V.P. Peer Mahomed Rowther vs Dalooram Jayanarayan

John Wallis, C.J.—This is an appeal from a judgment of Mr. Justice Coutts Trotter, giving the plaintiff damages for breach of contract on the

ground that the goods delivered pursuant to the contract were found to be damaged by white ants and not of merchantable quality. Mr. M.D.

Devadoss, in appeal, has raised a fresh point that Section 113, Indian Contract Act, does not mean that in the case of sales by description and

sales by sample there is the same warranty that the goods are of merchantable quality as is provided in Sections 14 and 15 of the English Sale of

Goods Act, 1893. It would be a very extraordinary thing if these two statutes which are founded on the same course of English decisions were

found to vary in such a material particular as this. The language used in Section 113, Indian Contract Act, is not as clear as the language used in the

Sale of Goods Act, which uses the words, '' merchantable quality."" But the first illustration to Section 113, Indian Contract Act, is clearly taken

from the case of Gardiner v. Gray (1815) 4 Campbell 141 which was one of the earliest cases to lay down that there was '' a warranty that the

goods shall be saleable in the market under the denomination mentioned in the contract between them'' (the parties). There was a series of cases

subsequently, including the case of Jones v. Just (1868) L.R. 3 Q.B. 197 down to the case of Nusserwanji Bomanjee Mody and Ors. v. Gregson

and Ors. (1868) L.R. 4 Ex. 49. That case was decided in 1868 about the time when the Indian Contract Act was under consideration, and it

appears fairly clear that the language of Section 113 was borrowed from the language of that eminent Judge, the late Mr. Justice Willes at page 55

of the judgment in that case. He says, "" Another class of cases is that of goods brought under a specified commercial description, either by sample,

or even after inspection of bulk"" (the two cases dealt with in the section). He goes on : ""In such cases it is an implied term, notwithstanding the

sample or inspection, that the goods shall reasonably answer the specified description in its commercial sense. The sample in such cases is looked

upon as a mere expression of the quality of the article, ''not of its essential character, and notwithstanding the bulk be fairly shewn, or agree with

the sample, yet if from adulteration or other causes not appearing by the inspection or sample, though not known, to the seller, the bulk does not

reasonably answer the description in a commercial sense, the seller is liable"". It is quite clear that the language of Section 113 is modelled upon the

language of the case just cited, and does not mean to lay down any rule different from that which is to be found in the English cases and which has

now been embodied in greater detail in Sections 14 and 15 of the Sale of Goods Act.

That being so, the facts of the present case are that the bales of yarn were imported from England bound in iron hoops; and the evidence is that

one hoop was removed, when they were imported. If the other hoops had been removed and the goods had been subjected to a detailed

examination, they would have lost the character of imported goods under which they were sold. The evidence is that the outside of the bales was

inspected before purchase but without removing the hoops or examining the contents. That was such examination as the case admitted of, and it

would not disclose the fact that white ants got in and had injured the yarn. Therefore the fact that the goods were inspected before purchase is no

answer, Section 113 of the Indian Contract Act says, ""where goods are sold as being of a certain denomination there is an implied warranty that

they are such goods as are commercially known by that denomination, although the buyer may have bought them by sample, or after inspection of

the bulk"". Section 14 of the Sale of Goods Act says that ""the goods shall be of merchantable quality; provided that if the buyer has examined the

goods there shall be no implied condition as regards defects which such examination ought to have revealed."" The present defect is not a defect

which the examination which took place ought to have revealed.

The only other point is as to whether there were sufficient grounds to justify the finding on the evidence of the learned Judge that these goods

were not of a merchantable quality at the time they were delivered by the seller to the buyer.

They were delivered in Madras and despatched by rail to Calcutta and took about 15 or 16 days to arrive. They were examined on arrival and

found to be very badly damaged by white ants, and in such a condition, according to the uncontradicted evidence, they were no longer

merchantable as black yarn bearing Hanuman Mark. Now, the question which Mr. Devadoss has argued is whether it is sufficiently shown that that

damage took place before delivery in Madras. Four witnesses who are accustomed to handle yarn were examined on commission on this subject,

and the 3rd and 4th witnesses who are the brokers of large firms in Calcutta, namely Messrs. Ewing and Co and Messrs. Finlay Muir & Co., say

that the injury was not recent, and that the goods were worm eaten very long before. There is a slight discrepancy between the 3rd and 4th

witnesses, because the 4th witness speaks of seeing the bodies of the dead ants, whereas the 3rd witness speak only of the stain. But this is not a

difference of any great importance, as dead white ants would not leave very many traces excepting the stain to which both the witnesses speak;

and they both attach great importance to the fact that there were no live white ants to be found which they would have expected to find, if the

damage had been recent. White ants are such a common plague in India that there is no reason for disbelieving these gentlemen, who must have

had abundant experience of goods which have been damaged by white ants. Their evidence is absolutely uncontradicted and not shaken in cross

examination, and in this circumstance it is not open to us to differ from the learned Judge who has found it to be sufficiently proved that the loss

incurred was incurred before delivery by the defendant to the plaintiff.

In the result, the appeal fails, and must be dismissed with costs.

Spencer, J.

I agree. The only question of law argued by Mr. Devadoss was whether there was any implied warranty of good quality in the five bales of

black yarn with Hanuman Mark which were sold by the defendant to the plaintiff. If the case were being tried in an English Court of justice, I

consider that the appellant''s contention would be quite untenable. The words of Section 14, Clause (2) of the Sale of Goods Act are very clear. It

runs as follows :--"" Where goods are bought by description from a seller who deals in goods of that description (whether he be the manufacturer

or not), there is an implied condition that the goods shall be of merchantable quality; provided that if the buyer has examined the goods, there shall

be no implied condition as regards defects which such examination ought to have revealed."" The corresponding section in the Indian Contract Act,

Section 113, is as follows: ""Where goods are sold as being of a certain denomination, there is an implied warranty that they are such goods as are

commercially known by that denomination, although the buyer may have bought them, by sample, or after inspection of the bulk."" I consider that

the words ''after inspection of the bulk'' correspond with the proviso to Clause (2) of Section 14, Sale of Goods Act; and I am fortified in this

opinion by the commentary on the section in Cunningham and Shephard''s Indian Contract Act which says, ""The section, following the English

Law, requires that the goods tendered shall not only correspond to the description given but shall also be saleable or merchantable as such. It was

an held in Gardiner v. Gray (1815) 4 Campbell 144."" Now if these bales of yarn were eaten by white ants in such a way that the goods were

perforated by the channels made by the insects and were crumbling to pieces, there can be no doubt that they would not be saleable or

merchantable as yarn. Mr. Devadoss relies on Section 116, Indian Contract Act, which deals with latent defects. I do not think the section applies

at all to the present case. It deals with defects which are only detectable by expert examination and would not apply to the state of goods which, as

here, are found on close inspection to be thoroughly damaged and disintegrated.

[The rest of His Lordship''s judgment deals with the evidence in the case and is not material to this report--Rep.]

I therefore agree that the appeal must be dismissed with costs,