Dodd v. Farlow , 93 Mass. 426 ( 1865 )

Bigelow, C. J.

We do not deem it necessary to determine all the questions raised at the trial of this case, because it seems to us that there is one objection to the validity of the memorandum of the contract which is fatal to the plaintiffs’ claim. It is conceded that the broker who made the contract had no express authority from the defendants to war-ant the articles sold to be of merchantable quality. Nevertheless such a warranty waa inserted in the memorandum or sale noté delivered to the plaintiffs by the broker.

It was contended, on the part of the plaintiffs, that an authority to make such warranty is derived from the usage of trade; and evidence was offered from which, under instructions from the court, the jury have found that an authority was implied, in case of a sale by a broker of the kind of merchandise described in the memorandum, to insert a warranty of their quality which would be binding on the vendor. But notwithstanding this finding, we are clearly of opinion that the plaintiffs are not entitled to recover, because the alleged usage on which the jury have based their-verdict is unauthorized by law, and cannot be regarded as valid. It contravenes the principle, which has been sanctioned and adopted by this court upon full and deliberate consideration, that no usage will be held legal or binding on parties which not only relates to and regulates a particular course or mode of dealing, but which also engrafts on a contract of sale a stipulation or obligation which is different from or inconsistent with the rule of the common law on the same subject. Dickinson v. Gay, 7 Allen, 34, 37.

Such, as we understand it, was the effect of the usage proved at the trial. It consisted of two parts or branches, each of which was essential to the one integral usage on w7hich the plaintiffs relied; and unless both can be maintained as legal and valid, the entire usage must fall to the ground. The first branch was in substance this: that, in a sale of the particular kind of goods which was the’ subject of controversy in this case, although nothing may have been said in making the bargain on the subject of warranty or as to the quality of the merchandise, and notwithstanding the buyer may have had opportunity to examine it, there was nevertheless a warranty tacitly implied that the article was merchantable. The second branch of the usage was a sequence of the first, and was this : that where the same kind of goods was sold through the. agency of a broker, he had, by implication derived from usage, authority to give an express warranty of the articles and to insert it in the memorandum, unless forbidden to do so by the 'endor. The proof of usage, therefore, was confined in terms to cases where a warranty as between vendor and. purchaser would be implied if the sale was made directly, without the intervention of a broker, and it was only as a part of or consequence of this usage that a broker was authorized to insert an express warranty in the sale note when employed to sell the same kind of merchandise. It was not contended that any distinct and independent usage existed by which a broker had authority to give such warranty, but only that as by usage a warranty would be implied in a sale of such goods between vendor and purchaser, so an authority by the same usage was given to the broker to insert an express warranty in the memorandum.

Regarding therefore the usage as an integral one, the decisive objection to its recognition is, that it embraces an element directly contrary to the ancient and well established rule of the common law, that a vendor cannot be held responsible for the quality of goods sold, if he make no warranty or representation concerning their nature, condition or merchantable value. In other words, it abrogates, to a certain extent, the maxim caveat emptor, and puts on the vendor the burden of warranty, although he may be ignorant of the quality of the articles, or may have had no means of ascertaining their condition or value, and may have had no intention of selling the article with warranty. Such a usage is very like the one relied upon in the leading case of Thompson v. Ashton, 14 Johns. 316, which was held invalid and of no effect because it tended to introduce vagueness, confusion and uncertainty into the rules regulating the rights and obligations of parties .under contracts for the sale of merchandise.

But we do not think that it would avail the plaintiffs, or add anything to the validity of the usage which they set up in support of the contract of sale, if we could separate its two parts or branches, and consider the case as depending on that portion of the usage only by which an authority is implied in a broker to insert an express warranty of an article in a sale note when no such authority has been conferred by the vendor. The difficulty in the way of sanctioning and adopting in a court of law that part of the usage seems to us to be insuperable. It is liable to the grave objection that it is unreasonable, and so contrary to the ordinary rules by which the relation of principal and agent is regulated, that it cannot be presumed to have been in contemplation of a vendor in employing a broker to make a sale of merchandise. Even if the usage was known to the vendor, he would have a right to disregard it, and to disavow a contract made in conformity to it. Seccomb v. Provincial Ins. Co. 10 Allen, 305, 314. We have very great doubt whether a usage can be regarded as reasonable which invests an agent with power to bind his principal by a contract into which the latter had not by any word or act, either express or implied, of his own, authorized the agent to enter. The effect of the usage in question is not merely to give authority to a person acting as broker for another to make a sale in the ordinary way with the usual stipulations and incidents of such a contract; but it extends the authority of the agent and invests him with power to insert a special agreement, which fastens on the vendor a liability not usually included in a sale of chattels in the regular course of business.

But the objection does not stop here. By the terms of the usage, as proved at the trial, the authority of the broker to give a warranty is implied, wholly irrespective of the nature and condition of the particular property which may be the subject of the contract, without any regard to. the facts and circumstances under which the sale is authorized to be made. If this usage is upheld, then a broker may give a warranty binding on his principal, although the latter may have authorized goods to be sold, not for a sound price, but at a rate far below the market value of a merchantable article ; so he may be held liable on his broker’s warranty, although at the time of the sale he may never have seen the goods, and knew-nothing of their condition or value, or even when he knew that they were an inferior article, or had been greatly damaged ; and this too where the vendee may have seen and examined the article and had full opportunity to become acquainted with its quality and condition. The dangerous consequences which would follow if such usages were permitted to interfere with the operation of established legal principles and to control the rights and obligations of parties under contracts are too plain and palpable to allow us to hesitate in rejecting them as unreasonable and invalid.

We are inclined to think that the instructions were defective in not submitting to the jury in a clear and precise form the question of the authority of the broker to make three separate and distinct sales to different persons, instead of one sale of the whole lot of merchandise to one person. But it is unnecessary to dwell on this part of the case, as in the event of another trial the case may present itself in an aspect which will render this part of the controversy unimportant.

Exceptions sustained.