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Leal v. Holtvogt

    Brief Fact Summary. Ferdinand and Mary Leal, (Appellees) sued Joseph and Claudia Hotvogt, (Appellants), for damages resulting from the sale of a one-half interest in a lame horse. Appellants appeal the trial court finding in favor of Appellees holding that an express warranty on the condition of the horse for the purposes intended was breached.

    Synopsis of Rule of Law. An implied warranty of fitness for a particular purpose has been created if (1) the seller had reason to know of the buyer’s particular purpose; (2) the seller had reason to know that the buyer is relying on the seller’s skill or judgment to furnish or select appropriate goods; and (3) the buyer must, in fact, rely upon the seller’s skill or judgment.

    Facts. Appellants owned and operated a horse barn. They were experienced in training, breeding, boarding, selling and showing horses. Appellees were novices in the breeding industry. They learned the trade from Appellants and upon Appellants’ advice, invested in Appellants’ stallion. The parties entered into a contract for the sale of a one-half interest in the horse that by its terms called for the parties to share equally in the expenses and profits resulting from their joint ownership. Appellants did not disclose to Appellees at the time of the sale that the horse had suffered from chronic lameness. Within several months, Appellees became dissatisfied with the partnership and indicated that they wanted either a refund or of their money or a remedy for their concerns. In the meanwhile, neither party continued payments on the horse’s mortality insurance and it lapsed. Soon after the horse died.

    Issue.
    Whether an implied warranty of fitness for a particular purpose was given by the Appellants to the Appellees at the time of the sale

    Whether competent and credible evidence was presented to support the trial court’s finding that the Appellants breached the warranty because the horse was lame.

    Held.
    Yes. An implied warranty of fitness for a particular purpose was given by the Appellants to the Appellees at the time of the sale

    Yes. There was competent and credible evidence that the implied warranty of fitness for a particular purpose was breached.


    Discussion.
    Appellants gave to Appellees an implied warranty of fitness for a particular purpose. Appellants testified at trial that they knew Appellees wanted to buy an interest in the horse to start a breeding program. They knew that Appellees were inexperienced and relying on their judgment. The relationship between parties was like that of teacher and student. This is further evident in the fact that Appellants steered Appellees away from purchasing another horse stating that it was not the type of horse they wanted to buy. Lastly, the Appellees justifiably relied upon Appellants representations regarding the horse. Appellees were novices in the industry and they testified that they trusted Appellants who hold themselves out as experts. Because these three elements were proven at trial, Appellants gave an implied warranty of fitness for a particular purpose to Appellees at the time of sale.

    There was competent and credible evidence that the implied warranty of fitness for a particular purpose was breached. At trial there was testimony that the horse suffered from chronic lameness at the time of the sale and this lameness would affect the attractiveness of the horse to mare owners.


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