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Ownership and Transfer of Horses and Interests in Horses, including Warranty and Fraud.
Note that there are several articles available about these subjects in the Publications section.
Alpert v. Thomas, 643 F. Supp. 1406 (D. Vt. 1986).
An Arabian horse buyer claimed that prior to purchase of the horse, which was acquired as a stallion prospect on an installment basis, she was given an oral guarantee that the horse would breed sound. The purchase agreement provided that the horse was sold "as is," but the agreement contained no "merger clause." Several months after the purchase, when the mares failed to get in foal the buyer determined that the horse could not breed. Buyer was sued when she refused to make further payments on the purchase price. The trial court first ruled that issues concerning the sale of a stallion were governed by the UCC and that revocation of acceptance was effective despite the "as is" contract. The court noted that because the seller knew the horse was being bought for breeding, custom and usage in the horse trade is that the implied warranty of merchantability includes a warranty that the stallion is fertile and capable of getting a mare in foal. The court rejected the claim of the selling farm that it was not a "merchant."
Appleby v. Hendrix, 673 S.W.3d 295 (Tex. App. 9 Dist. 1984).
Discussions of the suitability of a horse for breeding as an express warranty.
Arine v. McAmis, 603 P.2d 1130 (Ok. 1979).
Mare sold at auction was announced to have been "in foal." Buyer discovered mare was not in foal, and struck a new deal with the auction company for a reduced price. After transporting the horse to California, buyer discovered that the mare was infertile, and rescinded the sale. The court held that the evidence supported rescission and that an award of attorneys fees in the buyer's favor was justified under an Oklahoma statute allowing attorneys fees for an action on an account or note.
Baram v. Farugia, 606 F.2d 42 (1979).
"In this age of space travel and computer technology, a horse named Foxey Toni requires us to return to a more tranquil era and examine elements of trover and conversion under Pennsylvania common law. We must decide in this diversity case whether payment of the horse's full value to the owner by one converter precludes recovery by the original power in a conversion action against persons who received possession from the original converter. We hold that recovery from the first converter precludes further recovery of compensatory or punitive damages for subsequent conversions."
Bradshaw v. Thompson, 454 F.2d 75 (6th Cir. 1972).
Horse owner sued his agents for breach of fiduciary duty for failure to sell horses at highest and best prices, and demanded an accounting. The trial court sent the case to the jury, and the owner appealed after being dissatisfied with the verdict. The appeals court held that even though an equitable claim was made, the case was properly tried to a jury.
The owner also sued one agent for signing over registration papers to a buyer at auction. The appeals court held that the sale was complete at the fall of the hammer, and that transfer of title to the horse was not tied to transfer of registration papers.
Brodsky v. Nerud, 414 N.Y.S.2d 38, 25 U.C.C. Rep Serv. 1266 (App. Div. 1979).
Claimer of racehorse sued for rescission after determining the horse was a gelding instead of a colt as stated in the racing program. The racing association asserted that it had corrected the mistake by a public address. The trial court dismissed the case at the close of plaintiff's evidence. The appeals court reversed, holding that the failure of the racing association to correctly list the sex of the horse could constitute negligence, and the program constituted an express warranty by the owner (subject to the owner's defense that he conveyed the correct information to the racing association). The appeals court also reversed the trial court's determination that the claimer had not rejected the horse within a reasonable time, distinguishing Myron v. Yonkers Raceway.
Butler v. Shipshewana Auction, Inc., 697 N.E.2d 1285 (Ind. App. 1998).
An auction company is exonerated from fraud because
"[t]he evidence presented to the trial court revealed that it is not within Shipshewana Auction's custom to observe or inspect livestock or horses brought to auction prior to their sale."
Calloway v. Manion, 572 F.2d 1033 (5th Cir. 1978).
Buyer acquired a mare, as a show horse, in exchange for another horse. Prior to the exchange, buyer noticed swelling in the hock, but was supposedly told by the seller that it "was not a problem." Buyer and seller agreed, though, that if the horse was unsuitable, the remedy would be return of the horse for credit to acquire another horse. After the exchange, buyer determined that the mare had an incipient ovary condition that caused her to kick her hock. Buyer sought rescission and damages based on breach of warranty and misrepresentation. Buyer was unable to prevail on the breach of warranty claim because the contractual remedy was the exclusive remedy. Although buyer prevailed on his fraud claim and could recover damages, he was not entitled to rescission because he exercised dominion over the mare and because he bred her and she got in foal.
