Scottish Court of Session Decisions

Upon February 13, 1893, Henry Pini & Company, commission merchants, London, sent an order to George Smith & Company, ironfounders, Glasgow, in the following terms:—“ Soil-pipes to W. Macfarlane & Company's pattern, No. 32, 1500 pipes, 4 in. dia., 6 ft. long, 1 4 in. metal, to weigh 60 lbs. each, coated, at 1s. 3 3 4 d. per yard. … Both soil-pipes and R, W. pipes guaranteed equal in all respects to Macfarlane's goods … Extra care to be given to the coating of the soil-pipes and painting of the R.W. pipes. Where delivered—F.A.S. Glasgow, in four weeks. Terms —5 per cent. discount monthly.”

Upon 1st March Pini & Company directed Smith & Company that the pipes were to be consigned to the order of R. Mac—kill & Company, Glasgow, and the mate's receipt to be handed to that company. Upon 23rd March Smith & Company sent an invoice to Pini & Company, intimating that 1500 No. 39 pipes of certain dimensions had been shipped free alongside the s.s. “Fire King” at Glasgow, c/o Messrs Robert Mackill & Company, 29 Waterloo Street, Glasgow. Upon March 25th Pini & Company wrote—“We know nothing of No. 39 pipes … and cannot accept this description. If you will please refer to our order you will see that we specified Macfarlane's patterns.” In consequence of this letter the London agent of Smith & Company called upon Pini & Company and wrote this docquet upon the invoice “Above pipes are same in every respect as ordered and estimated for.” Upon March 27th Pini & Company paid Smith & Company £257, 19s. 8d. as the contract price of the goods ordered.

The goods were sent to Liverpool, there transhipped, and sent to Buenos Ayres. Neither at Glasgow nor Liverpool was any examination of the pipes made on behalf of Pini & Company.

When the goods arrived at Buenos Ayres Pini & Company's buyers refused to take delivery on the ground, as they stated in a letter of May 20th 1893, that the pipes were “different in weight and shape from those of Macfarlane, contrary to what had been ordered.” Upon 8th June they wrote finally declining the pipes. Pini & Company received their customers' letter of 20th May about the middle of June, but they did not inform Smith & Company that the pipes had been rejected until July 11th, upon which date they wrote that their customers in Buenos Ayres had refused to take delivery, and that the pipes were lying for Smith & Company's account. No detailed information of the particulars in which the pipes were said to be disconform to contract was given to Smith & Company until 18th January 1894, when Pini & Company sent them a letter containing details of the points in which they considered Smith & Company's pipes differed from Macfarlane's pattern.

In February 1894 Pini & Company raised an action in the Sheriff Court at Glasgow (1) for repayment of the price of the pipes; and (2) for payment of £250 for freight, insurance, &c., and loss and damage to their reputation.

The pursuers pleaded—“(1) The defenders having obtained payment for the soil pipes on the false representation that they were of the description ordered, are bound to return the money so obtained, with interest and expenses incurred. (2) The defenders having failed to supply soil pipes in terms of their contract, are bound to make good to the pursuers all loss sustained through their failure to fulfil their contract.”

The defenders pleaded—“(3) The pursuers having taken delivery of the goods and having used and dealt with them as their own property, the defenders are entitled to absolvitor. (4) The goods in question having been delivered to and received by the pursuers in the port of Glasgow, the defenders have no concern with what happened to them in Buenos Ayres. (5) The goods not having been timeously rejected, the pursuers' claim is barred.”

Upon 28th January 1895 the Sheriff—Substitute ( Guthrie), after certain findings in fact, found “that the pursuers' rejection was not timeous, and that they are not entitled to repayment of the price or to damages as concluded for: Therefore assoilzies the defenders, and decerns.”

