Page images
PDF
EPUB

breach has prevented title vesting in the buyer. We have seen that the seller's engagement to furnish the agreed article, and also his engagement to afford a reasonable opportunity for inspection, are conditions precedent to his transfer of title to the buyer. Until title has vested in the buyer, the seller has the power to transfer it to a third person who can hold the property to the exclusion of the first contractee; although by so doing the seller subjects himself to damages for a breach of his contract.1

231. When Seller's Power ceases. On the other hand, as soon as title has vested in the buyer, by his acceptance of the property, even though he might have rejected it because of the seller's breach of a condition precedent, the seller's power, as a rule, to confer rights upon third persons has ceased. Neither such third persons nor the seller can thereafter set up the latter's breach of a condition precedent as against the buyer.2

In the Colorado case, cited in the last note, the vendor engaged to sell and deliver at the buyer's place of business in Denver certain flour. The flour was shipped by the vendor, but the latter's agent diverted it from the buyer to a third person. The buyer made a demand upon such person for the flour, who refused to deliver it, whereupon the buyer brought an action in replevin therefor. It was held that the vendor had the power to sell the flour to a third person at any time before it was accepted by the buyer; but that if no sale had been made prior to the buyer's acceptance, when he made his demand upon the third person for the flour, such acceptance vested the ownership in the buyer and entitled him to maintain his action. The stipulations in the sale contract, that the flour should be of a particular quality, and that it

1 Gabarron v. Kreeft, L. R. 10 Exch. 274 (1875); Burdick's Cases on Sales, 402; Emery's Sons v. Irving Nat. Bk., 25 Ohio St. 360 (1874); First Nat. Bank of Cairo v. Crocker, 111 Mass. 163 (1872); Burdick's Cases on Sales, 427; A. B. Supply Co. v. V. P. Cement Co., 203 N. Y. 133; 96 N. E. 370 (1911).

2 Hanauer v. Bartels, 2 Colo. 514, 522 (1875); Rechten v. McGary, 117 Ind. 132; 19 N. E. 731 (1888); Lovell v. Isidore Newman & Son, 192 Fed. 753; 113 C. C. A. 753 (1912).

should be delivered at a prescribed place without charge for freight to the buyer, were declared to be for his benefit, and he could waive compliance with them.

§ 6. Buyer's Rights upon Breach of Warranty.

232. No Right to return the Goods. - A breach of this collateral agreement by the seller does not entitle the buyer to return the goods; it gives him only a right to damages, save in a few jurisdictions. Such is the rule, whether this engagement is collateral from the first, or whether, being an essential term of the contract and available as a condition precedent to the buyer, he has taken title to the goods, and, waiving his right to treat the engagement as a condition, can take advantage of it only as a collateral agreement. In either case, the title to the goods, having vested in the buyer with the assent of both parties, cannot be devested by the sole act of either.1

233. Right to Damages only. The leading case in the United States upon this subject is Thornton v. Wynn,2 and in England, Street v. Blay. In the latter case, all previous decisions were carefully examined by Lord Tenterden, who, after considering the dicta of Lord Eldon and others, that upon a breach of warranty the buyer might "return the goods and bring an action to recover the full money paid," declared: "It is, however, extremely difficult, indeed, impossible, to reconcile this doctrine with those cases in which it has been held, that where the property in the specific chattel has passed to the vendee and the price has been paid, he has no right, upon

1 Mondel v. Steel, 8 M. & W. 858, 870 (1841). "The performance of the warranty not being a condition precedent to the payment of the price, the defendant, who received the chattel warranted, has thereby the property vested in him indefeasibly, and is incapable of returning it back." The same doctrine has been applied when the seller of corporate stock broke his collateral agreement not to engage in a competition with the corporation. McMillan v. Batten, 52 Ore. 218, 224; 96 Pac. 675 (1908).

