HARVARD

LAW REVIEW.

VOL. XXVII.

NOVEMBER, 1913.

No. 1.

REPRESENTATION AND WARRANTY IN SALES.-HEILBUT v. BUCKLETON.

IN

[N a previous number of this review the writer criticized the well-known case of Derry v. Peek,2 and pointed out the inconsistency between the English law relating to warranty and that governing liability for misrepresentation generally, in that an honest misrepresentation by a seller to induce the sale of goods was ground of liability, whereas, according to that decision, an honest misrepresentation made under other circumstances imposed no liability.

In a case recently decided by the House of Lords the supposed inconsistency is denied. Express warranty is confined to the field of express contract, and it is said that no representation as such amounts to a warranty.

The case which so decided presented the following facts. The plaintiff inquired of the defendant whether his firm was bringing out a new rubber company. The defendant replied that they were, and the plaintiff then asked whether the company was all right. The defendant answered that his firm was bringing it out, to which the plaintiff rejoined that was good enough for him. The plaintiff was induced by this conversation to buy shares in the company, which proved a failure and the plaintiff lost his money. The jury 2 14 App. Cas. 337 [1889]. 3 Heilbut v. Buckleton, [1913] App. Cas. 30.

1 24 HARV. L. Rev. 415.

found that the company was not properly termed a rubber company, as it was engaged in other business as well as in raising rubber.

The Court of Appeal on these facts held the defendant liable as a warrantor of the truth of the statement that the company was a rubber company. The House of Lords, reversing this decision, held that there was no evidence proper to be submitted to the jury upon the question of warranty. Lord Haldane said:

"As neither the circumstances of the conversation nor its words were in dispute, I think that the question of warranty or representation was one purely of law, and that it ought not to have been submitted to the jury.... The words proved by the respondent were words which appear to me to have been words not of contract but of representation of fact. No doubt this representation formed part of the inducement to enter into the contract to take the shares which was made immediately afterwards, and was embodied in two letters dated the next day, April 15. But neither in these letters nor in the conversation itself are there words either expressing or, in my opinion, implying a special contract of warranty collateral to the main contract, which was one to procure allotment.

"It is contrary to the general policy of the law of England to presume the making of such a collateral contract in the absence of language expressing or implying it." 4

The other Lords who delivered opinions made it equally clear that in their view no express warranty was possible unless the elements of a contract could be found. Lord Atkinson said:

"The question of Johnston's intention in making this affirmation remains. . . . The existence or non-existence of such an intention in the mind of the party making the affirmation, that his affirmation should be taken as a warranty of the truth of the fact affirmed, is, in an action of breach of warranty, no doubt a question for the decision of the jury which tries the action; and all the evidence in the case touching the knowledge, conduct, words, and actions of that party, from first to last, may be considered by them in arriving at a conclusion upon this question. In the present case it would appear to me that every relevant piece of evidence given, every fact proved, tends to disprove the existence of such an intention in Johnston's mind when this conversation took place, rather than to establish it." 5

4 [1913] App. Cas. 30, 36.

[1913] App. Cas. 30, 43.