Kingsley v. Fitts & Avery

The opinion of the court was delivered by Royce, Ch. J. • The referees have found that the account against John M. Dyer (of $121.61,) which it was agreed by the defendants in May, 1875, should be taken by the defendant Fitts to reimburse him for money due him from Avery, was sold to the plaintiff for $100 ; that Fitts received and has retained said $100 ; that upon said sale being made the defendant Avery, with the consent of Fitts, ordered said account paid to the plaintiff by endorsing thereon “ pay the within account to Chester Kingsley,' (Signed) Fitts & Avery ” ; that the plaintiff brought suit in the name of the defendants against Dyer to collect the account; that Dyer pleaded an offset and recovered upon said plea more than enough to balance said account. Having been defeated in his attempt to collect the account, the plaintiff claims to recover of the defendants the amount he paid for the account and the money expended in his effort to collect it. It was held in Gilchrist v. Hilliard, 53 Vt. 592, that upon the sale of accounts the vendor was bound to make them what they appeared to be — accounts due and owing. The account sold to the plaintiff was not due and owing at the time of the sale; hence there was a breach of the implied warranty of the defendants at the time of their making the sale ; and the defendants are liable to make good the loss the plaintiff has sustained in consequence [296] of such breach, unless they are excused from liability on account of the circumstances under which the sale was made. The reason why Fitts offered to sell the account at a discount was because he. did not want anything to do with Dyer. Neither he nor Avery then thought that Dyer would claim any offset to the account. His offer to sell was an open one : he was ready to sell to any one who might choose to purchase at the discount named, and so signified to Avery. Neither Fitts nor Avery understood that Avery was employed to sell the account, or that any agency was conferred upon him in respect to its sale, and he did not at any time offer to sell it. By the language used by Fitts he intended to inform Avery that he would sell the account at the discount named to any one who desired to purchase, and he coul d say so if he pleased. Avery informed the plaintiff that Fitts would sell the account for $100 ; the plaintiff told Avery that he would purchase it at that price, paid him the money and requested him to see Fitts and get it. Avery’s authority was limited to the payment of the money and procurement of the account. If the plaintiff had personally paid the money to Fitts and taken an assignment of the account, there can be no doubt but that he would have been liable upon an implied warranty that it was due and owing. We are unable to see how the fact that the money was paid by an agent of the plaintiff and the account delivered to him for the plaintiff changes the legal liability of the defendants. The principle that a principal is chargeable with the knowledge of such facts as are known to his agent, is not available as a defense. There was no duty resting upon the plaintiff to make inquiry as to the'validity of the account. It is evident that Fitts, when he offered the account for sale, intended to give the purchaser to understand that it was due and owing ; and as it was not due and owing he cannot be permitted to retain the consideration paid for it. The judgment is reversed, and judgment on the report for the plaintiff for the sum of $197.10, as found due by the referees, and interest.