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1959 Supreme(Mad) 283
MADRAS HIGH COURT
RAMASWAMI,ANANTANARAYANAN
Sorabji Hormusha Joshi and Co.
Versus
V.M. Ismail, Plaintiffs
Letters Patent Appeal No. 9 of 1956
Decided On : 18 November, 1959
V.C. Gopalaratnam, L.V. Krishnaswami Iyer, K.K. Rajagopalachari and U.C. Gopalan, for Appellants; P.S. Srisailam, V. Ratnam and V.S. Ramakrishnan, for Respondents.
The implied condition of merchantable quality is waived if the buyer has examined the goods and the defects could have been discovered by such examination.
Headnote:
SALE OF GOODS - Implied condition of merchantable quality - Examination of goods by buyer - Waiver of condition - Acceptance of goods - Right to reject goods - Right to sue for damages for breach of warranty - Time for inspection - Reasonable time.
Fact of the Case:
The plaintiffs, Ismail and Ibrahim, are brothers doing business in hides and skins in Vaniyambadi in North Arcot District. The defendants Sorabji Hormusha Joshi and Co., (referred to in this judgment as Joshi and Co.) are carrying on business in Bombay, from 1946. They import dried sheep skins from East Africa. The plaintiffs had two transactions with the defendants and of which we are concerned only with the transaction of October 1947. In October 1947 the second plaintiff met the defendants and learnt from them that a consignment of dried sheep skins from East Africa had arrived in Madras and was lying in the Madras harbour.
Finding of the Court:
The plaintiffs have not shown that the goods supplied to them by the defendants were not of merchantable quality as described in the sold-notes. The plaintiffs had an opportunity to inspect the goods before taking delivery, but they did not do so. The plaintiffs accepted the goods and started making objections only when the prices had started to fall and wanted to go back on their contract.
Issues: 1. Did the defendants commit breach of the condition and warranty regarding the quality of the goods supplied and if so, are the plaintiffs entitled to damages for the same? 2. Whether the plaintiffs are estopped from questioning the quality of the goods supplied for the reasons stated in paragraph 5 of the written statement? 3. To any and what damages are the plaintiffs entitled? 4. Is the first plaintiff a necessary party to the suit and entitled to the reliefs? 5. To any and what other relief or reliefs are the plaintiffs entitled?
Ratio Decidendi: 1. Where goods are bought by description from a seller who deals in goods of that description, there is an implied condition that the goods shall be of merchantable quality. 2. If the buyer has examined the goods, there shall be no implied condition as regards defects which such examination ought to have revealed. 3. The buyer is not bound to reject the goods, and that his mere acceptance of the goods, or the fact of the sale itself, does not extinguish his rights. 4. The buyer may waive the condition to be fulfilled, or elect to treat the breach of the condition as a breach of warranty, and not as a ground for repudiating the contract. 5. The right of a buyer for damages for breach of warranty proceeds upon the basis of acceptance of the goods delivered, and not a rejection thereof. 6. The right of rejection of goods, and the right to sue for damages for breach of warranty, are alternative remedies. They are not cumulative. 7. A buyer can (where goods not answering to the description contracted for are delivered) waive the condition and accept the goods, and sue for damages, for breach of warranty, and this is the effect of S. 13 (1) of the Sale of Goods Act. 8. The basis on which a buyer would be entitled to such damages, would be the difference between what the goods were worth when they arrived, and! what the sale of the goods would have realised, had they been in the state contracted for.
Final Decision: Appeal allowed.
RAMASWAMI, J. : This appeal is directed against the decree and judgment of our learned brother Basheer Ahmed Sayeed, J., in C. C. C. A. No. 9 of 1953, reversing the decree and judgment of the learned City Civil Judge, Madras, in O. S. No. 126 of 1949.
2. The defendants Sorabji Hormusha Joshi and Co., (referred to in this judgment as Joshi and Co.) are carrying on business in Bombay, from 1946. They import dried sheep skins from East Africa. The plaintiffs, Ismail and Ibrahim, are brothers doing business in hides and skins in Vaniyambadi in North Arcot District. The second plaintiff Ibrahim stays and does business in Bombay. The plaintiffs had two transactions with the defendants and of which we are concerned only with the transaction of October 1947. In October 1947 the second plaintiff met the defendants and learnt from them that a consignment of dried sheep skins from East Africa had arrived in Madras and was lying in the Madras harbour.
The second plaintiff looked into the import invoices with the defendants showing their stock at Madras of East African raw dried sheep skins, In three lots, two of 6 bales each and one of 5 bales, bearing particular numbers and in all 17 bales lying in the Madras harbour. It was agreed that on payment of the price by the plaintiffs in Bombay, the plaintiffs should get delivery orders and clear the goods in the Madras harbour through M/s. Maswood and Co., Madras. The lots purchased are described as sheep skins, shade dried, U. K. quality, comprising of Choice I and Choice II.
This transaction was completed on 18-11-1947 and delivery orders to Madras Maswood and Co., for these 17 bales were handed over to the second plaintiff as against cash payment of Rs. 3900 plus 3600 plus 2750 totalling Rs. 10,250. The second plaintiff says that he went to the Madras harbour to take delivery of the goods through M/s. Maswood and Co., and found that some of the bales appeared on the face of them to have been water-damaged. One Mr. Marfatia is said to have been sent tor according to the second plaintiff and he is said to have assured the latter that he would represent the matter to the defendant firm and do the needful for making a settlement. In the meantime Mr. Marfatia is said to have desired to be informed of the extent of damage and the quantity which would have to be rejected and taken back. Then the second plaintiff had engaged M/.s. Maswood and Co., to despatch the bales by train to Vaniyambadi on 25-11-1947 from the S. R. V. S. godown, where they had been taken on 22-11-1947. The goods reached Vaniyambadi within a week thereafter.
At Vaniyambadi the goods were unloaded and taken to the Katheeb Tanning Factory, owned by P. W. 6, the local Municipal Chairman. This was in the beginning of December 1947. Subsequently on an unspecified date three bales, of which one was of Choice No. I and the other two were of Choice No. II, were said to have been opened. The first two bales were not water-damaged but some of the skins were worm-eaten and had quality skins. In the water-damaged bale, some skins had only become bad on account of water-damage but there wore no worms in any of the bales, vide the evidence of the first plaintiff as P. W. 3 (p. 49 of the printed papers).
But the first letter to the first plaintiff Ex. A-6 does not refer to the opening of these three bales but merely mentions Only after receipt of the report of this person (Marfatia), Joshi will come for some settlement as written yesterday. The next letter Ex. A-8 dated 23-12-1947 beyond stating that the purchasers had some complaints to make to this Joshi, does not specify what the matter was even as regards the three bales opened or anything about the other 14 bales. In fact Joshis lieutenant one Khan seems to have told the first plaintiff to send a complaint and that if that was done they would look into the matter. The second plaintiff as a matter of fact sent a telegram on 24-12-1947 Joshi says - given complaints in writing - he wil
