Falco Corp. v. Hood

Campbell, J. Falco assigns as error the charge of the trial judge to the jury as follows: ■ “Now where there is no express warranty the law implies a war [719] ranty and the evidence in this case is to the effect that there was not an expressed warranty made by the Falco Corporation when the property was leased to the defendant Hood and, therefore, I instruct you that the law would imply that there was a warranty to the effect that the car wash equipment which was being leased by Falco to the defendant Hood was reasonably fit for the use and purpose for which it was being leased and which was in the contemplation of both lessor and lessee at the time of the execution of the contract.” We are of the opinion that this exception is well taken. The evidence in this case reveals that Hood selected the automobile washing equipment; that Falco never saw this equipment until after it had been delivered to Hood and installed under Hood’s supervision; that Hood represented to Falco that the equipment was satisfactory and met with the approval of Hood. The manufacturer’s warranty was sent to and delivered directly to Hood. The contractual agreement between Falco and Hood provided: “TITLE AND SUITABILITY. The Lessor covenants that is is the lawful owner of the Equipment and that Lessee shall peaceably and quietly hold, enjoy, possess and use the Equipment during the term of this lease; provided, however, that the Equipment has been ordered from a supplier selected by Lessee, and Lessor shall not be liable for specific performance of this lease or for damages if, for any reason, supplier delays or fails to fill the order. No warranties, expressed or implied, representations, promises or statements have been made by the Lessor unless endorsed hereon in writing. The Lessee agrees that each Item of Equipment and the installation thereof shall be conclusively deemed approved by and satisfactory to Lessee unless Lessee shall have given Lessor written notice to the contrary not later than five days after the effective date hereof. Lessee agrees that Lessor shall not be liable for any loss, damages or expense caused by the Equipment or the use, maintenance, servicing thereof, or for the loss of use thereof, or for any loss of business or damage whatsoever and howsoever caused.” Under the terms of this agreement, the parties thereto specifically provided that there were no warranties from Falco to Hood. “. . . When competent parties contract at arms length, upon a lawful subject, as to them the contract is the law of their case.” Suits v. Insurance Co., 249 N.C. 383, 386, 106 S.E. 2d 579 (1958). [720] In addition to everything else, the contractual agreement provided in the provisions above set out that Hood should have five-days within which to give written notice of any defects in the-equipment, and if such notice should not be given, the equipment and installation thereof should be conclusively deemed approved by-Hood and satisfactory to Hood. Hood not only admitted the execution of the lease agreement,, but raised no question as to the authenticity thereof and asserted no-claim that it failed to express the agreement he had entered into with Falco. “Where a lease of business equipment makes no provision that the lessee might recover damages because of any defect in the equipment at the time of delivery and that the lessee should give-the lessor written notice of any defect within 5 days or it would be conclusively presumed that the equipment was delivered in good repair, the lessee is not entitled to damages or replacement as against the lessor for an asserted defect or misrepresentation as to the condition of the machinery at the time of delivery, no-notice of any defect having been given the lessor as required by the instrument.” 5 Strong, N.C. Index 2d, Landlord and Tenant, § 5, p. 156. This case is similar to the case of Leasing Corp. v. Hall, 264 N.C. 110, 141 S.E. 2d 30 (1965). Likewise, see the annotation in 68 A.L.R. 2d 850 at 859, § 5, et seq. The plaintiff also assigns as error the charge of the trial court on the issue of damages wherein the trial judge limited the recovery to $8,197.96. This limitation on the amount of damages is contrary to the lease agreement entered into between Hood and Falco. “In a suit for damages arising out of a breach of contract the party injured by the breach is entitled to ‘full compensation for the loss and to be placed as near as may be in the position which he would have occupied had the contract not been breached. . . ” Construction Co. v. Crain and Denbo, Inc., 256 N.C. 110, 123, 123 S.E. 2d 590 (1962). “. . . ‘Generally speaking, the amount that would have been received if the contract had been kept and which will completely indemnify the injured party is the true measure of damages for its breach. . . .” Troitino v. Goodman, 225 N.C. 406, 412, 35 S.E. 2d 277 (1945). The above stated principles of law, when coupled with the express terms of the contractual agreement entered into between Falco [721] .and Hood which sets out that upon default the entire amount shall be due, clearly indicates that the damages to which Falco is entitled are the differences between what Hood agreed to pay as rent and what he actually paid. New trial. ParKer and HedriCK, JJ., concur.