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All-States Leasing Co. v. Bass

Idaho Supreme Court
538 P.2d 1177 (1975)


Facts

Noah Bass (defendant) operated a car service station. Bass wanted to purchase a coin-operated car-wash machine. Bass contacted a manufacturer and selected a machine. To pay for the machine, Bass contacted All-States Leasing Co. (All-States) (plaintiff) and worked out a finance lease. In a finance lease, the lessee chooses a desired good. The lessor, usually a financial institution, purchases the good and then leases it to the party who picked it out. Under this finance-lease arrangement, All-States purchased the car-wash machine and then leased the machine to Bass. Bass made two payments but refused to continue paying. All-States sued Bass for payments on the lease. As a defense, Bass asserted that All-States breached the implied warranty of merchantability. However, the implied warranty of merchantability only applies to merchants. To show All-States was a merchant under the Uniform Commercial Code (UCC), Bass presented evidence that All-States had executed over 40 finances leases for the same kind of machine. The trial court found that All-States had breached an implied warranty and rescinded the agreement. All-States appealed.

Rule of Law

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Issue

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Holding and Reasoning (McQuade, C. J.)

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Dissent (Shepard, J.)

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