“ Note.—The pursuers call themselves commission merchants, and it was no doubt well known to the defenders that they were probably purchasing for some correspondent in South America. They were, however, the only persons with whom the defenders contracted, or whom the defenders knew about in the matter. There was in the contract or the negotiations no reference to a foreign principal, the goods were not as in some examples that occur in practice enclosed or packed so as to make examination in this country difficult, or injurious, or impossible, and there was no condition at all qualifying the natural inference from the terms of the contract, that on delivery to the pursuers and payment by them the matter ended. Neither usage of trade nor the course of dealing between the parties

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supports the contention that the question of performance should remain open till the buyer in Buenos Ayres had examined and approved. It is said that Mr Brown, the defenders' agent in London, wrote a guarantee upon the invoice and got payment of the price a month before the stipulated time of payment. It was argued in effect that that was a guarantee that the pipes would pass inspection at Buenos Ayres— in other words, that it added a new condition to the contract, making it equivalent to a sale with delivery at Buenos Ayres. In the light of what took place at the time, it seems to have been intended only to remove an objection that had been taken to the terms of the invoice, and there is no ground for holding that Mr Brown had power to make so serious a change on the original agreement. The defenders, if one may draw an inference from the large additional discount they offered for this early payment, were anxious to get their money, but it was not argued, so far as I understood, that they would have been willing to allow so serious an alteration of the contract as the pursuers' view of this representation involves, that Mr Brown had express authority so to vary it, or that they were aware that the money had been obtained upon the footing that a further guarantee as to the goods had been given. All this argument, however, seems to be futile when we notice that what Mr Brown wrote is but an expression of the defenders' original obligation, and that it does not bear to relieve the pursuers of the duty of examining and rejecting the goods within a reasonable time, which is, as I read the contract, before or immediately after delivery to them, the buyers.

The pursuers appealed, and argued—The question was whether the defenders had timeously rejected the goods when they were found disconform to contract, so as to entitle them to repetition of the price they had paid under the idea that they were conform to contract. It was admitted that the goods were not examined at Glasgow, nor at Liverpool, but no duty lay upon the pursuers to make such an examination. The general rule was, if the buyer had no opportunity of examining the goods before they were sent to their destination abroad, he must reject them on discovering the defect. In this case the buyer was in London, and Mackill his agent was only agent for receiving the goods on board the vessel. He could not bind his principal to anything else—Bell's Comms, i. 464; Stevenson v. Dalrymple, June 28, 1808, M. voce Sale, App. i. 5. In that case the Court proceeded upon what followed the buyer's discovery that the goods were not conform to contract, not upon the ground that he had not examined them before he used them — M'Cormick & Company v. Bittmeyer & Company, June 3, 1869, 7 Macph. 854. In the second place, if it was considered that the pursuers ought to have had the goods examined and rejected at Glasgow or Liverpool, the defenders had put them off their guard by their agent's action in writing the docquet he did upon the invoice, the effect of that docquet being that the goods were guaranteed to be conform to contract, and the obligation to examine was therefore taken off the pursuers.

The defenders argued — The defenders were bound to deliver the goods “free alongside” the ship, and it was not denied that they had carried out that part of the bargain. It was then the duty of the pursuers to examine the goods for themselves, and to reject them if disconform to contract. To say that they were excused from that duty because they themselves resided in London, and the agent they employed in Glasgow was not capable of examining the goods, was absurd. In the second place, the docquet upon the invoice could not have thrown them off their guard, because all that it referred to was the difference between the number under which the pipes had been ordered and the price that appeared in the invoice. The pursuers must have known that the defenders' London agent could not have any personal knowledge that the pipes were according to contract. Even if no duty lay upon the pursuers to examine the goods upon shipment, they were not timeously rejected by them when the buyer in Buenos Ayres refused them, because, although he let the pursuers know he would not take them by a letter dated May 20th 1893, they did not acquaint the defenders with that fact until July 11th, and did not furnish them with specific details of the objections to the pipes until January 18th 1894.

At advising—