Clarkson, J.
Tbe defendant in tbe court below made a motion to strike out all tbe allegations in tbe complaint, as follows: Paragraphs 7, 8, 9, 10, 11, 12, 13, 14, 15, 16, 17, 18 and 19. Tbe court below refused tbe motion of defendant to strike out tbe above paragraphs of tbe complaint with tbe exception of tbe following: “Tbe court is of tbe opinion tbat tbe issues as set out in paragraph 16 of tbe complaint should be stricken from said paragraph.” We think tbe court below correct in its decision.
Tbe defendant in bis brief and in this Court demurred
ore tenus
to tbe complaint.
In addition to tbe question on tbe motion to strike, there is tbe further question for our decision: Does tbe complaint state facts sufficient to constitute a cause of action? We ihink so. Tbe authorities dealing with tbe sufficiency of tbe complaint also dispose of tbe question raised on tbe motion to strike.
In
Snipes v. Monds,
190 N. C., 190 (191), it is beld: “Even after answering in the trial court, or in this Court, a defendant may demur
ore ienus,
or the court may raise the question
ex mero motu
that the complaint does not state a cause of action.
Garrison v. Williams,
150 N. C., 675.”
Seawell v. Cole,
194 N. C., 546 (547);
Key v. Chair Co.,
199 N. C., 794 (796). The defendant was within his right when he demurred
ore tenus.
Plaintiff and defendant were dealers — the plaintiff purchased its cars for resale. The plaintiff was required to make a report of all sales to the defendant. Black’s Law Dictionary defines a dealer, as follows: “A dealer, in the popular, and therefore in the statutory, sense of the word, is not one who buys to keep, or makes to sell, but one who buys to sell again.”
In
Swift & Co. v. Aydlett,
192 N. C., 330 (334-5), it is held: “The doctrine of implied warranty in the sale of personal property is too well established in this jurisdiction now to be drawn in question. It should be extended rather than restricted.
Poovey v. Sugar Co.,
191 N. C., 722;
Swift v. Etheridge, supra
(190 N. C., 162). The harshness of the common law rule of
caveat emptor,
when strictly applied, makes it inconsistent with the principles upon which modern trade and commerce are conducted; the doctrine of implied warranty is more in accord with the principle that ‘honesty is the best policy,’ and that both vendor and vendee, by fair exchange of values, profit by a sale. In
Grocery Co. v. Vernoy,
167 N. C., 427, the late
Justice Brown
says: ‘It is well settled by repeated decisions that on a sale of goods by name, there is a condition implied that they shall be merchantable and salable under that name; and it is of no consequence whether the seller is the manufacturer or not, or whether the defect is hidden or might possibly be discovered by inspection.’ ”
The case of
Williams v. Chevrolet Co.,
209 N. C., 29, was an action to recover for defective materials and workmanship in an automobile sold to the plaintiff by Dixie Chevrolet Company, Inc. The first issue in this case was as follows: “Was the Chevrolet automobile, sold by Dixie Chevrolet Company, Inc., to the plaintiff, defective in material or workmanship at the time of its delivery to the plaintiff, so that it was not reasonably fit for the use for which it was intended?” In the opinion in this case, it is said: “The full significance and import of the first issue seems to have been overlooked on all hands. If the automobile purchased by the plaintiff were so defective ‘that it was not reasonably fit for the use for which it was intended,’ then the plaintiff would be entitled to recover of the seller for want of consideration.
Swift Co. v. Aydlett,
192 N. C., 330, 135 S. E., 141;
Register Co. v. Bradshaw,
174 N. C., 414, 93 S. E., 898;
DeWitt v. Berry,
134 U. S., 306; 6 R. C.
L., 684,
et seq.
Similarly, the seller would be entitled to recover over against the dealer or manufacturer, irrespective of the terms of the contract of warranty.
Ashford v. Shrader,
167 N. C., 45, 83 S. E., 29. It is believed that a covenant, however expressed, must be regarded as
nude pact,
and not binding in law, if founded solely upon considerations which the law holds altogether insufficient to create a legal obligation.
Hatchell v. Odom,
19 N. C., 302. 'If it (the article sold) be of no value to either party, it, of course, cannot be the basis of a sale’—
Ashe, J.,
in
Johnston v. Smith,
86 N. C., 498. The refusal to warrant against worthlessness would fall with the balance of the supposed contract for want of consideration.
