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Decisions of the Superior Courts of New South Wales, 1788-1899

Fitzgerald v. Luck (1839) 1 Legge 117; (1839) NSW Sel Cas (Dowling) 33; [1839] NSWSupC 73

sale of goods, title - market overt - reception of English law, market overt - caveat emptor

Supreme Court of New South Wales

Dowling C.J.,  Willis and Stephen JJ,  5 October 1839

Source: Sydney Herald, 9 October 1839 [1]

Fitzgerald v. Luck, -- This was an action of assumpsit tried before Mr. Justice Stephen, when a verdict was returned for the plaintiff.  The circumstances were as follow: -- About three years since, a person named Luck bought a horse at public auction from Mr. Liscombe; this horse he sold to the plaintiff, and about two years afterwards it was claimed by Mr. E. Cox, who said it had been stolen from him two or three years before, and took it away.  An action of assumpsit was brought and a verdict was returned for the plaintiff, subject to several points reserved.  A very lengthy argument now took place to show that the action was not maintainable.  The Court took time to consider the case.

 

Dowling C.J.,  Willis and Stephen JJ, 12 October 1839

Source: Sydney Herald, 18 October 1839 [2]

Saturday, October 12. -- Before the three Judges In Banco.

Fitzgerald v. Luck. -- This was an action of special assumpsit for falsely warranting the defendant's title to a horse sold and delivered by him to the plaintiff at the price of £30, with the common courts.  Plea non assumpsit.

At the trial before Mr. Justice Stephen and assessors on the 25th September, 1839, it appeared in evidence that the defendant sold the horse in question to the plaintiff in May, 1837, at the price of £30 and gave him a bought and sold note, without any warranty or affirmation of title.  The plaintiff lost the horse shortly after the sale, and in August following it being found in the possession of a Mr. Suttor of Bathurst it was claimed by a Mr. Edward Cox, as his property, having been stolen from him two years before.  Mr. Cox went before the Police Magistrate at Bathurst and swore to the horse, and the Magistrate ordered the animal to be delivered up to him, he giving a bond to produce the horse again when called upon for the purposes of justice.  Several attempts had been made by Mr. Cox to discover the thief by tracing the horse through the hands of several possessors but without success.  Two or three summonses had been issued for the purpose.  The defendant had become possessed of the horse by a sale at public auction, held by Mr. Liscombe at Bathurst, the animal had been brought into that town, by two Policemen, having been seized under the Licensing Act, being employed to carry spirits about the country for th[e] purpose of being illegally retailed.  The sale was made in the presence of six persons of whom the defendant was one, and he became the purchaser.  There was no proof of any public market or fair being held at Bathurst.  It was contended on the part of the defendant that the action was not maintainable without an express warranty or affirmation of title, or something to shew fraud or that the defendant knew that the horse was stolen.  Here the defendant had not warranted title, nor was there any knowledge on his part that the horse was stolen.  It was also contended that the sale by public auction under the direction of the Magistrates must in this Colony be regarded as a sale in Market overt and therefore without proof of fraud or scienter, the action was not maintainable.  In support of this was cited Springwell v. Allen (Aleyn [81].) and the dictum of Mr. Justice Littledale in Early v. Gurnett, (9 Barnwell and Creswell 932.)  For the plaintiff it was insisted that the defendant by assuming a property in the horse impliedly warranted a title to it, and in failure of consideration the plaintiff was entitled to recover his money back.  It was also contended that the sale by auction as proved could not be treated as a sale in Market overt.  The learned judge who heard the case suggested that upon the facts proved a verdict should be entered for the plaintiff, (which was done) with leave to enter a verdict for the defendant if the Court should be of opinion that the action was not maintainable.  Accordingly on a former day in this term a motion was made for that purpose and the case having been argued by Messrs. Kerr and Windeyer for the plaintiff and Messrs. a'Beckett and Checke for the defendant, the Court reserved the case for judgment.

