51 N.J.L. 361 | N.J. | 1889
The opinion of the court was delivered by
This suit was upon a promissory note made by the defendant. The defence was the want or failure of consideration.
The city council of Holly Beach City proposed to build a breakwater. The defendant was an applicant for a contract to do the work, and prepared and sent to the city council an ■agreement with the city to that effect. Members of the city council sent word to the defendant that the city had already •entered into a contract for the building of the breakwater with Gould & Downs; that these parties could not fulfill their contract, and that, if the defendant would make a satisfactory arrangement with Gould & Downs, the city would give him the contract. The parties thereupon entered into negotiation, the conclusion of which was a contract, in writing and under ■seal, whereby Gould & Downs, for the consideration of a note for $375, and $500 in city bonds, assigned to the defendant '“all our right, title and interest in a certain contract entered Into by the authorities of Holly Beach City and ourselves to build a certain breakwater ordered built by a resolution passed April 14th, 1887.” Subsequently the city council, having obtained the opinion of counsel that the city had no power to build the breakwater, refused to ratify the arrangement of the defendant with Gould & Downs, and abandoned the project of constructing the work.
The defendant’s contention was that, inasmuch as there was a sale of the contract, a wai’ranty that the contract was a valid contract was implied, and that the contract, being ultra vires on the part of the city and void, the consideration entirely failed. If the proposition on which the defence was rested be sound in law, the defence was appropriate in this suit. The doctrine of implied warranty of title in the sale of goods applies as well to the sale of a chose in action, and extends,, not merely to the paper on which the chose in action is-written, but embraces also the validity of the right purported to be transferred. Wood v. Sheldon, 13 Vroom 421. Nor is there anything in the nature of the alleged infirmity of the contract that would bar the defence. In the ordinary case of a suit on a breach of a warranty of title, the validity of the vendor’s title against the adverse claimant is triable if the purchaser has in fact lost title, although the transactions which determine the vendor’s title are res inter alios aeta. If the contract, which was the subject matter of the assignment, was in fact ultra vires, a foundation was laid for this defence, the city having repudiated the contract in limine on that ground.
The validity of the defence offered and overruled depends upon the fundamental proposition, Avhether, under the circumstances of this sale, a warranty of title is implied in law. " The theory on which a warranty of title is implied upon the sale of personal property is, that the act of selling is an affirmation of title. The earlier English cases, of which
In Wood v. Sheldon, supra, Chief Justice Beasley, in delivering the opinion of the court, adopted, in terms, the rule-stated by Mr. Benjamin, and made it the foundation of decision. The precise question now under discussion did not then arise. In Eichholz v. Bannister, 17 C. B., N. S., 708, 721, Erle, C. J., said : “ I consider it to be clear upon the ancient authorities that if the vendor of a chattel, by word or conduct-,, gives the purchaser to understand that he is the owner, that tacit representation forms part of the contract, and that if he-is not the owner his contract is broken. * * * In almost all the transactions of sale in common life, the seller, by the-very act of selling, holds out to the buyer that he is the-owner of the article he offers for sale.” It that case it was-held, that on the sale of goods in an open shop or warehouse,, in the ordinary course of business, a warranty of title was implied. But there is a line of English cases holding that where the facts and circumstances show that the purpose of the sale, as it must have been understood by the parties at the time, was not to convey an absolute and indefeasible title, but only to transfer the title or interest of the vendor, no warranty of title will be implied. In this proposition, the fact that the-vendor is in or out of possession is only a circumstance of more or less weight, according to the nature and circumstances-of the particular transaction. Thus, in Morley v. Attenborough, 3 Exch. 500, the holding was, that, on a sale by &• pawnbroker at public auction, of goods pledged to him in the way of business, there was no implied warranty of absolute-title, the undertaking of the vendor being only that the subject of the sale was a pledge, and irredeemable by the pledgor;.
Chief Justice Erie, in his opinion in Eichholz v. Bannister, describes Morley v. Attenborough, Chapman v. Speller, and Hall v. Condon, as belonging to the class of cases where the conduct of the seller expresses, at the time of the contract, that
The limitation above mentioned upon the doctrine, that the act of selling is an affirmation of title, has been adopted in this state. In Bogert v. Chrystie, 4 Zab. 57, 60, this court held that the general rule, that the vendor of goods, having possession and selling them as his own, is bound in law to warrant the title to the vendee, did not apply where the vendor sells with notice of an outstanding interest in a third party, and subject to that interest. In Hoagland v. Hall, 9
In National Bank of Northampton v. Massachusetts Loan and Trust Co., 123 Mass. 330, the defendant had a contract with B., pledging to him certain tobacco, in which it was recited that the tobacco was B.’s own property, and free from all encumbrances, and made an assignment to the plaintiff of all his right, title and interest in and under the contract, with all the property therein mentioned.” The tobacco was then in the defendant’s possession, and was delivered by him to the plaintiff. Afterwards a third person demanded and recovered of the plaintiff part of the tobacco as his property, which had been pledged to the defendant without right. The plaintiff then sued the defendant on an alleged implied warranty of title. The court ruled adversely to the plaintiff’s claim. In the opinion the court said, that the written assignment did not purport to be a sale of the goods, but of all the defendant’s right under the contract, and its obvious purpose was to substitute the plaintiff in the place of the original pledgee, and that the fact that at the time of the transfer to the plaintiff the goods were in the actual possession of the defendant did not vary the case.
In the case in hand, the circumstances connected with the assignment, independent of the words “ all our right, title and
The contention that the plaintiff was in fault, in that he-made no delivery of the contract to the defendant, is without substance. The contract was neither produced at the negotiation between the parties, nor was it required. The transaction was the purchase of Gould & Downs’ interest to consummate an arrangement whereby those parties were to be got-rid of, that the city might give the defendant a contract.. The defendant obtained by the assignment all he bargained, for.
The defence was properly overruled, and the rule to show cause should be discharged.