Contract to deliver.-The words "for a price in money,' contained in 19 & 20 Vict. c. 97, s. 2 (repealed by this Act), are here omitted. But the subsequent words, "payment of the price," show conclusively that the section contemplates only the case of a sale, apart from the fact that the Act does not apply to any other transaction. Specific or ascertained. The words in the original Act were "specific goods." See on this, the notes to s. 17, ante, p. 115, This section reproduces, with modifications due to the Judicature Acts and Orders, s. 2, now repealed, of 19 & 20 Vict. c. 97 (the Mercantile Law Amendment Act, 1856). Formerly, at common law, the buyer had no remedy except in an action for damages. In equity, however, the Courts, in cases where damages were not a sufficient compensation, as, e.g., where the sale was of articles of unusual beauty or rarity (d), decreed that the seller should deliver up the specific chattels sold. The cases in equity on the subject are collected in White & Tudor's Leading Cases in Equity (e), where the rule, as deduced from the authorities, is stated. The same remedy was provided at law by the Mercantile Law Amendment Act, s. 2, above referred to; and now under s. 24 of the Judicature Act, 1873, every Court can grant equitable relief. The plaintiff.-Under s. 62 (1), this term includes a defendant counter-claiming. Under Ord. XLVIII. r. 1 of the Rules of the Supreme Court, which substantially reproduces s. 78 of the Common Law Procedure Act, 1854 (17 & 18 Vict. c. 125), provision is made for the recovery of chattels by a writ of delivery. The effect of the rule, it seems, is only to give a right of distress until delivery, and a writ of assistance is still necessary for the actual delivery of a specific chattel (ƒ). S. 52. breach of 53. (1.) Where there is a breach of warranty Remedy for by the seller, or where the buyer elects, or is com- warranty. pelled, to treat any breach of a condition on the part of the seller as a breach of warranty, the buyer (d) See per Kindersley, V.-C., in Falcke v. Grey (1859), 4 Drew. at p. 658; 29 L. J. Ch. 28. (e) Vol. I. p. 912 (ed. 1886) notes to Cuddee v. Rutter; Benj. p. 932. It is to be noted that the Act has no saving clause as to the rules of Equity: cf. s. 61 (2). (f) See Wyman v. Knight (1888), 39 Ch. D. 165, q. v. for the form of order. Judgment in an action of detinue provides primarily for the return of the specific chattel, Eberle's Hotel Co. v. Jonas (1887), 18 Q. B. D. 459 (C. A.). S. 53 (1). S. 53 (1). is not by reason only of such breach of warranty entitled to reject the goods; but he may (a) set up against the seller the breach of warranty in diminution or extinction of the price; or (b) maintain an action against the seller for damages for the breach of warranty. Warranty (except as regards Scotland) is defined in s. 62 (1), to be "an agreement with reference to goods which are 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." As to the distinction between a condition and a warranty, and the right of the buyer to reject the goods on breach of the former, see s. 11, ante, pp. 68-70. Where the buyer elects, or is compelled.—The buyer may elect under s. 11 (1) (a), or be compelled under s. 11 (1)(c). In the case of an agreement to sell under s. 1 (3), when the seller's "warranty" is in fact a condition, the buyer may elect either to treat the breach of "warranty," so-called, as a breach of condition, and refuse to accept the goods (g); or he may accept the goods and sue the seller under this section for breach of the warranty arising ex post facto. In the case of a sale of specific goods, accompanied by a true warranty, the buyer cannot, under s. 11 (1) (c), in the absence of fraud on the seller's part (h), refuse to accept the goods, unless the warranty was expressly intended to operate as a condition (i); his only remedy is an action under this section for damages for breach of warranty. So, also, by acceptance of part or all of the goods under a non-severable contract, the buyer is compelled, as shown by (g) The dicta of the judges in Heyworth v. Hutchinson (1867), L. R. 2 Q. B. 447, are to the effect that in an agreement to sell specific goods a warranty does not amount to a condition; but see the discussion of the case in Benj. p. 936. (h) Street v. Blay (1831), 2 B. & Ad. 456; Gompertz v. Denton (1832), 1 C. & M. 207. (i) Bannerman v. White (1861), 10 C. B. N. S. 844; Head v. Tattersall (1871), L. R. 7 Ex. 7 (return of a horse). The return of the goods may, by agreement, be the buyer's only remedy, and he cannot retain them and sue on the breach of warranty. Hinchcliffe v. Barwick (1880), 5 Ex. D. 177. 8. 11 (1) (c), to treat any breach of a condition as a breach of warranty (k). The rule in clause (a) is an illustration of the principle first established definitely in Basten v. Butter (1), that payment shall be commensurate with the benefit received. The remedies are alternative. The buyer, when sued for the price, is not bound to set up the defective quality of the goods; he may pay the whole price and then sue for damages for breach of contract (m). And sub-s. 4 to this section further shows that the buyer, having used the remedies given him in clause (a), may seek compensation for further damage for the same breach. The effect of the Judicature Acts is to substitute a counterclaim for the buyer's old remedy by cross-action. Under Ord. XIX., r. 3, the buyer may set off, or set up by way of counter-claim, "any right or claim," whether sounding in damages or not, and by way of cross-action, against the claim of the seller. And further, under Ord. XXI., r. 17, the buyer is enabled to recover consequential damages which may possibly far exceed the amount of the price sued for by the seller (n). As regards procedure, the buyer may either S. 53 (1). (1.) Under clause 1 (a), in defence set up