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McClung-Logan Equipment Co. v. Thomas

Decided: July 7, 1961.


Appeals from the Circuit Court for Baltimore County; Menchine, J.

Brune, C. J., and Henderson, Hammond, Marbury and Sybert, JJ. Marbury, J., delivered the opinion of the Court.


This case involves two appeals from the Circuit Court for Baltimore County. The first appeal is from a directed verdict for the appellee in a replevin action instituted by the appellant, McClung-Logan Equipment Company, Inc. (conditional seller), against the appellee, Donald J. Thomas (conditional buyer), to recover possession of an Allis-Chalmers diesel tractor and a hydraulic dozer, with equipment (hereinafter collectively referred to as the tractor).

The second appeal is from a judgment rendered by the same court, upon a verdict of a jury for the sum of $9,975.01 (less a remittitur of $500.00, representing the amount the jury could have allowed the appellee as counsel fees) in favor of the appellee (counterclaimant) against the appellant (counterdefendant) for damages claimed for the wrongful seizure and detention of appellee's tractor, allegedly aggravated by the wanton, wilful, and malicious conduct of appellant. The counterclaim contained six counts, four in tort, and two in contract. At the conclusion of the appellee's case as counterclaimant, appellant's motion for a directed verdict was overruled as to counts 1, 2, 3, and 6, but granted as to counts 4 and 5. Counts 1, 2, and 3 were tort counts for trespass and conversion and count 6 was based upon an alleged breach of contract by appellant.

On March 4, 1958, appellant sold the tractor to appellee under a conditional contract of sale for $21,115.00. Appellee paid $6,925.00 as a down payment and the balance of $14,190.00 was to be paid in twenty-four equal monthly installments of $591.25 each, beginning with April 4, 1958, and evidenced by twenty-four promissory notes of $591.25 each, maturing on the same date as the respective monthly installments. The notes were without interest from date until maturity, and 6% from maturity until paid. The tractor was sold with a warranty to repair or replace within a six months'

period parts found defective according to the terms of the contract.

On March 5, 1958, appellant sold, transferred, and assigned all of its right, title, and interest in and to the said conditional contract of sale and the tractor referred to therein to the Union Trust Company of Maryland and endorsed, with recourse, over to the Union Trust Company the twenty-four promissory notes given by appellee to appellant. Appellant's comptroller, Taylor, executed the assignment and endorsed the notes. The contract and notes were then delivered to and discounted with the Union Trust Company.

The controversy out of which this case arose began when appellee discovered in the Spring of 1958, after he began to use the tractor, within the warranty period, that the tractor was defective. The tractor developed its first leak in March, along with other trouble, and erratic blade action in April of 1958. In May, when appellee started his grading work, he discovered that the tractor would not perform contour grading in a satisfactory manner and he would have to use other equipment to complete the work the tractor was supposed to do. These conditions were promptly reported to appellant, who sent mechanics to inspect the tractor and make repairs, but they failed to remedy the condition.

Appellee continued to complain and request that the defective condition be corrected, but to no avail. Many of his requests were simply ignored. This went on for more than a year, until finally appellee, who had paid the regular monthly payments for twelve months, told appellant, after making the twelfth payment in March of 1959, that his season was here again and that he was not going to continue making payments until the tractor was fixed. He did this in order to induce appellant to fix the tractor. Appellee withheld the monthly payments beginning with April, 1959, and put them in the Commercial and Savings Bank in Bel Air.

On April 8, 1959, Mr. Alvis, a factory man from Allis-Chalmers, came out and, after a three hour inspection, told appellee he had a legitimate complaint. Mr. Alvis said he would study the matter, determine what the trouble was and

that appellee would hear from him. The report of April 8, 1959, shows that the complaint was "erratic blade action and that the tractor would not maintain a level cut as the frames oscillated." The diagnosis was that the need for service was urgent and that the top leaf of the main spring was not the same length on each side of the center bolt, causing one frame to oscillate more than the other.

In May of 1959 appellant sent a mechanic who installed a new spring in the tractor, but this did not correct the trouble. During all this time appellee, in his busy season, had to use other equipment to straighten out the grade. Appellee made numerous telephone calls to appellant about the condition and on July 10, 1959, two mechanics came out and went over the hydraulic system, but did not overhaul the control valve. The tractor still would not perform properly and the mechanics suggested that they take the tractor to appellant's shop. Appellant's Mr. Tennant, who was in charge, asked appellee's permission to take the tractor into the shop where proper test equipment could be used to check everything. Appellee replied that that was all right with him, but he first wanted a letter from appellant saying the tractor would be properly fixed and returned to his place for a field demonstration. Mr. Tennant said that he did not have that authority and referred appellee to Mr. Taylor, the comptroller, who did.

The same day, July 14, 1959, appellee spoke to Taylor and asked for such a letter. Taylor then asked appellee about the payments. Appellee told Taylor that when the tractor was fixed and field demonstrated to do satisfactory work, the payments, which were then four months in arrears, would be brought up to date. Taylor acquiesced in this arrangement and agreed to write the letter and send it up with Mr. Cloud when he came to get the tractor. Neither Mr. Cloud nor the letter arrived and appellee called Taylor again. Taylor then, as an excuse, said that the trailer on which the tractor had to be moved over the state roads was busy, that the permit to use it had been held up, but the trailer and the letter would be up the next day. These excuses were not true for, without notice to appellee, appellant's officers had met and decided

to replevy the tractor. The trailer and letter did not arrive. However, on July 17, 1959, appellant, in complete disregard of its agreement to send the letter and pick up the tractor for testing and repairs, did, without any notice to appellee, obtain a writ of replevin, issued out of the Circuit Court for Harford County, and seize the tractor, although it knew that all right, title, and interest to the tractor had been assigned to the Union Trust Company and had not been reassigned to it.

Neither the contract nor any of the notes were reassigned to appellant until ten days after the writ was issued, although the four notes, then in default, had been charged to the appellant's account at the Union Trust Company and forwarded, without endorsement, to the appellant as they became due. At the time the replevin suit was instituted appellant had in its physical possession these four notes. The Union Trust Company was not a party to the ...

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