This section is from the book "The Law Of Contracts", by William Herbert Page. Also available from Amazon: Commercial Contracts: A Practical Guide to Deals, Contracts, Agreements and Promises.
If the chattel which is sold is in the possession of the seller, there is an implied warranty that the seller has title thereto, unless there is some agreement to the contrary. Total failure of title to a chattel which is the subject-matter of the contract, amounts to total failure of consideration.1 If the buyer has paid for such chattel in advance, either in whole or in part, he may recover the money which he has thus paid to the seller.2 If several chattels have been sold by an indivisible contract, it has been held in case of a failure of title to a part of such chattels that a pro rata recovery of the purchase price may be had.3 This seems, however, contrary to the general analogies of the law, since, if the contract is an entire one, the courts have no right to make an apportionment of the consideration for the parties, which the parties have not made for themselves; and, accordingly, unless the chattel, the title to which has failed, is the vital and material part of the contract, failure of title to such chattel is a partial failure of consideration for which compensation can be made in damages and which, accordingly, does not discharge the entire contract.4 If the seller delivers goods which are entirely worthless,5 or if he does not deliver goods at all,6 the contract is discharged. If the buyer has paid for the goods in advance and the seller fails to deliver them, the buyer may recover the purchase price which he has thus paid in.7
18 Loring v. Oxford, 18 Tex. Civ. A pp. 415, 45 S. W. 305.
19 Wilson v. Breyfogle, 63 Fed. 379, 11 C. C. A. 248.
20 Wilson v. Breyfogle, 63 Fed. 379, 11 C. C. A. 248.
1 Paika v. Perry, 225 Mass. 563, 114 N. E. 830; Shores Lumber Co. v. Claney, 102 Wis. 235, 78 N. W. 451.
2 United States. In re Syracuse Gardens Co., 231 Fed. 284.
Massachusetts. Paika v. Perry, 225 Mass. 563, 114 N. E. 830.
New York. Ledwich v. McKim, 53 N. Y. 307.
Pennsylvania. Wilkinson v. Ferree, 24 Pa. St. 190.
Rhode Island. Peckham v. Kiernan, 13 R. I. 354.
3 Moorhead v. Davis, 92 Ind. 303; Routh v. Caron, 64 Tex. 289.
4 See Sec. 2982.
If the seller delivers only a part of the goods which he has agreed to deliver, the buyer may recover for the deficiency.8 If the buyer has given his promissory note for the goods in advance, and he subsequently refuses to accept the goods, it has been held that he may show such breach on his part as a defense to an action on the note.9
In an executed contract of sale there is, as a rule, no implied warranty of quality, and in the absence of such warranty the vendee is without remedy for defects in quality.10 If a contract provides for passing the title to chattels in the future and there is an express or implied warranty as to quality, tender of chattels not possessing the qualities specified is a breach which may operate, at the election of the buyer, as a discharge, discharges the contract.11
5 Hixson v. Cook, 130 Ark. 401, 197 S. W. 698; Wood v. Sheldon, 42 N. J. L. 421, 36 Am. Rep. 523; Stone v. Frost, 61 N. Y. 614.
6 Martin v. Cunningham, 231 Mass. 280. 1 A L. R. 1511, 121 N E. 21.
7 Martin v. Cunningham, 231 Mass; 280, 1 A L. R. 1511, 121 N E. 21.
8 Creighton v. Comstock, 27 O. S. 548.
9 Acme Food Co v. Older, 64 W. Va, 255, 17 L. R. A. (NS.) 807, 61 S. E. 235.
10 United States. Barnard v. Kellogg, 77 U. S. (10 Wall.) 383, 19 L. ed 987.
Maryland. Horner v. Parkhurst, 71 Md 110, 17 Atl 1027.
Massachusetts. Mixer v. Coburn, 52 Mass. (11 Met.) 550, 45 Am. Dec. 230; Eight v. Bacon, 126 Mass. 10, 30 Am. Rep. 639.
Michigan. McCray Refrigerator Co. v. Woods, 99 Mich. 269, 41 Am. St. Rep. 599, 58 N. W. 320.
North Carolina. Dickson v. Jordan, 33 N. Car. (11 Ired.) L. 166, 53 Am. Dec. 403.
Pennsylvania. Lord v. Grow, 39 Pa. St. 88, 80 Am. Dec. 504.
