Civil Procedure-Commission-Assistance of experts to court under Civil,
Iustice Ordinance 1929, Order VIII

Execution-Stay of execution pending determination of counter-claim
Sale of Goods-Merchantable quality-Sale of Goods Act

Sale of Goods-Remedies for breach 'by sellers-Buyer loses the right to repu-
diate after he accepts the goods-Buyer can only counter-claim when he

                has given a negotiable security                                                                               .

Defendant bought a certain quantity of clothing material from the
plaintiffs and gave them drafts payable after 2, 3 and 4 months in respect
of the price. The sale was by description as well as by sample. The de-
fendant after selling a limited quantity of the g~s discovered that they
were unmerchantable. He sent a sample of the goods to the Government
analyst and it was found that the goods contained a high percentage of a
chemical material which rendered them useless for sale in the Sudan. . The
defendant did not attempt to repudiate the contract until he was asked to
pay the drafts. The plaintiffs bring this action for the recovery of the

                value of the drafts.                                                                 .

Held: (i) There was a breach by the plaintiffs of the implied condi- .
tion as to merchantability under ss. 14 (2) and 15 (2) (c) of the Englis!i

                Sate of Goods Act 1893.'             '

(ii) Since the defendant has accepted the goods and since the property
has passed to him them according to ss. 11 ( 1 ) of the Sale of Goods
Act he had lost his right to reject the goods and is compelled to treat
the breach of condition as a breach of warranty.

(iii) Defendant must pay the value of the drafts but he may bring a
counter claim for damages in respect of the breach of warranty.

(iv) Section 53 (3) of the Sale of Goods Act applies because the
goods were not worthless and to determine the measure of damages a cOm- .
mission is issued to assist the court.

Civil Justice Ordinance 1929, Order VIII.

'English Sale of Goods Act 1893, ss. 14 (2), 15 (2) (c), 11 (1) and 53.

Action

September 28, 1930. Halford J.: It is common ground between
the parties that on April 20th, 1929 defendant gave an order .to the
plaintiffs' local agent for various draperies including ~epe de chitJe

• Court: Halford J.

and'satin giove, the former at 4/6 and-the latter at 5/9 per metre,
the order being subject to the approval of the plaintiffs who are an

. Italian firm of manufacturing weavers at' Cemobbio. The goods were
ordered on samples chosen by the defendant and were to be des-
patched by postal parcels; the crepe de chine was invoiced at 4/8
and the satin giove at 6/1 per metre and the certified invoices and
policies dated June 30th were received by the plaintiffs' agent in
Khartoum some time in July and copy duly delivered to defendant.
The goods themselves were received later by Barclays Bank in Khar-
toum on or about August 10th and taken delivery of by defendant
against sterling drafts accepted by him at 2, 3 and 4 months date,
these drafts covering not only the value of the goods above-mentioned,
but various others purchased by defendant from plaintiffs.

The plaintiffs have instituted these proceedings for the recovery
of the value of these drafts, amounting in all to a sum of E.227.811
m/ms which the defendant has refused to pay on the ground that the
crepe de chine and satin giove was invoiced at 2d/per metre in
excess of the price as ordered and further that the crepe de chine
was found on sale to be of non-merchantable quality as it was over-
loaded by a chemical substance which rendered the fibre useless and
worthless in this country. He further says that the crepe de chine
was purchased as being "all silk" whereas on chemical analysis it was
found to contain over 50% of other substances.

It is further common ground that the defendant made .no com-
plaint to the plaintiffs' agent until some two months after accepting
and taking delivery of the goods and a few days before the maturity

           of the first draft.                                                                               .

The plaintiffs deny defendant's allegations as to the quality of the
goods and maintain that since he has accepted them and taken delivery
he cannot two months later repudiate the contract by rejecting them
and refusing to pay the price.

Hence the preliminary and essential issue for determination is
whether, assuming the goods were sold by sample or description
and on receipt were not of merchantable quality, the defendant is
entitled to reject them some 2 months after accepting delivery.

He admits that he opened the parcels on receipt and stocked
the goods on his shelves and he 'started selling at once. He argues
that on the first complaint by a customer he had the goods tested
and subsequently submitted to the government analyst and that he

could not reasonably haye complained to the plaintiffs before he did
as the defect in the goods was not patent to the eye.

It seems to me that the law as laid down in the English Sale of
Goods Act 1893, which is invariably applied by this court, is clear
on the point.

Whether goods are purchased by description (section 14 (2»
or 'Sold by 'Sample (section 15 (2) (c))., there is an implied condition
that they :shall be of merchantable quality subject to the proviso that
no such coadition exists as to defects which examination by the pur-
chaser conld have revealed.

Section 11 (1) says that if there be breach of a condition, the
goods can be rejected and the contract repudiated but provided always
that where the purchaser has accepted the goods, the property in
which has passed to him, the breach of any condition to be fulfilled
by the seller can only be treated as a breach of warranty and not
as ground for rejecting the goods and treating the contract as repudi-
ated.

And this is unquestionably to my mind the position of the defend-
ant in the present case.

His remedies are set out in section 53 of the Act. A breach of
warranty by the seller does not entitle the buyer to repudiate and
reject the goods but he can either set up the breach by way of defence
in dimunution or extinction of the price or maintain An action against
the seller for damages.

It is settled law however (See Benjamin o~ Sales, 6th Edition,
p. 1139) that if the buyer has given a negotiable security he cannot
set up breach of warranty by way of defence to an. action for the
price. He can however counterclaim for damages.

This is the action he should have taken but has so far failed
to take in the present proceedings.

There must be judgement for the plaintiffs for the amount of
the drafts sued on but I will stay execution of the judgement provided
that the defendant institutes his counterclaim within 15 days. If
he does so there will be a stay pending determination of the counter-
claim and the final question of costs will be considered on judgement
on the counterclaim. Failing his instituting the proceedings within
the period above-mentioned, final judgement will be entered for the
plaintiff together with costs including full scale percentage fees.·