Case laws on Sales of Goods Act-1930

Case book

On

Law of sale of goods

Northern University Bangladesh

Department of Law

Index

Serial No.	Title of the Case	Page No.
01	Barrow, Lane & Ballard Ltd v Phillip Phillips & Co Ltd [1929] 1 K.B. 574
02	Couchman v. Hill [1947] K.B. 554.
03	Cehave N.V. v. Bremer Handelsgesellschaft mbH; the Hansa Nord [1976] Q.B. 44.
04	Rowland v. Divall [1923] 2 K.B. 500.
05	Microbeads A.C. v. Vinhurst Road Markings [1975] 1 W.L.R.218
06	Beale v. Taylor [1967] 1 W.L.R. 1193.
07	Ashington Piggeries Ltd. V. Christopher Hill Ltd. [1972] A.C. 441
08	Nichol v. Godts (1854) 10 Ex. 191
09	Re Moore & Co. v. Landauer & Co. [1921] 2 K.B. 519
10	Brown (B.S.) & Son Ltd. V. Craiks Ltd. [1970] 1 W.L.R. 752
11	Frost v. Aylesbury Dairy Co. Ltd. [1905] 1 K.B. 608
12	Vacwell Engineering Co. Ltd. V. B.D.H. Chemicals Ltd. [1969] 1 W.L.R. 927
13	McAlpine & Sons Ltd. V. Minimax Ltd. [1970] 1 Lloyd’s Rep. 397
14	Griffiths v. Peter Conway Ltd. [1939] 1 All E.R.
15	Crowther v. Shannon Motor Co. Ltd. [1975] 1 W.L.R. 30
16	Godley v. Perry [1960] 1 W.L.R. 9
17	Philip Head & Sons v. Showfronts [1970] 1 Lloyd’s Rep. 140.
18	Federspiel v. Charles Twigg [1957] 1 Lloyd’s Rep. 240
19	Pignataro v. Gilroy [1919] 1 K.B. 459
20	Greenwood v. Bennett [1973] 1 Q.B. 195

Case No. 1

Title of the Case:

Barrow, Lane & Ballard Ltd v Phillip Phillips & Co Ltd [1929] 1 K.B. 574

Summary of the Fact:

A sold to Y 700 bags marked “E.C.P.” and known as lot 7 of Chinese groundnuts, lying in a specified warehouse. At the time of the sale there were, unknown to parties, only 591 bags, and 109 bags having been stolen.

Issue:

1. Whether the non-existence of the goods at the time of the contract will render the contract void?
2. Whether the seller is entitled to the full amount of money which was agreed between the parties as the price of the goods in total?

Decision:

It was held that the contract was void. Therefore no duty or liability on the part of either party shall accrue in this case. The seller is not entitled to the price and the goods accepted by the buyer shall be returned.

Reasoning:

If, in a contract for the sale of specific goods, the goods have, without the seller’s knowledge, perished at the time when the contract was made, the contract is void according to section 6 of the Sale of Goods Act 1979 of United Kingdom.

Case No. 2

 Title of the Case:

Couchman v. Hill [1947] K.B. 554.

Summary of Fact:

In the catalogue at a sale by auction a heifer was described as “unserved”. Both the owner and the auctioneer confirmed this in answer to a question by the bidder. The printed conditions of sale excluded liability for misdescription. But the plaintiff buyer was an insistent sort of fellow and he asked both the auctioneer and the defendant seller specifically if they could confirm what was in the catalogue, namely, that the heifer was unserved. He received a positive answer from each. He then bid for the heifer and was successful. Later it was found that the heifer was pregnant and she died from carrying a calf at too young an age.

Issue:

1. Whether a breach of warranty has occurred?
2. Whether the buyer is entitled to damages for such breach?

Decision:

It was held that breach of warranty has occurred and the seller was liable in damages for breach of warranty.

