February 1953 Radio-Electronics
[Table of Contents]
Wax nostalgic about and learn from the history of early electronics.
See articles from Radio-Electronics,
published 1930-1988. All copyrights hereby acknowledged.
Most of us probably never give much thought to how vulnerable we could be in a lawsuit related to our professional activities - until it's too late. That is particularly true if you are not directly involved in the sales or service business. Even when it is reasonable to believe that there is no way a jury or judge could find you liable for a charge levied against you, the skill of a talented lawyer and/or whims and prejudices of judges and/or jurors can doom you. Although a bit dated, the legal cases cited in this Radio-Electronics article give a little insight into why you would do well to give some thought to what the consequences of your actions and/or statements might invite if someone decides you have offended him or her. Remember that settled legal cases are regarded as precedence when a similar case comes before a court. Interestingly, I was able to find on legal websites (and link to) a few of the cases cited here.
Servicing - Test Instruments, Who Is Liable?
Service technicians and dealers: These recent court decisions may help safeguard you against loss
By Leo T. Parker
A reader recently asked: "If a purchaser signs a contract with a dealer for the installation of a television set, can the dealer recover damages if the purchaser rescinds the contract, and, if so, how much damages may the contractor receive? If the customer denies that he signed the installation contract what is the proper legal procedure for the contractor?"
The answers to these legal questions are given in a recent higher-court decision and should help TV and appliance dealers, technicians, and distributors to win suits of this nature.
In the case of Krumholz v. Rusak, 41 N.W. (2d) 177, the testimony showed that a dealer signed a contract with a purchaser to install certain equipment in his home.
The purchaser later refused to allow the seller to install the equipment, and the seller sued to recover the profit he would have earned on the job had the purchaser not rescinded the contract.
The jury considered all testimony and held the purchaser liable for $840, the profit the seller would have earned had the contract been completed.
If a purchaser breaches a contract for installation of a television set, the dealer may sue and recover the anticipated profits which he would have earned by fulfilling his part of the contract.
Another reader asked this question:
"Very often I lease out television sets with privilege of purchase by the customer. By this plan I get the customer to tryout my set without any financial loss. How can I protect myself against theft or other damage to a television set I lease to a customer under a 'privilege-of-purchase' contract?"
A new higher-court decision clearly answers this question:
In Perreault v. Circle Club, 95 N.E. (2d) 204, the testimony showed the following facts: A dealer leased the Circle Club a television set for one month at a rental of $150 a month, with an option to buy it for $1,721.25. The lease contained the following provision: "The lessee shall pay for any damage to the equipment during the term hereof or while the same is in his actual possession or constructive possession, which may be due otherwise than to ordinary wear and tear incident to the normal use thereof, and at the termination of this agreement, by the expiration of the terms hereof or otherwise, the lessee shall surrender to the lessor the said equipment in good order, repair and condition in all respects, reasonable wear and tear excepted."
A few days after the set was installed some one broke into the premises of the Circle Club and stole the set, without negligence or other fault on the part of the Club.
The dealer sued the Club to recover $1,571.25, ($1,721.25 less the one-month rental of $150 already paid).
The higher court held the Club liable to the dealer for $1,571.25.
The court explained that if the Circle Club had not signed a contract containing the clause above, it would not have been liable to the dealer for any payment unless the dealer had convinced the court that the theft of the set resulted from some fault or negligence of the Circle Club.
Therefore, dealers who lease sets, or place them in homes on approval, should protect themselves against loss, damage, or theft of the sets by having the customers sign an agreement containing the full text of this damage clause plus any other protective clauses your attorney thinks necessary.
According to a late higher-court decision, a television technician is liable for all losses resulting from his negligent installation of television sets and other equipment.
In Russell v. Union Company, 191 S.W. (2d) 278, a property owner sued a technician to recover damages for the destruction of his dwelling by fire. The property owner proved that after the technician had installed the television equipment, together with the necessary wiring and electrical connections, his house caught fire and burned down. The technician had cut the power-line insulation, exposing the wire, and then used uninsulated, sharp-edged staples in securing the wiring to the parts of the interior of the dwelling. The jury held the technician liable for the full value of the dwelling and its contents, and the higher court approved the verdict.
