Scottish Court of Session Decisions

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Cite as: [1905] SLR 42_437, [1905] ScotLR 42_437

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SCOTTISH_SLR_Court_of_Session

Page: 437↓

Court of Session Inner House Second Division.

Wednesday, March 15 1905.

[Sheriff Court of Lanarkshire at Glasgow

42 SLR 437

D. Y. Stewart & Company

v.

Croom & Arthur.

Subject_1Sale
Subject_2Disconformity to Contract
Subject_3Rejection
Subject_4Right to Retain Goods and Set up Claim for Damages — Sale of Goods Act 1893 (56 and 57 Vict. c. 71), sec. 11, sub-sec. 2, and secs. 35 and 53.
Facts:

The purchasers of two mechanical stokers intimated rejection of them to the sellers, but continued to use them for three months thereafter. In an action by the sellers for payment of the price the purchasers put in a counterclaim for damages in respect that the machines were disconform to contract.

Held (following The Electric Construction Company, Limited, 24 R. 312, 34 S.L.R. 295) (1) that the purchasers having continued to use the machines for three months after intimating rejection of them, were not entitled to found on their alleged rejection; and (2) that having elected to reject, they were not entitled thereafter to fall back upon the alternative remedy provided by the Sale of Goods Act of retaining the machines and claiming damages.

Headnote:

This was an action raised in the Sheriff Court of Glasgow at the instance of Croom & Arthur, engineers, against D. Y. Stewart & Company, ironfounders. The pursuers sued for the price of two mechanical stokers supplied to the defenders in August 1901. The defenders averred that the stokers were defective in construction and workmanship and disconform to contract, in respect that they did not prevent smoke to the satisfaction of the sanitary inspector, and they put in a counter-claim of damages. The pursuers denied the alleged warranty and averred that any failure was due to the improper use by the defenders or to the imperfect construction of certain parts which the defenders were bound under the contract to supply.

The defenders averred that they intimated rejection of the stokers on 16th September
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1902, but they admittedly continued to use them until the end of the year, when they removed them.

The Sheriff-Substitute ( Boyd) allowed a proof, and the Sheriff ( Guthrie) adhered. The facts disclosed at the proof sufficiently appear from the Sheriff-Substitute's interlocutor.

On 29th November 1901 the Sheriff-Substitute pronounced the following interlocutor:—“Finds in fact, that by letters between the parties the pursuers contracted to supply and fit up two of their mechanical stokers to two of the defenders' boilers for the sum of £85 each, the defenders to erect the engine and overhead shafting and the brickwork and rough labour, the pursuers guaranteeing to prevent black smoke to the satisfaction of the sanitary inspector; (2) that the pursuers did supply and fit up the stokers in August 1901, and the defenders used them until the end of 1902; (3) that after their erection the sanitary inspector still complained of black smoke from the defenders works, but that this was caused, not by defective construction of the stokers, but by improper use of them by the defenders; (4) that the defenders removed the stokers in the end of 1902, and now refuse to pay for them: Finds in law that they are bound to pay for them; Therefore decerns as craved.”

In his note he said—“I do not think the defenders are entitled to succeed in their counter-claim as that is laid in article 2 of the defences. By section 11 (2) of the Sale of Goods Act the defenders were bound to reject the stokers or to keep them and claim damages. I do not think they have been consistent. Mr Bowser says they were rejected in September 1902. If so, I do not think they can claim damages— Electric Construction Company, 24 R. 312.”

The defenders appealed to the Court of Session, and argued that the Sheriff-Substitute was wrong in his third finding in fact, and that the case of The Electric Construction Company, supra, if applicable, had been adversely criticised in later cases. They admitted that the stokers were detachable pieces of mechanism, but argued that they had no option but to continue using then; in order to keep their works in operation until they could enter into contracts to get them replaced.

The pursuers and respondents argued that there was no express warranty. If the stokers failed to prevent smoke, this was due to the improper use of them by the appellants. In any event, the appellants having intimated rejection of the machines, and thereafter continued to use them for a long period, were not entitled to found on their alleged rejection, and having elected to reject could not claim damages. They cited the following cases:— The Electric Construction Company, Limited v. Hurry & Young, 24 R. 312, 34 S.L.R. 295; Lupton & Company v. Schultze & Company, 37 S.L.R. 839; Dick & Stevenson v. Mackay, 7 R. 778, at p. 787, 17 S.L.R. 565.