Chernick v. Caseres, 759 S.W.2d 832, 7 UCC Rep. Serv. 2d 781 (Ky. App. 1988).
Horse buyer attempted to revoke acceptance of horse, three years after purchase, after it was discovered in subsequent litigation brought by subsequent buyer (see Chernick v. Fasig-Tipton, below) that the horse was unfit for breeding. The court of appeals affirmed the trial court's determination that the attempted revocation was ineffective because it was untimely and because his attempt to breed the horse after learning of the defect was an act of dominion over the horse.
Chernick v. Fasig-Tipton, 703 S.W.2d 885 (Ky. App. 1986).
Thoroughbred horse sold by auction company at a breeding stock sale was determined by the buyer to be unfit for breeding and rejected the horse. The trial court determined that the auction company was negligent because it failed to take reasonable care to ensure the catalog information was accurate, and determined that the consignor had committed fraud in not disclosing that the horse had previously aborted a foal. It awarded return of the sales proceeds and damages against the sales company, and punitive damages against the consignor. The court of appeals upheld the judgments against the sales company and consignor, but reversed the award of damages against the sales company because no claim for damages was lodged against the sales company. It suggested that the sales company has a high duty to buyers, and that punitive damages will be given in the appropriate case.
Cohen v. North Ridge Farms, Inc., 712 F. Supp. 1265 (E.D. Ky. 1989).
Purchaser of a yearling thoroughbred at auction determined after the sale that the horse had a displaced soft palate. The purchaser attempted to rescind the purchase and sued for return of his purchase price. The district court held that the disclaimers of warranty in the sales catalog were effective to prevent rescission based on failure of consideration and mutual mistake. The court further dismissed a claim based on misrepresentation because the consignor was under no duty to inspect, discover or disclose defects in the horse. The court also held that the auctioneer had no fiduciary duty to the purchaser to inspect or require its consignors to inspect horses for defects.
Coleman v. Neel, 590 So. 2d 1278 (La. 1991).
Buyer of horse for breeding purposes determined that the horse was unsound for breeding after only one mare got in foal. Buyer's action for rescission (redhibition under Louisiana law) resulted in a judgment for the seller. The court of appeals affirmed, holding that the buyer failed to prove that the horse was unsound at the time of the sale. The buyer's claim that the horse had a defect of wind was also rejected because the trial court found that laryngieal hemiplegia did not constitute a wind defect, and that any defect could have been discovered by the buyer.
Courtin v. Sharp, 280 F.2d 345 (5th Cir. 1960).
Buyer agreed to purchase a thoroughbred from a seller. Before a written contract could be executed and while the horse was still in the possession of the seller, the horse was accidentally killed. The court (construing Kentucky law) held that the risk of loss transferred to the buyer upon the "completed verbal sale," and the buyer was thus liable for the purchase price.
Comment: This pre-UCC case is discussed in J. White and R. Summers, 1 UNIFORM COMMERCIAL CODE (4th ed.) sec 5-3. White and Summers assert that the case should be decided differently under the UCC, and that the seller should never be considered a bailee for purposes of transfer of risk of loss under section 2-509(2).
Fasig-Tipton Co. v. Jaffe, 449 N.Y.S. 268, 269 (App. Div. 1982).
Auction company sued buyer of horses for deficit from resale of horses after buyer defaulted. Summary judgment was entered against buyer despite buyer's claim that auction company misrepresented that a profit would be made from the purchases. Appeals court reversed, holding that the defense presented a trial issue.
Forbis v. Reilly, 684 F. Supp. 1317 (W.D. Pa. 1988).
Buyer of two Arabians claimed that seller committed fraudulent misrepresentation by asserting that mare was capable of producing a foal and that colt was one of the finest ever bred by the seller. It was also allegedly represented that the colt's "human eye" would "fill in." Summary judgment was granted for the seller. With regard to the mare, the court noted that there was no indication that the statement was untrue when made. With regard to the colt, the court stated that no reasonable reliance was placed on the representations, and that the statements about the quality of the horses was mere puffing. The court noted that the buyer was experienced with horses.