Furniture Co. v. Mfg. Co.,
169 N. C., 41, 85 S. E.
(Hearse case).” Medicine Co. v. Davenport,
163 N. C., 294;
Grocery Co. v. Vernoy,
167 N. C., 427;
Furniture Co. v. Mfg. Co.,
169 N. C., 41;
Swift & Co. v. Etheridge,
190 N. C., 162;
Gorby v. Bridgeman
(1919), 183 W. Va., 727, 92 S. E., 88;
Olson v. Sullivan
(1925), 109 Okla., 297, 234 Pac., 634;
Little v. G. E. CanSyckle & Co.,
115 Mich., 480, 73 N. W., 554; Williston on Contracts (Revised Edition, 1937), Vol. 5, sec. 1355, p. 3801.
The underlying principle on which appellee relies in this case is well settled in Williston on Contracts,
supra,
p. 3800,
el seq.:
“As has been seen damages are recoverable for such consequences of a breach as would follow in the usual course of events. It becomes necessary to inquire when consequential damages fall in this category. . . . For example, defects in goods sold will not justify the recovery of consequential damages other than those which might be expected to flow from the defects. Where goods are sold with a warranty to a dealer it must be assumed that the dealer may resell them with a similar warranty to a subpur-chaser. Accordingly, if this is done, and the subpurchaser recovers damages from the original buyer, the latter has a
prima facie
right to recover these damages against the seller who originally sold him the goods.” Williston on Contracts,
supra,
sec. 1394, p. 3893.
The principal argument in defendant’s brief on the question of its demurrer
ore tenus
to the complaint seems to be bottomed on the premise that in the sale of personal property by one dealer to another dealer the law does not raise an implied warranty. While it is true the complaint alleges that the agreement by and between the plaintiff and defendant for the sale of ears by the defendant to the plaintiff was made with the consent and approval of Ford Motor Company; nevertheless, the mere approval of the contract by Ford Motor Company in nowise changes the legal obligations that the law imposes on every vendor and vendee, even though each one be called a dealer. As between dealers there is an implied warranty that the personal property sold is merchantable and salable and reasonably fit for the use for which the property was sold.
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Clarkson, J.
Tbe defendant in tbe court below made a motion to strike out all tbe allegations in tbe complaint, as follows: Paragraphs 7, 8, 9, 10, 11, 12, 13, 14, 15, 16, 17, 18 and 19. Tbe court below refused tbe motion of defendant to strike out tbe above paragraphs of tbe complaint with tbe exception of tbe following: “Tbe court is of tbe opinion tbat tbe issues as set out in paragraph 16 of tbe complaint should be stricken from said paragraph.” We think tbe court below correct in its decision.
Tbe defendant in bis brief and in this Court demurred
ore tenus
to tbe complaint.
In addition to tbe question on tbe motion to strike, there is tbe further question for our decision: Does tbe complaint state facts sufficient to constitute a cause of action? We ihink so. Tbe authorities dealing with tbe sufficiency of tbe complaint also dispose of tbe question raised on tbe motion to strike.
In
Snipes v. Monds,
190 N. C., 190 (191), it is beld: “Even after answering in the trial court, or in this Court, a defendant may demur
ore ienus,
or the court may raise the question
ex mero motu
that the complaint does not state a cause of action.
Garrison v. Williams,
150 N. C., 675.”
Seawell v. Cole,
194 N. C., 546 (547);
Key v. Chair Co.,
199 N. C., 794 (796). The defendant was within his right when he demurred
ore tenus.
Plaintiff and defendant were dealers — the plaintiff purchased its cars for resale. The plaintiff was required to make a report of all sales to the defendant. Black’s Law Dictionary defines a dealer, as follows: “A dealer, in the popular, and therefore in the statutory, sense of the word, is not one who buys to keep, or makes to sell, but one who buys to sell again.”
In
Swift & Co. v. Aydlett,
192 N. C., 330 (334-5), it is held: “The doctrine of implied warranty in the sale of personal property is too well established in this jurisdiction now to be drawn in question. It should be extended rather than restricted.
Poovey v. Sugar Co.,
191 N. C., 722;
Swift v. Etheridge, supra
(190 N. C., 162). The harshness of the common law rule of
caveat emptor,
when strictly applied, makes it inconsistent with the principles upon which modern trade and commerce are conducted; the doctrine of implied warranty is more in accord with the principle that ‘honesty is the best policy,’ and that both vendor and vendee, by fair exchange of values, profit by a sale. In
Grocery Co. v. Vernoy,
167 N. C., 427, the late
Justice Brown
says: ‘It is well settled by repeated decisions that on a sale of goods by name, there is a condition implied that they shall be merchantable and salable under that name; and it is of no consequence whether the seller is the manufacturer or not, or whether the defect is hidden or might possibly be discovered by inspection.’ ”
The case of
Williams v. Chevrolet Co.,
209 N. C., 29, was an action to recover for defective materials and workmanship in an automobile sold to the plaintiff by Dixie Chevrolet Company, Inc. The first issue in this case was as follows: “Was the Chevrolet automobile, sold by Dixie Chevrolet Company, Inc., to the plaintiff, defective in material or workmanship at the time of its delivery to the plaintiff, so that it was not reasonably fit for the use for which it was intended?” In the opinion in this case, it is said: “The full significance and import of the first issue seems to have been overlooked on all hands. If the automobile purchased by the plaintiff were so defective ‘that it was not reasonably fit for the use for which it was intended,’ then the plaintiff would be entitled to recover of the seller for want of consideration.
