Arcos Ltd v E. A. Ronaasen & Son
| Jurisdiction | England & Wales |
| Judge | Lord Buckmaster,Lord Warrington of Clyffe,Lord Atkin,. |
| Judgment Date | 02 February 1933 |
| Judgment citation (vLex) | [1933] UKHL J0202-1 |
| Date | 02 February 1933 |
| Court | House of Lords |
[1933] UKHL J0202-1
Lord Buckmaster.
Lord Blanesburgh.
Lord Warrington of Clyffe.
Lord Atkin.
Lord Macmillan.
House of Lords
After hearing Counsel for the Appellants, as well on Tuesday, the 29th day of November last, as on Thursday, the 1st day of December last, upon the Petition and Appeal of Arcos, Limited, whose Registered Office is at Bush House, Aldwych, in the County of London, praying, That the matter of the Order set forth in the Schedule thereto, namely, an Order of His Majesty's Court of Appeal, of the 13th of April 1932, might be reviewed before His Majesty the King, in His Court of Parliament, and that the said Order might be reversed, varied, or altered, or that the Petitioners might have such other relief in the premises as to His Majesty the King, in His Court of Parliament, might seem meet; as also upon the printed Case of E. A. Ronaasen and Son, lodged in answer to the said Appeal; and Counsel appearing for the Respondents, but not being called upon: and due consideration being had this day of what was offered for the said Appellants:
It is Ordered and Adjudged, by the Lords Spiritual and Temporal in the Court of Parliament of His Majesty the King assembled. That the said Order of His Majesty's Court of Appeal, of the 13th day of April 1932, complained of in the said Appeal, be, and the same is hereby, Affirmed, and that the said Petition and Appeal be, and the same is hereby, dismissed this House: And it is further Ordered, That the Appellants do pay, or cause to be paid, to the said Respondents the Costs incurred by them in respect of the said Appeal, the amount thereof to be certified by the Clerk of the Parliaments.
My Lords,
The Appellants are an English company, and are the instruments of the Russian Government for the sale of their goods in this country. By two contracts, dated 13th November, 1929, they agreed to sell to the respondents a quantity of redwood and whitewood staves c.i.f. the River Thames. The staves were to be shipped during the summer of 1930, and were to be of the following dimensions: under one contract as to 90 standards they were to be of 1/2 in. thickness, 28 ins. in length, and 2 ins. to 5 ins. in breadth; and as to 10 standards, 1/2 in. thickness, 17 ins. in length, and 2 1/2 ins. to 5 ins. in breadth; and under the other, 135/180 standards were to be 1/2 in. by 28 ins. by 2 ins. to 5 ins.; 15/20, 1/2 in. by 17 ins. by 2 1/2 ins. to 5 ins.; 27, 1/2 in. by 28 ins. by 2 ins. to 5 ins.; 3, 1/2 in. by 17 ins. by 2 1/2 ins. to 5 ins. Each contract was in the same terms and provided that any dispute that should arise should be forthwith referred to the decision of a third party to be mutually agreed upon, or, in default, to two arbitrators.
The goods were shipped from Archangel on or about 9th October, 1930. The buyers rejected the documents when tendered, on the ground that the shipment was not a shipment during the summer of 1930 in accordance with the terms of the contracts.
This matter was referred to arbitration, and the Arbitrator, by his award dated 18th February, 1931, awarded that the Respondents were not entitled so to reject the goods. Since October, 1930, the goods which had been landed have lain exposed to the weather on the open wharf.
On 10th April, 1931, the Respondents demanded a further arbitration with regard to the quality and cutting of the staves. This was referred to two arbitrators, according to the contract, and they, having failed to agree, on 3rd July, 1931, appointed Mr. Vigers as umpire, who heard the evidence, inspected the goods, and made his award on 24th August, 1931. It is as to the meaning of the Award upon the true facts there found that this Appeal is concerned.