The Chief Justice now delivered the judgment of the Court.  He said we are of opinion that this action is maintainable and that the verdict entered for the plaintiff must stand.  Three propositions were sought to be established on the part of the defendant.  First, that the sale by auction to the defendant under the orders of the Magistrates at Bathurst amounted in law to a sale in Market overt, so as absolutely to change the right of property in the absence of any proof of knowledge in the defendant that the horse was stolen, or any other indication of fraud.  Secondly that supposing this not to be a sale in Market overt, yet Cox could not claim the horse without prosecuting the supposed thief to conviction.  And, thirdly that at all events this action could not be maintained without an express warranty or affirmation of title in the horse or proof of a guilty knowledge that the defendant had no title in the animal.  As to the first point I think it cannot be maintained that a sale by public auction at a place not authoritatively appointed by law for publicly buying and seeling, is a Market overt.  It is not found as a fact in this case, that this sale took place in an open public market-place.  It was simply a sale by auction, but with what notoriety or advertisement previously to the sale does not appear.  But six persons seem to have been in attendance at the auction.  It has been holden by this Court that a sale in Market overt has a legal technical meaning even in this Colony.  In McLucas and another v. Hunt tried on the 7th April 1834,[3] the plaintiff bought ca[tt]le at a fair value openly and publicly in the day time in the yard of an Inn at Parramatta, of  a man named Young, (many persons being present) and re-sold them to the defendant who paid the plaintiff partly in cash and partly by his promissory note.  Before the promissory note became due it was discovered that the cattle were stolen by Young (who was afterwards brought to jus[t]ice) and the plaintiff having brought his [ac]tion [again]st the defendant upon the note, it was contended that the sale in the Inn Yard, was under the circumstances in this Colony (where we have at present no public fairs or open cattle markets in country places) tantamount to a sale in Market overt, but after solemn argument Chief Justice Forbes, Mr. Justice Burton and myself held that in this court we were bound to give a legal technical meaning to ``a sale in Market overt," and that as the right of property was not changed by such a sale as was proved, the plaintiff could not recover.  If we were to hold that a sale by public auction however notorious in a place appointed by the vendor himself, or by any other person amounted in law to a sale in Market overt, it is scarcely necessary to point out the evil consequences which might result in this Colony.  Such a mode of sale might afford a ready mode of disposing of stolen property without the knowledge of the true owners.  Such a sale has none of the well-known incidents of a sale in Market overt; one of which is that it shall be in a public open place duly appointed for that purpose by public authority, to which all persons may have recourse.  The sale here may have been by the orders of the Magistrates, and the defendant may have been an innocent purchaser, yet we have no authority for treating such a sale as a sale in Market overt.  Whenever we shall have public markets established in the country places of this Colony it is probable that the doctrine contended for may become applicable to similar transactions but in the present case there is no basis for the argument which has been addressed to us.  But with respect to this particular species of property, the sale even in Market overt would not change the property unless the directions of the statutes 2 Phillip and Mary, cap. 7, and 31st Elizabeth, cap. 12 had been observed, the requisites of which it is not now necessary to recapitulate.  Then, secondly it appears to us that Cox the true owner of this horse had done all that was incumbent on him to establish his claim to the animal.  He went before the Magistrates and swore to the property, endeavoured to trace the thief through several persons who had had possession of the animal and caused summonses to issue to such persons, and finally upon giving bond to produce the animal, when called upon, for purposes of justice, the magistrates ordered it to be delivered to him.  Until the contrary was shewn the original right of property remained unchanged.  Then as the right of property was not changed the case resolves itself into the third proposition, namely, whether the action could be maintained upon an implied without an express warranty or affirmation of title, or without proof of knowledge of infirmity of title.  No doubt both parties to this transaction as far as appears to the contrary, are equally innocent, but one of them must be the sufferer.  The defendant, in fact, held himself out as the apparent owner of the horse, and on that footing the plaintiff dealt with and paid him the purchase money.  