Fuller v. Fasig-Tipton Co., 587 F.2d 103 (2d Cir. 1978).
Auction company deducted from sales proceeds sums to repay debt owed to auction company by seller's consigning agent. The appellate court reversed a summary judgment granted to the auction company, holding that one dealing with an agent for a disclosed principal may not set off the agent's indebtedness against amounts owed the principal. Agreement of principal to loan money to agent was held not to have relieved auctioneer of its obligation to pay principal.
Gaillard v. Hancock, 111 F. 3d 138 (9th Cir. 1997).
Four co-owners of the racehorse SUNDAY SILENCE entered into an agreement whereby they agreed to syndicate the horse as a stallion at the end of his racing career, and that the parties would share in all expenses and proceeds relating to the horse. One co-owner, Arthur Hancock, was to serve as syndicate manager and was to receive four breeding rights as such. One of the owners, Zenya Yoshida, bought the interests of the other three prior to a syndicate being formed. However, he paid a substantial sum to Hancock to buy his potential breeding rights granted as syndicate manager.
One of the other co-owners sued, contending that the extra purchase price to Hancock was merely a way of paying Hancock more than the others, and the extra funds should have been shared with all co-owners as proceeds relating to the horse. The district court granted summary judgment to Hancock and the Ninth Circuit affirmed on the basis that Yoshida had the right to buy Hancock's breeding rights because they were separate from Hancock's interest in the horse, even though they were contingent.
Green v. McGrath, 662 F.Supp. 337 (E.D. Ky. 1986).
A case which wanders all over the map in trying to apply general principles of law to a situation where a stallion had disappeared before a breeding contract which was not quite "live foal" and not quite "no guarantee" was performed.
Harry F. Guggenheim v. Commissioner, 46 T.C. 559 (1966).
Purchaser of racehorse later syndicated racehorse as a stallion, selling several shares. Gain on sale of shares treated as capital gain, but contested by IRS. Tax Court ruled that stallion shares constituted interests in the stallion and not mere breeding rights, and thus gain could be treated as capital gain.
Hayes v. Equine Equities, Inc., 480 N.W.2d 178, 18 UCC Rep. Serv. 2d 452 (Neb 1992).
Buyer, who purchased horse upon seller's false representations concerning the cost of the horse, rescinded sale after horse he purchased foundered. Seller claimed that the rescission, which occurred 21 months after the sale, was untimely. The court stated that the delay was excused by the continued reassurances of the seller and the difficulty in discovery of the misrepresentation. The court also held that the buyer was justified in relying on the representations.
Highland Stud International, et al. v. Baffert, et al., Civil Action No. 00-261-JMH (E.D.Ky. 2002).
The former purchaser of the "breeding rights" to Kentucky Derby winner REAL QUIET purchased his "racing qualities" in 2000. The 2000 agreement provided that the horse was sold "as is" and with no representation or warranties concerning the physical condition of the colt. The purchaser later sued the seller, trainer, and a veterinarian asserting various claims, including breach of contract and fraud, after REAL QUIET manifested a tendon injury after his arrival in Kentucky. The Court held that the purchaser could not assert "tort claims" such as fraud, under the "economic loss doctrine." That doctrine provides that in sales governed by the UCC and involving purely economic losses as opposed to personal injuries, a party is bound by the contract and generally is limited to only contract claims. The Court also held that there was no breach of contract. Therefore, the purchaser's claims were dismissed.
Hoffmann v. Fasig-Titpton New York, Inc., 1991 WL 5867 (S.D.N.Y. 1991).
Disgruntled purchaser of horse at auction sought to stay arbitration proceeding brought by auction company by filing a claim in New York state court. The defendant auction company removed the case to federal court on the basis of diversity jurisdiction, even though it was a New York corporation. The federal court remanded the action to state court because the removal was improper, holding that the auction company was not a mere nominal party for purposes of diversity jurisdiction.
Hughes v. Robertson, 1 TB Mon 215 (Ky. 1823).
Seller sold buyer a racehorse seller knew to be blind, but was not discovered by buyer in a pre-purchase inspection. The court held that an action at law for fraud was available to the buyer, because the seller had a duty to reveal the whole truth about the horse's defect.
