Summary
In Giles v. Phillips, 238 Miss. 528, 119 So.2d 349 (1960), the Mississippi court held that receipt of goods does not preclude a later rejection of them. "But receipt will become acceptance if the right of revocation is not exercised within a reasonable time."
Summary of this case from Oda Nursery, Inc. v. Garcia Tree & Lawn, Inc.Opinion
No. 41443.
April 4, 1960.
1. Sales — acceptance and use of neon sign with notice of defects — buyer liable for purchase price less cost of remedying defects.
When neon sign was delivered by seller and erected on buyer's premises, buyer could have refused to accept the sign because the "N" in sign had been broken and needed to be replaced and because a "Curb Service" panel had not been displayed, or buyer could have kept the sign and been entitled to credit on the purchase price thereof for difference between its purchase price with the letter "N" and the panel included and value of sign with those two items omitted, but when he elected to keep and use the sign he was liable for purchase price thereof less the cost of replacing the brokn letter "N" and the panel.
2. Sales — acceptance — what constitutes.
When goods are sent to a buyer in performance of seller's contract, buyer is not precluded from objecting to them by merely receiving them, but receipt will become acceptance if the right of rejection is not exercised within a reasonable time, or if any act be done by the buyer which he would have no right to do unless he were the owner of the goods.
Headnotes as approved by McGehee, J.
APPEAL from the Circuit Court of Harrison County; LESLIE B. GRANT, Judge.
Albert S. Johnston, Jr., Arnaud Lopez, Biloxi, for appellant.
I. There was an implied warranty on the part of appellee, the manufacturer of the neon sign described in the contract sued on herein, that the chattel would reasonably perform the services for which it was manufactured and sold. Brown v. Murphee, 31 Miss. 91; Missouri Bag Co. v. Chemical Delinting Co., 214 Miss. 13, 58 So.2d 71, 33 A.L.R. 2d 501; Viking Refrigerators v. Farrel, 180 Miss. 181, 176 So. 910.
II. An implied warranty survives the acceptance of the goods by the buyer with knowledge of the defect, or opportunity for such knowledge. Although the buyer, by such acceptance, loses (on obvious contract principles) his right to rescind, he retains his right to a remedy in court for damages, either by suit for breach of warranty, or by recoupment or counterclaim, when sued for the price. D. Rosenbaum's Sons v. Davis Andrews Co., 111 Miss. 278, 71 So. 388; Hall Commission Co. v. R.L. Crook Co., 87 Miss. 445, 40 So. 1006; Mobile Auto Co. v. Sturges, 107 Miss. 848, 66 So. 205; National Cash Register Co. v. Hude, 119 Miss. 36, 80 So. 378; Sharp v. Brookhaven Pressed Brick Co., 120 Miss. 850, 83 So. 274; Stillwell, Bierce Smith Vaile Co. v. Biloxi Canning Co., 78 Miss. 779, 29 So. 513.
III. Everything proven directly by the evidence and all matters established by reasonable inference from such evidence, are taken most strongly against the party seeking a peremptory instruction. Dean v. Brannon, 139 Miss. 312, 104 So. 173; Fore v. Alabama V.R. Co., 87 Miss. 211, 39 So. 493; McKinnon v. Braddock, 139 Miss. 424, 104 So. 154; New Orleans N.E.R. Co. v. Jackson, 140 Miss. 375, 105 So. 770; New Orleans N.E.R. Co. v. Martin, 140 Miss. 410, 105 So. 864.
Wadlington Corban, Biloxi, for appellee.
I. Where buyer after knowledge of defects in machinery retained and used same, his only right when sued for price was reduction of amount by actual value of necessary changes. Alig v. Lackey, 114 Miss. 392, 75 So. 139; Carver Gin Co. v. Gaddy, 62 Miss. 201; Lumbermen's Supply Co. v. Poplarville Sawmill Co., 117 Miss. 274, 78 So. 157; McDaniel v. Smith, 210 Miss. 71, 48 So.2d 638; Missouri Bag Co. v. Chemical Delinting Co., 214 Miss. 13, 58 So.2d 71; Sikemeier v. Jacob, 92 Miss. 562, 46 So. 169; Stillwell, Bierce Smith Vaile Co. v. Biloxi Canning Co., 78 Miss. 779, 29 So. 513; Ware v. Houghton, 41 Miss. 370, 93 Am. Dec. 258; 6 R.C.L., Sec. 319 p. 936; Williston on Sales, Sec. 611.
