Die Jovis, 2° Februarii,
1933.
Parliamentary
Archives,
HL/PO/JU/4/3/878
ARCOS, LIMITED
v.
E. A. RONAASEN AND
SON.
Lord
Buck-
master.
Lord
Blanes-
burgh.
Lord
Warring-
ton of
Clyffe.
Lord
Atkin.
Lord
Macmillan.
Lord
Buckmaster.
MY LORDS,
The Appellants are an English
company, and are the instru-
ments of the Russian Government for
the sale of their goods in this
country. By two contracts, dated
13th November, 1929, they
agreed to sell to the respondents a
quantity of redwood and white-
wood staves c.i.f. the River
Thames. The staves were to be
shipped during the summer of 1930,
and were to be of the following
dimensions : under one contract
as to 90 standards they were to be of
1/2 in. thickness, 28 ins.
in length, and 2 ins. to 5 ins. in breadth; and
as to 10
standards, 1/2 in. thickness, 17 ins. in length, and 21/2 ins.
to
5 ins. in breadth; and under the other, 135/180 standards were
to
be 1/2 in. by 28 ins. by 2 ins. to 5 ins.; 15/20, 1/2 in. by
17 ins. by
2 1/2 ins. to 5 ins.; 27, 1/2 in. by 28 ins. by
2 ins. to 5 ins.; 3, 1/2 in. by
17 ins. by 21/2 ins. to 5
ins. Each contract was in the same terms and
provided that any
dispute that should arise should be forthwith
referred to the
decision of a third party to be mutually agreed upon,
or, in
default, to two arbitrators.
The goods were shipped from
Archangel on or about 9th Octo-
ber, 1930. The buyers rejected
the documents when tendered, on
the ground that the shipment was
not a shipment during the
summer of 1930 in accordance with the
terms of the contracts.
This matter was referred to
arbitration, and the Arbitrator,
by his award dated 18th
February, 1931, awarded that the
Respondents were not entitled so
to reject the goods. Since October,
1930, the goods which had
been landed have lain exposed to the
weather on the open wharf.
On 10th April, 1931, the
Respondents demanded a further
arbitration with regard to the
quality and cutting of the staves.
This was referred to two
arbitrators, according to the contract,
and they, having failed
to agree, on 3rd July, 1931, appointed Mr.
Vigers as umpire, who
heard the evidence, inspected the goods, and
made his award on
24th August, 1931. It is as to the meaning of
the Award upon the
true facts there found that this Appeal is
concerned.
The real dispute was as to
whether the goods satisfied the
description as to measurement
contained in the contracts, and upon
this the arbitrator found as
follows :-
" (2)
The goods tendered by the Sellers to the Buyers as
"
aforesaid and invoiced as 28 in. staves (hereinafter referred
"
to as ' the said 28 in. staves') were redwood and whitewood
"
staves bundled and were in length not less than 28 ins. and
"
not more than 28 1/8 ins.
" (3) The said 28 in.
staves are of the following thick-
" nesses :
" None are less than 1/2
in.
" 4.3 per cent, are 1/2 in.
" 85.3 per cent, are more
than 1/2 in. and not more
than 9/16 in.
18073
A
2 [2]
" 9.4 per cent, are more
than 9/16 in. and not more than
" 5/8".
" 1.0 per cent -are more
than 5/8 in. and not more than
" 3/4 in.
" None are over 3/4 in.
" (4) All the said 28 in.
staves were 2 ins. to 5 ins. in
" width.
'' (5) The goods tendered by the
Sellers to the Buyers as
" aforesaid and invoiced as 17 in.
staves (hereinafter referred
" to as ' the said 17 in. staves
') were redwood and whitewood
" staves bundled and were in
length not less than 17 ins. and
" not more than 17 1/8 ins.
" (6) The said 17 in.
staves are of the following thick-
" nesses :—
" None are less than 1/2
in.
" 6.4 per cent, are 1/2 in.
" 75 3 per cent, are more
than 1/2 in. and not more than
" 9/16 in.
" 18.3
per cent, are more than 9/16 in. and not more than
" 5/8 in.
" None are over 5/8 in.
" (7) With the exception of
2.159 standards 2 ins. in
" width all the said 17 in. staves
were 21/2 ins. to 5 ins. in width.
" The tender of 2.159
standards of 17 in. staves 2 ins. in width
" was within the
provisions of the contracts referred to in para-
" graph 5
(ii) of this award and constituted a good tender.