In re Blankinship-Cooper, Inc., 43 B.R. 231, 39 UCC Rep. Serv. 1008 (Bkrtcy N.D. Tex. 1984).
Bank had perfected security interest in stallion and in debtor's "general intangibles," and bank retained possession of the registration papers. Priority dispute arose with respect to the breeding rights, where a prior purchase money security interest existed on the horse. Bankruptcy court held that the breeding rights were not general intangibles and therefore the prior security interest prevailed. Moreover, possession of the registration papers gave no priority to the bank.
In re Bob Schwermer & Assoc., 27 B.R. 304 (Bkrcy N.D. Ill. 1983).
Bank filed financing statement with Illinois Secretary of State to perfect security interest in race horse. Held that security interest was properly perfected because race horse was not a farm product for purpose of perfection. Movement of race-horse following filing of financing statement, held not to defeat perfection.
In re Calumet Farm, Inc. (First City, Texas-Houston v. Due Process Stables), No. 92-268 (E.D. Ky. 1993).
Priority dispute arose between secured lender and transferee of breeding rights to stallion. Although the district court held that the immediate dispute was moot as to the breeding rights directly in issue, the district court gave guidance to the bankruptcy court as to resolution of the priority dispute as to future breeding rights. The court stated that a purchaser for value of a season from a shareholder takes property severed from the shareholder's interest in the stallion, and thus does not bear the risk of the originating shareholder's bankruptcy.
In re Wildlife Center, Inc., 102 B.R. 321 (Bkrcy E.D.N.Y. 1989).
Jockey Club registration papers are separate property than the horse itself. Possession of the papers perfected the auctioneer's security interest in them. Turnover order denied.
Johnson v. Waugh, 672 N.Y. Supp. 2d 148 (A. D. 3 Dept. 1998).
A joint venture in a horse is declared, notwithstanding the fact that many of the owners were not on the horse's papers.
J.P. Morgan Delaware v. Onyx Arabians II, Ltd., 825 F. Supp. 146 (W.D. Ky. 1993).
Holder of promissory notes for purchase of stallion share sued when buyers defaulted. Buyers claimed that the purchase agreements had been breached by the sellers, and holder of notes was subject to that defense. The district court ruled that whether the holder had knowledge of claims and defenses so as to be subject to them is a question of fact precluding summary judgment.
Keck v. Wacker, 413 F. Supp. 1377 (E.D. Ky. 1976).
Mare was listed in the auction sale catalog as "barren," but had, in fact, aborted a foal. Purchasing bidder, after the horse aborted a subsequent foal, revoked his acceptance of the mare, and the consigning seller sued for the purchase price. The trial court found that a material, although innocent, misrepresentation occurred, and that the revocation was effective. An award of punitive damages and attorneys fees was denied.
Keeneland Association v. Eamer, 830 F. Supp. 974 (E.D. Ky. 1993).
Purchaser of thoroughbred weanling from auction sale company attempted to rescind sale because after the sale the weanling was determined to have O.C.D. lesions in the ankles. The district court granted summary judgment in favor of the sales company and consignor. The court ruled that the auction company had no fiduciary duty to the purchaser, and that the disclaimers of warranty in the sales catalog were binding. The court ruled that the fraud claims were not valid because there was no evidence in the record that the consignor misrepresented the weanling's condition.
Keller v. Merrick, 955 P.2d 876 (Wyo. 1998).
The application of the Uniform Commercial Code to "representations concerning the gentleness of the horse." Purchasers bought horse for their son from a horse dealer, who had represented that the horse was gentle and suitable for an inexperienced rider. The son mounted the horse, and was injured when the horse galloped away. The seller took the horse back and refunded the purchase price, but the buyers sued for the injuries to their son. The trial court granted summary judgment to the buyers based on the Wyoming Recreation Safety Act. The appeals court reversed, holding that a warranty claim upon the sale of a horse was not governed by the Act, and that the sellers had a viable claim for breach of warranty under the UCC.
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Kwik-Lok Corp. v. Pulse, 702 P.2d 1226 (Wash. App. 1985).