Swift Co. v. Aydlett,
192 N. C., 330, 135 S. E., 141;
Register Co. v. Bradshaw,
174 N. C., 414, 93 S. E., 898;
DeWitt v. Berry,
134 U. S., 306; 6 R. C.
L., 684,
et seq.
Similarly, the seller would be entitled to recover over against the dealer or manufacturer, irrespective of the terms of the contract of warranty.
Ashford v. Shrader,
167 N. C., 45, 83 S. E., 29. It is believed that a covenant, however expressed, must be regarded as
nude pact,
and not binding in law, if founded solely upon considerations which the law holds altogether insufficient to create a legal obligation.
Hatchell v. Odom,
19 N. C., 302. 'If it (the article sold) be of no value to either party, it, of course, cannot be the basis of a sale’—
Ashe, J.,
in
Johnston v. Smith,
86 N. C., 498. The refusal to warrant against worthlessness would fall with the balance of the supposed contract for want of consideration.
Furniture Co. v. Mfg. Co.,
169 N. C., 41, 85 S. E.
(Hearse case).” Medicine Co. v. Davenport,
163 N. C., 294;
Grocery Co. v. Vernoy,
167 N. C., 427;
Furniture Co. v. Mfg. Co.,
169 N. C., 41;
Swift & Co. v. Etheridge,
190 N. C., 162;
Gorby v. Bridgeman
(1919), 183 W. Va., 727, 92 S. E., 88;
Olson v. Sullivan
(1925), 109 Okla., 297, 234 Pac., 634;
Little v. G. E. CanSyckle & Co.,
115 Mich., 480, 73 N. W., 554; Williston on Contracts (Revised Edition, 1937), Vol. 5, sec. 1355, p. 3801.
The underlying principle on which appellee relies in this case is well settled in Williston on Contracts,
supra,
p. 3800,
el seq.:
“As has been seen damages are recoverable for such consequences of a breach as would follow in the usual course of events. It becomes necessary to inquire when consequential damages fall in this category. . . . For example, defects in goods sold will not justify the recovery of consequential damages other than those which might be expected to flow from the defects. Where goods are sold with a warranty to a dealer it must be assumed that the dealer may resell them with a similar warranty to a subpur-chaser. Accordingly, if this is done, and the subpurchaser recovers damages from the original buyer, the latter has a
prima facie
right to recover these damages against the seller who originally sold him the goods.” Williston on Contracts,
supra,
sec. 1394, p. 3893.
The principal argument in defendant’s brief on the question of its demurrer
ore tenus
to the complaint seems to be bottomed on the premise that in the sale of personal property by one dealer to another dealer the law does not raise an implied warranty. While it is true the complaint alleges that the agreement by and between the plaintiff and defendant for the sale of ears by the defendant to the plaintiff was made with the consent and approval of Ford Motor Company; nevertheless, the mere approval of the contract by Ford Motor Company in nowise changes the legal obligations that the law imposes on every vendor and vendee, even though each one be called a dealer. As between dealers there is an implied warranty that the personal property sold is merchantable and salable and reasonably fit for the use for which the property was sold.
Ashford v. Shrader,
167 N. C., 45;
Grocery Co. v. Vernoy,
167 N. C., 427.
Tbe defendant also contends: “Tbat be was simply notified tbat a claim bad been asserted against Aldridge Motors, Inc., and tbat a suit bad been instituted against Aldridge Motors, Inc., to collect tbe claim,” and argues tbat plaintiff should be estopped to maintain tbis action. We think tbis contention cannot be sustained — this must be raised by answer, and cannot be raised on a demurrer
ore tenus
or a motion to strike. Estoppel such as tbe defendant tries to raise is a defense which can only be considered when set out in its answer. It would be an affirmative defense and the burden of proof would rest on tbe defendant.
In
Laughinghouse v. Ins. Co.,
200 N. C., 434 (436), it is written: “It is insisted tbat estoppel or waiver must be pleaded and as a rule tbis is true.
Mfg. Co. v. Assurance Co.,
110 N. C., 176;
Clegg v. R. R.,
135 N. C., 148, 154;
Modlin v. Ins. Co.,
151 N. C., 35;
Shuford v. Ins. Co.,
167 N. C., 547.”
Construing tbe complaint liberally, we think it sufficiently states a cause of action. Whatever may be tbe decisions in other states, tbe eases before set forth is tbe settled law of tbis jurisdiction and tbe majority rule.
We think tbe court below correct in striking out tbe issues as set forth in paragraph 16 of tbe complaint. What tbe jury did in tbe other case would be harmful and prejudicial in tbe trial of tbis case. In tbe present state of tbe record, we think tbe judgment of tbe court below must be
Affirmed.