquidated, are available, since they grew out of the same demand sued on.
In the case at bar the demand sued on is the foundation of the plea of recoupment, and the defendant seeks to answer the plaintiff's demand by showing damages because of defective machinery and parts unsuitable for use.
It was error for the court not to permit this evidence to be offered and the case to be tried and judgment rendered according to the finding of the jury as to the issues so made. The several special pleas were denied by the issue, in short, by consent.
We are therefore of the opinion that the peremptory instruction granted by the court below to the plaintiff for his demands, on other items mentioned in the instruction, constituted error, and the judgment will be reversed and the cause remanded for a new trial.
Reversed and remanded.