Mr. Pulse, co-owner of a stallion, conveyed his interest in the stallion to Kwik-Lock. By separate letter, Kwik-Lock conveyed two free breedings a year to the stallion to Mr. Pulse. Kwik-Lock terminated Mr. Pulse's free breedings after several years. The trial court ruled that the letter was enforceable, and granted damages to Mr. Pulse. In holding that the grant was enforceable despite the lack of a time limit, the appeals court held that grant of breeding rights in a stallion was not a sale of goods to which Article 2 of the Uniform Commercial Code applies. The appeals court held that parol evidence was relevant to determination of duration of the breeding rights.
Lane v. Spragg, 481 S.E.2d 592 (Ga. App. 1997).
Horse purchaser sued farm owner's father for misrepresentation in connection with the sale, under the theory that father was a partner in the farm business. Appeals court upheld summary judgment for father, based on father's affidavit that he did not share in profits and losses.
Leal v. Holtvogt, 702 N.E.2d 1246 (Ohio App. 2 Dist. 1998).
This case is an extraordinarily interesting one. There was a defect in an Arabian stallion sold by an expert to a novice, who had relied on expert's advice on what horse to buy, establishing a "confidential" but not a "fiduciary" relationship. The Court rejected claims of (a) negligent misrepresentation (because there was no affirmative representation) and (b) breach of express warranty (because the seller's statements were "puffing"), but sustained plaintiff's claims for (a) breach of the implied warranty of fitness for a particular purpose, and (b) actual fraud. Each of the latter claims was based on silence as to the defect -- because of the confidence reposed by the buyer and the seller. The only frequently-cited horse case which the Court relies on is Slyman v. Pickwick Farms, 15 Ohio App. 3d 25 (1984), but this case should become a leading case in the equine industry.
Lee v. Cox, 18 UCC Rep. Serv. 807 (M.D. Tenn. 1976).
Seller of horses was to retain registration papers until horses were paid for in full. Buyer filed bankruptcy and the bankruptcy judge ordered the seller to turn over the registration papers, so the horses could be sold. On appeal, the district court held that the seller's possession of the registration papers perfected a security interest in them, and therefore the bankruptcy court had no authority to require the papers to be turned over to the debtor's estate. Moreover, under the contract of sale, the seller retained legal title to the papers.
McClure v. Duggan, 647 F. Supp. 211 (N.D. Tex. 1987).
Statute of Frauds; Fraud
Plaintiff alleged breach of an oral agreement to sell him a horse. Trial court ruled that the oral agreement was unenforceable under the statute of frauds, but the plaintiff could proceed under a fraud claim for misrepresentation allegedly made to induce him not to buy the horse.
Miron v. Yonkers Raceway, Inc., 400 F.2d 112, 5 UCC Rep Serv 673 (2d Cir. 1968).
Buyer purchased a racehorse from an auction at Yonkers, which horse was discovered the day after the sale to have had a fractured bone in its leg. Yonkers and the consignor refused to take the horse back. The consignor sued buyer and Yonkers for the purchase price, and the buyer counterclaimed. The court held that because the buyer passed up a reasonable opportunity to examine the horse at the place of sale, as is customary in the business, his later rejection of the horse was wrongful because he did not reject the horse within a reasonable time. The court added that the injury may have occurred after the sale, and therefore the buyer could not meet his burden of proving the warranty breach.
Moyglare Stud Farm, Ltd. v. Due Process Stable, Inc., 562 F. Supp. 289 (S.D.N.Y. 1983).
Buyer, a New Jersey corporation whose principal resided in New York, revoked acceptance of horse purchased from seller, a Irish company. The seller sued for a declaration that the revocation was invalid, in federal court in New York. The court held that venue was proper there, although neither party resided in New York, because the cause of action arose in New York.
Nagels v. Christy, 330 S.W.2d 754 (Mo. 1959).
Dealer in horses represented five-gaited show mare to be a "lady's and amateur's horse" when, in fact, both the dealer and the owner knew the horse became unsound after warm-up. The buyer, who relied on this representation, sued for fraud and the jury awarded a refund of the purchase price and punitive damages. On appeal, the seller asserted that the representations of the dealer should not impose liability on him. The appeals court held that there was sufficient evidence that the dealer was an authorized agent for the seller, and thus the seller was liable for the representations of the agent.
