One may assume that a person he finds during business hours in charge of a place of business where automobiles are sold has authority to sell them, unless he has notice or knowledge to the contrary.80

When one freely contracts with an agent, knowing the agent's authority, he may not thereafter assert that he was misled into believing that the agent had greater authority.81

One in possession of an automobile to wash it, has no implied or apparent authority to sell it.82

If a purchaser deals with a mechanic in the employ of the seller in buying a car, he is bound at his peril to inquire into the extent of his authority.83

A salesman with authority to solicit contracts of purchase for auto mobiles, has been held to have apparent authority to make representations as to matters not covered by a written warranty.84

Where one delivers a car to a second hand dealer to be sold before a specified date, he has no recourse against a buyer purchasing subsequent to such date, as he clothed the dealer with apparent authority to sell the car at the time it was sold.85

One in possession of a car for the purpose of showing it to a prospective purchaser has no implied authority to sell or trade the same. This is true, although the owner turned over to him the registration certificate without indorsing it.86

Where a salesman with authority to sell motor trucks told a prospective purchaser that he would telephone his employer for authority to make an exchange, and later told the customer that he had done so and that he had the approval of the employer, and the deal was made, it was held that the customer could rely on such statements and that the employer could not rescind the trade.87

Where the order blank signed by the purchaser recited that it was subject to approval, and that the balance of the price was to be paid on delivery of car, the salesman had no authority to sell on time and take a chattel mortgage in his own name.8

88

An agent authorized only to sell cannot mortgage.89

80 Sherman v. Auto Bankers, 164 N. Y. Supp. 698 (1917). In this case it was said: "Remembering that the transaction in the instant case was in the office of defendant during its business hours, with no one but Marks present on all occasions, plaintiff had a right to assume that he was not a stranger and an interloper, but that he had authority to act in the capacity in which he did. And as was said in Cox v. Albany Brewing Co., 56 Hun, at page 492, 10 N. Y. Supp. at page 214:

"It has been held that a jury may presume the authority in such a case from an act openly done in the usual course of business at the office of the company, without the evidence of actual knowledge on the part of the company or its directors, or of express ratification.'

81 Tockstein v. Pacific K. K. Branch, 33 Cal. App. 262, 164 Pac. 906 (1917). 82 Hopkins v. Smathers, 114 S. C. 488, 104 S. E. 30 (1920).

83 Florence Auto Co. v. McBeth, Colo., 225 Pac. 816 (1924).

84 Manes v. J. I. Case Threshing Mach. Co., Tex. Civ. App. —, 241 S. W. 757 (1922).

85 Buckley v. Matheson, 120 Wash. 212, 206 Pac. 935 (1922).

86 Royle v. Worcester Buick Co., 243 Mass. 143, 137 N. E. 531 (1922).

87 Federal Supply Co. v. Wichita Sales & S. Co., Tex. Civ. App. —, 232 S. W. 879 (1921).

88 National Discount Co. v. Hooper, 141 Md. 284, 118 Atl. 605 (1922). 89 Evans & Son v. Pendarvis, S. C., 117 S. E. 716 (1923).

§1513. Automobile in possession of seller damaged after sale. The defendant agreed to purchase an automobile from the plaintiff for $700, and at the time of signing a contract to this effect $10 was paid in cash, and the contract recited that the balance was to be paid "when delivery of the car is tendered." Thereafter $490 was paid, leaving a balance of $200, for which suit was brought a few weeks later. After the total of $500 was paid, and while the car was still in the possession of plaintiff at its garage, a demonstrator in the employ of plaintiff took defendant's brother, who had acted for defendant in the matter of purchasing the car, for a ride in the car, during which the car was badly damaged. A few days later defendant called at the garage to pay the balance due on the car, and get possession of it, but when he was informed that he would have to take the car in its damaged condition, or pay for having it repaired, he declined to accept the car. It appeared that, as a part of the trade, the plaintiff was to put a new spring and a new lamp on the car, and perhaps, some other fixtures, and that none of these things had been done at the time of the accident.

There was no doubt but that there was a sale, and it was contended by the plaintiff that the car, at the time it was damaged, was the property of defendant, it having been sold and delivered to him before that time. The defense was that the title to the car had not passed to defendant, and was not to pass until it was delivered, and delivery was not to take place until the balance of $200 was paid, which sum, at the time of the accident, had not been paid, and on that account the plaintiff retained possession of the car.

It also appeared that at the time of the accident the automobile had never been out of the possession of the plaintiff; that it had been used by defendant or his brother on two occasions before the accident, on each of which it was operated by and in the control of a demonstrator employed by the plaintiff; that it was being operated by and was in the control of this demonstrator at the time of the accident; that when the machine was being taken out of the garage on the night of the accident, plaintiff's manager told the demonstrator not to take it out, as it had not been paid for. The jury were instructed that if the car had not been delivered, prior to the accident, to the defendant or his agent, they should find in his favor. There was a verdict for defendant, which was sustained on appeal.

