Habenicht v. Lissak (77 Cal. 139, 1888)

Foote, C.

This is an action for a breach of contract upon sale of a large number of bags. They were sold to the defendant by Hughes & Co., and were to be delivered by Rogers, Meyer, & Co., who held them in pledge for a debt due to them from Hughes & Co. The claim of Hughes & Co. was assigned by them to the plaintiff.

The defendant did not pay for the bags as he agreed to do, and they were sold at auction by the firm who held them in pledge. The price they brought was credited upon the debt which Hughes & Co. owed to Rogers, Meyer, & Co., and became a payment pro tcmto to Hughes & Co., and this suit was instituted to recover from the defendant the difference between the price he had agreed to pay Hughes & Co. for the bags, less the amount he had paid them, and the amount of money which they brought at auction.

The action appears to have been brought under section 3311 of the Civil Code, which reacls as follows:—

“The detriment caused by the breach of a buyer’s agreement to accept and pay for personal property, the title to which is not vested in him, is deemed to be:—

“1. If the property has been resold, pursuant to section 3049, the excess, if any, of the amount due from the buyer, under the contract over the net proceeds of the resale.”

In this instance the- property pledged was sold by the pledgee to reimburse himself for the purchase price, and the claim of Hughes & Co. was assigned in writing to the plaintiff, Habenicht.

All the steps necessary under .the statutes to make a legal and fair sale of the property held in pledge were duly taken, and no unfairness appears in the sale.

The plaintiff had judgment as prayed for, and from that, and an order refusing a new trial, the defendant has appealed.

The facts of the ease seem to be, that the bags were originally sold by Rogers, Meyer, & Co. to Hughes & Co., under a certain written contract. They did not pay for them at once, but did inspect, recei\re, and accept them in such a way as to make the delivery to them valid, and they then allowed the bags to remain in pledge with Rogers, Meyer, & Co., to be given up to them by the latter, as they should pay for them. Thereafter Hughes & Co. did make payments to Rogers, Meyer, & Co., on account of their debt due for the bags, Hughes & Co. being the owners of the bags, although they had transferred their possession to Rogers, Meyer, & Co. in pledge.

There is no question but that the title to the bags passed to Hughes & Co., for Mr. Hughes, as a witness, says he “received every consignment of these bags as they arrived, and accepted them. These bags came on a dozen vessels. As each lot arrived, I inspected and ac-accepted it. I examined the bags on' the wharf as they came out of the ship.” (Civ. Code, sec. 1141.)

When the title to the bags passed to Hughes & Co., and they had pledged them to Rogers, Meyer, & Co., the defendant, Lissak, with full notice and knowledge that the bags had been thus pledged, agreed to buy them from Hughes & Co., and to pay the price agreed upon into the hands of Rogers, Meyer, & Co., for the account of Hughes & Co., upon the delivery to him of the bags as he thus paid for them.

The particular bags which are involved in this controversy were not paid for or delivered to the defendant, and he never had title thereto. But it appears to us from the evidence that he could have had possession of them if he had paid for them as he agreed to do. His main defense seems to be that under the warranty, express or implied, the bags sold to him were to be merchantable as “return bags,” and that they were not fit for the purpose as warranted. The jury passed upon that question as submitted to them upon the evidence, and we are not prepared to say that they were wrong.

The complaint, in our opinion, states facts sufficient for a cause of action for the breach of a buyer's agreement where the title to personal property has not passed. Nor do we concur in the view of defendant’s counsel that the language of the complaint shows that Rogers, Meyer, & Co. were the equitable assignees of the claim due from the defendant to Hughes & Co.

The complaint states that Rogers, Meyer, & Co. were the pledgees of the goods of Hughes & Co., which they sold to the defendant with his knowledge that they were so pledged, and that he agreed to pay the money he owed for them to Rogers, Meyer, & Co., in order that it might be applied to the payment of the price for the goods which Hughes