Beasley, Hallett & Co. v. Huyett & Smith Mfg. Co.

Bleckley, Chief Justice. 1. What was the warranty? It was, that the dry kiln was of good material, well made, and with proper management capable of doing as good work as similar articles of any other manufacturer in the United States. What was the consequence stipulated for between the 278 parties, of a failure of this warranty? It was, that written notice should be given to the warrantors, stating wherein the kiln failed, and time, opportunity and friendly assistance were to be given to reach the kiln and remedy the defects. This notice was to be given and the defects were to be remedied if the failure occurred within thirty days of first use. The contract added : “ Continued possession or use of the machinery after the expiration of the time named above, shall be conclusive evidence that the warranty is fulfilled.” Did the warranty extend to any defects not actually discovered within thirty days of first use, or to any which were so discovered if there was a failure to give written notice of the same? We think not. The fair construction of the contract, as a whole, is that thirty days would be allowed to test the kiln and develop any defects which could be and were discovered within that time, but as to any which were not discoverable or not actually discovered until the expiration of the thirty days the purchasers took the risk. It will be noticed that possession or use of the machinery after the time limited was to be conclusive evidence that the whole warranty, not merely a part of it, was fulfilled. This stipulation manifests an intention to restrict the general words in which the warranty was expressed, from their apparent application to all defects whatsoever, to such of them as should be discovered within thirty days from first use. Perhaps a more accurate statement would be, that the warranty embraces all defects whatsoever, and the stipulation introduces a condition equivalent to the expression, “provided they are discovered within the specified time and written notice thereof be given.” What we have said treats the warranty as an honest contract made upon an honest and fair sale of the property, with no fraud or fraudulent concealment on the part of the warrantors. 2. The plea of partial failure of consideration not al 279 leging that any written notice was given of the defects therein mentioned was no defence to the action, testing it by the contract containing the warranty which was in evidence. No point seems to have been made that it could not be so tested for the reason that the contract was not set out in the declaration. Had this point been made, of course the declaration alone could have been regarded in testing the plea on motion to strike it. 3. But the plea of partial failure of consideration, when amended and enlarged by the further plea of actual fraud on the part of the plaintiff by having knowledge of and fraudulently concealing the alleged defects, knowing that they were latent and could not be discovered within thirty days from the first use of the apparatus (and m fact they were not discovered until afterwards), would be a defence to the action to the extent, at least, of the partial failure of consideration occasioned by the fraud. There can be no doubt that it is a fraud for manufacturers of machinery to fill it with latent defects not discoverable in thirty days, and then sell it as good but warranting the same only as against defects actually discovered within thirty days, they knowing that the existing defects are not discoverable within that time, and concealing both the defects and their knowledge of them. To do this wTould be practicing deceit and committing actual fraud. Those who commit actual fraud cannot protect themselves against answering therefor by any form of warranty or any limitations which they may introduce in the terms of the warranty. Fraud in the principal contract, the contract of sale, is not to be answered by setting up a collateral contract which was as much the offspring of the fraud as was the principal contract itself. The special plea, as finally shaped by the plea of fraud, should not have been stricken; and m striking the same and m afterwards directing a verdict for the plaintiff the court erred. Judgment reversed.