Reasoning:

The special warranty overrides the printed conditions of sale. Though there was an exemption clause in the catalogue but the decision of the buyer to buy the heifer depended upon the positive assurance given by the seller and the auctioneer about her being unserved. Therefore, it amounts to a special warranty which was subsequently breached. Therefore, notwithstanding the exemption clause the seller is liable to pay damages. The exemption clause affects the catalogue but not the oral assurance which is given by the seller and the auctioneer.

Case No. 3

Title of the case: Cehave N.V. v. Bremer Handelsgesellschaft mbH; the Hansa Nord [1976] Q.B. 44.

Summary of the fact:

A written contract to sell fruit pellets contained the express stipulation, “shipment to be made in good condition.” In fact, some of the pellets were not in good condition when shipped. However, they were, on arrival, still fit to be used for the purpose the buyer had intended and although they were worth less than they should have been, they could still have been re-sold at a reduced price.

Issue:

1. Whether there is a breach of condition?
2. Whether the buyer is entitled to repudiate the contract and reject the goods?

Decision:

It was held that there was no breach of condition and the buyer was not entitled to repudiate the contract and to reject the goods. But the buyer is entitled to damages.

Reasoning:

The sellers were not in breach of the implied conditions as to fitness for purpose and merchantable quality. The express stipulation in the contract was not a condition and the sellers’ breach of it had not been serious enough to go to the root of the contract. Therefore the buyers were entitled only to damages.

Case No. 4

Title of the case: Rowland v. Divall [1923] 2 K.B. 500.

Summary of fact:

Rowland bought a motor-car from Divall and used it for four months. Divall had no title to the car, and consequently Rowland had to surrender it to the true owner. Rowland sued to recover the total purchase price he had paid to Divall.

Issue:

1. Whether there is a breach of condition?
2. Whether the buyer is entitled to recover the total purchase price?

Decision:

It was held that there is a breach of implied condition as to title by the seller and therefore the buyer is entitled to recover the purchase price in full, notwithstanding that he used the car for four months.

Reasoning:

There was a breach of condition. Consequently the buyer can repudiate the contract and reject the goods. But in this case the car was already taken by the real owner; hence no question of rejection of goods arises. Therefore, the buyer can repudiate the contract by taking back the full purchase money as damages due to the breach of condition. The consideration had totally failed on the part of the seller. The use of the car that he had had was no part of the consideration that he had contracted for, which was the property in and lawful possession of the car, whereas what he got was an unlawful which exposed him to the risk of an action at the suit of the true owner.

Case No. 5

Title of the Case: Microbeads A.C. v. Vinhurst Road Markings [1975] 1 W.L.R.218

Summary of fact:

In a contract, made before May 1970 the seller sold the buyers some road marking machines. Unknown to them, another company was in the process of patenting their own road marking apparatus under the patents Act which gave them rights to enforce the patent from November 1970. In 1972 this company brought a patent action against the buyers. The buyers then claimed against the sellers for breach of the implied condition as to title and breach of the implied warranty as to quiet possession.

Issue:

1. Whether there was a breach of condition as to title?
2. Whether there was a breach of warranty as to quiet possession?

Decision:

It was held that the sellers were not liable for breach of implied condition. But the sellers were liable in damages for breach of implied warranty as to quiet possession.

Reasoning:

There was no breach of condition because at the time of the sale the sellers had had every right to sell. The goods were not yet brought under patent. The contract was made before May 1970 and the Patent became enforceable in November 1970. Therefore, the contract is not affected under the Patent Act. On the other hand, there was a breach of warranty as to quiet possession because that was an undertaking as to the future.

Case No. 6

Title of the case: Beale v. Taylor [1967] 1 W.L.R. 1193.

Summary of the fact:

A buyer responded to an advertisement describing a car for sale as a “1961” model. He inspected the car before buying it. After buying it he discovered that the car consisted of half a 1961 model and half of an earlier car.

Issue:

1. Whether there was a breach of implied condition as to description?
2. Whether the buyer was entitled to reject the car?