Newman v. Armstrong Holdings (Brampton), Ltd., No. 94-CA-1350-MR (Ky. App. 1995).
Disclaimer in conditions of sale effective to block a rescission of the sale of a horse purchased at auction.
North Ridge Farm v. Stathatos, 760 S.W.2d 89 (Ky. App. 1988).
See North Ridge Farms v. Trimble, below.
North Ridge Farms, Inc. v. Trimble, 37 UCC Rep. Serv.1280 (Ky. App. 1983), aff'd sub nom, Trimble v. North Ridge Farms, 700 S.W.2d 396 (1985); following remand, North Ridge Farm v. Stathatos, 760 S.W.2d 89 (Ky. App. 1988).
Syndicator of a stallion took a security interest in a share sold to a syndicate member. One year's nomination (breeding season) was sold to another breeder. The Kentucky Court of Appeals held that the buyer of the breeding season took free of the security interest in stallion syndicate share from which the season was derived. The Court stated that the buyer of the season could not be a buyer in the ordinary course of business of goods under section 9-307 of the UCC because although the stallion share was within the definition of "goods," the season was severed from those goods. However, because the syndicate agreement authorized the sale of seasons, the security interest was extinguished as to the season pursuant to UCC section 9-306. The Kentucky Supreme Court affirmed, its reasoning different from that of the Court of Appeals, but the earlier (unreported) decision became the basis of In re Blankenship-Cooper, Inc. which is much broader in scope.
On remand, the trial court awarded damages in favor of the buyer of the season, who had not been permitted to breed. The court held that the agent who handled the transaction for a disclosed principal was not liable, but the principal was liable. The Kentucky Court of Appeals affirmed.
Norton v. Lindsay, 350 F.2d 46 (10th Cir. 1965).
Buyer of racehorse rescinded sale and sued for refund of his purchase price when he determined after purchase that the horse had been subject to nerve-severing surgery ("high nerved"). The court of appeals affirmed the trial court's grant of summary judgment to the buyer on the basis that a representation that a horse was sound created an express warranty.
O'Shea v. Hatch, 640 P.2d 515, 33 UCC Rep. Serv. 561 (N.M. 1982).
Horse sold to buyer was represented as a gelding when, in fact it was a ridgling. After discovery of the problem, the buyer sought to revoke acceptance of the horse, but the seller refused. The buyer then attempted to correct the problem with surgery, but the horse continued to be unsuitable for riding. The buyer sued and was awarded judgment in his favor. The court held that despite the surgery and continued training of the horse, the buyer maintained his right to revoke acceptance.
Presti v. Wilson, 348 F. Supp. 543 (E.D.N.Y. 1972).
Plaintiff sued to enforce an alleged oral agreement to buy a horse. The court dismissed the suit based on the statute of frauds.
Price v. Scharps, 405 So. 2d 1043 (Fla. App. 1981).
Buyer of in-foal mare, who after the purchase paid the stud fee owed by seller of mare, sued the seller for reimbursement. The court held that the buyer was entitled to recover the stud fee from seller of the mare.
Richard v. Comeaux, 626 So.2d 507 (La. App. 1993).
Buyer bought horse with the oral understanding that he would receive registration papers needed to register the horse with the American Quarter Horse Association. After he had not received the papers for two months, he sued for rescission. The appeals court upheld a judgment allowing rescission.
Shannon v. Kinderhill Select Bloodstock, No. 91-CI-00213 (Woodford Cir. Ct. Ky. 1992).
Seller of breeding rights that retained stallion service certificates to secure payment had a prior perfected security interest and was entitled to retain certificates.
Russell v. Lawrence, 507 S.E.2d 161 (Ga. App. 1998).
This case holds that a security interest in horses was not effectively granted by the owner of a farm where the horses are kept, who claimed to have purchased them when he purchased the real estate. The farm owner "had no legal right to sell what he did not own," and "merely registering the horses at national associations" did not give a "voidable title to the horses." While this case is predominantly a UCC Article IX case, it has Article II in general implications.
Sessa v. Riegle, 427 F. Supp. 760 (E.D. Pa. 1977).
