Otis v. Cullum - 92 U.S. 447 (1875)
U.S. Supreme Court
Otis v. Cullum, 92 U.S. 447 (1875)
Otis v. Cullum
92 U.S. 447
1. Under authority of acts of the Legislature of Kansas, the City of Topeka issued certain bonds payable to a party named, or bearer. They became the property of a bank, which put them upon the market, and disposed of them. This Court having decided that the legislature had no power to pass the acts, and that the bonds were void, the purchasers brought suit on the ground of failure of consideration to recover the amount paid for them. Held that, as the bank gave no warranty, it cannot be charged with a liability it did not assume.
2. The vendor of such securities is liable ex delicto for bad faith, and ex contractu there is an implied warranty on his part that they belong to him, and are not forgeries. Where there is no express stipulation, there is no liability beyond this.