Wisconsin. Milwaukee Boiler Co. v. Duncan, 87 Wis. 120, 41 Am. St. Rep. 33, 58 N. W. 232; Scott Lumber Co v. Hafner-Lothman Mfg. Co., 91 Wis. 667. 65 N. W. 513.
11 United States. Pope v. Allis, 115 U. S. 363, 29 L ed. 393; St Louis Paper Box Co v Hubinger Bros Co., 100 Fed. 595, 40 C C. A. 577, 227 Fed. 804.
Florida. Southern Colonization Co. v. Derfler, 73 Fla. 924, 75 So. 790.
Iowa. Roper v. Wells, 182 la. 237, 165 X. W. 385; Fulton Bank v. Mathers, 1S3 la. 226, 166 N. W. 1050.
Kentucky. Glover Machine Works v. Cooke-Jellico Coal Co., 173 Ky. 675, 191 S. W. 516.
Massachusetts. Clark v. Baker, 46 Mass. (5 Met.) 452; Hallwood Cash Register Co. v. Lufkin, 179 Mass. 143, 60 N. E. 473.
Michigan. Ripley v. Case, 78 Mich. 126, 18 Am. St. Rep. 428, 43 N. W. 1097.
Nebraska. McCormick Harvesting Machine Co. v. Knoll, 57 Neb. 790, 78 N. W. 394; Toledo Computing Scale Co. v. Fredericksen, 96 Neb. 689, 146 N. W. 957.
If the title to a chattel has passed, but the chattel does not possess the qualities which it was agreed that it should have, the question arises whether the vendee may avoid the contract and resist payment of the purchase price if the contract is still executory on his part, or whether he may only sue for damages, or whether he has an election between these two remedies. If the buyer knew of the breach of warranty when he received and accepted the goods, it is generally held that he waived such breach as a discharge of the contract.12 If the buyer does not know of the breach of warranty when he receives and accepts the goods, it is held in some jurisdictions that he may treat the breach of warranty, if material, as a discharge of the contract; and if he has not paid the purchase price, he may avoid liability thereon, while if he has paid the purchase price, he may recover such payment.13 To exercise this right the vendee must return what he has received under the contract,14 or he must offer to return it, although actual tender is not necessary if the adversary party makes it clear that the tender will not be accepted.15 In other jurisdictions it is held that the receipt and acceptance of the goods prevents the buyer from treating the breach of warranty as a discharge,16 whether he knew of such breach when he received the goods or not. The latter view has frequently been said to be that which commands the support of the weight of authority; but an examination of the decisions seems to indicate that the authority is rather evenly balanced, with a preponderance of authority, especially among the recent cases, in favor of the theory that if the breach of warranty is material, if the seller did not know of such breach when he received the goods, and if he acts promptly and offers to return the goods to the seller, he may avoid the contract. In jurisdictions in which the Uniform Sales Act is in force, this question is settled by legislation. This act provides that, "Where there is a breach of warranty by the seller the buyer may, at his election * * * (d) rescind the contract to sell, or the sale, and refuse to receive the goods, or, if the goods have already been received, return them to the seller and recover the price or any part thereof which has been paid."17
New Jersey. Smith v. York Mfg. Co., 58 N. J. L. 242, 33 Atl. 244; Header v. Cornell, 58 N. J. L. 375, 33 Atl. 960.
New York. Cohen v. Platt, 69 X. Y. 348, 25 Am. Rep. 203.
Virginia. Virginia-Carolina Chemi-cal Co. v. Carpenter, 90 Va. 292, 38 S. E. 143.
Washington. Sevier v. Hopkins, 101 Wash. 404, 172 Pac. 550.
12 See Sec. 3049.
13 Iowa. Toledo Savings Bank v. Rathmann, 78 la. 288, 43 N. W. 193; Aultman v. Trainer, 80 la. 451, 45 N. W. 757; McCormick Harvesting Machine Co. v. Brower, 94 la. 144, 62 N. W. 700; Timken Carriage Co. v. Smith, 123 la. 554, 99 N. W. 183; American Fruit Product Co. v. Davenport Vinegar & Pickling Works, 172 la. 683, 154 N. W. 1031.
Kansas. French v. Gordon, 10 Kan. 370; Gale Sulky Harrow Mfg. Co. v. Stark, 45 Kan. 606, 23 Am. St. Rep. 739, 26 Pac. 8.