'' (12) It was admitted by the
Buyers that some excess in
" thickness is permissible and I
find that staves of thickness
" not exceeding 5/8 in. are
fit for the purpose of making cement
'' barrels whether as sides
or headings.
" (13) The said 17 in. and
28 in. staves are now swollen
" and in bad condition by
reason of wetting since shipment. J
" cannot say with
accuracy from their present size what was
" their thickness
when shipped but I find that their thickness
" was closer to
1/2 in. when shipped than it is now and I am
" satisfied that
the staves when shipped were commercially
" within and
merchantable under the contract specification."
and upon these findings he held
that the Respondents were not
entitled to reject the goods. The
Award was in the form of a
special case which came before Wright
J. on 15th December, 1931,
who referred it back to the arbitrator
to say what was the evidence
upon which he based his statement as
to the admission by the buyers
that some excess in thickness was
permitted. To which the Arbitra-
tor replied that that was his
clear impression, but that his Award
was not based on that
admission, and that the buyers had in fart
received the very goods
that the contract had provided. Wright J.
in his judgment decided
"in favour of the buyers, upon the ground
that the difference
in the sizes was not of such a trivial character
as would justify
its being disregarded by the Court, that the find-
ing as to
measurement shows that the goods were not those con-
tracted to be
sold and that it was those goods and not their com-
mercial
equivalent that the buyers were entitled to demand. The
Court of
Appeal have confirmed this view.
It is not necessary to examine
again the actual difference
between the goods shipped and those
defined in the specification;
nor is it possible to fix the exact
extent to which the exposure of
the staves, for which the
Respondents were responsible, has altered
their size. For the real
question is whether the statement of the
Arbitrator that the
staves, when shipped, were commercially within
[3] 3
and merchantable under the
contract shows that the Arbitrator has
found that according to its
proper construction the contract has been
satisfied. The very
wording of the phrase leads strongly to the
conclusion that it
does not bear that interpretation.
The fact that the goods were
merchantable under the contract
is no test proper to be applied in
determining whether the goods
satisfied the contract description,
and I think the phrase " com-
" mercially " itself
shows that while the goods did not in fact
answer the description,
they could, as a matter of commerce be so
dealt with, but the
rights of the buyers under the contract are not
so limited.
If the article they have
purchased is not in fact the article that
has been delivered, they
are entitled to reject it, even though it is
the commercial
equivalent of that which they have bought.
But for the decision in the case
of Vigers and Sanderson, 1901,
1 K.B. 108, there
could, I think, be little doubt about this matter.
The learned
Judge there held that the buyer was entitled to reject
the goods,
but he made a statement that the clause entitling the
rejection
does not operate " so as to force the buyer to take the
"
goods which are neither within nor about the specification, nor
"
commercially within its meaning." That decision must be read
in
relation to the words of the contract then considered, which
pro-
vided that the goods were to be " about " the
specification stated,
and no such word as " about "
occurs in the present contract.
There is no room in this
contract for any elasticity, and I agree
with the judgment of Lord
J. Scrutton in the case of Green v. Arcos,
in 39
Lloyds List Reports, p. 229, at p. 231, that the phrase used
by
Bigham J. was only intended to cover cases in which the dif-
ference
was so small that the law would not regard it.
The only part of this case that,
in my opinion, presents any
difficulty is the fact that some
change of size took place owing to
the exposure for which the
Respondents were responsible, but I agree
with the interpretation
of the Court of Appeal upon the finding in
this respect, namely,
that though the staves were nearer to 1/2 in.
when they
were delivered, yet they did not then satisfy the specifica-
tion,
except by regarding the matter as one in which the commer-
cial
equivalent can be accepted for the actual description.
I can find no flaw in the
reasoning of Wright J. and the Court
of Appeal, and their
unanimous opinion renders further discussion
of the matter
unnecessary.
48073 A 2
IN THE MATTER OF THE ARBITRATION ACT, 1889 and
IN THE
MATTER OF, AN ARBITRATION
between
ARCOS, LTD. (Sellers)
Lord
Buck-
master.
Lord
Blanes-
burgh.
Lord
Warring-
ton of
Clyffe.
Lord
Atkin.
Lord
Macmillan.
v
E. A. RONAASEN AND SON (Buyers).
Lord Warrington of Clyffe.
MY LORDS,
The question in this Appeal
from a unanimous Judgment of
Scrutton, Greer and Slesser, L.J.J.,
affirming a Judgment of
Wright, J., in favour of the buyers is
whether on a sale of goods
by description the implied condition
that the goods shall correspond
with the description (Sale of
Goods Act, 1893, Section 13) has been
performed by the seller so
as to disentitle the buyer to reject the
goods.