In July 1956 the appellee, William B. Phillips, doing business as Phillips Sign Service, sold to the appellant, Barney M. Giles, doing business as Barney's Drive-In, a neon sign, which was manufactured, constructed and erected by the appellee for the use of the appellant at his place of business in Biloxi, Mississippi, for the contract price of $1,428, including sales tax. The sign was delivered and erected about October 20, 1956 when the appellant executed an acceptance thereof stating: "I hereby accept * * * (1) neon sign as per contract less (1) unit N as in BARNEY'S, less (1) painted panel reading CURB SERVICE, OPEN 24 HOURS in good order. (To be picked up.)"
The proof disclosed without dispute that the words "less (1) unit N as in BARNEY'S" meant that the N in the neon sign had been broken and needed to be replaced, and that the same would be manufactured at Alexandria, Louisiana and would be "picked up" by the purchaser; and that the words "less (1) painted panel reading CURB SERVICE, OPEN 24 HOURS" meant that these words were to be displayed at or near the neon sign and that the same had been omitted, and that it was agreed that the same would likewise be manufactured by the appellee, and would be "picked up" by the appellant at the place of business of the former at Alexandria, Louisiana.
The appellant continued to use the neon sign at his place of business in Biloxi for more than a year without ever having stopped by the place of business of the appellee to pick up these two missing parts of the neon sign, and also he wholly failed to make any of the payments called for in his contract.
Upon the trial the appellant undertook to show that, notwithstanding his execution of the acceptance of the neon sign as being "as per contract" with the noted exceptions thereon, that the sign otherwise turned out to be defective due to improper manufacturing. The trial court ruled in substance that the appellant was bound by his acceptance of the neon sign "as per contract", with the noted exceptions, and directed a verdict in favor of the appellee for the amount sued for, including interest and a reasonable attorney's fee, but less what would be required to replace the broken letter "N" of the sign and less the cost of supplying the painted panel reading "Curb Service, Open 24 Hours." Proof was duly taken as to what a reasonable attorney's fee would be.
(Hn 1) In our opinion when the sign was delivered and erected, the appellant could have refused to accept it and offered to return it or he could have kept the same and been entitled to credit on the purchase price thereof for the difference between its purchase price with the letter "N" and the "Curb Service" sign included, and the value of the sign with those two items omitted. He selected to keep and use the sign, and he is therefore liable for the purchase price thereof less the cost of replacing the broken letter "N" and the "Curb Service" sign.
In the case of Alig v. Lackey, 114 Miss. 392, 75 So. 139 (1917) it was held that where a buyer has the knowledge of defects in machinery and retains and uses the same, his only right, when sued for the purchase price, was a reduction in the amount thereof to the extent of the costs of the repairs or replacements. See also McDaniel v. Smith, et al, 210 Miss. 71, 48 So.2d 638 where the Court held that a buyer's continued use of equipment after discovery of its alleged unsuitable and unsatisfactory condition without notifying the seller of rejection or without returning or offering to return the equipment to the seller, constituted acceptance by the buyers so as to make them liable on the notes for balance due. In this case there was no offer shown to return the equipment. (Hn 2) The law on the issue involved here is set forth in the cases of Ware v. Houghton, 41 Miss. 370, 93 Am. Dec. 258; Carver Gin Co. v. Gaddy, 62 Miss. 201, Stillwell Co. v. Biloxi Canning Co., 78 Miss. 779, 29 So. 513; Sikemeier v. Jacob, 92 Miss. 562, 46 So. 169; 6 R.C.L. 936, Sec. 319; Williston on Sales, Sec. 611. We think that the controlling principle involved in the case at bar is set forth in the case of Stillwell Bierce Smith Vaile Co. v. Biloxi Canning Co., 78 Miss. 779, 29 So. 513 as follows: "When goods are sent to a buyer in performance of the vendor's contract, the buyer is not precluded from objecting to them by merely receiving them; for receipt is one thing and acceptance another. But receipt will become acceptance if the right of rejection is not exercised within a reasonable time, or if any act be done by the buyer which he would have no right to do unless he were the owner of the goods."
We are of the opinion that there was no issue of fact to be submitted to the jury and that the directed verdict in favor of the appellee was correct and that the case must therefore be affirmed.
Affirmed.
Hall, Holmes, Ethridge and Gillespie, JJ., concur.