2 12 Wheat. (25 U. S.) 183, 197 (1827). Accord, Gay Oil Co. v. Roach, 93 Ark. 454; 125 S. W. 122; 27 L. R. A. N. s. 914; 137 Am. St. R. 122 (1910). Seller warranted against leakage; no right of rescission in buyer. H. O. Williams Transportation Line v. Darius Cole T. Co., 129 Mich. 209; 88 N. W. 473 (1901).

32 B. & Ad. 456, 462 (1831); Burdick's Cases on Sales, 435.

the breach of the warranty, to return the article and revest the property in the vendor, and recover the price as money paid on a consideration which has failed, but must sue upon the warranty, unless there has been a condition in the contract authorizing the return, or the vendor has received back the chattel and has thereby consented to rescind the contract, or has been guilty of a fraud, which destroys the contract altogether. . . . On the other hand, the cases have established that the breach of the warranty may be given in evidence in mitigation of damages, on the principle, as it should seem, of avoiding circuity of action; ... and there is no hardship in such a defence being allowed, as the plaintiff ought to be prepared to prove a compliance with his warranty, which is part of the consideration for the specific price agreed by the defendant to be paid." 1

234. Right to rescind. -Some of our State courts, however, hold that the buyer may rescind an executed contract of sale for a breach of warranty, and, upon seasonably returning the property, may recover the purchase price, if he has paid it, or may set up such breach as a complete defence to an action for the price, if it is unpaid. If he rescinds, he cannot recover damages suffered by the breach of warranty.3

235. False and Innocent Warranty confounded. It is to be noted, in the first place, that these decisions make no distinction between the buyer's rights upon a breach of warranty and his rights in case of fraudulent representations as to quality.

1 Lightburn v. Cooper, 1 Dana (Ky.), 273 (1833); Kase v. John, 10 Watts (Pa.), 107 (1840); Voorhees v. Earl, 2 Hill (N. Y.), 288 (1842); Allen v. Anderson, 3 Humph. (Tenn.) 581 (1842); West v. Cutting, 19 Vt. 535 (1847); Wright v. Davenport, 44 Tex. 164 (1875); Pryor v. Ludden & Bates, 134 Ga. 288; 67 S. E. 654 (1910); Pourier Mnfg. Co. v. Kitts, 18 N. D. 556, 560; 120 N. W. 558 (1909); Hafer v. Cole, Ala.;

57 So. 757 (1912); Iler v. Jennings, 87 S. C. 89; 68 S. E. 1041 (1910). 2 Taintor v. Wentworth, 107 Me. 439; 78 At. 572 (1911); Gerli & Co. v. Mistletoe Silk Mills, 80 N. J. L. 128; 76 At. 335 (1910), applying P. L. 1907, § 69.

3 Houser & Haines Mnfg. Co. v. McKay, 53 Wash. 237; 101 Pac. 894 (1909); Uniform Sales Act, § 69; Gerli & Co. v. Mistletoe Silk Mills, 80 N. J. L. 128; 76 At. 335 (1910).

That such a distinction should be made is held in the following carefully considered cases: Millsopp v. Woolf, 1 Ala. App. 599; 56 So. 22 (1911)

This is apparent from the following extracts: "If there was a fraud in the sale, or an express warranty and a breach of it, in either case the defendant might avoid the contract by returning the ox within a reasonable time."1 "A warranty may be treated as a condition subsequent at the election of the vendee, who may, upon a breach thereof, rescind the contract and recover back the purchase-money as in the case of fraud." 2 "He relies upon the warranty, and the breach of it is equally injurious to him, whether the seller acted in good or bad faith."