Law of Partnership
Modern higher courts consistently hold that a valid partnership never exists unless the partners agree to share both losses and profits.
For illustration, in Nuland v. Pruyn, 222 Pac. (2d) 261, the testimony brought out these facts: Pruyn owned a radio and television repair service business. Nuland represented that he was an expert radio service technician. They made an agreement that Nuland was to devote his services to the business; that Pruyn's equipment and stock was worth $2,500; that 50 per-cent of the gross receipts of the business would be deposited in a bank account until Pruyn received $2,500 as repayment; that thereafter a fund of at least $1,000 was to be maintained, and that the excess was to be divided equally between Pruyn and Nuland. The higher court held that no valid partnership agreement existed because the testimony did not prove conclusively that Pruyn and Nuland were to share both profits and losses.
Generally speaking, the law is well settled in all states that a properly recorded chattel mortgage is superior to a technician's mechanic's lien on a television set. However, a higher court recently held that a mechanic's lien is superior to a mortgage which was not recorded, and where the technician had no knowledge of the existence of the mortgage.
In Christian v. Boyd, 222 S.W. (2d) 157, a purchaser gave a dealer a note and chattel mortgage for the balance due on the equipment purchased. This mortgage was not recorded. Some time later a technician repaired the equipment, and the purchaser failed to pay the bill for materials and labor.
Since the testimony showed that the technician had no knowledge that the mortgage existed, the higher court held that the technician could take possession of the equipment to secure payment of his bill.
The court explained that if the mortgage had been recorded, it would have been superior to the technician's lien, and the technician could not have taken possession of the equipment.
A recorded chattel mortgage constitutes legal notice to the public that a lien exists. Many small-loan companies require that the borrower execute a chattel mortgage on his household possessions, and if you have any doubt about the set-owner's ability to pay, it is advisable to check up before you undertake any expensive repair jobs.
What Lien Must Cover
Considerable discussion arises from time to time over the legal question: "What charges does a mechanic's lien cover?" According to a higher-court decision - Eastex Finance Company v. Bryant, 42 So. (2d) 418 - a technician cannot have a valid mechanic's lien to secure payment of any charges, unless the amount of the bill includes both labor and materials,
A technician filed a mechanic's lien against equipment to recover $350. Since the bill was for accessories, and did not include a labor charge, the higher court held the lien void and said:
"The Service Station could have no lien for the price or value of any items or any accessories sold by the said Service Station in the regular course of business, where no labor was both performed and charged for in the installation of such accessories."
For comparison, see Funchess v. Pennington, 39 So. (2d) 1. Here the court held that a technician claiming a lien for labor and materials furnished in repairing a television set has the burden of proving that he supplied both labor and materials. This court explained that if the technician made a charge for installing repair parts and accessories he can have a valid mechanic's lien on the set to secure payment for the parts, plus the labor charge.
A higher court recently decided that the Federal Communications Com mission has jurisdiction to extend the time allowed for construction of a television station. In other words, failure of a company to complete construction of a station within the time specified in the permit will not forfeit its right to complete the work where the Commission grants an extension of time.
For example, in United v. Federal Communications Commission, 178 Fed. Rep. (2d) 700, it was shown that the United Detroit Theatres Corporation applied for a six-month construction permit for a television station in Detroit, Michigan. The corporation found it would not be able to complete the station in six months and applied for an extension of time. The Commission granted the application without a hearing.
In the meantime another company applied to the Commission for a permit to operate a television station on the same channel previously awarded the United Detroit Theatres Corporation.
In subsequent litigation the higher court upheld the Commission's decision in retaining the channel for the United Detroit Theatres Corporation, saying:
"The failure of the Commission to consider appellant's (United Detroit Theatre Corporation's) application in its normal routine turn was within permissive administrative discretion ... if there remain available (television) channels to which the applicant may be assigned."
Posted August 22, 2018