West Coast Airlines, Inc. v. Miner's Aircraft & Engine Service, Inc.

Supreme Court of Washington · 1965 · Contracts

ContractsSalesMistakeTitleEstoppelImplied Warrantymutual assentmeeting of the minds

Facts

West Coast sold sealed metal engine cans to Junk Traders as scrap metal, but neither party knew that two aircraft engines were still inside two of the cans. Miner, an experienced aircraft-engine dealer who knew the engines had belonged to West Coast, knew their substantial value, and knew FAA-required records were missing, persuaded Junk Traders that the engines were worth only scrap and purported to buy them for $125. West Coast discovered the mistake only after Miner sought the records, and Junk Traders then informed Miner of the mistake before cashing his check, but he refused to return the engines. Miner later purported to trade one engine to Clark, but never delivered it or transferred title.

Issue

Did title to the engines pass when West Coast sold the sealed cans as scrap to Junk Traders, and if not, could Miner's Aircraft nonetheless retain the engines through estoppel or implied warranties against Junk Traders? A related issue was whether Clark could recover the goods he traded for an engine that Miner never delivered or conveyed title to.

Rule

A sale is a consensual transaction, and the subject matter that passes is determined by the parties' intent as shown by their agreement and the surrounding circumstances. Unknown contents of an article sold, when not essential to the article's existence or usefulness and not within the parties' contemplation or intention, do not pass with the sale; without mutual assent to the identity of the thing sold, there is no contract and no transfer of title. Estoppel and implied warranties of title and quiet possession are unavailable to a buyer who had superior knowledge, actual and reasonable notice of the defect, relied solely on his own expertise, was not misled by the seller, failed to change position, and did not act in good faith.

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One of 10 multiple-choice questions for this case. Pick an answer to see why.

In Portland, Oregon, Cascade Freight sold 40 sealed steel storage drums to Riverbend Recycling for scrap by weight. Neither side knew that one drum contained a detachable industrial laser head that had been placed inside for temporary storage and was not necessary to the drum's use as scrap metal.

Who has the better claim to title to the laser head?

Explanation. A sale passes only the subject matter the parties mutually intended to transfer, as shown by their agreement and surrounding circumstances. Unknown contents merely deposited inside an article sold, and not within the parties' contemplation or essential to the article's existence or usefulness, do not pass. Here, the sale was of steel drums as scrap, not the hidden laser head. No rescission is required because there was never a contract for the sale of the laser head. (Derived from West Coast Airlines, Inc. v. Miner's Aircraft & Engine Service, Inc. (1965).)