Scottish Court of Session Decisions

The Sale of Goods Act 1893 (56 and 57 Vict. cap. 71), section 14, enacts—“Subject to the provisions of this Act and of any statute in that behalf, there is no implied warranty or condition as to the quality or fitness for any particular purpose of goods supplied under a contract of sale, except as follows: (1) where the buyer expressly or by implication makes known to the seller the particular purpose for which the goods are required, so as to show that the buyer relies on the seller's skill or judgment, and the goods are of a description which it is in the course of the seller's business to supply (whether he be the manufacturer or not), there is an implied condition that the goods shall be reasonably fit for such purpose, provided that in the case of a contract for the sale of a specified article under its

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patent or other trade name, there is no implied condition as to its fitness for any particular purpose. …”

Crichton & Stevenson, coalmasters, 11 Bothwell Street, Glasgow, raised in the Sheriff Court at Glasgow an action against Robert Love, coal and ore merchant, 95 Bath Street, Glasgow, for payment of £52, 13s. 5d. The sum in question was the price of 140 tons 9 cwt. of Strathaven unscreened coal put on board the s.s. “Dalbeattie” in Glasgow harbour by the pursuers in implement of an order received from the defender.

The defender pleaded—“(2) The defender being agent for a disclosed principal is not liable to the pursuers in the sum sued for, and decree of absolvitor should be granted with costs. (3) The pursuers having sold a coal for bunkering steamers, and being aware of the purpose for which the coal was supplied, were bound to supply an article suitably and reasonably fit for the purpose, and having failed to do so decree of absolvitor should be granted with costs. (4) Separatim—The order having been given on the assurance that the coal would be as suitable as Auchlochan coal was for the ‘Dalbeattie,’ and the coal supplied being entirely unsuitable and useless, absolvitor should be granted with costs.”

The facts with regard to plea 2, the other pleas eventually not being maintained, were thus narrated by the Lord President—“I now go in detail to the facts which raise the controversy in this case. The pursuers, the coalmasters, were represented by a gentleman of the name of Jeffrey, who is their employee. Jeffrey, as he himself sets forth, was the coal salesman with the pursuers, and part of his business naturally was to go about asking for orders. Among other people whose orders he wanted to secure was a firm called Honeyman & Company, who were shipowners and needed coal, and there was no question that Jeffrey approached Honeyman in order to see whether he could get an order out of Honeyman. Now here is what Jeffrey says about it himself; he says—‘I never had an order for coal from Honeyman & Company. I am aware that they do a good deal of shipbroking. I have approached Mr Honeyman several times to give me an order. In March 1906 I met Mr Honeyman in the corridor which leads to the office. His office is next door to ours. He mentioned he had a boat coming in and he could give us an order now he thought. He asked the name and price of the coal. I told him it was Slamannan coal. I mentioned it was Strathaven colliery. I said it was unscreened steam coal. The price I quoted was 7s. 6d. f.o.b. Glasgow. He told me it was for bunkers.’ Then there is some mention of Honeyman having used another coal and Jeffrey goes on—‘I said I thought if Auchlochan suited him that ours would suit him.’ Now Jeffrey having thus approached Honeyman and suggested that he might give him an order for this Strathaven coal, and knowing that it was to be used for bunker coal, Honeyman then told him that he did not usually deal direct but that he gave his coal orders through Love, who is the defender in this action; and he therefore suggested to Jeffrey that he would be glad to give him an order but that it must be done through Love and not through him. Accordingly, Jeffrey proceeded to meet Love, and he informed Love of the conversation that he had had with Honeyman. Honeyman in the same way had told Love. Then it is clear that Jeffrey and Love met, that they alluded to the conversation which had taken place between Jeffrey and Honeyman, and, in particular, Love seems to have rather complained to Jeffrey that he had been rather premature in fixing prices, because Love wanted his commission out of it, and he thought it could have been easier done if Jeffrey had not given the prices to Honeyman, and had left that for him, Love. The end of that was that Jeffrey consented, as in a question with Love, to give him it at rather a reduced figure so that there should be a profit for him, Love, allowing Love, so to speak, to resell to Honeyman at the price mentioned between Jeffrey and Honeyman. But here is what Jeffrey says about the interview with Love—‘When I met the defender,’ that is, Love, ‘in the Exchange, he told me the boat the coal was wanted for. He informed me that it was for Honeyman & Company the coal was for.’ Afterwards he says—‘Defender told me that it was Mr Honeyman's order I was getting; that that was the order Mr Honeyman spoke to me about.’

