## Facts

- Ralph W. Davis purchased a mobile trailer (mobile home) from Colonial Mobile Homes, Inc., a subsidiary of Vintage Enterprises, Inc.
- The contract required Colonial Mobile to deliver the trailer to Davis’s lot.
- Colonial Mobile delivered the trailer five days late, and Davis could not inspect it at delivery because it was locked.
- Colonial Mobile did not provide Davis the keys for about three weeks.
- After gaining entry, Davis found numerous defects, including windows that would not shut and loose paneling.
- Davis did not want to live in the trailer after inspecting it, but he moved in because he had already given his landlord a 30-day notice.
- During rains, water seeped into the trailer and flooded the floors.
- Davis repeatedly attempted to contact Colonial Mobile about the condition, but the seller did not respond to his calls.
- Colonial Mobile sent a representative to the trailer several times, but no repairs were made.
- Davis retained counsel, who tendered return of the trailer and demanded either a replacement or a refund of the amounts Davis had paid.
- After that demand, Colonial Mobile sent employees to repair the trailer, but Davis refused to allow repairs.
- Davis moved out of the trailer several months later.
- Davis sued for breach of contract, contending he had validly rejected the trailer; the trial court entered judgment for Davis without addressing whether rejection was valid.
- Davis appealed.

## Issues

1. Whether, in a bench trial, the trial court’s findings of fact and separate conclusions of law sufficiently determined the issues raised by the pleadings and evidence as required by N.C. R. Civ. P. 52.
2. Whether the pleadings and evidence required analysis under the Uniform Commercial Code, including whether Davis rejected the mobile home (or instead accepted it, or revoked acceptance) and what remedy followed.
3. Whether the sale of a mobile home by a merchant seller carried an implied warranty of merchantability under G.S. § 25-2-314, absent an effective exclusion or modification under G.S. § 25-2-316.

## Decision

- The Court of Appeals held the trial court’s findings and conclusions did not determine the issues raised by the pleadings and evidence, as Rule 52 requires in a nonjury case.
- The court held the allegations and evidence required application of the UCC, including buyer-remedy rules on rejection, acceptance, and possible revocation of acceptance.
- The court held the seller was a merchant with respect to mobile homes and, because the contract contained no valid exclusion or modification, the transaction carried an implied warranty of merchantability requiring fitness for ordinary residential use.
- The court vacated the judgment and remanded for proper findings of fact and conclusions of law applying the relevant UCC standards.

## Legal Principles

- In a nonjury trial, the judge must find facts specially and state conclusions of law separately, resolving the issues raised by the pleadings and proof so an appellate court can review evidentiary support and the legal rules applied. (Rule 52)
- Under G.S. § 25-2-314, a warranty of merchantability is implied in a contract for sale when the seller is a merchant with respect to goods of that kind, unless excluded or modified under G.S. § 25-2-316.
- A mobile home’s ordinary purpose is residential use; merchantability therefore requires that the home be fit for residential purposes.
- Limits on implied warranties may arise where the buyer examines the goods as fully as desired before contracting and has knowledge equal to the seller as to defects. (G.S. § 25-2-316(3)(b))
- Whether a buyer is entitled to rescission-type relief depends on UCC buyer-remedy doctrines (including timely and proper rejection, or revocation of acceptance), which must be decided through specific findings tied to the evidence.

## Conclusion

The Court of Appeals vacated and remanded because the bench-trial order did not make findings and separate conclusions that resolved the UCC issues raised by the case—especially whether Davis validly rejected (or accepted and later revoked acceptance of) the mobile home—while also recognizing that a merchant’s sale of a mobile home carries an implied warranty of merchantability for residential fitness absent a valid disclaimer.


Davis v. Vintage Enterprises, Inc., 209 S.E.2d 824 (1974)