Milburn vs. Belloni and others

Milburn vs. Belloni and others. Where a general agent, who is authorized and accustomed to make sales for his employers, of the articles in which they are dealing, gives a warranty as to the character of property sold hy him, his employers are bound thereby. Even if such agent exceeds his positive authority or instructions, in giving a warranty, upon making a sale, if the purchaser has no information of the fact, he will not be prejudiced. Where, upon a sale of a quantity of coal dust, the vendors’ agent gave a warranty that it had no dust of soft or bituminous coal mixed with it, it was held that, although the purchaser stated that he was purchasing the coal dust for the purpose of making brick, the vendors could not be held liable in an action on the warranty, upon any implied warranty that the article was suitable for the purpose for which it was purchased, or for any thing beyond the express agreement of their agent that it was the dust of hard coal, exclusively. And that the true rule of damages in such action was the difference between the value of the article as it was, and its value as it would have been, had it been what it was represented to be. A purchaser has no right to proceed without inquiry or examination, and use an article which will damage his business, relying upon a warranty which only goes to the nature or character of the article, and not to the effect of using it, and then hold the vendor responsible for the remote consequences of his own action. APPEAL by the defendants from a judgment entered upon the report of a referee. The action was for damages occasioned by a breach -of a warranty, in respect to the character of coal dust purchased by the plaintiff, for the purpose of using it in making brick: the warranty being that the dust was free from soft coal, and the breach alleged the contrary. The warranty alleged was, that “ the coal dust consisted of the dust of hard coal, free from admixture with any soft coal dust.” The price paid was $37.50. The coal dust so sold to the plaintiff was, at the time of the sale, in sight, and pointed out. The plaintiff was at the time a manufacturer of brick, and had been such seven years. He was admitted to testify as an expert, as to the effect of the use of soft coal in the manufacture of brick. The sale to the plaintiff was made by a person named French, the foreman and general agent of the defendants, at a yard not used as a “ sales-yard, but for storage and delivery.” He had charge of one of the yards, and was in the habit of making sales from the yard, occasionally. The referee found, as facts, that in the month of June, 1858, the plaintiff called at the coal yard of the defendants, in the city of Hew York, and inquired if they had hard coal dust for sale unmixed with soft coal dust, and stated that he would not have it if it had any soft or bituminous dust in it; at the same time saying if it had, it would damage or break his brick ; that the defendants did thereupon sell and deliver to the plaintiff fifty tons of coal dust, and warranted that it had no soft or bituminous coal in it; and that the coal dust so sold to the plaintiff had soft or bituminous dust mingled with it; that the plaintiff did not discover the intermixture of soft coal in that which he so purchased of the defendants, until he began to take down the kilns of brick for market that were made with the said dust, and that at that time he had used the said dust so purchased in making brick on his yard, except one ton; that a person not a dealer in coal, or not accustomed to the use of soft or bituminous coal dust, would not readily detect its presence when mixed with hard coal dust; that the brick of the plaintiff so made of the said coal dust were greatly injured by the soft coal dust mixed with it; and that the plaintiff had sustained damage from such injury to the amount of six hundred and fifty dollars. And the referee ordered judgment in favor of the plaintiff against the defendants, on account of said damages, for the sum of six hundred and fifty dollars with costs. Beebe, Dean & Donohue, for the appellants. D. C. Ringland, for the respondent. [MAJORITY — By the Court, Emott, J.] By the Court, Emott, J. The person in the employ of the defendants, who made the sale of coal dust to the plaintiff, was authorized to make such a sale in the course of the business of the defendants, and they are bound by the warranty given by him in the transaction. He was a general agent of the defendants, constantly in their employ, having charge of one of their yards, and accustomed, at least occasionally, to make sales from their yard. His authority and general employment were recognized by one of the defendants, who came into the yard before this transaction was completed, and allowed or directed him to make the sale, as well as by the subsequent ratification of the act. Even if, as an agent for selling, he exceeded his positive authority or instructions, in giving a warranty, as no information to that effect was given to the plaintiff, the latter