The facts and the law
applicable to them have been or are about
to be so thoroughly
stated and discussed by other noble and learned
Lords, whose
opinions I have had the advantage of reading, that
I propose to
state quite shortly my reason for agreeing with their
conclusion
and that of the four learned Judges by whom the case
was decided
in the Courts below.
The contracts (there were two
in identical terms) were for the
sale by the Appellants as
sellers to the Respondents as buyers of a
quantity of Russian
redwood and whitewood staves of certain
specified dimensions in
length breadth and thickness. As to
length and breadth certain
limits of variation were permitted by
the contract and are
specified in the description, but as to thick-
ness this is to be
in every case 1/2-inch without any qualification.
The goods were duly shipped and
tendered but they were re-
jected by the buyers on the only
ground material to this Appeal,
viz., that they or a large number
of them exceeded the contractual
thickness and that the statutory
condition was therefore not
fulfilled.
Pursuant to the contracts the
matter was referred to a com-
mercial arbitrator who made his
award in the form of a special
case.
Under the contracts the staves
were to be of a definite thickness
of 1/2-inch, neither more nor
less, and with no qualification such as
" about " or "
substantially " or " commercially " whatever may
be
the precise meaning of this last word. The sellers therefore
were
bound to tender 1/2-inch staves.
The actual results of the
inspection of the staves given by the
Arbitrator disclosed
extensive variations in thickness always on the
side of excess.
The staves had, however, been exposed to weather
since landing
and were swollen and in bad condition.
Under these circumstances the
Arbitrator stated " I cannot say
" with accuracy from their
recent size what was their thickness
" when shipped but I find
that their thickness was closer to 1/2-inch
" when shipped than it is
now." That is in my opinion a finding
that staves now exceeding
1/2-inch were at shipment also in excess of
that measure though not to the
same extent. He then adds " I am
2 [5]
" satisfied that the
staves when shipped were commercially within
" and
merchantable under the contract specification," and he made
an
award in favour of the sellers.
In my opinion by acting as he
did he has added to the
description in the contract a
qualification to which the contracting
parties have not agreed,
and which he was not entitled to add, and
that the Courts below
were justified in setting aside his award.
It is not suggested that this is
a case in which the deviations
from the contractual thickness were
so slight as to be negligible.
In such a case a simple finding
that they answered the description
would be proper without the
addition of such a qualification as
above mentioned.
I agree that the Appeal fails
and should be dismissed with costs.
Lord
Buck-
master.
Lord
Blanes-
burgh.
Lord
Warring-
ton of
Clyffe.
Lord
Atkin.
Lord
Macmillan.
[6]
ARCOS, LIMITED
v.
E. A: RONAASEN AND SON.
Lord Atkin.
MY LORDS,
The question between the parties
arises on an award stated in
the form of a special case by an
umpire appointed under a sub-
mission contained in two contracts
for the sale of timber. The
contracts were in the White Sea 1928
C.I.F. form and were between
the appellants Arcos, Limited,
sellers, and the respondents, E. A.
Ronaasen and Son, buyers. It
is unnecessary to set them out at
length. The substance was that
the sellers agreed to sell to the
buyers " the wood goods
hereinafter specified " subject to a varia-
tion of 20 per
cent, in sellers' option on any item, to be shipped
from Archangel
" during the summer 1930." The first contract
specified
" Redwood and whitewood staves bundled
90 standards 1/2 in. by
28 ins. by 2 ins. to 5 ins.
10 standards 1/2 in. by
17 ins. by 2-1/2 ins. to 5 ins.
Messrs. Arcos, Limited, promise to
do their best to induce the
shippers not to cut any 2 ins. in the
1/2 in. by 17 ins. headings, but
should a few 2 ins. width
fall buyers agree to take same at a reduc-
tion in price of 40s.
per standard." There were further conditions
on the back of
the contract which it is unnecessary at present to
consider. The
second contract was in identical terms save as to
quantities of
standards and provided for 135/180 and 27 standards
of 28 ins.
length, and 15/20 and 3 standards of 17 ins. length. The
staves
were required by the buyers for making cement barrels and
this was
made known to the sellers in circumstances that implied a
condition
that they should be fit for that purpose. The goods in
question
were shipped under the contracts in October. When the
shipping
documents were tendered the buyers refused them on the
ground that
there had not been a summer shipment. There was an
arbitration to
determine this dispute, and the umpire held that the
shipment was
a summer shipment. The buyers thereupon examined
the goods which
had been landed and claimed to reject them on the
ground that they
were not of contract description. This dispute
went to arbitration
and the umpire made his award in the form of
a special case in
which, after stating the facts, he awarded subject
to the opinion
of the Court that the buyers were not entitled to
reject. On the
hearing of the special case Wright J., and on
appeal the Court of
Appeal, differed from the umpire and held that
the buyers were
entitled to reject. The simple question is whether
the goods when
shipped complied with the implied condition (Sale
of Goods Act
1893, Section 13) that they should correspond with the
description.