Decision:

It was held that the seller was liable for breach of condition as to description and the buyer is entitled to reject the goods thereby.

Reasoning:

The buyer had relied at least to some extent on the description of the goods which becomes a condition. Therefore dissimilarity with the description of the delivered goods caused the breach of such condition.

Case No. 7

Title of the case: Ashington Piggeries Ltd. V. Christopher Hill Ltd. [1972] A.C. 441

Summary of fact:

The sellers supplied herring meal consisting of herrings plus preservative under a contract to sell “herring meal” which was wanted by the buyers for use as an ingredient in compounding animal feed to be sold to another person who wanted it to feed to mink. Unfortunately the herrings and preservative together had suffered a chemical reaction making the meal poisonous to mink.

Issue:

1. Whether the goods corresponded with the description?
2. Whether the goods were of merchantable quality?

Decision:

It was held that the meal supplied corresponded with the description “herring meal”. The feed was not of merchantable quality.

Reasoning:

There had been no addition of goods outside the contract description. The feed had an ingredient which was toxic.

Case No. 8

Title of the case: Nichol v. Godts (1854) 10 Ex. 191

Summary of the Fact:

Nichol agreed to sell to Godts some oil described as “foreign refined rape oil, warranted only equal to sample.” Nichol delivered oil equal to the quality of the samples, but which was not “foreign refined rape oil.”

Issue:

1. Whether a breach of condition has occurred?
2. Whether the buyer is entitled to refuse the goods?

Decision:

It was held that breach of condition occurred and Godts could refuse to accept the goods.

Reasoning:

Where there is a sale of goods by sample as well as by description, the goods must correspond with the description as well as sample. Here the goods corresponded with the sample but not with the description.

Case No. 9

Title of the case: Re Moore & Co. v. Landauer & Co. [1921] 2 K.B. 519

Summary of Fact:

Moore sold to Landauer 3,100 cases of Australian canned fruits, the cases to contain 30 tins each. Moore delivered the total quantity, but about half the cases contained 24 tins, and the remainder 30 tins. Landauer rejected the goods. There was no difference in market value between goods packed 24 tins and goods packed 30 tins to the case.

Issue:

1. Whether a breach of condition has occurred?
2. whether the buyer is entitled to reject the goods/

Decision:

It was held that Landauer could reject the whole goods as there was a breach of condition.

Reasoning:

As the goods delivered did not correspond with the description of those ordered.

Case No. 10

Title of the Case: Brown (B.S.) & Son Ltd. V. Craiks Ltd. [1970] 1 W.L.R. 752

Summary of fact:

The buyer of “industrial fabric” found that it was unsuitable for making into dresses but that it was suitable for other industrial purposes; as such it was commercially saleable, though at a slightly reduced price.

Issue:

1. Whether the goods were of merchantable quality?

Decision:

It was held that the goods were of merchantable quality.

Reasoning:

The goods could be used for some other purposes and it had commercial value. Therefore it meets the demand of merchantable quality. If the goods supplied are useless for any purpose for which goods of that description are usually used then they are probably not of merchantable quality. On the other hand, if they are still suitable for some of the purposes for which goods of that description are usually used and could be re-sold for the same or very nearly the same price as if they were suitable for every purpose, they will remain of merchantable quality.

Case No. 11

Title of the Case: Frost v. Aylesbury Dairy Co. Ltd. [1905] 1 K.B. 608

Summary of Fact:

Aylesbury, a milk dealer supplied Frost with milk which Frost and his family consumed. Even though Aylesbury had taken all reasonable precautions to prevent contamination of the milk, it contained typhoid germs which infected Frost’s wife who died as a result.

Issue:

1. Whether any breach of condition has occurred?

Decision:

It was held that Aylesbury was liable for breach of condition.