Prima facie it would seem a principle of common justice without any authority that if a vendor assumes to be owner of a chattel having the possession of it, and parts with it to another for a valuable consideration, he impliedly guarantees to the vendee that he had a lawful right to dispose of the property in the chattel.  But there are numerous decisions establishing the principle that every vendor of personalty, impliedly warrants that he has a title enabling him to sell it.  In Blackstone's Commentaries, page 451, it is laid down that ``By the civil law an implied warranty was annexed to every sale in respect to the title of the vendor: and so too in our law a purchaser of goods and chattels may have a satisfaction from the seller if he sells them as his own and the title proves deficient without express warranty for that purpose."  This doctrine was never doubted until the dictum of Mr. Justice Littledale in Early v. Garnet, (9 Barnwell and Cresswell, 932), but upon referring to the authority on which that dictum is based, it will be found that it does not bear upon the present case.  The dictum reported is ``It has been held that where a man sells a horse as his own, when in truth it is the horse of another, the purchaser cannot maintain an action against the seller unless he can shew that the seller knew it to be the horse of the other at the time of the sale.  The scienter or fraud being the gist of the action where there is no warranty, for there the party takes upon himself the knowledge to the aid of his qualities."  For this see Springwell and Allen, 2 East. 448, but that case is very distinguishable from the present.  That was an action on the case for selling a horse as the defendant's own, when in truth it was the horse of another person, and upon not guilty pleaded, it appeared that the defendant bought the horse in Smithfield, that is in Market overt, but did not take care to have him legally tolled; but it was held that as the plaintiff could not prove that the defendant knew it to be the horse of the other person the plaintiff must be nonsuited; for the scienter or fraud is the gist of the action where there is no warranty; for ``there the party takes upon himself the knowledge of the title to his horse and his qualities."  The principle in the dictum of Mr. Justice Littledale is only an echo of that case, but omiting the important facts that the action was in tort and not assumpsit, and that the defendant had bought in Market overt.  The present is an action of assumpsit against a vendor who did not buy in Market overt, but who assumes to be the o[w]ner -- parts with the horse as owner and receives the purchase money from the plaintiff upon the faith that he is owner and as it has turned out that he really had no title to the horse, the consideration has failed, and we think there can be no doubt that the plaintiff has a right to recover back his money.  The two cases are obviously distinguishable.  To hold that this action does not lie would be a violation of the first principles of justice and would go to destroy all confidence between man and man.  The essence of a contract of this kind is its mutuality.  The defendant sells as the true owner, and the plaintiff gives his money on that footing.  If it turns out that he is not the true owner, surely the plaintiff has a right to have his money back, unless he knows the defendant's infirmity of title.  It is an implication of law, and of common sense, that if A sells to B for valuable consideration, A guarantees that B shall have undisturbed possession of the thing bought.  This is a warranty of title not of quality, which makes all the difference and it is impossible to apply the maxim caveat emptor to such a transaction.  Here the defendant never had any title to sell, although he supposed he had, for the right of property in Cox had never changed.  Had the defendant bought the horse in Market overt then the dictum of Mr. Justice Littledale might have applied, and the case of Springwell v. Allen, would have been in point, for then the plaintiff if he had brought an action in case must have shewn that the defendant knew that the horse was stolen, before he could recover ba[c]k his money.  As was well put in argument, suppose the plaintiff had not paid for the horse, but in the mean time Cox had claimed and got possession of it as rightful owner, could it be contended that in that case the defendant could have maintained an action against the plaintiff for the price.  I apprehend not.  This point was decided by this Court in McLucas v. Hunt, 7th April, 1834, which was an action upon a promissory note given by the vendee of stolen cattle to the plaintiff, an innocent vender, and before the note became due is was discovered that the cattle was stolen, and it was held that as the consideration fail[ed the action ???] there were no express authority for holding this action maintainable on an implied warranty of title in property of this description -- on grounds of public policy -- that it will have a salutary effect in repressing horse and cattle stealing by causing such property to be traced to the offenders and thus bring them to justice -- on that ground alone, if there were no other we should be of opinion that the verdict for the plaintiff ought not to be disturbed.

