Sale of goods-Merchantable quality-Whether "quality" includes "grade"
Plaintiff purchased from defendant 100 cases of El Hamama tea. and
accepted the same, thereby losing the right of rejection. The tea, which

"' Court:- Gorman C.l., Bennett A.G. and Flaxman PJ.

was reputed among merchants to be of grade I, had declined in quality
from about the time of the sale. and was in fact between grades I and 2,
and saleable as "Hamarna' tea. but only at a price about tlk Less than the
former quality.

Held: Plaintiff's only claim was on the footing that the tea was no.
of merchantable quality under section 14 (2) of tbe English Sale of Goods
Act. "Quality" within the section is not necessarily restricted to stale or"
condition, but may include grade, if the description attached to the goods'
has come to be associated with a definite standard or grade, This was the
case in regard to Hamama tea, and, since the tea supplied feU belo that
grade, the plaintiff was entitled to damages.

Bristol Tramways 1'. Fiat Motors, Ltd. [1910) 2 K.B. 831 relied
Jones v. Just (1868) L.R. 3 Q.B. 197 discussed.

English Sale of Goods Act 1893, .55: 14 (2), 35.

The plaintiff has appealed. In his appeal he raised two points
(l) that the goods were not of merchantable quality, and that he was
entitled to relief for breach of the implied condition that the goods
should be of merchantable quality contained in section 14 (2) of the
Sale of Goods Act 1893, and (2) that the relief here should be rejec-
tion and recovery of the price paid, and not mere damages.

On the evidence in the court below as to the dealings by the plain-
tiff with the tea, I agree with the judge that the plaintiff accepted the
goods within section 35 ofthe Sale of Goods Act, and that the right to
reject is gone, and that his only remedy (if any). is in damages.

That brings us to the main point of the case. Has there been
breach of the implied condition as to merchantable quality? It is well
known that the old rule of the common law, dating from the time when
all purchases of chattels or goods was in market overt or, as one would
say in the Sudan, in the Suq, was caveat emptor. The article was there
to be seen and tested by the buyer, and, in the absence of fraud by the

seller, it was the buyer's duty to satisfy himself that what he was buy-
ing was in accordance with his requirements. The modern tendency
has been to make inroads into this principle, largely by means of im-
plied conditions and' warranties, and even before the passing of the
Sale of Goods Act it was laid down that where goods were, bought
by description and the buyer had no opportunity of inspection, the
goods must not only correspond with the description but also be mer-
chantable as such. In the particular case of Jones v. Just (1868) L.R.
3 Q.B.197, Manila hemp from Singapore had been purchased and
Manila hemp from Singapore was delivered, but was hemp which had
been wetted and subsequently dried and repacked, and, while still re-
taining it's character of hemp, was not merchantable, i.e., saleable in
the market as Manila hemp, but only at a reduced price, the buyer was
awarded damages.

This rule is now contained in section 14 (2) of the Act in prac-
tically the same form as set out in Jones v. lust. In a sale by descrip-
tion there is an implied condition that the goods are of merchantable
quality, provided that, if the buyer has examined the goods, there is no
implied condition as regards defects which he might have detected by
such examination. Now what is the ambit of this implied condition?
Let us make it an express condition. What would be the meaning to
be attached to a sale of "100 cases EI Hamama tea of-merchantable
quality?" The first thing to be observed is that the tea delivered must
correspond with the description. It must be El Hamama tea, i.e., it
must be tea coming from a certain place, imported by a certain firm
and packed in a certain way, for that we may infer from the evidence
is what constitutes EI Hamama tea. What, if anything, does the con-
ditions as to merchantable quality add to this? Now quality is q~:-,
fined in the Act to include state or condition, and I confess that in, 'the
earlier stages of the case I was inclined to the view that, in respect of
this condition, quality ought to be restricted to state and condition, for
to go beyond, that and read it as referable also to quality in the sense of
grade seemed to me to be adding to the description that which the
parties had not agreed should form part of the description. Quality,
in other words, as the statutory definition shows, has a two-fold mean-
ing. In the sense of state or condition, the stipulation that the Hamama
tea sold shall be of merchantable quality is easily understandable; the
boxes must be intact, ,the tea must not have deteriorated from it's orig-
inal state by exposure to air. If J buy a box of Lyons chocolates, it
docs not suffice that they are actually Lyons chocolates; they must be
fresh, and not have turned that pale brown colour which chocolates do

on exposure to the air. If they have deteriorated in this manner, then
their state or condition, i.e. their quality, is not merchantable. Jones v.
lust is a similar case. But the introduction of the other aspect of qual-
ity, namely grade, to the stipulation that the goods shall be of merchant-
able quality is less easy, and has caused me to hesitate a great deal. It
seemed to be adding to and modifying a conventional description
agreed upon between the parties, and making the description read
"Hamarna tea of the first grade" and not merely Hamama tea. It was
open to the parties so to have agreed, and had they done so the stipula-
tion as to grade would have formed part of the description. But they
did not so agree. How, it may be asked, can that description be modi-
fied in effect by an implied condition as to merchantable quality?
Should not merchantable quality be restricted in it's interpretation to
quality in the sense of state or condition only?

I have come to the conclusion that it should not be so restricted,
and that it is possible that, by a stipulation express or implied as to
merchantable quality, a stipulation as to grade may be imported into
the contract without the description being modified. The solution of
the difficulty is that the description is a matter of agreement between
the parties, it is what they make it; subject to the canons of interpreta-
tion, the test to be applied to ascertaining the contents of the descrip-
tion is a purely subjective one, the intention of the parties. They may
make a stipulation as to grade part of the description. But the test of
merchantability is not subjective; it does not depend on the intention
of the parties; it's criterion is objective, and it's ambit is to be discov-
ered by reference to the practice of the market in respect of this par-
ticular commodity, for it has to be saleable, merchantable as such, and
whether it is so or not depends, not on the intention of the parties, but
on the practice of the market in respect of tills commodity. As is said
in Benjamin on Sales 6th ed., p. 729, "The rule is an inference from
the character of the transaction that the parties were dealing not for
the shadow of the thing designated, described, but for the thing itself
as understood in commerce",' and in Bristol Tramways v. Fiat Motors,
Ltd. [1910] 2 K.B. 831, at p. 841, Farwell L.J. defined an article as of
merchantable quality if it "is of such quality and in such condition"
(note that the Lord Justice refers to both aspects of quality) "that a
reasonable man acting reasonably would after a full examination ac-
cept it under the circumstances of the ease in performance of his offer
to buy that article.. "The objective nature of the criterion is ap-

1 Sec 8th ed. p. 644