(COURT OF APEAL)*

ABDEL GADIR ABU REGEILA v. OMER ALl MOHAMED

AC-REV-373-1964

 Principles

·  Sale of Goods—Specific goods—Caveat emptor rule does not apply in case of fraudulent misrepresentation

In case of sale of specific goods by inspection, the maxim caveat emptor does not apply when there is a fraudulent misrepresentation

Judgment

Advocates:  \lohamed Ziada for applicant

Abdel Moneim Abdalla El Mekki for respondent

Abdel Magid Imarn I., HC-REV-175-1963. June 18, 1964: —This is an application for revision submitted on behalf of applicant (and plaintiff) against the decree of the District Judge (High Court) dated March ç, 1963, vide which his claim for recovery of the sum of £S.1326.6oom/ms. being balance of price of a lorry and damages for an alleged breach of a contract of sale in respect of the same, was dismissed.

The contract in this case was in respect of the sale of a specific chattel, namely, a lorry described as Bedford “Sifinga.” Specific goods are defined as: “Goods identified and agreed upon at the time a con tract of sale is made “—see Chalmers, Sale of Goods (14th ed., 1963), p. 186. In this case the maxim caveat emptor applies, in which case the seller would be answerable to any latent defects, which an examination cannot reveal. Again, the property in the goods passes to the buyer on delivery in the absence of any agreement to the contrary.

In spite of applicant’s (and plaintiff’s) denial, it was proved that the lorry was properly examined by an engineer selected and approved by applicant’s son. The engineer carried out thorough examination, pointed out the defects after testing up to Merkhiyat Hills. These defects seem to have been mended, for applicant took delivery and proceeded in his lorry to the Gezira.

The lorry broke down the same day near Massalamia Gate and was repaired by applicant at a garage in the industrial area of Khartoum. He then went to Wad Medani and after —rr days brought back the lorry to respondent and asked for either the change of the Perkins engine or to return the lorry and be repaid his money paid in advance on the allegation that the lorry was not a Bedford Siringa but a diverse assemblance of a lorry. The respondent accepted neither.

The defects which put the lorry off work at Massalainia Gate and later repairs by the applicant himself were not proved to have been latent defects. The court below was therefore right on holding the applicant to the maxim.

But, I think the court below went off track when it disregarded the question of fraudulent representation alleged by the applicant; for it is clear that the respondent was offering for sale a Bedford Sifinga. The learned advocate for the respondent tries to urge that there was no question of misrepresentation but only non-disclosure in so far as Perkins engine and other parts were concerned and he also urges that the evidence shows, it does not show, that the term Bedford Sifinga is styled by ordinary members of the public to any lorry whatsoever that used paraffin for fuel. Perhaps this may be so in so far as Sifinga is concerned and not the mark of a lorry, e.g., Bedford, Fiat, etc.

The evidence clearly shows that the respondent was offering a specific lorry for sale as Bedford—Sifinga or no Sifinga. The engine, inter alia, turned out to be Perkins. That was a false representation for which the applicant was entitled to revoke the contract.

The representation may be false and fraudulent. In that case even if it only was to part of the consideration, the contract may be avoided according to the rules: fra’us omnia viriat, and the person who makes it may be liable to exemplary damages—see Chalmers, Sale of Goods (14th ed, 1963), p. 188.

I hope it is clear that the maxim caveat emptor does not cover a case of false and fraudulent representation.

But it seems it is too late now for the applicant to avoid the contract— for he elected to adopt the contract and retained the lorry till January i, 196 as appears from his statement. In this case he will be entitled only to damages and though he struck high when he asked for £S. per day, yet in the circumstances of this case, that may be reasonable by way of exemplary damages.

For the above the application partly succeeds. The decree of the District Judge (High Court) above-mentioned s reversed. There shall be a decree of £S.371.000m/ms. in favour of applicant with costs here and in the court below. The respondent’s counterclaim is hereby dismissed.

BabikerAwadafla C.J. March 28. 1966: —The facts of this case are as follows:

By virtue of a written but undated agreement—which appears to have been entered Into on May 7, 1961—applicant sold to respondent a Bedford lorry for a sum of £S. of which £S. was paid by respon dent in cash and the balance by monthly instalments secured by six promissory notes each for £S. and one promissory note for £S. Payment of the first promissory note was to be made on May 31. 1961.

It was provided in the agreement that respondent had received the lorry after inspection by an expert and that it was free from all defects.

About two months later, on July 6, 1961, respondent instituted a civil suit against applicant claiming rescission of the contract and recovery of the sum of £S.795 and damages on ground of breach of fundamental condiuon on the part of applicant. Respondent contended that neither the machine nor the body of the lorry were of Bedford make, and that the lorry was absolutely defective and actually stopped after running for only 25 kilos.

Applicant admitted the breach but contended that as the property in the lorry had passed to respondent after a thorough inspection and use of the lorry fot two months, it was out of respondent’s power to repudiate the contract. Applicant thCrefore counterclaimed for recovery of the value of the seven promissory notes and interest.

The case was tried by District judge Dafalla El Radi who framed the following issues:

i.                    Does the rule of caveat emptor apply?

ii. Was the lorry completely defective and failed to run after only 25kilos?

iii. Was defendant (i.e., applicant) immediately notified of that fact?

iv. What are the respective rights of the parties vis-à-vis each other?

v. Is defendant entitled to recover the balance sale price?

The evidence disclosed an appalling case of fraud. Although applicant described the lorry as Bedford, he well knew that it was an assembly of varions brands with a Perkins engine. What he wants to rely upon is the ignorance of respondent, an unsophisticated person with obviously no idea about car engines, as well as on the provision in the contract that respondent bad received the lorry after inspection. On reading the record, 1 am satisfied that no inspection was carried out by any independent expert who did explain to respondent the true facts and that the provision in question, was simply a clever device by applicant to guard against the consequences of discovery of the fraud which he knew was imminent. The learned District Judge treated the case as a sale of a specific chattel which respondent had a chance to inspect and therefore decided the case against him and refused to allow rescission. Through sheer oversight, the learned District Judge made no pronouncement on the counterclaim.

Respondent applied to the Honourable the Judge of the High Court who decided there was fraud entitling respondent to repudiate the contract were it not for the fact that respondent had kept the lorry with him for some time. Although I agree with the Honourable the Judge of the High Court on the finding of fraud, yet it is clear that respondent was protesting from the outset as to the condition of the lorry and that the dispute between him and the applicant continued incessantly from the date of receipt of the lorry until July 6, 1961, when the suit was instituted, i.e., a period of only two months.

However, the Honourable the judge of the High Court awarded respondent a sum of £S. by way of damages and dismissed the counter claim for the value of the promissory notes. In other words, respondent was allowed to retain the lorry for what it is worth, was absolved from liability on the promissory notes and has a decree for £S, 371.000m/ms. exclusive of costs.

Having regard to all the circumstances of the case, I think that this decision was just and equitable and I see no reason for intervention by this court on applicant’s behalf.

This application for revision is therefore dismissed with costs.

Osman El Tayeb 1. March 28, 1966: —I concur.