Slater v Hoyle & Smith Ltd
| Jurisdiction | England & Wales |
| Court | Court of Appeal |
| Year | 1920 |
| Date | 1920 |
Contract - Sale of Goods - Breach of Warranty of Quality - Measure of Damages - Market Value - Circumstances peculiar to Plaintiff -
Sect. 53 of the Sale of Goods Act, 1893, contains the following sub-sections:—
Sub-s. 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.”
Sub-s. 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.”
Manufacturers agreed to sell 3000 pieces of unbleached cotton cloth of a specified quality at a certain price per piece to be delivered within a certain period. They delivered 1625 pieces of inferior quality. The purchasers accepted and paid for these pieces but refused to take any further deliveries, and, being sued by the manufacturers for non-acceptance of the remaining pieces, counterclaimed damages for breach of warranty of quality in relation to the 1625 pieces.
The purchasers had made a contract to deliver 2000 pieces of bleached cloth to third persons at a price per piece higher than the market price per piece of the 1625 pieces as delivered, and in fulfilment of that contract had actually delivered 691 of the 1625 pieces, and had received payment for them.
Held, that this contract was not to be taken into account in measuring the damages.
APPEAL from the judgment of Greer J. in an action tried at Manchester before the learned judge without a jury.
The plaintiffs were manufacturers of cotton cloth. On June 20, 1918, they agreed to sell to the defendants at 6l. 9s. per piece of 136 yards 3000 pieces of unbleached repp, condenser weft, of a specified length, width, yarn, warp, and weft. Delivery was to commence in two months and to be completed in December, 1918, but this period was afterwards extended by the consent of both parties. Between August 22, 1918, and January 30, 1919, the plaintiffs had delivered and the defendants had accepted and paid for 1625 pieces.
The defendants alleged, as the fact was, that these pieces were not in accordance with the contract and were unmerchantable if offered for sale as described therein, and they refused to accept the remaining 1375 pieces on the footing that the plaintiffs by persistently delivering inferior cloth had repudiated their obligations under the contract.
The plaintiffs sued the defendants for not accepting the 1375 pieces. The defendants counterclaimed (1.) for breach of warranty of quality as to the 1625 pieces, and (2.) for breach of contract to deliver the 1375 pieces.
The learned judge held that the plaintiffs had repudiated their obligations under the contract and gave judgment for the defendants on the claim.
Upon the counterclaim, for non-delivery of the 1375 pieces he awarded the defendants nominal damages only, because at the time of delivery the market price had fallen below the contract price. As to the 1625 delivered by the plaintiffs, the defendants claimed the difference between the market value on the various days of delivery of 1625 pieces of the quality described in the contract and the market value of the pieces delivered as they were. This difference the learned judge found to be 4½d. a yard, that is the difference between 1s. a yard, the market value of the goods as described in the contract, and 7½. a yard, the market value of the goods actually delivered. He gave judgment for the defendants, the buyers, upon this footing.
The sellers appealed. The evidence at the trial showed that the buyers, the respondents, had made two contracts to sell bleached cloth to the West Somerset and Devon Manufacturing Co., one dated December 14, 1917, for 2000 pieces at 8½d. a yard, and the other dated June 26, 1918, for 3000 pieces at 1s. 3&D a yard. They had completed deliveries under the earlier of these contracts by the end of January, 1919, and in fulfilment thereof they had in fact delivered 691 pieces of the cloth they had purchased from the appellants, and had received the full contract price of 8½d. a yard from the company. The appellants did not know that these contracts had been made or that their goods were to be delivered in fulfilment of either of them. They contended nevertheless that the learned judge ought to have taken them into account in mitigation of the damages claimed by the respondents.F1
Cyril Atkinson K.C. and T. B. Leigh for the appellants.
Sylvain Mayer K.C. and Eastham for the respondents.
December 5. Written judgments were delivered.