Purchaser of standardbred racehorse sued seller for breach of warranty when horse was discovered to have tendenitis and thrombosis of the arteries. The trial court found for the seller, holding that the seller's statement that the horse was sound was an expression of opinion, and not a warranty. The court also doubted that sufficient reliance was shown because purchaser was chiefly relying on his agent's evaluation of the horse. Further, there was no showing that the defects existed at the time the burden of proof shifted, which was the time the seller tendered the horse for delivery. Moreover, there was no breach of the warranty of merchantability, because the horse was fit to race despite the fact that the alleged defects delayed its racing career and affected its performance.
Siciliano v. Hudson, 1996 WL 407562 (N.D. Miss. 1996).
Buyer of horse who claimed she was defrauded by seller could not recover under seller's homeowner's insurance policy.
Simpkins v. Ritter, 204 N.W.2d 383 (Neb. 1973).
A leading case on the question of whether a horse's papers are evidence of its ownership.
Simpson v. Widger, 709 A.2d 1366 (N.J. Super. A.D. 1998).
Buyer of show horse in 1989 sued seller for fraud and breach of warranty when the horse developed ringbone disease in 1994. The seller allegedly assured the buyer that the horse was sound. The court, relying on Norton and Sessa, that the warranty of "soundness" meant that the horse was "serviceably sound," not free from problems that could affect the performance of the horse. The court also held that no fraud had been shown because there was no evidence that the seller believed that the presence of ringbone might affect the horse's serviceability and resale value. Finally, the court held that limitations had run on the warranty claim, despite the delay in discovery of the defect.
Small v. Ciao Stables, Inc., 289 Md. 554, 425 A.2d 1030 (1981).
Buyer of thoroughbred from auction company sued auction company for rescission because horse suffered from a wind condition. Auction company defended the action but a jury found in favor of the buyer. The seller, who had consigned through an agent, then sued the auction company for the purchase price. The court held that the seller's suit was barred by principles of res judicata since there was no indication that the auction company had not adequately defended the original action.
Simpson v. Widger, 709 A.2d 1366 (N.J. Super. A.D. 1998).
This case, citing both Norton v. Lindsay, 350 F.2d 46 (10th Cir. 1965) and Sessa v. Riegle, 427 F. Supp. 760 (E.D. Pa. 1977), aff'd o. b. 568 F.2d 770 (3rd Cir. 1970), held that a warranty of "soundness" does not include the confirmation defect which might lead to a future inability of the horse to perform. Citing no horse or other animal cases, the Court also held that an independent veterinary examination, which included X-rays which might have disclosed the defect, established "the absence of reliance as a matter of law."
Slyman v. Pickwick Farms, 472 N.E.2d 380 (Ohio 1984).
A discussion of a horse's respiratory condition as an express warranty.
Snow v. American Morgan Horse Ass'n, 686 A.2d 1168 (N.H. 1996).
American Morgan Horse Association claimed horse breeder defrauded it by falsely registering foals. Appeals court affirmed the fraud ruling but held that damages for such fraud were not recoverable under the New Hampshire Consumer Protection Act.
Stewart v. Shanahan, 277 F.2d 233 (8th Cir. 1960).
Buyer sued in federal court for misrepresentation and breach of warranty upon a purchase of $3,750 show horse. The district court dismissed buyer's claims for mental anguish because they were unrecoverable under these claims. The buyer thus did not have a sufficient amount in controversy to invoke diversity jurisdiction in federal court. The Court of Appeals reversed, holding that if the mental distress allegations were made in good faith, jurisdiction in federal court was proper.
Thoroughbred Horseman's Ass'n v. Dyer, 905 S.W.2d 752 (Tex. App. 1995).
Horse auction company deemed to have lien on registration papers to secure auction fees and commissions, where horse was withdrawn from the auction sale.
Toney v. Lambarth, 514 S.W.2d 106 (Mo. 1974).
Purchaser and seller entered into a written contract of sale contingent upon examination of the horse by a veterinarian and a determination that the horse was sound. The veterinarian declared the horse not sound because of an eye defect. The trial court held that the horse was sound, and thus denied rescission. The appeals court reversed on the basis that the contingency was not met, even if the horse was "sound" relative to its intended purpose.