cannot be prejudiced by the fact, if it exist. This was not a special agency for this particular transaction, but a general agency in the business of the defendants to make sales of the articles in which they were dealing, and the rule of law as to such agents, in the particular now under consideration, is undisputed. The referee finds that the defendants’ agent warranted “or promised that the coal dust which he sold to the plaintiff had no dust of soft or bituminous coal mixed with it.” This is the only warranty proved, and upon this alone, or for its breach, the action is brought. It is true that the evidence establishes, and the referee finds, that the plaintiff stated that he was purchasing the coal dust for the purpose of making brick, and that soft coal dust would not answer that purpose, and would destroy or injure the brick if it should be used. But he did not ask nor receive a warranty that the coal dust was fit for this business, nor any other warranty than that it contained no soft or bituminous coal. It was a sale of an existing article, and not a contract for its manufacture. There is in such a case no implied warranty, such as will arise in some cases where an article is ordered of a manufacturer for a special purpose. The distinction is well illustrated in an observation of Mr. Justice Maulé, in the course of the argument in Keates v. Cadogan, (2 Eng. L. and Eq. 320,) which is often quoted. “If a man says to another, sell me a horse fit to carry me/ and the other sells a horse which he knows to be unfit to ride,” or, it might be said, upon that, sells a horse which is unfit to ride, thus representing the fact to be otherwise, “ he may be liable for the con- ■ sequences; but if man says, ‘ sell me that gray horse to ride/ and the other sells it, knowing that the former will not be able to ride it, that would not make him liable.” The defendants in the present case cannot be held upon any implied warranty that the article was suitable for the purpose for which it was purchased, or for any thing beyond the express agreement of their agent, that it was the dust of anthracite coal exclusively. It will be remembered that the suit is upon a warranty, and not for fraud, and depends altogether upon a breach of a positive agreement. This is, indeed, as has been already observed, the finding of the referee. The warranty which he determines to have been made and broken, was a warranty that the article was free from soft coal, and not that it was fit for use in making brick. But the rule of damages which was applied referred to a warranty of the latter description, that is, a warranty of the fitness of the article for the purpose to which it was to be applied. If we lay out of view all which occurred between these parties at the time of the sale, in reference to the intended use of the article, as immaterial to the legal aspect of the case, it will become very obvious that the true rule of damages for a breach of the warranty which was actually given, would have been the difference between the value of the article as it was and its value as it would have been, if it had been what it was represented to be. The defendants are not responsible for the consequences of an improper use of the article they sold; because they simply agreed that it was a certain thing, and not that it was fit for a certain purpose. The rule is well laid down in the case of Hargous v. Ablon, (5 Hill, 472, and 3 Denio, 406.) But the referee has applied a different rule. He has in fact decided that one kind of warranty was given, and proceeded to award damages for the breach of another and a different one. The injury which the plaintiff sustained in his kiln of brick, was not the consequence of the fact that the dust which he bought contained bituminous coal, but of his making use of the dust when it contained that ingredient. It was his duty to have ascertained that fact before using the article. He had no right to proceed without inquiry or examination, and use an article which would damage his business, relying upon a warranty which only went to the fact of the nature or character of the article, and not to the effect of using it, and still hold the defendants responsible for the consequences of his acts. The warranty was broken immediately upon the sale; the fact could then have been known, and the damage, if any, ascertained and demanded. The plaintiff cannot now hold the defendants responsible, under this warranty, for the remote consequences of his own subsequent action. His recovery, under these pleadings and proofs, should have been limited to the difference between the value of the article sold him as it was, and its value as it would have been, if it had been such as it was represented, and to that value generally, and not for a particular use or purpose. [Orange General Term, September 9, 1861. As the referee erroneously applied a different rule of damages, the judgment entered on his report must be reversed, and a new trial at the circuit ordered; the costs to abide the event. Emott, Lott, Brown and Scrugham, Justices.]