When the umpire inspected them on July 9, 1931.
some nine months
after landing and exposure to rain, he found the
actual
measurements to be as follows :—
28 in. staves.
None less than 1/2 in.
4.3 per cent. were 1/2 in.
85.3 per cent. between 1/2
in. and 9/16 in.
9.4 per cent. between 9/16 in.
and 5/8 in.
1 per cent. between 5/8 in. and 3/4 in.
None over
3/4 in.
17 in. staves.
None less than 1/2 in.
6.4 per cent. were 1/2 in.
75.3 per cent. between 1/2
in. and 9/16 in.
18.3 per cent. between 9/16 in.
and 5/8 in.
None over 5/8 in.
[7] 2
He found that they were all fit
for use in the manufacture of cement
barrels. He was unable with
accuracy to say what was their thick-
ness when shipped, but "
their thickness was closer to 1/2 in. than it
" is now and I
am satisfied that the staves when shipped were com-
"
mercially within and merchantable under the contract specifiea-
"
tion,"
The decisions of the learned
Judge and of the Court of Appeal
appear to me to have been
unquestionably right. On the facts as
stated by the umpire as of
the time of inspection only about 5 per
cent, of the goods
corresponded with the description : and the
umpire finds it
impossible to say what proportion conformed at the
time of
shipment. It was contended that in all commercial
contracts the
question was whether there was a " substantial "
com-
pliance with the contract: there always must be some margin :
and
it is for the tribunal of fact to determine whether the margin
is
exceeded or not. I cannot agree. If the written contract
specifies
conditions of weight, measurement and the like, those
conditions
must be complied with. A ton does not mean about a ton,
or a yard
about a yard. Still less when you descend to minute
measurements
does 1/2 in. mean about 1/2 in. If the seller wants a
margin he must
and in my experience does stipulate for it. Of
course by recognised
trade usage particular figures may be given a
different meaning, as
in a baker's dozen; or there may be even
incorporated a definite
margin more or less : but there is no
evidence or finding of such a
usage in the present case. No doubt
there may be microscopic
deviations which business men and
therefore lawyers will ignore.
And in this respect it is necessary
to remember that description and
quantity are not necessarily the
same: and that the legal rights in
respect of them are regulated
by different sections of the code
description by Section 13,
quantity by Section 30. It will be found
that most of the cases
that admit any deviation from the contract
are cases where there
has been an excess or deficiency in quantity
which the Court has
considered negligible. But apart from this
consideration the right
view is that the conditions of the contract
must be strictly
performed. If a condition is not performed the
buyer has a right
to reject. I do not myself think that there is any
difference
between business men and lawyers on this matter. No
doubt in
business men often find it unnecessary or inexpedient to
insist on
their strict legal rights. In a normal market if they get
something
substantially like the specified goods they may take them
with or
without grumbling and a claim for an allowance. But in a
falling
market I find that buyers are often as eager to insist on their
legal
rights as courts of law are ready to maintain them. No doubt
at
all times sellers are prepared to take a liberal view as to
the
rigidity of their own obligations, and possibly buyers who in
turn
are sellers may also dislike too much precision. But buyers
are not
as far as my experience goes inclined to think that the
rights defined
in the code are in excess of business needs. It may
be desirable to
add that the result in this case is in no way
affected by the umpire's
finding that the goods were fit for the
particular purpose for which
they were required. The implied
condition under Section 14 (1),
unless of course the contract
provides otherwise, is additional to
the condition under Section
13. A man may require goods for a
particular purpose and make it
known to the seller so as to secure
the implied condition of
fitness for that purpose : but there is no
reason why he should
not abandon that purpose if he pleases, and
apply the goods to any
purpose for which the description makes
them suitable. If they do
not correspond with the description there
seems no business or
legal reason why he should not reject them if
he finds it
convenient so to do.
Agreeing as I do with the
reasoning of the judgments below, I
find it unnecessary to say
more than that I agree that the appeal
should be dismissed with
costs.
(18073-14) Wt. 130-37 14
2/33 P. St. G.311