Travis v. Washington Horse Breeders Ass'n, 759 P.2d 418 (Wash. 1988).
Purchaser of a horse that was discovered to have a heart murmur sued for rescission. The court upheld a jury verdict finding that the auctioneer and consignor had violated the consumer protection act because it was unconscionable that such a horse would be offered for sale as a race horse without a physical examination.
Tribe v. Peterson, 964 P.2d 1238 (Wyo. 1998).
An interesting discussion of conversation about an "extra gentle" horse.
Trimble v. North Ridge Farms, Inc., 700 S.W.2d 396 (Ky. 1985).
See North Ridge Farms v. Trimble, above.
White v. Roberts, 454 S.E.2d 584 (Ga. App. 1995).
Buyer, a resident of Georgia, alleged that sellers and their veterinarian, residents of Nebraska, conspired to defraud him by selling him a lame horse. All sale transactions occurred in Nebraska. The Georgia Court of Appeals ruled that the Georgia trial court did not have jurisdiction over the veterinarian.
Whitehouse v. Lange, 910 P.2d 801 (Idaho 1966).
Buyer approached seller about acquiring a mare for breeding purposes. Mare turned out to be infertile. Appeals court upheld judgment against buyer based on implied warranty of fitness, even though seller selected the particular horse to purchase. Seller's claim that buyer failed to mitigate damages by not having horse treated at a veterinary college was rejected by the court because there was insufficient evidence that the treatment would have successfully restored fertility.
Wilson v. Lexington Trots Breeders Ass'n, No. 93-CA-0755-MR (Ky. App. 1994).
Defendant was the successful bidder on several horses sold at auction. On the purchase form, he printed corporate name as the buyer, but signed his name without indicating agency status. The conditions of sale provided for personal liability unless an agent authorization was filed with the auction company. Upon default, the auction company sued the individual. Summary judgment in favor of the auction company against the individual was upheld on appeal.
Vallette v. Toussaint, 467 So.2d 107 (La. App. 1985).
Buyer of horse determined that horse was not Louisiana bred, as represented, and brought action to rescind the sale. Under Louisiana law, the attempted rescission was too late, but the court ruled that seller's communications with the buyer were equivalent to attempts to repair, which toll the prescribed period for rescission.
Vanier v. Ponsoldt, 833 P.2d 949 (Kan. 1992).
Buyer of an Arabian stallion at a Kentucky auction financed part of the purchase price by a note and security agreement to consignor. Two years after the purchase, buyer defaulted and was sued by the consignor. Buyer raised fraud and breach of warranty as a defense because the consignor had represented that the stallion was sound, when, in fact, the stallion had OCD lesions in the hock prior to the sale, and the swelling which possibly indicated the condition was reduced by draining the fluid in the hock and injecting corticosteroids. Further, at the auction, the horse was bid-up by the buyer's advisor, who was actually acting on behalf of the sales company. As to the warranty claim based on the representations of soundness, the court ruled that the representations were only opinions, and that there was no evidence that the statements were untrue at the time they were made. The claim for fraud was barred by the one-year contractual limitation on the time for rescission. As to the fraud at the auction, the court ruled that the buyer ratified the sale when he continued to make payments after finding out about it. The court also upheld the forum selection clause in the security agreement, and held that the law of the forum, Kansas, rather than the governing substantive law, Kentucky law, governed whether a party was entitled to a jury trial.
White Devon Farm v. Stahl, 389 N.Y.S.2d 724, 20 UCC Rep. Serv. 291 (Special Term 1976).
Buyer of racehorse intending to retire horse to stud at a later date revoked acceptance of the horse a year after delivery was made, after determining that the horse was unfit for breeding. Seller claimed that buyer's inspection and revocation were untimely. The Court ruled that because the parties contemplated that the buyer would use the horse as a stallion and because infertility was difficult to detect, the inspection and revocation were timely and effective.
Yuzwak v. Dygert, 7 UCC Rep. Serv. 2d 731, 534 N.Y.S.2d 35 (App. Div. 1988).
Seller stated to potential buyer prior to auction sale that horse was quiet and easy to handle. The buyer sued for breach of warranty and fraud. The appeals court held that the statement constituted a warranty and a representation on which a fraud claim may be based.
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