122 US 575 Shippen v. Bowen
122 U.S. 575
7 S.Ct. 1283
30 L.Ed. 1172
May 27, 1887.
[Statement of Case from pages 575-577 intentionally omitted]
The bill of exceptions states that the plaintiff, to sustain the issues on his part, introduced evidence tending to show that at the date mentioned in the complaint defendant sold to him, for $8,000, 91 sheets of paper purporting to be Clark county, Arkansas, funding bonds; that said sheets of paper were forgeries, and not genuine bonds, as they purported on their face to be; that defendant, at the time of sale, expressly affirmed their regularity and validity, although he knew, or had reason to suspect, at the time, that they were not genuine and valid; that plaintiff believed and supposed that they were genuine and valid, and relied upon defendant's representations to that effect; and that plaintiff had no notice or knowledge that defendant was acting in said sale as agent for another person.
The defendant introduced evidence tending to show that said papers were genuine and valid Clark county, Arkansas, funding bonds; that at the time of the sale he made no statement, representation, or warranty as to their genuineness or validity, but, on the contrary, stated that he knew nothing of the circumstances under which they were issued; that he had neither notice nor knowledge of any want of validity or of any defects in said bonds, nor notice of any facts which would have aroused suspicion in reference to them; that, in the sale of said bonds to plaintiff, he was acting as the agent of Charles W. Tankersley, from whom he had received the bonds shortly before their sale, but did not at the time disclose to plaintiff his agency.
The court charged the jury that, upon the facts conceded before them, the bonds, by reason of certain unauthorized alterations of the coupons, were not valid and genuine obligations of the county of Clark. The jury were also instructed that whoever sells such instruments as those delivered to the plaintiff, 'if nothing whatever be said in respect to their character, by the act of selling warrants them to be the genuine obligations of the county; that is, that they are not forged or counterfeited, but are the true and proper obligations of the county, such as they purported to be on their face; and upon an action for breach of warranty, or an action upon the contract, the defendant would undoubtedly, beyond all question, be liable for the amount which he received for the bonds; * * * but this action is not of that character,—that is, it is not an action upon the contract alone. As I said to you in the outset, it is an action for a false representation, or for a misrepresentation, of fact, and there must be something more to maintain this action than the implied warranty which arises from the act of selling, and which is an inference of law coming from the act of selling.' The court said further upon the subject of warranty: 'It is not claimed that there were any direct representations in respect to the genuineness of those bonds made at the time of the sale thereof, except in this way: I think Mr. Shippen states that the defendant said he would warrant the title to the bonds. I will not undertake to repeat what the witnesses said in respect to that matter; the only witnesses were the parties to the suit, I believe, as to what was stated at the time.' Without giving more of the charge, it is sufficient to say that its scope is indicated by the circuit judge in the opinion delivered by him when denying the plaintiff's motion for a new trial. He said: 'The complainant charges that, to induce plaintiff to purchase certain bonds, the defendant represented that they were genuine and valid bonds, whereas, in truth and in fact, they were worthless forgeries. The court charged the jury that it was necessary for plaintiff to show that the defendant, at the time of the sale of the bonds to the plaintiff, misrepresented the facts concerning their genuineness. In other words, the court was of the opinion, and so charged the jury, that plaintiff could not recover in this action by merely proving a sale of the bonds to him by defendants, and that the bonds were forgeries. It was held to be necessary to prove knowledge on the part of the defendant of the forged character of the bonds, or an express misrepresentation concerning the fact of their genuineness. The counsel for plaintiff insists that in such a case as this no scienter need be alleged, nor if alleged need be proved. I am unable to concur in the soundness of this proposition.'
Geo. E. Adams, for plaintiff in error.
G. G. Symes, for defendant in error.
[Argument of Counsel from pages 579-581 intentionally omitted]
Mr. Justice HARLAN, after stating the facts of the case in the foregoing language, delivered the opinion of the court.
