Gooden v. Hunter

Citations: 355 P.2d 20; 56 Wash. 2d 617; 1960 Wash. LEXIS 388Docket: 34795

Court: Washington Supreme Court; August 25, 1960; Washington; State Supreme Court

SummaryOriginalCytator Case TreatmentBackward CitatorAnalysis

EnglishEspañolSimplified EnglishEspañol Fácil

On April 1, 1954, Virgil M. Gooden and others (plaintiffs) entered into a written contract to purchase a commercial fishing boat from Howard Hunter and others (defendants), which included an express warranty that the boat was "ready to fish." The total sale price was $12,500, structured with a down payment of real property valued at $7,000 and a remaining $5,500 payment to a bank holding a chattel mortgage on the boat. The contract did not specify when the property conveyance was due. The plaintiffs delivered some property on the contract date and took possession of the boat on April 21, 1954, subsequently hiring Richard Quinn to operate it.

Disputes arose during the summer, leading the defendants to declare the sale void in August 1954. They repossessed the boat on September 23, 1954, after Quinn returned it, resumed mortgage payments, and sold the boat to a third party in March 1955. The plaintiffs initiated legal action in December 1955, claiming damages for breach of warranty and restitution for the real estate value conveyed.

The trial court dismissed both claims. The dismissal of the breach of warranty claim was upheld due to a finding that the alleged equipment defects did not render the boat unready to fish. As for the restitution claim, the court found that title to the boat remained with the defendants at the time of repossession, the plaintiffs were in default, and they had not tendered any benefits received from the boat during their possession prior to repossession.

The appellants contest the evidentiary support for two findings and argue that no profits were generated from their possession of the boat, therefore claiming no benefits should be awarded to the respondents. However, it is recognized that the appellants did derive some benefit from the boat's possession during the 1954 fishing season, calculable as the reasonable rental value, despite no actual profit being realized. This benefit is relevant to the net recoverable amount but does not preclude the appellants' right to seek recovery. The court clarifies that restoration of benefits is not a prerequisite for initiating an action for rescission and restitution; a willingness to do equity suffices.

The court acknowledges that the trial court's findings indicate that the respondents held title to the boat and that the appellants were in default on the purchase contract. Nevertheless, the court concludes that the appellants are entitled to recovery since the written sales contract lacks a forfeiture provision. Previous case law establishes that, absent such a provision, a vendor who rescinds must return amounts paid, less any damages incurred. Contrastingly, in Rider v. Cottle, the court allowed a vendor to retain prior payments without a forfeiture clause when repossessing personal property, which raises doubts about the soundness of that decision.

A conditional seller has the right to repossess goods upon a buyer's default, but this right comes with the obligation to account for any payments made by the buyer, deducting actual damages and the reasonable value of use of the property. The purpose of a sales contract retaining title until payment ensures the seller is secured for the purchase price, and sellers cannot simultaneously retain both the property and payments unless explicitly stated in the contract. The court overruled Rider v. Cottle, allowing sellers to include forfeiture provisions if desired. The respondents claimed laches as a defense against the appellants' claim for rescission and restitution, but the trial court did not address this due to its ruling on other grounds. The court clarified that laches applies only if the delay harms the other party, which was not demonstrated in this case. The dismissal of the breach of warranty claim was affirmed, but the dismissal of the restitution claim for contract payments prior to repossession was reversed, requiring a determination of the net recovery amount owed to the appellants after accounting for the rental value of the boat during their possession. Both parties are to bear their own costs on appeal.