 

Dowling C.J., Willis and Stephen JJ, 12 October 1839

Source: Dowling, Select Cases, Vol. 6, State Records of New South Wales, 2/3464, p. 9

[A sale by Auction not in a public market or fair, is not a sale in market overt.

The owner of a horse which had been stolen from him, finding it is the possession of another person into whose hands it had strayed went before a magistrate & swore to the property, & endeavoured to trace it through different possessors to discover the thief, without success, & got possession of it again by order of the magistrate.  Held that he had done enough to entitle him to the possession. 

The vendor personal property without express warranty or of affirmation of title is liable on an implied warranty if it turns out that he has no title.]

James Fitzgerald v George Luck

This was an action of special assumpsit for falsely warranting the Defts title to a horse sold & delivered by him to the Plf as the price of 30£, with the common courts.  Plea non assumpsit.  At the trial before A. Stephen J. and assessors on the 25th Sept 1839 it appeared in evidence that the Deft sold the horse in question to the Plf. in May 1837 at the price of 30£ & gave him a bought & sold note, without any warranty or affirmation of title.  The Plf lost the horse shortly after the sale and in August following, it being found in the possession of a Mr Suttor at Bathurst it was claimed by a Mr. E. Cox, as his property, having been stolen from him two years before.  Mr Cox went before the Police Magistrate at Bathurst, & swore to the horse and the Magistrate ordered the animal to be delivered up to him, he giving bond to produce the horse again when called upon for the purposes of justice.  Several attempts had been made by Cox to discover the thief, by tracing the horse through the hands of several possessors, but without success.  Two or three summonses had been issued for this purpose.  The deft had become possessed [p.10] of the horse by sale at a public auction held by a Mr Lipscome the directions of the Magistrate having been brought into that town by two Policemen as a stolen horse.  The sale was made in the presence of six persons, of whom the Deft was one, & he became the purchaser.  There was no proof of any public market or fair being held at Bathurst.  It was contended on the part of the Deft that the action was not maintainable without an express warranty or affirmation of title or something to shew fraud, or that that [sic] the Deft knew that the horse was stolen.  Here the Deft had not warranted titled, nor was there any knowledge on his part that the horse was stolen.  It was also contended that the sale by public auction under the direction of the Magistrate must in this Colony be regarded as a sale in a market overt, and therefore without proof of fraud or seicutur [sic], the action was not maintainable.  For this was cited Springwall v Allen, Aleyn 91 & the dictum of Littledale J. in Early v Garrett 9 B.H. 932.  For the Plf it was insisted that the Deft by assuming a property in the horse he impliedly warranted title to it & on failure of consideration the Plf was entitled [p.11] to recover his money back.  It was also contended that the sale by public auction as proved could not be treated as a sale in Market overt.  The learned Judge suggested that upon the facts proved a verdict should be entered for the Plf (which was done) with leave to enter a verdict for the Deft; if the Court should be of opinion that the action was not maintainable.  Accordingly on a former day in this term a motion was made for that purpose, & the case having been argued by Mr Kerr & Mr Windeyer for the Plf & Mr Beckett & Mr Cheeke for the Deft, the Court reserved the case for judgment.

