Merchants' & Mechanics' Savings Bank v. Fraze

36 N.E. 378, 9 Ind. App. 161, 1894 Ind. App. LEXIS 17
CourtIndiana Court of Appeals
DecidedFebruary 3, 1894
DocketNo. 1,028
StatusPublished
Cited by20 cases

This text of 36 N.E. 378 (Merchants' & Mechanics' Savings Bank v. Fraze) is published on Counsel Stack Legal Research, covering Indiana Court of Appeals primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Merchants' & Mechanics' Savings Bank v. Fraze, 36 N.E. 378, 9 Ind. App. 161, 1894 Ind. App. LEXIS 17 (Ind. Ct. App. 1894).

Opinion

Reinhard, J.

The appellant sued the appellees in the Randolph Circuit Court, on a promissory note alleged to have been given by the appellees to Galbraith Bros., and by them assigned, before maturity, to the appellant.

The complaint is in two paragraphs, each of which contains a copy of the note sued upon, which is as follows:

"275. Winchester, Ind., Jan. 20, 1890.
"June 1,1890, for value received, we, the undersigned, of Saratoga, county of Randolph, and State of Indiana, jointly and severally promise to pay to the order of Galbraith Bros., of Janesville, Wis., the sum of two hundred and seventy-five dollars, negotiable and payable at the Randolph County Bank of Winchester, with interest at the rate of 8 per cent, per annum from date, with ex[163]*163change and cost of collection and customary attorney’s fees, without any relief whatever from valuation and appraisement laws. And the drawers and indorsers severally waive presentment for payment, protest for nonpayment and notice thereof, and all defenses on the grounds of any extension of the time of its payment that may be given by its holders to them, or either of them.
"Benjamin E. Fraze,'
"William Fraze.”

The note was indorsed in blank "Galbraith Bros.”

There was an answer in five paragraphs, to each of which a demurrer was filed and overruled. At this point in the proceedings the venue of the cause was changed to the court below, where, at a subsequent term, the appellants filed their reply in four paragraphs.

Upon the issues thus joined, there was a jury trial and a verdict in favor of the appellees.

With their general verdict the jury also returned answers to interrogatories submitted to them. Motions for judgment, notwithstanding the verdict, and for a new trial were filed by the appellant and overruled.

Separate errors are assigned upon the ruling of the court in overruling the demurrers to the several paragraphs of the answer.

It is conceded in the brief of appellant’s counsel, that the second paragraph of the answer is sufficient. No particular objection is pointed out to the fifth paragraph.

The third and fourth paragraphs of the answer aver, that the note in suit was given to the payees in part consideration for a breeding horse; that there was an implied warranty accompanying the sale of the horse, and a breach of such warranty. It is claimed, on behalf of appellant, in argument, that neither of these paragraphs set up a valid defense:

(1) Because the note is governed by the law merchant, [164]*164and is alleged in the complaint to have been indorsed to the appellant for value, before maturity, and without knowledge of the defense now set up.

(2) That even if the note was not negotiable by the law merchant the facts averred in these answers are insufficient to show that there was an implied warranty.

Is the note negotiable by the law merchant? It is payable at the Randolph County Bank, at Winchester, and is in all respects sufficient as a note of that character unless its negotiability is destroyed by the clause, waiving “all defenses on the grounds of any extension of time of its payment that may be given by its holders” to the makers or either of them. It is sufficient for us to say upon this point, that the question has been fully and explicitly settled against the contention of the appellant. Oyler v. McMurray, 7 Ind. App. 645, 34 N. E. Rep. 1004, and authorities cited.

The note not being governed by the law merchant, the appellant took it subject to, and charged with, all the equities and defenses existing against it. Sims v. Wilson, 47 Ind. 226; Ayers v. Harshman, 66 Ind. 291; Carithers v. Stuart, 87 Ind. 424; Henry v. Gilliland, 103 Ind. 177.

Do the facts averred in these answers constitute an implied warranty? It is averred in each of these paragraphs, in substance, that the note was given in part consideration of a stallion purchased by the appellees of the payees; that the sellers were, at the time of the execution of the note, and before, engaged in importing, raising, and selling breeding horses for breeding purposes, and that the appellee, Benjamin E. Fraze, being desirous of purchasing a stallion for breeding purposes, made application, through the agent of said Galbraith Bros., to buy a stallion for that purpose, and that said Galbraith Bros., through their agent, sold to the said [165]*165Benjamin E. Fraze a stallion for breeding purposes, and that the 'note in suit was given in part consideration of the purchase price of said horse, and for no other or different consideration; that said Galbraith Bros, were informed and knew of the purpose for which said horse was wanted, and sold him to said appellee for that purpose and no other; and that said Galbraith Bros, thereby impliedly warranted said horse to be fit and suitable for breeding purposes and a reasonably sure foal-getter, and that said appellee accepted said horse with the implied warranty and belief that he was fit for the purpose of breeding and a reasonably sure foal-getter.

It was averred that the other appellee signed said note as surety for Benjamin E. Fraze. Facts are then averred from which it is made to appear that the horse was not as represented; that after a fair trial he proved to be utterly worthless as a foal-getter and for breeding purposes, and that in fact he possessed no value for any purpose.

It may be stated to be the general rule that an executed sale for a chattel does not carry with it an implied warranty, and that in the absence of fraud or misrepresentation the purchaser takes the article with all its defects. In such cases the maxim caveat emptor applies. Court v. Snyder, 2 Ind. App. 440, and authorities cited.

This rule, however, has no application in cases of ex-ecutory sales where the article contracted for is to be manufactured or produced for a specific purpose or use. In that class of cases there is an implied warranty that the article is reasonably fit or suitable for the purpose or use for which it was ordered. Bushman v. Taylor, 2 Ind. App. 12.

Says a standard law writer upon this topic: “But where a chattel is to be made or supplied to the order of the purchaser, there is an implied warranty that it is reasonably fit for the purpose for which it is ordinarily [166]*166used, or that it is fit for the special purpose intended by the buyer, if that purpose be communicated to the vendor when the order is given, as is shown by the authorities now to be reviewed.” Benjamin on Sales, section 965.

The contract here relied upon is, perhaps, strictly speaking, not an executory one, but for obvious reasons the same rule must be applied to it. The appellee, Benjamin E. Fraze, desired to purchase a stallion for breeding purposes, and so informed Galbraith Bros., through their agent. They were producers of, and dealers in, this kind of live stock, and undertook to sell Fraze a horse for breeding purposes. Here the contract was to supply an article which the seller produced and was dealing in; the article was for a particular purpose, and the implication necessarily arises that the buyer relied upon or trusted in the judgment or knowledge of the seller.

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Bluebook (online)
36 N.E. 378, 9 Ind. App. 161, 1894 Ind. App. LEXIS 17, Counsel Stack Legal Research, https://law.counselstack.com/opinion/merchants-mechanics-savings-bank-v-fraze-indctapp-1894.