“Now, the order that he gave him was, undoubtedly, an order for a cargo of Strathaven coal. Well, the Strathaven coal was supplied. It was put in the boat, but the performance going down the river was so bad that they anchored off Greenock Pier; and eventually the coal was put out upon the quay at Ardrossan and rejected. But before it was finally rejected they had another trial of it. They had tried it in the boat, but they also had a trial of it in a tug. I am not going into this matter closely on the evidence. I wish simply to state the result at which I have arrived, because it is a result at which I have arrived without the slightest doubt. This is not the difficult part of the case. I am clearly of opinion, as a jury matter, that this coal was de facto unfit. It behaved very badly in the vessel going down, and I think it got a perfectly fair trial in the tug, and was proved to be unsuitable coal for bunker coal. I do not say that with boilers of a particular construction, with forced draught, it might not be possible to get this coal to burn, and analysis probably shows that it has the constituents of heat in it. But that is not the question. The question is an ordinary jury question, and if I was in the trade I should hold, without the slightest hesitation, that this particular cargo of coal was a bad cargo, and was not good enough to raise steam.”

On March 30, 1907 the Sheriff-Substitute ( Fyfe) pronounced this interlocutor-“Finds (1) That in March 1906 defender ordered from pursuers about 150 tons of Strathaven

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unscreened coal at 7s. 6d. per ton delivered f.o.b. at Queen's Dock, Glasgow; (2) That in implement of this order pursuers delivered 140 tons 9 cwt., the price of which is £52, 13s, 5d.; (3) That defender has not paid the price; (4) That defender has failed to establish his pleas: Therefore repels defender's pleas and decerns against defender as craved.”

Note.—“In my opinion there is no room for defender's agency plea. … It seems to me beyond question that the contracting party was defender, by whom the order for the coal was placed, to whose order it was delivered, and to whom it was without objection invoiced

The rejection of defender's agency plea in effect sets up pursuers' case, for there is no serious dispute about the quantity of coal delivered nor about the price.

The onus of proof accordingly shifts to defender to establish the case he sets forth on record. He first sets out to establish the proposition that pursuers induced him to purchase by representing (or rather misrepresenting) that their coal would give as good satisfaction as Auchlochan coal, which had previously been used in the ‘Dalbeattie’ bunkers.

The proof does not seem to me to support this alleged guarantee or sale by Auchlochan sample. …

The defender's case therefore resolves itself into the general plea that the coal delivered not having been reasonably fit for the purpose for which it was supplied, defender was entitled to reject it.

There is no doubt about the facts (1) that what was sold was ‘Strathaven unscreened coal’; (2) that its intended use was, within the knowledge of seller and buyer, for bunkering a steamer; (3) that Strathaven unscreened coal was put on board the ‘Dalbeattie.’ The case is not that one thing was bought and a different thing was put aboard ship, but rather that the thing bought was, when used on board the ship, unfit for its only purpose of raising steam.

In this case, as in all such cases, section 14 of the Sale of Goods Act is pressed upon my attention. I often think in looking at section 14 (1) that the most significant phrase in it is the parenthetical phrase whether he be the manufacturer or not.’ In framing this sub-section (1) of clause 14, what seems to me to have been before the mind of the draughtsman, and probably the only thing before his mind, was the sale of manufactures. I don't think that he had in contemplation at all the sale of a product such as coal, and I cannot but think that if it does apply to products, this entire clause 14 assumes different aspects when applied to manufactures and to products. If a seller sells such a thing as, say a locomotive engine, the ordinary buyer must obviously rely on the seller's skill and judgment, and so it is quite reasonable that under clause 14 the responsibility of the articles sold turning out fit for the purpose for which a locomotive is required shall rest with the seller. But when we come to such a product as unscreened coal—that is, practically coal as it is dug out of the earth—I don't think this applies. No skill or judgment of the seller is, or can be, exercised to fit the subject of sale for a market. If it is not in itself fit for its purpose nothing the seller can do can make it fit.

The same considerations apply to clause 14 (2). I much doubt whether this subsection either was intended to cover a product such as coal. I think it also contemplated only manufactures. I do not think that coal brought up from the bowels of the earth falls within the term ‘goods,’ as used in this sub-section, and so I do not think that, in the statutory sense, any question here arises upon merchantable quality or buyer's examination.