the defective quality S. 53 (1) (a). of the goods "in diminution (o) or extinction (p) of the price sued for; or (2.) Under clause 1 (b), maintain an action (including, under S. 53 (1) (b). s. 62 (1), a counter-claim) (q) to recover special or consequential damages, notwithstanding (see clause 4) the previous diminution or extinction of the price. Previous to the Judicature Acts, the buyer's right to insist on a reduction of the price on the ground of breach of warranty could not be made available if he had given a negotiable security for the price, and the action was brought on the security. The reason was that the law did not permit an unliquidated and uncertain claim to be set up in defence against the liquidated (k) Benj. p. 946. (1) (1806), 7 East, 479. See notes to Cutter v. Powell, 2 Sm. L. C. (9th ed.) 1. (m) Davis v. Hedges (1871), L. R. 6 Q. B. 687. is (n) The usual course, it seems, to plead the diminution in value by way of defence pro tanto, with a counter-claim for the special damage: Bullen & Leake, Precs. of Pleading (ed. 1888), Part II. p. 304. (0) Mondel v. Steel (1841), 8 M. & W. 858, the leading case before the Judicature Acts. (p) Poulton v. Lattimore (1829), 9 B. & C. 259. (q) Defined as " in the nature of a proceeding in a cross-action," per Bowen, L.J., in Amon v. Bobbett (1889), 22 Q. B. D. at p. 548. S. 53 (1). S. 53 (2), (3). demand represented by a bill or note (o). Since the Judicature Acts, the buyer is allowed such a set-off or counter-claim as is shown above, and even before the Judicature Acts the buyer could, in an action on a bill or note, show a total failure of consideration (p). ILLUSTRATIONS. 1. A. agrees to sell B. a quantity of seed, warranted to be good new growing seed, which B. sows. It proves wholly unproductive. In A.'s action for the price B. may successfully defend himself against the whole of A.'s claim by showing that the seed was worthless. Poulton v. Lattimore (1829), 9 B. & C. 259. 2. A. sells to B. for twelve guineas a horse warranted sound, of which B. pays three guineas. The horse is unsound, and in fact worth only a guinea and a-half. B. may show, in A.'s action for the balance of the price, that he has been overpaid. King v. Boston (1789), 7 East, at p. 481, note (a). (2.) The measure of damages for breach of warranty is the estimated loss directly and naturally resulting, in the ordinary course of events, from the breach of warranty. (3.) In the case of breach of warranty of quality such loss is primâ facie the difference between the value of the goods at the time of delivery to the buyer and the value they would have had if they had answered to the warranty. In relation to the measure of damages which the buyer is entitled to recover for breach of warranty, the rules are substantially the same as those which are given in the case of the seller's breach of his obligation to deliver under s. 51. These two sub-sections embody (as was shown under s. 51, ante, p. 278) the first part of the rule in Hadley v. Baxendale, sub-s. 3 being the particular application of it. Primâ facie.-I. e., subject to ss. 54 and 55. In order to estimate what the real value of the goods as warranted would have been, the price obtained by the buyer on a re-sale before the breach of warranty has been discovered may be put in evidence, but the difference between the contract (0) See the exposition of the law, and citation of authorities, in Byles on Bills (ed. 1885), p. 151; Benj. P. 946. (p) Wells v. Hopkins (1839), 5 M. & W. 7. price, and the price on the re-sale cannot be claimed as specific S. 53 (2), (3). damage (q). The measure of damages may be largely increased when the goods are bought for a particular purpose known to the seller. In this case special circumstances are involved. See on this the notes to s. 54, post, pp. 292, 293. ILLUSTRATIONS. 1. B. buys of A., a coachbuilder, a pole for his carriage. The pole, being defective, breaks, in consequence of which B.'s horses and carriage are damaged. The value of the pole is 37., and the amount of the damages to the horses and carriage is 1307. B. may recover 133/. from A., if the jury find that the damages are the natural consequence of the defect in the pole. Randall v. Newson (1876), 2 Q. B. D. 102. 2. B. buys of A. seed barley, of which A. warrants the quality. A. delivers inferior barley. The difference between the value of the seed sold and of the seed as warranted is 157. B. may recover from A. 151. Randall v. Raper (1858), E. B. & E. 84; 27 L. J. Q. B. 266. 3. B. agrees to buy of A. a quantity of Manilla hemp. On arrival the hemp is found to be damaged and unmerchantable. B. sells it, and realizes, by reason of a rise in the market, 75 per cent. of the market price of undamaged hemp. B. may recover from A. in an action for breach of warranty, the 25 per cent. difference. Jones v. Just (1868), L. R. 3 Q. B. 197 (r). (4.) The fact that the buyer has set up the breach of warranty in diminution or extinction of the price does not prevent him from maintaining an action for the same breach of warranty if he has suffered further damage. This rule is in accordance with that passage in the judgment in Mondel v. Steel (s), where Parke, B. says (t): "To the extent that [the buyer] obtains, or is capable of obtaining, an abatement of price . . . he must be considered as having received satisfaction for the breach of contract, and is precluded from recovering in another action to that extent, but no more." ILLUSTRATION. B. agrees to buy of A. a ship to be built according to certain specifications. A. builds the ship in an unworkmanlike manner. B., in an action by A. for the agreed price, obtains an abatement, by (9) Clare v. Maynard (1837), 6 A. & E. 519; Cox v. Walker (1835), ibid. 523, n.; Mayne on Damages (ed. 1894), p. 192. G. (r) See also Cassaboglou v. Gibb (8) (1841), 8 M. & W. 858. U S. 53 (4). |