The real dispute was as to whether the goods satisfied the description as to measurement contained in the contracts, and upon this the arbitrator found as follows:—
"(2) The goods tendered by the Sellers to the Buyers as aforesaid and invoiced as 28 in. staves (hereinafter referred to as 'the said 28 in. staves') were redwood and whitewood staves bundled and were in length not less than 28 ins. and not more than 28 1/8 ins.
(3) The said 28 in. staves are of the following thicknesses:
None are less than 1/2 in.
4.3 per cent. are 1/2 in.
85.3 per cent. are more than 1/2 in and not more than 9/16 in.
9.4 per cent. are more than 9/16 in. and not more than 5/8 in.
1.0 per cent. are more than 5/8 in. and not more than 3/4 in.
None are over 3/4 in.
(4) All the said 28 in. staves were 2 ins. to 5 ins. in width.
(5) The goods tendered by the Sellers to the Buyers as aforesaid and invoiced as 17 in. staves (hereinafter referred to as 'the said 17 in. staves') were redwood and whitewood staves bundled and were in length not less than 17 ins. and not more than 17 1/8 ins.
(6) The said 17 in. staves are of the following thicknesses:—
None are less than 1/2 in.
6.4 per cent, are 1/2 in.
75.3 per cent, are more than 1/2 in. and not more than 9/16 in.
18.3 per cent, are more than 9/16 in. and not more than 5/8 in.
None are over 5/8 in.
(7) With the exception of 2.159 standards 2 ins. in width all the said 17 in. staves were 2 1/2 ins. to 5 ins. in width. The tender of 2.159 standards of 17 in. staves 2 ins. in width was within the provisions of the contracts referred to in paragraph 5 (ii) of this award and constituted a good tender.
(12) It was admitted by the Buyers that some excess in thickness is permissible and I find that staves of thickness not exceeding 5/8 in. are fit for the purpose of making cement barrels whether as sides or headings.
(13) The said 17 in. and 28 in. staves are now swollen and in bad condition by reason of wetting since shipment. I cannot say with accuracy from their present size what was their thickness when shipped but I find that their thickness was closer to 1/2 in. when shipped than it is now and I am satisfied that the staves when shipped were commercially within and merchantable under the contract specification."
and upon these findings he held that the Respondents were not entitled to reject the goods. The Award was in the form of a special case which came before Wright J. on 15th December, 1931, who referred it back to the arbitrator to say what was the evidence upon which he based his statement as to the admission by the buyers that some excess in thickness was permitted. To which the Arbitrator replied that that was his clear impression, but that his Award was not based on that admission, and that the buyers had in fact received the very goods that the contract had provided. Wright J. in his judgment decided in favour of the buyers, upon the ground that the difference in the sizes was not of such a trivial character as would justify its being disregarded by the Court, that the finding as to measurement shows that the goods were not those contracted to be sold and that it was those goods and not their commercial equivalent that the buyers were entitled to demand. The Court of Appeal have confirmed this view.
It is not necessary to examine again the actual difference between the goods shipped and those defined in the specification: nor is it possible to fix the exact extent to which the exposure of the staves, for which the Respondents were responsible, has altered their size. For the real question is whether the statement of the Arbitrator that the staves, when shipped, were commercially within and merchantable under the contract shows that the Arbitrator has found that according to its proper construction the contract has been satisfied. The very wording of the phrase leads strongly to the conclusion that it does not bear that interpretation.
The fact that the goods were merchantable under the contract is no test proper to be applied in determining whether the goods satisfied the contract description, and I think the phrase "commercially" itself shows that while the goods did not in fact answer the description, they could, as a matter of commerce be so dealt with, but the rights of the buyers under the contract are not so limited.
If the article they have purchased is not in fact the article that has been delivered, they are entitled to reject it, even though it is the commercial equivalent of that which they have bought.
But for the decision in the case of Vigers and Sanderson, 1901, 1 K.B. 108, there could, I think, be little doubt about this matter. The learned Judge there held that the buyer was entitled to reject the goods, but he made a statement that the clause entitling the rejection does not...
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