It is not suggested that there was any express warranty given that the coal pursuers sold would attain such and such a result, and if I am right that the statutory implied warranty is not applicable to a product known to the intending buyer, such as coal from a named coalfield, then we get clear of the technicalities of the statute, and are thrown back upon the common law obligations of seller and buyer.

So regarded, the single question seems to me to be—did pursuers do for defender what they contracted to do for him—that is to say, deliver to him what he had bought from them. Now, defender, it is clear from the proof, knew what ‘Strathaven unscreened coal’ meant, for he had bought it before. What he contracted that pursuers should do for him was—that they should dig out of the bowels of the earth a certain quantity of the coal lying in Strathaven pit, and on his account put that on board the s.s. ‘Dalbeattie.’ This pursuers did, and that as it seems to me ends the whole matter as in a question between pursuers and defender. …”

The defender appealed, and argued (on plea 3 only, the others being given up)—The Sale of Goods Act 1893, section 14 (1) applied. That enactment was applicable to the sale of any kind of goods, manufactured or not— Wallis v. Russell, L.R. [1902] 2 Irish 585; Gillespie Brothers & Company v. Cheney, Eggar, & Company, [1896] 2 QB 59. The latter case was a fortiori of this, for the contract specified a special coal under a descriptive name, but the seller's knowledge of the purpose of the purchase still was sufficient to bring in the implied warranty of fitness. Here no doubt the coal mentioned was “Strathaven” coal, but such coal could not be treated as a commodity passing under a trade name, and was not homogeneous in character. Though the commodity might answer the description in the contract, that was not sufficient, but it must come up to the meaning of the parties. It was, for example, not sufficient to supply “No. 1 hay” if the parties meant a particular market which required a higher quality to answer that description than other markets— Jacobs v. Scott & Company, May 4, 1899, 2 F. (H.L.) 70, esp. Ld. Ch. Halsbury at 75–6, and Lord Watson at 77, 36 S.L.R. 611. Here bunker coal, suitable for a steamship, was the meaning of

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parties, and Strathaven was merely inserted as having been suggested by the pursuers. There had been no inspection here; the coal was simply bought on the suggestion and recommendation of the sellers. The previous communings with Honeyman formed part of the transaction. Both parties to the contract knew of these communings, of their terms, that these were being carried out, and that it was Honeyman's order. The defender was therefore entitled to act, as he did, in knowledge of and reliance on these communings, and the pursuers also so acted. Where the purpose was disclosed the seller was under an implied warranty of fitness—Benjamin on Sales, p. 652. Mere knowledge of the purpose of the purchase was sufficient to import a warrant of fitness on the part of the seller— Douglas & Company v. Milne, November 13, 1895, 23 R. 163, esp. Lord Ordinary Low at 164, 33 S.L.R. 128; Jones v. Just, L.R., [1868], 3 Q.B. 197, where Mellor (J.) laid down the rules which sections 13 and 14 of the statute incorporated, and cited Jones v. Bright, 5 Bing. 533, a case in which a warranty was implied though there had been inspection. Reliance on the seller's skill or judgment need not necessarily be proved, for the two parts of the section could be read separately. There was therefore here an implied warranty which had not been fulfilled, and the defender should be assoilzied.

Argued for the pursuers (respondents)—The Sale of Goods Act 1893, sec. 14 (1), where it said “so as to show” that the buyer was relying on the seller was to be read “in such a way as to show.” That was not so here, and the cases cited were inapplicable. In Wallis v. Russell, cit. sup., the question was whether the selection had been left to the seller. In Gillespie Brothers & Company, cit. sup., the buyers had expressly intimated their reliance on the sellers, and that case showed that the statute might be evaded by the actings of parties—Lord Russell at [1896], 2 Q.B. 63. In Jacobs, cit. sup., the difficulty was that the article appeared to have been precisely specified, when it had not, the selection being with the seller—Lord Stormonth Darling, Ordinary, at 2 F. (H.L.) 72. The only question here was whether the contract came under section 14 (1). It did not. The defender asked for a specific article and got it. He did not rely on the seller. The communings with Honeyman were no part of the contract. The connecting link between the two was. a missing. To make the section apply it must be proved that Honeyman's “reliance” that the coal was as good as Auchlochan, had been incorporated as part of the contract. The defender had not done so, and all he was entitled to was a fair article for the price—Bell's Prin. sec. 95. He had got that, and the Sheriff-Substitute's judgment was therefore right and should be affirmed.

At advising—