54. Where any right, duty or liability would arise under a contract of sale by implication of law, it may be negatived or varied by express agreement or by the course of dealing between the parties, or by usage, if the usage be such as to bind both parties to the contract. The Sale of Goods Act (Ont. s. 14; U. K. s. 12) provides: 14. In a contract of sale, unless the circumstances of the contract are such as to show a different intention, there is:
(a) an implied condition on the part of the seller that in the case of a sale he has a right to sell the goods, and that in the case of an agreement to sell he will hive a right to sell the goods at the time when the property is to pass;
(b) an implied warranty that the buyer shall have and enjoy quiet possession of the goods; and
(c) an implied warranty that me goods shall be free from any charge or encumbrance in favour of any third party, not declared or known to the buyer before or at the time when the contract is made.
The rule stated in sub-s. 1 is in accordance with the better opinion prevailing prior to the passing of the statute namely, that by a contract of sale the seller impliedly undertakes that he has (or,in the case of an agreement to sell, that he will have) a right to sell the goods, unless the circumstances are such as to show that the seller is transferring only such property as he may have in the goods. There is usually no implied undertaking, for instance, where the seller is selling in a special character, such as a mortgagee or pledgee, or a sheriff under an execution.
Peuchen v. Imperial Bank, 1890, 20 O.R. 325 (re-viewing the cases) ; Sims v. Marryatt, 1851, 17 Q.B. 281; Eicholz v. Bannister, 1864, 17 C.B.N.S. 708, 23 R.C. 198; cf. 25 Halsbury, Laws of England, 153; Willis, Sale of Goods, 127-9. As to damages, see Confederation Life Association v. Labatt, 1900, 27 O.A.R. 321. The distinction between the condition as to title and the warranty of quiet possession is similar to that between a covenant for title and one for quiet enjoyment. The former is an assurance by the grantor that he has the very estate in quantity and quality which he purports to convey; the latter is an assurance to the grantee against consequences of a defective title and of any disturbance thereupon. Thus if the title is defective, the buyer may, under the Sale of Goods Act, reject the goods, but if he has accepted them and is afterwards disturbed, he has his remedy by action for breach of warranty. 25 Halsbury. Laws of England, p. 154, note (n). In the United States the similar section of the Uniform Sales Act contains the following additional provision:
13. - (4) This section shall not, however, be held to render liable a sheriff, auctioneer, mortgagee, or other person professing to sell by virtue of authority in fact or law goods in which a third person has a legal or equitable interest.