Reasoning:

The purpose for which the milk was supplied was sufficiently made known to Aylesbury by its description and the milk was clearly unfit for human consumption. Therefore, a breach of condition as fitness of goods has occurred and the buyer is entitled to damages for such breach.

Case No. 12

Title of the case: Vacwell Engineering Co. Ltd. V. B.D.H. Chemicals Ltd. [1969] 1 W.L.R. 927

Summary of Fact:

Vacwells, who made transistors, bought from B.D.H. some ampoules of boron tribromide which were marked “harmful vapour.” Two of Vacwells’ chemists washed the ampoules in a sink, to remove the labels. A violent explosion occurred, killing one of the chemists, injuring the other and causing considerable damage to the premises. The chemical boron tribromide reacted violently to water; apparently one of the chemists had dropped an ampoule in the sink, the ampoule had broken and the chemical had come into contact with water. The dangerous propensity of the chemical was unknown to B.D.H. and the chemists of Vacwells.

Issue:

1. Whether the chemical was fit for the use for which it was required.

Decision:

It was held that the chemical was not fit for the use for which it was required or for purpose. Therefore a breach of condition as to fitness of goods occurred.

Reasoning:

The ampoules did not bear labels drawing attention to the danger which would ensue if the chemical was brought into contact with water.

Case No. 13

Title of the Case: McAlpine & Sons Ltd. V. Minimax Ltd. [1970] 1 Lloyd’s Rep. 397

Summary of Fact:

McAlpines bought four carbon-dioxide fire extinguishers from Mini max. A fire broke out in a timber hut erected by McAlpines on a site. Two of the fire extinguishers were in the hut. When applied to the fire, they exploded, allegedly greatly adding to the damage.

Issue:

1. Whether the goods were fit for the purpose for which they were required?

Decision:

It was held that the fire extinguishers were not fit for the purpose for which they were required. Therefore a breach of condition as to fitness was breached.

Reasoning:

It is obvious that the fire extinguishers were not fit. Because those are bought to extinguish the fire but they caused more damage by explosion.

Case No. 14

Title of the case: Griffiths v. Peter Conway Ltd. [1939] 1 All E.R.

Summary of Fact:

Mrs. Griffiths purchased a tweed coat which caused her to suffer dermatitis. She had an unusually sensitive skin and there was nothing in the coat that would have affected anyone with normal skin.

Issue:

1.      Whether the coat is unfit for purpose?

2.      Whether the seller is liable?

Decision:

It was held that the coat is not unfit and the seller is not liable.

Reasoning:

The plaintiff’s skin abnormality had not been made known to the seller.

Case No. 15

Title of the case: Crowther v. Shannon Motor Co. Ltd. [1975] 1 W.L.R. 30

Summary of the Fact:

In 1972 the plaintiff paid £390 for a 1964 Jaguar car with 82,000 miles on the milometer. He drove it 2,000 miles within three weeks of purchase and then the engine seized up. At the time of the sale the engine must have been nearing the point of failure.

Issue:

1.      Whether a breach of condition occurred?

Decision:

It was held that the seller was in breach of the condition that the car should be reasonably fit for the purpose of being driven on the road.

Reasoning:

The car became useless after running 2,000 miles. Therefore, this is not a minor defect and frustrated the main purpose of the contract. The implied condition as to fitness was not fulfilled.

Case No. 16

Title of the case: Godley v. Perry [1960] 1 W.L.R. 9

Summary of Fact:

Godley, a boy of six, bought a plastic catapult from Perry, a stationer. Godley used the catapult properly but it broke in his hands as it was made in an indifferent manner and part of it ruptured Godley’s eye. Perry had bought a quantity of these catapults from B, a wholesaler, by sample and    Perry’s wife had tested the sample, before placing the order, by pulling back its elastic.

Issue:

Whether Godley could recover from Perry

Whether Perry could recover from B

Decision:

It was held that Godley could recover from Perry and Perry could recover from B.

