Switzer v. Henking

158 F. 784, 15 L.R.A.N.S. 1151, 1908 U.S. App. LEXIS 3986
CourtCourt of Appeals for the Sixth Circuit
DecidedJanuary 22, 1908
DocketNo. 1,719
StatusPublished
Cited by1 cases

This text of 158 F. 784 (Switzer v. Henking) is published on Counsel Stack Legal Research, covering Court of Appeals for the Sixth Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Switzer v. Henking, 158 F. 784, 15 L.R.A.N.S. 1151, 1908 U.S. App. LEXIS 3986 (6th Cir. 1908).

Opinion

KNAPPEN, District Judge.

The appellants filed a claim against the estate of the bankrupt above named, alleging that claimants entered into an agreement with the bankrupt whereby claimants were to purchase from the Clendenin Coal & Coke Company all the merchantable timber on a certain tract of land described, and to pay for the same the sum of $2,250, the timber to be lumbered on joint account by claimants, the bankrupt, and a fourth person (the two latter having charge of the operations), the capital for such operation to be obtained by loan through the joint and several obligations of the four parties; that after paying claimants the $2,250 purchase price advanced, claimants together were to have one-third of the net profits, and each of the other parties a third; that the bankrupt was an experienced timber man; that “as an inducement (to claimants) to enter into said contract and purchase said timber the said bankrupt, at and before the time of the making of said contract, represented and warranted that the timber standing and growing upon the lands aforesaid would cut and manufacture a million feet or more of merchantable lumber,” when in fact said timber contained but 500,000 feet of merchantable lumber; that claimants entered into the contract referred to and purchased, and paid for the timber in sole reliance upon such representations and warranty, believing therefrom that the timber would cut the amount stated; that the title to said timber was taken in the name of one of the claimants, the manufacturing and marketing of the same being done by a corporation organized for the purpose by the four 'parties concerned; that the timber has been cut and marketed, yielding but 500,000 feet of merchantable lumber, and that claimants have thereby lost $1,000. The petition asks that the claim be referred to a competent court for liquidation, and that when so liquidated it be allowed. The claim was rejected as not provable. The appeal is from that action.

The sole question presented is whether the claim as stated is provable. If provable, it must be under subsection 4 of section 63a of the bankrupt act, which provides for proof of debts founded “upon a contract express or implied,” in connection with the provision in that section for the liquidation of unliquidated claims prior to proving and allowance. It is unnecessary to consider whether a claim arising in tort is provable under the bankrupt act, on the theory of waiver of tort or otherwise. Not only is there no charge that the alleged misrepresentations were known to the bankrupt to be untrue, but the brief of appellants’ counsel expressly disclaims any charge of fraud or bad faith, and plants the claim squarely and solely upon “an express warranty, arising out of and a part of an express contract.” The claim is for reimbursement of claimants on account of the shortage in the [786]*786timber purchased. The specific question thus presented is, does the claim state a promise, express or implied, on the part of the bankrupt to so reimburse? The bankrupt is not alleged to have in terms promised to make such reimbursement. If any such promise is to be found, it must therefore be because implied in the term “represent and warrant.” The term “represent” is not claimed, and cannot well be claimed, to imply a promise to reimburse. The discussion may therefore be limited to the meaning of the term “warrant.” Anderson’s Law Dictionary defines the term thus: “To give assurance of the existence of a fact; as, of the quality of goods sold, the validity of a title, the description and uses of insured property.” The term “warrant” has, with respect to three classes of transactions, viz., conveyances of real estate, sales of personal property, and contracts of insurance (both marine and fire), a settled and technical meaning. As applied to these classes of transactions, an agreement on the part of the war-rantor to indemnify the warrantee against damages on account of a breach of the warranty is implied in the term “warrant,” the definition of which thus includes such promise to indemnify. But this technical use of the term seems to be confined to these three classes of cases. Thus: The American & English Encyclopaedia of Law, in stating “the general scope of the subject,” says:

“The term ‘warranty’ is used in several distinct connections: in insurance law, to indicate an undertaking on the part of the insured that certain alleged facts are as he represents them to be; in the law of real property, to indicate a covenant on the part of the grantor in the conveyance to protect the title conveyed to his vendee; in the law of sales of personal property, to indicate a collateral undertaking on the part of the seller as to the quality of or title to the subject of the sale. Warranties of this last character may be either express or implied.” 30 Am. & Eng. Enc. of Law, p. 128.

The law dictionaries of Bouvier, of Anderson, and of Rapalje and Lawrence, as well as Stroud’s Judicial Dictionary, all divide their definitions on the subject of warranty, and their citations in respect thereto, under the three heads only of insurance,' sales of personal property, and conveyances of real property. The case of sales of personal property is the only one of the classes mentioned under which it can be even plausibly suggested that the claim in question comes. Were this a claim against a vendor of property upon a warranty of quantity, it may safely be conceded,' at least for the purposes of this opinion, that the law would imply an agreement to make good the damage caused by the breach, and that such claim would thus be provable in bankruptcy. But it is to be noted that the bankrupt is not charged to have been the owner or vendor of the timber in question, or even to have been in any way interested in the sale of the timber, either directly, or collaterally as surety, or guarantor for the seller. His interest in the purchase was of the same kind as that of claimants, viz., to procure a tract which could be profitably lumbered. We are cited to no authorities recognizing the extension of this doctrine of warranty beyond the three classes of cases mentioned, and we, know of no authority which holds that a good-faith “representation and war-' ranty” made by one partner or joint purchaser of .property to his co-purchasers or copartners, as inducement for the making of such co-partnership contract and purchase, as to the value or quantity of the [787]*787thing to be purchased, or the profitableness of the enterprise contemplated, comes within the rules applicable to warranties in sales of property and insurance contracts; or, in other words, which hold that an implied promise is raised on the part of one so “representing and warranting” to reimburse his associates for any loss they may suffer from the failure of such representations.

Cases of warranty relating to representations by the vendor of property are cited in appellants’ brief. They do not support the proposition necessary to the provability of the claim here in question, viz., that the term “represent and warrant,” used under the circumstances stated, implies a promise to respond in damages for failure of the representations to hold good. Had the bankrupt added to his assurance an express promise to make good to claimants any loss they might suffer through the failure of the tract to cut the quantity represented, it may be conceded that a claim founded upon such promise would be provable in bankruptcy, as it would be suable had not bankruptcy intervened. To illustrate: In Drummond v. Prestman, 12 Wheat. 515, 6 L. Ed.

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Cite This Page — Counsel Stack

Bluebook (online)
158 F. 784, 15 L.R.A.N.S. 1151, 1908 U.S. App. LEXIS 3986, Counsel Stack Legal Research, https://law.counselstack.com/opinion/switzer-v-henking-ca6-1908.