Johnston v. . Trask

[EDITORS' NOTE: THIS PAGE CONTAINS HEADNOTES. HEADNOTES ARE NOT AN OFFICIAL PRODUCT OF THE COURT, THEREFORE THEY ARE NOT DISPLAYED.] [EDITORS' NOTE: THIS PAGE CONTAINS HEADNOTES. HEADNOTES ARE NOT AN OFFICIAL PRODUCT OF THE COURT, THEREFORE THEY ARE NOT DISPLAYED.] An oral contract, by which a person sells his own chattels or choses in action for more than $50, payment and delivery being made, and agrees to take them back from and repay the purchase-price to the purchaser on demand, is an entire contract, and the promise to take back the property and repay the purchase-price is not void by the third section of the statute of frauds. (Wooster v. Sage, 67 N.Y. 67; Fitzpatrick v.Woodruff, 96 id. 561; White v. Knapp, 47 Barb. 549;Williams v. Burgess, 10 A. E. 499; Fay v. Wheeler,44 Vt. 292; Dickinson v. Dickinson, 29 Conn. 600; 1 Benj. on Sales [Corbin's ed.] § 169.)

Executed contracts of sale, embracing a promise by vendors of chattels that in case they do not suit the purchaser or do not possess certain specified qualities the vendor will repay to the vendee the purchase-price upon their return, have been frequently considered by the courts. (Towers v. Barrett, 1 D. E. 133;Thornton v. Wynn, 12 Wheat. 183), but no case has been cited holding that such a promise on the part of a vendor is an independent contract. When an agent, by an oral contract, sells and delivers the goods of a disclosed principal, his personal oral warranty of quality is not a contract independent of the contract of sale, but is a part of it, and one consideration is sufficient to support the sale and warranty. The oral contract of the defendants, that they would purchase for the plaintiff in the market at market rates the bonds for the usual compensation, and in case he should thereafter become dissatisfied with the bonds, that they would, on demand, take them off his hands at what they cost him, was a single contract. Under this contract, the bonds were purchased and held by the defendants until the purchase-price and their commissions were paid, and then they delivered the bonds to the plaintiff. The promise of the defendants that they would take the bonds off the plaintiff's hands at what they cost him, upon request, is not a contract for the sale of goods, chattels or things in action, within the third section of the statute of frauds, but is a provision for the rescission of the entire contract, and is valid.

The learned counsel for the appellants, in support of his contention, cites Hagar v. King (38 Barb. 200). In that case a firm was indebted to the plaintiffs in the action for work performed in constructing part of a railroad. The defendant, who was one of the firm, asked the plaintiffs to take from the railroad corporation its bonds in payment of the debt, orally agreeing with the plaintiffs, for himself, that if they would so take the bonds, he, not the firm, would, within ten days, take the bonds from and pay to the plaintiffs the amount of the firm's debt. The plaintiffs assented to the proposal. Afterwards they accepted from the corporation its due bill for the amount due them for their work, payable in the bonds of the corporation, and gave a receipt for all of their demands for work done on the road. The plaintiffs then indorsed the due bill, delivered it to the corporation and received the bonds. Within ten days the plaintiffs tendered the bonds to the defendant and demanded the amount for which they were taken in payment. It was held that the oral agreement embraced two contracts, one to accept the bonds in payment of the debt, and another to purchase the bonds at a future day at a given price, and that the latter contract was within the third section of the statute of frauds and void. That case is easily distinguishable from the one at bar. The defendant in that case, as an individual, was not indebted to the plaintiffs, and his individual contract to take back the bonds was held to be distinct from the contract by which the firm's debt was paid in the manner described. Was the evidence sufficient to sustain the conclusion that the managing partner was authorized to make the contract in behalf of the firm?

The defendants admitted in their answer that they were bankers and brokers, and that they entered into that part of the contract by which they agreed to purchase the bonds for the plaintiff, which, by their concession, was within the ordinary business of the firm. But they neither averred in their answer, nor gave evidence tending to show that the promise to take back the bonds was beyond the scope of their business. There being no evidence which shows that the transaction was actually beyond the scope of the business of the firm, the question arises whether it was apparently beyond the scope of its business. (Union Nat. Bank v. Underhill, 102 N.Y. 336.) The case shows that, in addition to the business usually done by bankers and brokers, the defendants were accustomed to purchase and carry securities on margins for their customers. The undisputed evidence is that the managing partner did make the promise upon which the plaintiff recovered, thus asserting his authority to make it in the name, and in behalf of the firm. No evidence is found in the record which would justify the court in holding, as a matter of law, that the promise upon which the action was brought was so far beyond the scope of the business of the firm, that the plaintiff had no right to rely upon it. The evidence was sufficient to cast upon the defendants the burden of rebutting the presumption arising from the evidence and the pleadings, and they having failed to do this no error was committed in refusing to nonsuit on the ground that the managing partner had no authority to bind the firm by this contract.

The third ground upon which a nonsuit was asked for is not supported by the evidence. The undisputed evidence is, that the managing partner of the firm on several occasions advised the plaintiff not to part with the bonds, and assured him that they were good and would ultimately advance in the market. Under these circumstances, the plaintiff was not guilty of laches in not earlier returning the bonds and demanding the price paid. (Wooster v. Sage, supra.)

The judgment should be affirmed, with costs.

All concur.

Judgment affirmed.