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Heller v. Hammond

Decided: November 3, 1958.

WALTER E. HELLER & COMPANY, INC., A CORPORATION, ASSIGNEE OF THE PEERLESS CORPORATION, PLAINTIFF-APPELLANT AND CROSS-RESPONDENT,
v.
HARRY HAMMOND, INDIVIDUALLY AND TRADING AS HAMMOND APPLIANCE TELEVISION AND REFRIGERATION CO., DEFENDANT, AND THE HAMMOND APPLIANCE CO., INC., A CORPORATION OF NEW JERSEY, DEFENDANT-RESPONDENT AND CROSS-APPELLANT



Price, Schettino and Hall. The opinion of the court was delivered by Schettino, J.A.D.

Schettino

[52 NJSuper Page 334] Appeal and cross-appeal are taken from a judgment of dismissal of plaintiff's action on a book

account and defendant Hammond Appliance Co., Inc.'s counterclaim for alleged storage charges.

On March 19, 1957 plaintiff, the assignee of the Peerless Corporation, filed a complaint on a book account for goods sold and delivered against Harry Hammond, individually and trading as Hammond Appliance Television And Refrigeration Co. Harry Hammond was served on March 25, 1957. Thereafter, on September 10, 1957 plaintiff filed an amended complaint against Harry Hammond, individually and trading as Hammond Appliance Co., Inc., hereafter referred to as "Appliance Co." Harry Hammond is president of the corporate defendant. The corporate defendant denied the allegations of the complaint and set forth in the separate defenses that the goods delivered were not of merchantable quality or fit for the purposes of sale, and that there had been a rescission for that reason but the seller had never "picked up" the goods although it had agreed to do so. It counterclaimed for reasonable storage charges. Although the pretrial order is inadequate, we hold that it limited the issues to rescission and to a counterclaim for storage charges. The action was dismissed against Harry Hammond after plaintiff's opening statement.

On July 27 or 28, 1956 Peerless sold to defendant Appliance Co. 50 electric broilers upon an express representation by Peerless that it would accept return of the entire shipment if any of the broilers proved to be defective. After certain credits were deducted the amount to be paid was $1,529. Delivery was made either on July 31, 1956 or shortly thereafter.

The first few broilers sold by Appliance Co. were returned by its customers as defective. An inspection revealed that many were in an imperfect state. Defendant immediately notified Peerless that it was rescinding the sale. The record clearly establishes that Peerless accepted the rescission and agreed to repossess the broilers. Peerless later went into bankruptcy, never having retaken the goods. However, it made arrangements with the Roto-Broiler Company of

America to honor its guarantees and service its products. Defendant was notified of these arrangements.

While waiting for the seller to retake the broilers, defendant kept them in its stores. Plaintiff contends they were displayed for sale. Defendant contends they were merely held in storage, taking up valuable store space.

After holding the goods for about a year and after service on Harry Hammond of the original complaint, defendant, acting upon the advice of its attorney, decided to repair some of the broilers and sell them for whatever it could get for them. Starting in July 1957 it sold 27 of them for $625 or $650.

After a trial without a jury, the trial court found the facts substantially as we have just stated but entered a judgment of no cause of action on both the plaintiff's claim and on the defendant's counterclaim. It is unclear on what grounds the judgment of no cause of action on plaintiff's claim was based. As to the counterclaim, the trial court held that defendant did not establish its claim by a preponderance of the evidence as to the reasonable value of the storage charges. The effect of the decision was that defendant did not have to return any of the broilers, or pay for the goods, or turn over any of the proceeds of the sales. At the trial, evidence pertaining to the question of damages for breach of warranty was admitted over plaintiff's objection that the issue was not within the pleadings or pretrial order.

On this appeal plaintiff contends the trial court erred (a) in receiving evidence pertaining to the question of damages for breach of warranty as this issue was not encompassed by the pretrial order, and (b) in allowing the defense of rescission since it was not available because defendant "accepted" the goods by exposing them for sale and reselling a part of them after having originally rescinded the sale. Defendant cross-appeals from the finding against it on the counterclaim.

That there was a breach of express warranty (R.S. 46:30-18) and of an implied warranty of merchantability (R.S. 46:30-21) cannot ...


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