Sir James Dowling CJ.  We are of opinion that this action is maintainable, & that the verdict entered for the Plf must stand.  Three propositions were sought to be established on the part of the Deft.  First, that the sale by auction to the Deft under the orders of the Magistrates at Bathurst amounted in law to a sale in Market overt, so as absolutely to change the right of property in the absence of any proof of knowledge in the Deft that the horse was stolen, or any other indication of fraud.  Secondly, that supposing this not to be a sale in market overt, yet Cox could not claim the horse, without prosecuting the supposed thief to conviction, & thirdly that [p.12] at all counts this action could not be maintained without an express warranty or affirmation of title in the horse, or proof of a guilty knowledge that the Deft had no title to the animal.  As to the first point, I think it cannot be maintained that a sale by public auction in a place not authoritatively appointed by law for publicly buying & selling, is a sale in Market overt.  It is not found as a fact in this case, that this sale took place in an open public market place.  It was simply a sale by auction, but with what notoriety or advertisement does not appear.  But six persons previously to the sale seen to have been in attendance at the auction.  It has been holden by this court that a sale in market overt has a legal technical meaning even in this Colony.  In M'Lucas & ano v Hunt - 7 April 1834 the Plf bought cattle at a fair value openly & publicly in the day time in the yard of an Inn at Parramatta of a man named Young, (many persons being present) & resold them to the Deft who paid the Plf partly in cash, & partly by his promissory note.  Before the promissory note became due, it was discovered that the cattle were stolen [p.13] by Young (who was afterwards brought to justice) & the Plf having brought his action against the Deft, upon the note, it was contended that the sale in the Inn Yard under the circumstances, in this Colony [where we have at present no public fairs or open Cattle markets in Country places] was tantamount to a sale in market overt but, after solemn assessment, Forbes CJ. Burton J. & myself held that in this court we were bound to give a legal technical meaning to "a sale in market overt", & that as the right of property was not changed by such a sale, as proved, the Plf could not recover.-  If we were to hold that a sale by public auction, however, notorious, in a place appointed by the vendor himself or by any other person amounts in law to a sale in market overt, it is scarcely necessary to point out the evil consequences which might result in this Colony.  Such a sale has none of the well known incidents of a sale in market overt, one of which is that it shall be in a public open place duly appointed for that purpose by public authority to which all persons may have recourse.  The sale here, may have been by the order of the Magistrates and the Deft may have been an innocent purchaser, yet we have no authority [p.14] for treating such a sale as a sale in market overt.  Whenever we shall have public markets established in the country places of this Colony, it is probable that the doctrine contended for may become applicable to similar transactions, but in the present case there is no basis for the argument which has been addressed to us.  Then Secondly, it appears to us that Cox, the true owner of this horse, had done all that was incumbent on him to establish his claim to the animal.  He went before the Magistrates & swore to the property, endeavoured to trace the thief through several persons who had possession of the animal - caused summonses to issue to such persons, & finally upon giving bond to produce the animal when called upon for purposes of public justice the Magistrates ordered it to be delivered up to him.  Until the contrary was shewn, the original right of property remained unchanged.  Then as the right of property was not changed the case resolves itself into the third proposition, namely, whether this action could [p.15] be maintained upon an implied without an express warranty or affirmation of title or without proof of knowledge of infirmity of title.  No doubt both parties to this transaction as far as appears to the contrary are equally innocent, but one of them must be the sufferer.  The deft in fact held himself out as the apparent owner of the horse & on that footing the Plf dealt with and paid him the purchase money.  Prima facie it would seem a principle of common justice without any authority, - that if a vendor assumes to be owner of a chattel having the possession of it, & parts with it to another for valuable consideration he impliedly guarantees to the vendee that he had a lawful right to dispose of the property in the chattel.  But there are numerous decisions establishing the principle that every vendor of personalty, impliedly warrants that he has a title enabling him to sell it.  In 2 Bl.Com.451. it is laid down that "By the Civil law an implied warranty was annexed to every sale in respect to the title of the vendor; & so too, in our law, a purchaser of goods & chattels [p.16] may have a satisfaction from the seller if he sells them as his own and the title proves deficient, without any express warranty for that purpose.  