Maine. Milliken v. Skillings, 89 Me. 180, 36 Atl. 77; Libby v. Haley, 91 Me. 331, 39 Atl. 1004. Massachusetts. Bryant v. Isburgh,
79 Mass. (13 Gray) 607, 74 Am. Dec. 655; Morse v. Brackett, 98 Mass. 205; Smith v. Hale, 158 Mass. 178, 35 Am. St. Rep. 485, 33 N. E. 493.
Missouri. Compton v. Parsons, 76 Mo. 455; Aultman v. Hunter, 82 Mo. App. 632.
Nebraska. Puntenney-Mitchell Mfg. Co. v. Northwall Co., 66 Neb. 5, 91 N. W. 863.
North Carolina. Winn v. Finch, 171 N. Oar. 272, 88 S. E. 332.
Oklahoma. Hart-Parr Co. v. Duncan, - Okla. -, 4 A. L. R. 1434, 181 Pac. 288.
Pennsylvania. Selig v. Rehfuss, 195 Pa. St. 200, 45 Atl. 919.
Wisconsin. Merrill v. Nightingale, 39 Wis. 247; Parry Mfg. Co. v. Tobin, 106 Wis. 286, 82 N. W. 154; Kelsey v. Ringrose Net Co., 152 Wis. 499, 140 N. W. 66.
See, Rescission for Breach of Warranty, by Francis M. Burdick, 4 Columbia Law Review, 1; Rescission for Breach of Warranty, by Samuel Wil-liston, 4 Columbia Law Review, 195; and Rescission for Breach of Warranty, by Samuel Williston, 16 Harvard Law Review, 465.
In jurisdictions in which the Uniform Sales Act has not been adopted and in which the courts of last resort have not passed upon this question, it may well be regarded as an open one. In view of the general attitude of the American courts, it would seem that the theory that breach of warranty could not justify rescission after title once had passed was adopted out of unnecessary deference to English authority;18 and that the result thus reached is not justified by sound reasoning. While the lack of an adequate means of transferring title from the grantee to the grantor may require the courts to compel the grantee of realty to rely upon his covenants,19 equity has not felt bound in this way in all jurisdictions, even in case of real property; 20 and there appears to be no reason which will justify the courts in compelling the buyer to keep an article which lacks the material qualities for which he bargained, and to seek redress in damages, for the sole reason that he permitted the title and the possession to pass to him before he could discover the lack of such qualities, even by the exercise of the utmost diligence.
14 Dean v. Brown, - Ala. -, 78 So. 966; Massillon Engine & Thresher Co. v. Schirmer (la.), 93 N. W. 599; Voor-hees v. Earl, 2 Hill (N. Y.) 288, 38 Am. Dec. 558; Rosenwater v. Selleseth, 33 N. D. 254, 156 N. W. 540.
15 Lake v. Western Silo Co., 177 la. 735, 158 N. W. 673.
16 England. Street v. Blay, 2 B. & Ad. 456; Hey worth v. Hutchinson, L. R. 2 Q. B. 447.
United States. Thornton v. Wynn, 25 U. S. (12 Wheat.) 183, 6 L. ed. 595; Lyon v. Bertram, 61 U. S. (20 How.) 149, 15 L. ed. 847.
Connecticut. Trumbull v. OHara, 71 Conn. 172, 41 Atl 546.
Indiana. Hoover v. Sidener, 98 Ind. 290.
Michigan. H. H. Williams Transportation Line v. Darius Cole Transportation Co., 129 Mich. 209, 56 L. R. A. 939, 88 N. W. 473; Feist v. Root, 189 Mich. 595, 155 N. W. 491.
Minnesota. Lynch v. Curfman, 66 Minn. 170, 68 N. W. 5.
New York. Voorhees v. Earl, 2 Hill (N. Y.) 288, 38 Am. Dec. 588.
Tennessee. Allen v. Anderson, 22 Tenn. (3 Humph.) 581, 39 Am. Dec. 197.
Vermont. Hoadley v. House, 32 Vt. 179, 76 Am. Dec. 167.
17 Sec. 69, Uniform Sales Act.
For a discussion of the propriety of this provision, see Rescission for Breach of Warranty, by Samuel Wil-liston, 16 Harvard Law Review, 465.