[FULL BENCH.]

1922 Present : Bertram C.J. and Porter and Schneider J.J.

KEARLEY & TONGE, LTD., v. PETER.

50-D. C. Colombo, 2,103

Agreement to import goods for another-Clause in contract that all complaints regarding goods should be made within seven days of arrival of goods-Latent defect in goods-No complaint made within seven days-Claim for damages.

Defendant ordered a consignment of Australian jams through the plaintiffs, and it was agreed between them that all complaints regarding the goods should be made within seven days from arrival of the goods. The goods arrived in November, 1920, and seventeen specimen cases were delivered to defendant at once,, and the rest were, by agreement, kept at plaintiffs' stores and delivered on February 4, 1921, The defendant found the seventeen cases in good condition, but found that some of the tins delivered in February were leaking owing to bad soldering. The defendant claimed damages in respect of the bad tins.

Held [per BERTRAM C.J. and SCHNEIDER J. (PORTER J. dissentiente)], that as the defect was a latent defect the defendant was entitled to claim damages, even though he had made no claim within seven days.

BERTRAM C.J.-The fact that the buyer has examined the goods before accepting them does not prejudice any claim he may have as regards any defects which a reasonable examination would not have revealed. It is possible for a seller by special contract to contract himself out of the liability which the law imposes upon him, and the question in this case is, has he effectively done so ? In other words, is it the true meaning of the clause that the buyer undertook to make within seven days any complaint which he might have to make, even with regard to a defect, which with those seven days could not possibly be known to him, and renounced the right to make any such complaint afterwards The law regards with jealousy any attempt by persons who are liable under the law unreasonably to relieve themselves of their responsibilities by the insertion of general words in a printed contract. It requires them in such cases to make their meaning clear by express words.

THE facts are set out in the judgment of the Chief Justice.

H. J. C. Pereira, K.C. (with him Navaratnam), for defendant, appellant.-Clause 8 of the indent cannot include latent defects which were not discoverable within seven days of delivery. It could only be construed to cover defects that could be discovered on inspection. It was the duty of the plaintiffs to supply goods of a

merchantable quality. This is an implied condition required by the Sale of Goods Ordinance, No. II of 1896, section 14 (2) and 15 (2) (c). The rule that risk passes with the property does not apply to damages resulting from a latent defect. There is evidence of the surveyor which has not been rebutted by the plaintiffs, that the soldering was inefficiently carried out. This is a defect which could not have been discovered by the plaintiffs on inspection at the time of delivery. The fact that the seventeen cases delivered in November were to all outward appearances good and merchantable is evidence that the defect was latent and could be found out only when the jam began to exude. Counsel cited Drummond v. Van Ingen,[1] Jones v. Just,[2] and Heilbutt v. Hickson.[3]

H. V. Perera (with him Spencer Rajaratnam), for plaintiffs, respondent.-Clause 8 was understood by the parties to include all defects both patent and latent, and so it was acted on by them for years. There in definite evidence, that this clause was inserted so that the plaintiffs may pass on their liability to the manufacturers. It is always open to the panties to contract out of the Sale of Goods Ordinance, and so they have done in this case. Therefore, conditions as to merchantable quality provided in sections 14 (2) and 15 (2) (c) will not apply (Sharp v. The Great Western Railway Co.)[4]

The surveyor's evidence