seller will be liable, if the goods are defective, even if the defect Chap. IV. be latent and not discoverable by reasonable care and skill (d). quality. If goods are bought by description from a seller who deals in Merchantable goods of that description, there is an implied condition that the goods shall be of merchantable quality (e); if, however, the buyer has examined the goods, there is no implied condition as to defects which such examination ought to have revealed (e). An implied condition as to quality, or fitness for a particular Usage of purpose, may be annexed by the usage of trade (f). trade. sample. When goods are sold by sample there is an implied condition, Sale by (1) that the bulk shall correspond with the sample in quality; (2) that the buyer shall have a reasonable opportunity of comparing the bulk with the sample; and (3) that the goods shall bo free from any defect rendering them unmerchantable, which would not be apparent on reasonable examination of the sample (g). Where the contract is made subject to a condition precedent to be performed, for example, a valuation to be made by a third party, who does not make the valuation, the sale cannot take effect (h). But if the performance of a condition becomes impossible owing to the act or default of one of the parties, the condition is considered, as against him, as having been performed (i). A warranty is an agreement with reference to goods which are Warranty. the subject of a contract of sale, but collateral to the main purpose of such contract, the breach of which gives rise to a claim for damages, but not to a right to reject the goods and treat the contract as repudiated (k). The buyer may waive a condition to be fulfilled by the seller, When or may treat the breach of such condition as a breach of warranty and when condition, and not as a ground for treating the contract as repudiated (1). warranty. Whether a stipulation is a condition, or a warranty, depends in each case on the construction of the contract of sale, and a (d) Frost v. Aylesbury Dairy Co., [1905] 1 K. B. 608. (e) Sale of Goods Act, 1893, s. 14 (2). Wren v. Holt, [1903] 1 K. B. 610, where a sale of beer in a beerhouse was held to be within this provision; Bristol Co. v. Fiat Motors, sup.; Jackson v. Rotax Co., [1910] 2 K. B. 937. (ƒ) Ib. s. 14 (3). (g) Sale of Goods Act, 1893, s. 15. (i) Mackay v. Dick, 6 App. Cas. 251. 70 Chap. IV. stipulation may be a condition, though called a warranty in the Remedy for breach of warranty. Implied warranty on sale of marked goods; chains contract (m). When a contract of sale is not severable and the buyer has accepted all or part of the goods, or when specific goods are sold and the property has passed to the buyer, the breach of a condition on the part of the seller can only be treated as a breach of warranty, unless there is an agreement to the contrary (n). When there has been a breach of warranty, the buyer may either set up the breach in diminution or extinction of the price, or he may sue the seller for damages (o). It should here be noticed that, by the Merchandise Marks Act, 1887 (p), on the sale or in the contract for the sale of any goods to which a trade mark, or mark, or trade description has been applied, the vendor is to be deemed to warrant that the mark is a genuine trade mark and not forged or falsely applied, or that the trade description is not a false trade description within the meaning of the Act, unless the contrary is expressed in some writing signed by or on behalf of the seller and delivered at the time of the sale or contract to and accepted by the buyer. Also, by the Anchors and Chain Cables Act, 1899, on every contract and anchors; for the sale of a chain cable or anchor, above a certain weight, there is, in the absence of an express stipulation to the contrary, an implied warranty that the anchor or cable has before delivery fertilisers and been proved in accordance with the Act (q). And, by the Fertilisers and Feeding Stuffs Act, 1906 (r), on the sale of certain kinds of fertilisers, or feeding stuffs for cattle or poultry, the prescribed invoice which must be given has the effect of a warranty; and in certain cases there is an implied warranty that the article of food is pure, or is suitable for use as food; and certain kinds of statements made in the invoice or in circulars or advertisements have the effect of a warranty (r). food stuffs. Warranty of title. It was for a long time doubtful to what extent there was an implied warranty on the part of the seller of goods that he had a good title thereto (s). (m) Sale of Goods Act, 1893, s. 11 (lb). See per Bowen, L.J., Bentsen v. Taylor, [1893] 2 Q. B. 280. (n) Ib. s. 11 (le); Wallis v. Pratt, [1911] A. C. 393. (0) Ib. s. 53. (p) 50 & 51 Vict. c. 28, s. 17; and 54 Vict. c. 15, s. 1. See post, p. 236. Benjamin on Sale, 597; Sims v. Marryat, 17 Q. B. 281; Morley v. Attenborough, 3 Ex. 512; Eichholz v. Bannister, 17 C. B. N. S. 708. Now, by the Sale of Goods Act (t), it is provided that, in a Chap. IV. contract of sale, unless the circumstances of the contract are such as to show a different intention, there is: (1) "An implied condition on the part of the seller that, in the case of a sale, he has a right to sell the goods, and that, in the case of an agreement to sell (u), he will have a right to sell the goods at the time when the property is to pass." (2) "An implied warranty that the buyer shall have and enjoy quiet possession of the goods." (3) "An implied warranty that the goods shall be free from any charge or incumbrance in favour of any third party, not declared or known to the buyer before or at the Sales by sheriffs, or forced sales by public auction, or sales of unredeemed pledges by pawnbrokers, are instances of sales which are generally made under circumstances such