At advising—

Judgment:

Lord Justice-Clerk—The evidence in this case is conflicting, and by no means satisfactory. I do not think it necessary to go into it in detail, and perhaps there are some points in which the Sheriff-Substitute's interlocutor may be open to criticism. But in the main I agree with his view that the failure of the mechanical stokers supplied by the defenders was due, not to inherent defects in the design, but to their not having been properly used by the defender.

[ After considering evidence His Lordship proceeded]—I therefore agree with the Sheriff-Substitute in his first view of the case, that the stokers did not get such fair play in the hands of the defenders as would entitle them to reject the stokers, even had they done so earlier than they did.

But even if it could be held that this was not a sound view of the evidence of fact, I should still feel compelled to hold that the defence put forward must fail. For I am unable to see any answer to the pursuers' contention that the defenders, by retaining the stokers and continuing to use them for a long period after they maintain that they rejected them, have altered their legal position. To me it appears quite certain that the decision in the case of the Electric Construction Company quoted at the debate is directly applicable to this case, and that, as a consequence, the defenders cannot now on the footing that they have retained the goods claim damages. Their case must be either that they rejected, which they say they did, and therefore are not liable in payment of the price, or that they retained subject to a claim of damages. But if they rejected, as they say they did, in September 1902, then under the case I have referred to they cannot claim damages.

Lord Kyllachy—In this case I agree with the Sheriff that the contract between the parties contained a condition or warranty to the effect that the defenders' apparatus should prevent smoke to the satisfaction of the Glasgow authorities. I also agree with him that this warranty was not fulfilled. I differ from him, however, when he proceeds to find that the failure of the apparatus “was caused not by defective construction of the stokers but by improper use of them by the defenders.” As to that I should be of opinion—having done my best to weigh the somewhat unsatisfactory evidence on the subject—that the pursuers have failed to prove that the defenders used the stokers improperly, or that thus or otherwise the non-fulfilment of the condition or warranty was due to their (the defenders') default.

But while so holding, and my conclusion being so far in favour of the defenders, it has still to be considered what was the effect in law of the defenders' continued use of the stokers down to the end of the year 1902—a fact as to which there is no dispute—and as to that I am obliged to say that I cannot distinguish the present case from that of The Electric Construction Company, 24 R. 312, decided by the First Division of the Court in 1897—a decision to

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which the Sheriff refers and to which the defenders appeal. I am not sure that I quite follow the reasoning by which in that case the majority of the Court reached the conclusion that the alternative remedy provided by the Sale of Goods Act 1893 was barred to the pursuers by their previous ineffective rejection. But not being in the circumstances prepared to propose to your Lordships that the point of law there and here involved should be submitted to the whole Court, I consider that as the two cases are not distinguishable we ought to follow the decision referred to. In that view I am not prepared to dissent from the judgment which I understand your Lordships propose, viz., that we should affirm the Sheriff-Substitute's interlocutor. I should have proposed, for the reasons I have explained, that in place of the second paragraph of the Sheriff's third finding in fact, which is I think not well founded, there should be substituted a finding to the effect that the pursuers have failed to establish that the sanitary inspector's complaint was due to any improper working or other default of the defenders, while on the other hand we should alter the finding in law so as to read, “Finds, however, in law that inasmuch as after intimating their rejection of the defenders' apparatus in September 1902 the defenders continued to use the same until the end of 1902, they (the defenders) are barred from claiming damages in respect of the apparatus being disconform to contract.” But agreeing with the Sheriff-Substitute's result, I do not think it necessary to dissent from the judgment which your Lordships propose.

The Lord Justice-Clerk intimated that Lord Young, who was absent, concurred in the judgment proposed.

Lord Kincairney, who was absent at the hearing, delivered no opinion.

The Court adhered.

Counsel:

Counsel for the Pursuers and Respondents— Campbell, K.C.— Spens. Agent— James G. Bryson, Solicitor.

Counsel for the Defenders and Appellants— Guthrie, K.C.— Hunter. Agent— Alex. Ross, S.S.C.
1905