BANKES L.J.F2 This is the plaintiffs' appeal from a judgment of Greer J. The plaintiffs are manufacturers of cotton cloths. The action was brought to recover damages for a refusal to accept 1375 pieces of cotton cloth, the balance of a quantity of 3000 pieces which the defendants had agreed to purchase from the plaintiffs. The defendants justified the refusal upon the ground that the goods which the plaintiffs had delivered under the contract were unmerchantable; and they counterclaimed for damages in respect of these goods. The learned judge held that the defendants were in the right in refusing to accept any more goods under the contract, and he awarded them a considerable sum as damages in respect of the goods which had been delivered. From this decision the plaintiffs appeal and ask that judgment shall be entered in their favour or that a new trial shall be ordered, upon the ground that the learned judge put a wrong construction upon the contract, and applied a wrong test in considering whether the goods supplied by the plaintiffs under the contract were or were not in accordance with the contract; and, further, that the damages awarded by the learned judge were excessive.
The last point that was taken was the only one which appeared to present any difficulty. The contract between the appellants and the respondents is dated June 20, 1918, and was for 3000 pieces, delivery to commence in two months, and to be completed in December or earlier. The cotton was to be unbleached. The respondents had entered into two contracts with the West Somerset and Devon Manufacturing Co. for bleached cloth, one dated December 14, 1917, for 2000 pieces at 8½d. per yard, and the other dated June 26, 1918, for 3000 pieces at 1s. 3d. per yard. The respondents completed the deliveries under the earlier of the two contracts by the end of January, 1919. They in fact used 691 pieces of the appellants' cloth in fulfilment of that contract, and were paid the full contract price for it. Under these circumstances it was contended for the appellants that the respondents had suffered no loss and that they ought not to be awarded any damages in respect of these 691 pieces. It is not suggested that the appellants had any knowledge of the respondents' contract with the West Somerset and Devon Co.
We reserved judgment in order that we might consider the cases of Rodocanachi v. MilburnF3; Wertheim v. Chicoutimi Pulp Co.F4; and Williams v. AgiusF5, to which attention was called by a member of the Court.
Rodocanachi's CaseF3 has been expressly approved by the House of Lords in Williams v. Agius.F5 Lord Esher M.R. in Rodocanachi's CaseF6 laid down the law as follows: “It is well settled that in an action for non-delivery or non-acceptance of goods under a contract of sale the law does not take into account in estimating the damages anything that is accidental as between the plaintiff and the defendant, as for instance an intermediate contract entered into with a third party for the purchase or sale of the goods.”
The claim in Wertheim's CaseF7 was for delay in delivering goods. Lord Dunedin in Williams v. AgiusF8 approves the decision in Wertheim's CaseF7, and distinguishes it from Rodocanachi's CaseF9 upon the ground that in the one case the buyer got the goods and was only...
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Bence Graphics International Ltd v Fasson UK Ltd
...against the seller cannot be reduced by taking this into account. He relied upon the decision of the Court of Appeal in Slater v Hoyle and Smith Ltd [1920] 2 K.B. 11 where the buyer bought cotton cloth from the seller in order to fulfil another contract which the buyer had already made with......
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Transfield Shipping Inc. v Mercator Shipping Inc. (The Achilleas)
...prospect to give rise to any claim for damages or an indemnity. 85 In reaching this conclusion Otton, L.J., distinguished Slater v Hoyle & Smith Ltd [1920] 2 K.B. 11. In that case the buyer had bought cotton cloth from the seller in order to fulfil another contract which the buyer had alrea......
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Linden Gardens Trust Ltd v Lenesta Sludge Disposals Ltd and Others ; St Martins Property Corporation Ltd and Another v Sir Robert McAlpine Ltd (formerly Sir Robert McAlpine and Sons Ltd)
...price of the defective goods, irrespective of whether he has managed to sell on the goods to a third party without loss: Slater v. Hoyle & Smith Limited [1920] 2 K.B. 11; see also as to non-delivery Williams Brothers v. Ed. T. Agius Limited [1914] A.C. 510. In those cases the judgments cont......