as to show that there is no intention to give an implied warranty (x). Bills of Lading. Lord Blackburn says (y): A bill of lading (z) is a writing signed on behalf of the owner of the ship in which goods are embarked, acknowledging the receipt of the goods, and undertaking to deliver them at the end of the voyage (subject to such conditions as may be mentioned in the bill of lading). The bill of lading is sometimes an undertaking to deliver the goods to the shipper by name, or his assigns; sometimes to order or assigns, not naming any person, which is apparently the same thing; and sometimes to a consignee by name, or assigns, but in all its usual forms it contains the word assigns. The bill of lading is, therefore, a written contract between those who are expressed to be parties to it, on behalf of their principals if they be agents, that is, generally speaking, between the master of the ship on behalf of his principals the shipowners, on the one part, and the person named as shipper of the goods on the behalf of the person who, at the time of shipment, was his principal, on the other part, by which it is agreed that the shipowner is to deliver the goods to the person who shall fill the character of assign. (t) S. 12. (u) See ante, p. 51. (x) Chapman v. Speller, 14 Q. B. 621; Morley v. Attenborough, 3 Ex. 500; Bagneley v. Hawley, L. R. 2 C. P. 625 ; (y) Blackburn on Sale, 421. (2) See the form of a bill of lading in the Appendix. Bill of lading defined. Chap. IV. and delivery of bill of lading may pass property. Sets of bills. Goods shipped are physically incapable of delivery during the Indorsement voyage; but it is a rule of the law merchant that the property in the goods may pass, not (as is sometimes said) that it necessarily passes (a), by indorsement and delivery of the bill of lading. Bills of lading are usually drawn in sets of three. If the bills are transferred to different bonâ fide purchasers for value, the goods pass to the purchaser who is first in point of time (b); but the shipowner may safely deliver the goods to the person who first presents either of the set, in the absence of notice of any prior claim (c). By the common law, although the transfer of a bill of lading might pass the property in the goods, it did not operate as an assignment of the contract expressed in the bill of lading, and therefore no right was conferred on the assignee to sue upon that 18 & 19 Vict. contract. This, however, was altered by the Bills of Lading Act, 1855 (d), by which, after reciting that: c. 111. Delivery orders-Dock warrants. "By the custom of merchants a bill of lading of goods being transferable by indorsement, the property in the goods may thereby pass to the indorsee, but nevertheless all rights in respect of the contract contained in the bill of lading continue in the original shipper or owner, and it is expedient that such rights should pass with the property," it was enacted: Sect. 1. "Every consignee of goods named in a bill of lading, and every indorsee of a bill of lading to whom the property in the goods therein mentioned shall pass, upon or by reason of such consignment or indorsement, shall have transferred to and vested in him all rights of suit, and be subject to the same liabilities in respect of such goods as if the contract contained in the bill of lading had been made with himself." Delivery Orders-Dock Warrants. Delivery orders (e), dock warrants, and wharfingers' receipts are generally written authorities to deliver the possession of (a) Sewell v. Burdick, 10 App. Cas. 74; Sale of Goods Act, s. 19 (3), ante, p. 51. (b) Barber v. Meyerstein, L. R. 4 H. L. 317; Sanders v. Maclean, 11 Q. B. D. 327. (c) Glyn v. E. & W. Ind. Docks Co., 7 App. Cas. 591. As to the effect of the transfer of a bill of lading upon the right of stoppage in transitu, see ante, p. 66. (d) 18 & 19 Vict. c. 111. See Freedom v. Simmonds, L. R. 3 P. C. 594. (e) The form may run as follows:"To A. B., I hereby undertake to deliver to your order endorsed hereon" (description of goods). (Signed) C. D. Farmiloe v. Bain, 1 C. P. D. 446. goods (f), so framed that the right to possess the goods passes by Chap. IV. indorsement and delivery of the documents. It will be noticed that, as the goods are on land, there is no reason why the indorsee should not at once produce the document to the bailee in whose possession the goods are, and take possession of the goods or require the bailee to attorn to him, i.e., become his bailee. The common law, while, as we have seen, it allowed the transfer of a bill of lading to pass the property in the goods on the ground of the physical impossibility of a purchaser acquiring possession, did not attribute the like effect to a transfer of a document of the nature under consideration. A man does not acquire possession of the goods merely by receiving a delivery order; in order to do so he must either have the goods delivered to him, or, if they are in the possession of a bailee, must procure attornment by the bailee to him (g), and this may be effected by merely lodging the delivery order with the bailee, provided the bailee does not dissent (h). It should be observed that, as the transfer of a delivery order effected by indorsement and delivery only transfers the right to possess, as distinguished from possession itself, the mere fact of a person taking such a transfer does not amount to acceptance and receipt of the goods within s. 4 of the Sale of Goods Act, 1893, until the person in whose possession the goods are consents to hold them as bailee for, or attorns to, the transferee (i). (f) Gunn v. Bolckow, 10 Ch. 499. (g) Farina v. Home, 16 M. & W. 119; Mc Ewan v. Smith, 2 H. L. C. 309. (h) Pearson v. Dawson, E. B. & E. 448. (i) Farina v. Home, sup. ; Bentall v. Burn, 3 B. & C. 423; 27 R. R. 391, ante, p. 56. |