The court in part said: "There might be a sale of personal property in which the title would pass from the seller to the buyer without delivery. There are also cases involving the sale of personal property in which delivery is essential to pass the title from the seller to the buyer, but whether the title passes by the sale or by the delivery is to be determined by the facts of each particular transaction."

On the question of delivery the court held, "That, in law, there is a delivery of property by a seller to a purchaser when the seller places the property at the disposal of the purchaser and relinquishes to the purchaser the control and right of control of, or dominion over, the property and the purchaser takes, or accepts, the control and right

of control, or dominion, over the property;" and that "acceptance need not be by words, but may be by act or acts of the purchaser." 90

§ 1514. Purchasing incumbered automobile. In many jurisdictions an incumbrance on an automobile is not effectual against purchasers without notice, or creditors, unless recorded in the county of the residence of the mortgagor, where the mortgagor retains possession.91 Where automobiles were sold by a manufacturer to a dealer, the former taking back a chattel mortgage thereon, and it was understood that the cars would be exposed for sale by the dealer in the regular course of his business, it was held that the mortgage was void as to a purchaser in regular course of business under a statute providing that, "Every mortgage, deed of trust or other form of lien attempted to be given by the owner of any stock of goods, wares or merchandise daily exposed to sale, in parcels, in the regular course of the business of such merchandise, and contemplating a continuance of the possession of said goods and control of said business, by sale of said goods by said owner, shall be deemed fraudulent and void. " 92

Where one agreed to purchase an automobile for another and permit him to pay for it out of his earnings in operating the same, the machine to belong to the former until paid for, and the latter took title in his own name, instead of the name of the other, as agreed, and then mortgaged the machine to a third person, it was held that the person so advancing the money could assert his ownership against the mortgage. It was also declared in this case that one in possession of property under a conditional sale contract, by attempting to sell or create a lien thereon, cannot impair the rights or interest of the owner.93

§ 1515. Statutory lien on car for injuries inflicted. Where a statute gives a lien on an automobile which by negligent operation inflicts personal injury, and provides for attachment of the car, the same is notice to all the world, and everyone takes such car subject to such lien, unless he comes within the exceptions provided in the statute. And under such statute, the machine may be attached and made liable to such lien although it was negligently operated by a borrower when the injury was done.1

Such a lien may be enforced against an automobile in the hands of an innocent purchaser.2

§ 1516. Possession as evidence of ownership. Where one had possession of an automobile for the purpose of selling it, being instructed

90 Kentucky Motor Car Co. v. Darenkamp, 162 Ky. 219, 172 S. W. 524 (1915).

91 Dixon v. Tyree, 92 Kan. 137, 139 Pac. 1026 (1914); Burbank v. Bobbitt, 157 Ky. 524, 163 S. W. 457 (1914).

92 J. I. Case Thresh. Mach. Co. v. Lipper, Tex. Civ. App. —, 181 S. W.

236 (1916).

93 Greene v. Carmichael, 24 Cal. App. 27, 140 Pac. 45 (1914).

1 Merchants Bank v. Brigman, 106 S. C. 362, 91 S. E. 332 (1917).

2 Tate v. Brazier, 115 S. C. 283, 105 S. E. 413 (1920).

to sell it so as to net the owner $350, and he sold it for the sum of $23, it was held that the price for which it was sold was sufficient to put the buyer on notice as to the ownership of the car, and that mere possession of the seller was not sufficient to pass a good title to the buyer.3

§ 1517. Failure to deliver automobile on time. If one fails to deliver automobiles within the time required by a contract of sale of such automobiles, he is liable in damages for the delay, unless such breach of contract was waived by the purchaser.

Thus, where one ordered motors and transmission to be delivered at a certain time and they were not delivered until later, it was held that the buyer could recover for damages caused by the delay in delivery.5

A contract of sale of an automobile to be delivered "on or about out of first shipment of" the model, must be performed by the seller making delivery within a reasonable time.6

Delivery of an automobile more than two months after Nov. 1, 1912, was not in compliance with an agreement to deliver it "on or near about" Nov. 1, 1912.7

An inquiry by the purchaser of an automobile concerning possible delivery, made after the date set for delivery, constituted a waiver of right of delivery on or before the time agreed upon.