We are of opinion that it was error to instruct the jury that the plaintiff could not recover, in the present action, unless he established the scienter upon the part of the defendant. The original complaint—though, perhaps, not in the most concise language—made a case in tort for the breach of an express warranty in the sale of the bonds. The bill of exceptions states that the evidence, in behalf of the plaintiff, tended to show that, although the defendant knew or had reason to suspect, when the bonds were sold, that they were not genuine and valid, he 'expressly affirmed their regularity and validity.' These words may not necessarily import an express warranty. But no particular phraseology or form of words is necessary to create a warranty of that character. As was held by the court of appeals of Maryland in Osgood v. Lewis, 2 Har. & G. 495, 518, 'an affirmation of the quality or condition of the thing sold, (not uttered as matter of opinion or belief,) made by the seller at the time of sale, for the purpose of assuring the buyer of the truth of the facts affirmed, and inducing him to make the purchase, if so received and relied on by the purchaser, is an express warranty. And in case of oral contracts, on the existence of these necessary ingredients to such a warranty, it is the province of the jury to decide, upon considering all the circumstances attending the transaction.' To the same effect are Henshaw v. Robins, 9 Metc. 83, 88; Oneieda, etc., v. Lawrence, 4 Cow. 442; Cook v. Moseley, 13 Wend. 278; Chapman v. Murch, 19 Johns. 290; Hawkins v. Berry, 5 Gilman, 36; McGregor v. Penn, 9 Yerg. 76, 77; Otts v. Alderson, 10 Smedes & M. 476. The plaintiff was clearly entitled to go to the jury on the issue as to an express warranty. But he was, in effect, denied that right by the instruction that he could not recover in this action unless he proved a scienter. It is true his pleadings also contained every allegation essential to support an action for deceit, apart from the issue as to express warranty. But the cause of action in tort for the breach of the express warranty was not obliterated, or removed from the case because it was joined with a cause of action for deceit.
In Schuchardt v. Allens, 1 Wall. 359, 368, which was an action on the case for a false warranty on the sale of certain goods,—the declaration also containing a count for deceit,—the court said that it was now well settled, both in English and American jurisprudence, that either case or assumpsit would lie for a false warranty, and that, 'whether the declaration be in assumpsit or tort, it need not aver a scienter; and, if the averment be made, it need not be proved.' It was also said that, 'if the declaration be in tort, counts for deceit may be added to the special counts, and a recovery may be had for the false warranty or for the deceit, according to the proof. Either will sustain the action.' See, also, Dushane v. Benedict, 120 U. S. 636, ante, 696. In 1 Chit. Pl. 137, the author says that case or assumpsit may be supported for a false warranty on the sale of goods, and that, 'in an action upon the case in tort for a breach of a warranty of goods, the scienter need not be laid in the declarato n, nor, if charged, could it be proved.' In Lassiter v. Ward, 11 Ired. 444, RUFFIN, C. J., citing Stuart v. Wilkins, 1 Doug. 18, and Williamson v. Allison, 2 East, 446, said: 'It was accordingly there held that the declaration might be in tort, without alleging a scienter, and, if it be alleged in addition to the warranty, that it need not be proved. The doctrine of the case is that, when there is a warranty, that is the gist of the action, and that it is only when there is no warranty that a scienter need be alleged or proved. It is nearly a half century since the decision, and during that period the point has been considered at rest, and many actions have been brought in tort as well as ex contractu on false warranties.' And so in House v. Fort, 4 Blackf. 293, 294, it was said that 'the breach of an express warranty is of itself a valid ground of action, whether the suit be founded on tort or on contract; and that, 'in the action on tort, the forms of the declaration are that the defendant falsely and fraudulently warranted, etc., but the words falsely and fraudulently, in such cases, are considered as only matters of form.' But as to the scienter the court said 'that is not necessary to be laid, when there is a warranty, though the action be in tort; or, if the scienter be laid, in such a case there is no necessity of proving it.' See, also, Hillman v. Wilcox, 30 Me. 170; Osgood v. Lewis, 2 Har. & G. 495, 520; Trice v. Cockran, 8 Grat. 450; Gresham v. Postan, 2 Car. & P. 540.
As the evidence entitled the plaintiff to go to the jury upon the issue of express warranty as to the genuineness of the bonds and coupons, and as the jury were in effect instructed that he could not recover, unless upon allegation and proof of the scienter, the judgment is reversed, and the case is remanded, with instructions to set aside the judgment and grant a new trial. Reversed.
Reversing 13 Fed. Rep. 537.