Porter v. Bright

Mr. Justice Sharswood delivered the opinion of the court, October 23d 1876. We are of opinion that the offer of the defendants below, the rejection of which by the learned court forms the subject of the first assignment of error, ought to have been admitted. That offer was in substance that the defendants did not know the bonds which they offered to sell the plaintiffs to be counterfeit, but supposed them to be genuine; that they stated to the plaintiffs what they had done themselves to ascertain their genuineness; that the plaintiffs must make inquiry and satisfy themselves upon that point, as they would guarantee against nothing except their being stolen, and afterwards the plaintiffs called cm the defendants and said that they had made inquiries and were satisfied from what they had heard that they were genuine, and the sale was then made. No doubt every vendor of a bond or other instrument of writing warrants impliedly his title in the same manner as the vendor of any other personal chattel does. If the bond is forged, or its assignment is forged, he has no title, and the vendee can reclaim [444] the price he has paid. It makes no matter whether the vendor knows his title to be bad or not, nor how entirely innocent he may be of any fraud in the transaction. What he has sold proves to be intrinsically worthless. But it would be carrying this doctrine entirely too far to hold that in the absence of concealment or false representation by the vendor, the vendee may not agree to assume all the risk of the title. Why not in the case of the forgery of the instrument as in the case of any other defect of the title, as, for example, that the bond was void for any other reason or that the assignment of it was forged ? There is nothing to .affect such a contract with illegality. Even in equity a vendee of land under articles cannot set up the failure of consideration in consequence of the vendor’s want of title if he expressly agreed to take the risk. “ Where the purchaser is aware of a flaw and provides not against it, he takes the risk of it on himself:” Lighty v. Shorb, 3 Penna. R. 452. The case of Charnley v. Dulles, 8 W. & S. 353, is an authority in point. That was the sale of a certificate of deposit issued by a bank payable to the order of J. S. Skinner, whose endorsement was forged. The vendor had no title, and if the case had there rested the vendee could have recovered back the price. But this court held that the liability of the vendor depended upon the circumstances of the sale, and that it was for the jury to say whether on the evidence the plaintiff took the certificate subject to every risk or not. The endorsement of the vendor there was “ without recourse,” but the court held that to be immaterial. It did not relieve him from the implied warranty of title. “ It was for the jury to say, on all the evidence, what was the understanding of the parties as to the liability of the defendants; whether the plaintiff took the note subject to every risk, as well of the solvency of the parties as of the genuineness of the signature of the payee to the endorsement. If he did, the defendants are not responsible; but if, on the other hand, there was no such understanding, the words ‘ without recourse’ alone do not in law .exempt the defendants from responsibility.” It is very plain that if the evidence proposed to be given by the defendants below had come up to their offer and had been believed by the jury, it would have been sufficient to have justified them in finding that one of the terms of the contract qf sale was that the plaintiffs took themselves the risk of the genuineness of the bonds. The plaintiffs in error have not furnished us with the evidence in the cause, and without it it is impossible for us to say whether there was anything of which to predicate the points of the answers to which the plaintiffs complain in the second, third, fourth and fifth assignments of error. If the evidence appended to the paper-book of the defendants in error was' all the evidence in the cause it certainly was not sufiicient to raise these points. There was no error in the court’s not charging as requested by the defendants in .their sixth point, “ that in the purchase and sale of said bonds the [445] law of caveat emptor applies,” nor in the answer to the seventh point that “if the plaintiffs made known to defendants the character of the bonds within a reasonable time after they discovered it themselves they were not negligent.” Judgment reversed, and a venire facias de novo, awarded. .