The acceptance of such goods after the time specified for their delivery is not a waiver of a claim for damages for the delay, unless the acceptance is made under circumstances manifesting an intention to waive damages.9

8 Stultz v. Miltenburger, 176 Ind. 561, 96 N. E. 581 (1911).

4 Jones v. United States, 96 U. S. 24, 24 L. ed. 644.

5 Buick Motor Co. v. Reid Mfg. Co., 150 Mich. 118, 113 N. W. 591.

6"In our opinion, under the terms of the contract, it should be said that the obligation of the vendors was to have delivery made of the car within a reasonable time. What would amount to a reasonable time for shipment from the East and receipt in Los Angeles would depend upon conditions within the knowledge of the vendors, and for that reason we think it was proper for the court to receive testimony touching the representations and statements made by the vendors on the subject of delivery. While in the plaintiff's testimony conversations shown between the plaintiff and one of the vendors, which conversations occurred subsequent to the making of the contract, those conversations were not relied upon by the trial judge as fixing a new and definite date upon which the automobile was agreed to be delivered, but only as showing the con

were

tinuing conditions as to the nondelivery and the explanations made by the vendors in attempted excuse of the same, all of which was competent as going to the question as to whether at the time the plaintiff gave notice of rescission there had been an unreasonable delay on the part of the vendors in the delivery of the automobile. The court directly determined that the delay was unreasonable, and, upon the evidence shown, we think that that conclusion was justified. Boland V. Smith, 47 Cal. App. 404, 190 Pac. 825 (1920).

7 Alamo Auto Co. v. Schmidt, Tex. Civ. App. 211 S. W. 804 (1919).

8 Griggs v. Renault Selling Branch, 179 App. Div. 845, 167 N. Y. Supp. 355 (1917).

9 Ramsey v. Tully, 12 Ill. App. 463; Buick Motor Co. v. Reid Mfg. Co., 150 Mich. 118, 113 N. W. 591; Spiers v. Halstead, 74 N. C. 620.

Nor does the giving of a note for the purchase price necessarily operate as such waiver. Industrial Works v. Mitchell, 114 Mich. 29, 72 N. W. 25.

And the buyer has the right to require the seller to deliver the goods contracted for after the time for delivery has passed, and by exercising his rights and insisting on the delivery of the goods after such time, the buyer does not waive his rights to whatever damages he may have suffered by the delay.10

§ 1518. Remedy of seller or buyer when other refuses to carry out sale contract. Upon the refusal of the buyer of an automobile to accept it from the seller, the latter has the choice of three remedies: First, the seller may, if the contract has been so far performed by him that the property is ready for delivery before he has notice of the buyer's intention to decline acceptance, treat the machine as belonging to the buyer, hold it after tender, subject to the latter's order, and recover the full agreed price; second, the seller may sell the machine for the buyer's account as his agent, taking the requisite steps to protect the latter's interest and obtain the best price available, and then recover the difference between the proceeds of the sale and the agreed price; third, the seller may treat the sale as ended by the buyer's default or refusal to accept and treat the machine as his, and recover the actual loss sustained, which is ordinarily the difference between the agreed price and the market price.11

By pursuing one of these remedies the seller waives the others.12 If the seller chooses the first of these remedies, it is incumbent on him to tender to the buyer the type of automobile contracted for, and, upon refusal of the buyer to accept, it is further incumbent on him to hold, not necessarily the particular automobile of the type for the use of the buyer, but at least an automobile of like kind, so as to be ready upon the payment of the purchase price to deliver same to the buyer. The seller must keep the machine in his own possession or in someone else's possession where it can be obtained for delivery, as, for instance, in a storage warehouse. It is not sufficient that the seller has assurance from the manufacturer that automobiles of the type in question can be supplied within 30 days after order for them.13 Where one gave an order for an automobile to be obtained from the factory in Michigan and delivered at a place in Florida, and before the machine left the factory notified the agent to cancel the order, it was the agent's duty to keep the damages as small as he could, reasonably, and he could not proceed and have the car shipped to Florida, sell it there, and then recover from the person giving the order the difference between the price the latter agreed to pay and the amount actually received for it. "For aught that appears," said the court, "the prompt cancellation of the order at the time the agent was notified would have entailed but nominal loss to either party, and we have no proper basis on this record for allowing a substantial recovery.

14

10 Buick Motor Co. v. Reid Mfg. Co., 150 Mich. 118, 113 N. W. 591.

11 Weber M. C. Co. v. Roberts, 203 Mo. App. 509, 219 S. W. 994 (1920); Ridden v. Lynch, 133 N. Y. Supp. 468 (1912); Schuenemann V. Wollaeger Co., 170 Wis. 616, 176 N. W. 59 (1920).

12 Schuenemann v. Wollaeger Co., 170 Wis. 616, 176 N. W. 59 (1920). 13 Weber M. C. Co. v. Roberts, 203 Mo. App. 509, 219 S. W. 994 (1920). 14 Faulk v. Richardson, 63 Fla. 135, 57 So. 666 (1912).