Reasoning:

The catapult was not fit for its purpose and it was not of merchantable quality. Since the defect of the goods could not be discovered by reasonable examination of the sample. Edmund Davies J. observed “Not extreme ingenuity, but reasonableness, is the statutory yardstick”

Case No. 17

Title of the case: Philip Head & Sons v. Showfronts [1970] 1 Lloyd’s Rep. 140.

Summary of facts: the defendants bought a carpet from the plaintiffs. When the carpet was delivered to the showrooms where it was to be laid, it was sent away for stiching. It was returned the next day in heavy bales and stolen.

Issues:

1. Whether the goods were in deliverable state?
2. Whether the defendants were liable for the price?

Decision:

It was held that the carpet in bales was not in a deliverable state. The defendants were not liable for the price.

Reasoning:

As the goods were not in a deliverable state, therefore the property remained in the plaintiffs. Hence the buyer cannot be held liable for the price. It would be in a deliverable state if it would be laid.

Case No. 18

Title of the case: Federspiel v. Charles Twigg [1957] 1 Lloyd’s Rep. 240

Summary of facts:

Federspiel, a Costa Rican company, bought from Charles twigg, an English company, 85 bicycles under a contract providing that Charles Twigg should ship them in June 1953. Federspiel paid the purchase price in advance. In July 1953 a receiver was appointed for the English company and all the assets, including the bicycles, became charged to the receiver. The Costa Rican company alleged that as the bicycles had been duly packed into cases, marked with their name, were registered for consignment, and shipping space was reserved for them in a named ship, this setting aside of the goods constituted an unconditional appropriation to which they had assented by letter and therefore the property had passed to them.

Issues:

1. Whether was there an appropriation within the relevant section of the Act?
2. Whether the buyer was entitled to recover the goods from the receiver?

Decision:

It was held that there was no appropriation within the relevant section of the Act and therefore the property had not passed to the buyer. The buyer company is not entitled to recover the goods from the receiver.

Reasoning:

The intention of the parties was that the property should pass on shipment which could not have been done and therefore there was no appropriation and the action failed.

Case No. 19

Title of the case: Pignataro v. Gilroy [1919] 1 K.B. 459.

Summary of Facts:

Gilroy sold to Pignataro 140 bags of rice, the particular bags being unascertained. On February 27 Pignataro sent a cheque for the price and asked for a delivery order. Gilroy sent a delivery order for 125 bags from a wharf, and wrote saying that the remaining 15 bags were ready for delivery at his place of business. Pignataro did not send for the 15 bags until March 25, when it was found they had been stolen without any negligence on Gilroy’s part. Pignataro sued to recover from Gilroy the price he had paid for the 15 bags.

Issues:

1. Whether Gilroy has appropriated the contract?
2. Whether Pignataro assented to such appropriation?
3. Whether Pignataro could recover the price claimed?

Decision:

Pignataro could not succeed and could not recover the price.

Reasoning:

 Gilroy had appropriated the 15 bags to the contract, and Pignataro’s assent to the appropriation was to be inferred from his conduct in not objecting. Therefore, the property in the 15 bags passed to Pignataro.

Case No. 20

Title of the case: Greenwood v. Bennett [1973] 1 Q.B. 195

Summary of the facts:

Bennett owned a jaguar car which he entrusted to Mr. S. to do some repairs on it. S. did not do so but instead used it for his own purposes and had a crash in it. Without any authority S. sold the car in its damaged state for £75 to Mr. H., an innocent purchaser. H. spent £226 on repairing the car.

Issue:

1. Whether Bennett was entitled to possession of the car?
2. Whether the innocent purchaser was entitled to get the improvement money?

Decision:

It was held that Bennett was entitled to possession of the car but he had to pay £226 to H.

Reasoning:

Bennett is the true owner. The sale of an article by a person who is not, or has not the authority of, the owner gives no title to the buyer. But an innocent purchaser is entitled to be recompensed to the extent that he spent money improving the goods before he discovered they were not his.