2 Inst. 719 Cro.Sac. 474. 1 Roll Abr.90.  The case of Robinson v Aurlerton Peake N.S. 94. went upon the same principle.  This doctrine was never doubted until the dictum of Littledale J. in Early v Garret 9 B & C 932 but upon referring to the authority on which that dictum is based it will be found that it does not bear upon the present case.  The dictum reported is - "It has been held that where a man sells a horse as his own when in truth it is the horse of another, the purchaser cannot maintain an action against the seller, unless he can shew that the seller knew it to be the horse of the other at the time of the sale: the seieuter or fraud being the gist of the action where there is no warranty for there the party takes upon himself the knowledge of the title to the horse & of his qualities", for this Springwall v Atler 2 East 440 in note but that case is very distinguishable from the present.  That was an action on the case, for selling a horse as the Defts own, when in truth it was the horse of another person, & upon not guilty pleaded, it appeared that the deft bought the horse in Smithfield i.e. a market overt, but did not take care to have him legally tolled; but it was held that as the Plf could not prove that the Deft knew it to be the horse of the other person, the Plf must be nonsuited for the sureties or fraud in the gist of the action where there is [p.17] no warranty; for there the party takes upon himself the knowledge of the title to the horse & his qualities. The principle in the dictum of Littledale J. is only one echo of that case, but omitting the facts that the action was in tort & not assumpsit, & that the Deft had bought in market overt.  The present is an action of assumpsit against a vendor who did not buy in market overt, but assumes to be the owner, - parts with the horse as owner, & receives the purchase money from the Plf, upon the faith that he is owner, and as it has turned out that he really had no title to the horse, the consideration has filed, & we think there can be no doubt that the Plf has a right to recover back his money.  The two cases are obviously distinguishable.  To hold that this action does not lie would be a violation of the first principles of justice & would go to destroy all confidence between man & man.  The issues of a contract of this kind is its mutuality.  The deft sells as the true owner, & the Plf gives his money on that footing.  If it turns out that he is not the true owner, surely the Plf has a right to have his money back, unless he knows the Deft infirmity of title.  It is an implication of law, & of common sense, that if a A sells to B for valuable consideration, A guarantees that B shall have undisturbed possession of the thing bought.  This [p.18] is a warranty of title, not of quality, which makes all the difference & it is impossible to apply the maxim caveat emptor to such a transaction.  Here the deft never had any title to sell although he supposed he had, for the right of property in Cox was never changed.  Had the Deft bought the horse in market overt, there the dictum of Littledale J. in 9 B & C might have applied, & the case of Springwall v Allen would have been in point, further the Plf if he brought case must have shewn that the Deft knew that the horse was stolen before he could recover back his money.  As was well put in argument; - suppose the Plf had not paid for the horse, but in the mean time Cox had claimed & got possession of it as rightful owner, could it be contended that in that case the Deft could have maintained an action against the plf for the price?  I apprehend not.  This point was decided by this court in M'Lucas v Hunt 7th April 1834 which was an action upon a promissory note given by the vendee of stolen cattle to [p.19] the Plf an innocent vendor, & before the note became due, it was discovered that the Cattle was stolen, & it was held that as the consideration failed, the action was not maintainable.  If however there were no express authority for holding this action maintainable or an implied warranty of title in property of this description, - on grounds of public policy, our decision that it may will most probably have a salutary effect in repressing horse & cattle stealing by causing such property to be traced to the offenders & thus bringing them to justice & on that ground alone if there were no other we would be of opinion that the verdict for the Plf ought no to be disturbed.

Willis J.  Civil Law the same.- Pound sale.

Stephen J.  S.O.

 

Notes

[1]  See also the similar case of Fitzpatrick v. Luck, Sydney Herald, 27 September, 14 October 1839; Sydney Gazette, 28 September 1839; Australian, 15 October 1839.

This is one of the few cases of this period to be reported.  See (1839) 1 Legge 117, reporting only the judgment delivered on 12 October 1839 (see below).

[2] See also Australian, 15 October 1839.

[3] The reference is to McLucas v. Hunt, 1834.

Published by the Division of Law, Macquarie University