Scottish Court of Session Decisions

David Kinnear, Todhills, Tealing, brought an action under the Debts Recovery Act in the Sheriff Court at Perth against John and Daniel Brodie, contractors, Coupar—Angus, for £30, 15s., being the price of a horse sold by the pursuer to the defenders.

On 17th November 1900 the Sheriff-Substitute ( Sym) after a proof, pronounced the following interlocutor, in which the facts of the case are sufficiently set forth:—“Finds in fact (1) that the defenders, who are contractors, having heard that the pursuer, a farmer at Tealing, had a chestnut horse which would be suitable for their business, went to Tealing about 31st July 1900, with a view to buy said horse; (2) that said horse, which had been foaled at Tealing, and had spent all its life there, was then seven years old, and though a somewhat fractious horse when being broken in, had for some time been quiet and tractable in pursuer's hands; (3) that the pursuer on said date sold him to the defenders for £31, with 5s. of a luck penny, or £30, 15s., and gave a warranty that he was ‘correct in wind and work’ (4) that on the following day the pursuer sent him to Auchterhouse Station, where he was met by Charles Ogilvy, the defenders' servant, and whence he was led by Ogilvy to the defenders' premises at Coupar-Angus; (5) that on the same day he was put into a waggon laden with a little over a ton of coal, and though carefully managed was very unruly and plunged violently; (6) that on 2nd August he was put into a stone-cart to fetch stone from Keithick Quarry to Cupar Grange, and though carefully managed by Ogilvy, was again unruly and plunged violently; (7) that on his second journey from the quarry, with about 18 cwts. of load, he stood fast, and then plunged violently and ran into a mill-dam some yards to the left of the road, where, being held down by the loaded cart, he was drowned, and that without any fault on the part of the defenders' said servant; finds in law that, until he was so drowned it was still within the power of the defenders to return him as not ‘correct in work,’ and that the conduct of the horse while in their possession justified his being so returned, and constituted a breach of said warranty, in respect that the defenders were entitled to expect that the horse was fit for immediate use: Therefore sustains the defences, assoilzies the defenders, and finds them entitled to of expenses, for which decerns.”

The pursuer appealed to the Sheriff

Page: 337↓

( Jameson), who on 17th January 1901 pronounced this interlocutor:—“Adheres to the findings in fact in the Sheriff-Substitute's interlocutor of date 17th November 1900; quoad ultra recals the said interlocutor: Finds in law ( first) that after the sale and delivery of the horse in question by the pursuer to the defenders, the said horse was at the defenders' risk; ( second) that the said warranty did not operate as a suspensive condition of the sale to the effect of preventing the passing of the risk from the pursuer to the defenders; ( third) that the loss caused by the death of the horse falls on the defenders; ( fourth) that the pursuer having sold and delivered the said horse to the defenders, is entitled to payment of the stipulated price: Therefore repels the defences, finds the defenders liable to the pursuer in the sum of £30, 15s. sterling, and decerns and ordains them to make payment of said sum to the pursuer: Further, finds the defenders liable to the pursuer in the sum of £ of expenses, for which decerns.”

Note.—“The facts of this case do not admit of much dispute, but I have the misfortune to differ from the Sheriff-Substitute in point of law. While undoubtedly the defenders had a right to repudiate the contract of sale and reject the horse in question in the event of his turning out disconform to warranty, yet they never exercised that right, and at the time the said horse was drowned he was their property under a completed contract of sale, and the maxim res perit domino applies. I am unable to regard the present as one of that class of cases in which the transfer of the property of the thing sold is suspended until the thing sold is subjected to some trial or test. The horse in question was not sold subject to trial for a week or any other period. A condition of that kind would have suspended the passing of the property till the expiry of the period of trial. It was absolutely sold, but subject to a warranty, the breach of which entitled the buyer to dissolve the contract. The warranty may accordingly be viewed as what Professor Bell (1 Com. 260, 7th ed.) calls a dissolving condition. But the buyer had not exercised his right to dissolve the contract at the date of the death of the horse, and the loss caused by that death accordingly falls on him.”

The Sale of Goods Act 1893, section 20, enacts—“Unless otherwise agreed, the goods remain at the seller's risk until the property therein is transferred to the buyer, but when the property therein is transferred to the buyer the goods are at the buyer's risk whether delivery has been made or not.” Section 53—“Where there is a breach of warranty by the seller … the buyer … may (a) set up against the seller the breach of warranty in diminution or extinction of the price … (2) The measure of damages for breach of warranty is the estimated loss directly and naturally resulting in the ordinary course of events from the breach of warranty. (3) In the case of breach of warranty of quality such loss is prima facie the difference between the value of the goods at the time of delivery to the buyer and the value they would have had if they had answered to the warranty. (5) Nothing in this section shall prejudice or affect the buyer's right of rejection in Scotland as declared by this Act.” Section 11 (2)—“In Scotland, failure by the seller to perform any material part of a contract of sale is a breach of contract, which entitles the buyer either within a reasonable time after delivery to reject the goods and treat the contract as repudiated, or to retain the goods and treat the failure to perform such material part as a breach which may give rise to a claim for compensation or damages.” Section 62 (1) … “As regards Scotland, a breach of warranty shall be deemed to be a failure to perform a material part of the contract.”

The defenders appealed to the Court of Session, and argued—Assuming that the horse was not conform to warranty, as both Sheriffs had rightly found, there was here no completed contract of sale. It was a sale under a suspensive condition, viz., that the horse should prove, on trial, to be conform to the warranty given. The buyers were entitled to a reasonable time in which to try the horse, and until that time had expired the property had not passed so as to impose the risk on them. This horse was proved to be disconform to the warranty, and the buyers had the right to reject it. Their position could not be worse because its restoration had become impossible, not through their fault, but in consequence of the vice against which the warranty was given, i.e., through the fault of the seller— Head v. Tattersall, (1871), 7 Exch. 7, per Bramwell, B.; Elphick v. Barnes (1880) 5 C.P.D. 321; Chapman v. Withers (1888), 20 Q.B.D. 824. Alternatively under the Sale of Goods Act the purchaser was entitled to set up the breach of warranty in extinction of the price—sec. 53 (1) ( a). The damage sustained was the price he had paid. On either ground the defenders were entitled to absolvitor.

Argued for the pursuer and respondent—On the assumption that the horse was disconform to warranty (which the respondent maintained was not proved) the Sheriff was right in holding that the property in the horse had passed under a completed contract of sale, and that the risk was therefore with the buyer—Sale of Goods Act, section 20. The Act did not provide otherwise where there was a breach of warranty. The case was not ruled by the authorities cited by the appellant, which were all cases of true conditional contract, the buyer having the right to reject the goods within a specified time. Here the contract was completed, and the maxim res perit domino applied. In any view, the damage sustained by the appellant was not the full price of the horse, but the difference between its value at the time of delivery and the value of what he bargained for—Sale of Goods Act, section 53 (3). The horse, although disconform to warranty, was worth something, and the appellant had given no proof of his actual loss.

Page: 338↓