Cornish v. Friedman

.Wood, J., (after stating the facts). 1. In the “American note” to “Benjamin on Sales,” concerning the subject of “what constitutes an express warranty,” it is said: “(1). All agree that neither the word ‘warrant’ nor any other particular word or form of words is necessary. “(2). All agree that mere words of praise and commendation, or which merely express the vendor’s opinion, belief, judgment, or estimate, do not constitute a warranty. “(3). All agree that any positive affirmation of a material fact as a fact, intended by the vendor as and for a warranty, and relied upon as such, is sufficient; and some hold the actual intent to warrant unnecessary. “(4). All agree that whether a particular assertion is an affirmance of a positive fact, or, on the other hand, only praise and commendation, opinion or judgment, is a question for the jury, where the meaning is ambiguous, and the intention of the parties may be gathered from the surrounding circumstances.” Benj. on Sales, p. 664. According to the last of the above subdivisions, it is clear that whether the alleged representations of appellant in this case were warranties or not was, under the evidence, a question for the jury. The court properly submitted that question in prayers granted at the instance of appellant. But the court in prayer number 2 granted at the request of appellees allows the jury to find appellant liable to appellees if they find that appellant made certain representations that were not in fact true, and if they further find that appellee, Friedman, relied upon such representations in making the purchase of the stock of the transfer company. This instruction would make Cornish liable, even if he made such representations only as matter of opinion, belief, judgment or estimate, which, if so made, according to all the authorities, would not be a warranty. The law in this regard is correctly expressed in prayer number 1 asked by appellees and given by the court, also in prayer number 1 given at the request of appellant. But the omission of this idea from prayer number 2 supra given at the request of appellees makes the instruction inherently defective and incomplete and an unsound proposition of law, which must be so held on a general objection thereto. It is wholly irreconcilable with the correct prayers. Bayles v. Daugherty, 77 Ark. 200; St. Louis, I. M. & S. Ry. Co. v. Beecher, 65 Ark. 64; Id. v. Hitt, 76 Ark. 224; Grayson-McLeod Lumber Co. v. Carter, 76 Ark. 69; Jones v. State, 89 Ark. 213; Miller v. Nuckolls, 77 Ark. 64; Fletcher v. Eagle, 74 Ark. 585; St. Louis, I. M. & S. Ry. Co. v. Rodgers, 93 Ark. 564. The above instruction and also instruction number 1 given at the instance of appellees also ignored the question as to whether, in order to constitute a warranty, it is necessary that the vendor intend that his representations shall be a warranty. In Sauerman v. Simmons, 74 Ark. 568, we said: “The law is well settled that any affirmation of a material fact, as a fact, intended by the vendor as and for a warranty, and relied upon as such is sufficient; but mere representations by way of commendation, or which merely express the vendor’s opinion, belief, judgment or estimate, do not constitute a warranty.” The only question in that case was whether or not the court erred in giving an instruction which assumed that a certain representation was a warranty, instead of submitting the question to the jury. Therefore our announcement of what constituted a warranty in that case was obiter dictum. The announcement, however, was strictly correct, as shown by all the authorities according to the American note (2) and (3) quoted above from Benjamin on Sales. It will be observed that we only announced in Sauerman v. Simmons, supra, that representations of a “material fact, as a fact, intended by the vendor as and for a warranty,” etc., is sufficient. Of course, in such case, where the representation is “intended by the vendor as and for a warranty,” there can be no question about it. But we did not by the above language say or hold that an intention to warrant was a necessary element, or conversely that the actual intent to warrant was unnecessary. That question is presented here in the giving of appellee’s prayer number 2 and in ignoring the proposition in appellee’s prayer number 2. Is an intention to warrant on the part of the vendor necessary to constitute a warranty? The text in 30 Am. & Eng. Ency. of Eaw (2 ed.), is as follows: “It was laid down in a very early case that an affirmation made at the time of the sale in regard to the character or quality of the thing sold is a warranty, provided it appears that it was intended as such, and this is the prevailing view now. In determining whether the affirmation was intended as a warranty the decisive test is whether the seller assumed to assert a fact of which the buyer was ignorant, or merely expressed an opinion or judgment upon a matter about which the ■ seller had no special knowledge, and as to which the buyer might be expected to exercise his own judgment or be equally able to form a correct opinion. In the former case there is a warranty, in the latter there is not.” As sustaining the text, cases are cited from various States in the footnote 4. But see to the contrary 30 A. & E. Ency. Law, 140. The author of the “American note” to Benjamin on Sales, at page 665, has this to say: “The better class of cases holds that a positive affirmation of a material fact, as a fact, intended to be relied on as such, and which is so relied upon, constitutes in law a warranty, whether the vendor mentally intended to warrant or not; and that his intention is immaterial.” Citing cases. Mr. Tiedeman, in his work on Sales, at page 283'says: “Some of the cases hold that, in order that any statement of the seller may amount to an express warranty of quality, it must be shown that he made the statement with the intention of warranting its truth. Unless this intention appears, it matters not how material and precise the statement is, it will not amount to a warranty. But the better opinion is that any positive statement of a material fact, which is made with the intention of influencing the buyer to buy, and the truth of which is relied upon by the buyer, will constitute a warranty, whether the seller intended to warrant the goods or not. The intention to warrant is conclusively presumed from his effort to influence the buyer’s actions by a statement -of fact.” See cases cited in note to sustain "the text. We concur with Mr. Tiedeman and the author of “American note” to Benjamin on Sales in the views above expressed. See also Buckman v. Haney, 11 Ark. 340; 30 A. & E. Ency. (2 ed.) 140 supra. 2. The evidence shows that appellees purchased the entire capital stock of the corporation. The note executed to Cornish was not in payment for his shares of stock or of his shares and Kempners, but was in part payment for all the shares of stock purchased. The warranty, if there was a warranty, applied as well to that note as to any other note, or any other part of 'the consideration. The defense of partial failure of consideration, growing out of the alleged breach of warranty, would be good against any one who sought to recover from the appellees the entire consideration or any part thereof. Contribution was a matter between Cornish and the other stockholders. If there was a partial failure of consideration which Cornish had to make good to the purchaser of the stock, he could call upon the other ■ stockholders to pay their proportion according to the number of shares owned by each of them. But he could not hold appellees, for that proportion. They were not liable for it. Moreover, there is no reversible error in the instructions on this point, because the question was not specifically raised in any manner in the trial court, and can not be raised here for the first time. For the error indicated in giving appellee’s prayer for instruction number 2, the judgment is reversed, and the cause is remanded for new trial.