[ocr errors]

236. Breach of Warranty as a Tort. This anomalous doctrine is to be accounted for, it is believed, by the fact that originally the action for breach of warranty was one in tort. As late as 1839, Chief Justice Shaw declared, "Where there is an express warranty on the part of the defendant, embodied in and made part of the contract of sale, and this warranty is false, case will lie, on the ground that by means of the warranty the buyer is lulled into security and prevented from making any examination." For this proposition he cited Williamson v. Allison, in which Lord Ellenborough used this language: "The warranty is the thing which deceives the buyer who relies on it and is thereby put off his guard. Then if the warranty be the material averment, it is sufficient to prove that broken to establish the deceit. . . . The ancient method of declaring was in

citing Scott v. Holland, 132 Ala. 389; 31 So. 514 (1902); Robertson v. Halton, 156 N. C. 215; 72 S. E. 316 (1911), citing Ashe v. Gray, 88 N. C. 190 (1883); Bullinger v. Marshall, 70 N. C. 520 (1874), and Chamberlain v. Robertson, 52 N. C. (7 J. L.) 12 (1859); Caldbeck v. Simanton, 82 Vt. 69; 71 At. 881 (1909).

1 Perley v. Balch, 23 Pick. (Mass.) 283, 285 (1839).

2 Dorr v. Fisher, 1 Cush. (Mass.) 271, 274 (1848); Burdick's Cases on Sales, 389.

3 Marston v. Knight, 29 Me. 341, 345 (1849). Accord, Farrell v. Manhattan Mark. Co., 198 Mass. 271; 84 N. E. 481 (1908); Piche v. Robbins, 24 R. I. 325; 53 At. 92 (1902); Demers v. Andrews Bros., 29 R. I. 209; 69 At. 923 (1908).

Salem India Rubber Co. v. Adams, 23 Pick. (40 Mass.) 256, 265 (1859). 5 2 East, 446, 451 (1802). And see argument for defendant in Bryant v. Isburgh, 13 Gray (79 Mass.), 607, 609, 610 (1859), and Beeman v. Buck, 3 Vt. 53 (1830). The latter case is explained in Caldbeck v. Simanton, 82 Vt. 69; 71 At. 881 (1909), as an action on contract.

No other proof was required

tort on the warranty broken. . to sustain the former mode of declaring than the warranty itself and the breach of it. Here, then, the plaintiff will be equally entitled to recover in tort upon the same proof, by striking out the whole averment of the scienter."

237. Failure to distinguish Warranty from Condition. - In the second place, some of the courts holding the doctrine now under consideration have failed to observe the distinction between a promissory condition and a warranty.1 In a leading case, it is asserted that there is no such difference between "the effect of an implied and an express warranty as deprives a purchaser of any legal right of rescission under the latter, which he has under the former." 2 The transaction, then, before the court was a bargain and sale of a specific chattela horse with an express warranty of soundness. The latter engagement was "a separate, independent, collateral stipulation" which did not suspend "the vesting of the thing sold in the vendee." And yet the court was unable to distinguish the case from one where the contract was for the sale by sample of cloves, which were found upon subsequent delivery to be of an inferior species. Here the seller's undertaking that the bulk should correspond with the sample was clearly an essential term of the sale contract. With respect to such a transaction - a sale by sample it had been properly held that the seller "certainly undertakes... that the thing is the same, generically and specifically, as that which he shows, . . . and if a different thing is delivered, he does not perform his contract,

...

1 Boothby v. Scales, 27 Wis. 626, 636 (1871), (condition that the article sold was reasonably fit for the purpose for which it was to be applied); such was the case, too, of Woodle v. Whitney, 23 Wis. 55 (1868), and Manufacturing Co. v. Stark, 45 Kan. 606; 26 Pac. 8 (1891). In Sparling v. Marks, 86 Ill. 125 (1877), the contract, as interpreted by the court, was for the sale and purchase of a pin, which was understood by both parties to be a diamond, when it was in fact a crystal. Clearly, the seller's engage ment that the pin was a diamond was not a collateral stipulation of warranty.

2 Bryant v. Isburgh, 13 Gray (79 Mass.), 607, 611 (1859); Burdick's Cases on Sales, 438.

Dorr v. Fisher, 1 Cush. (55 Mass.) 271, 273, 274 (1848); Burdick's Cases on Sales, 389.

« PreviousContinue »