[1952] EACA 141

## COURT OF APPEAL FOR EASTERN AFRICA

## Before SIR BARCLAY NIHILL (President), SIR NEWNHAM WORLEY (Vice-President) and MAYERS, J. (Kenya)

## PAN AFRICAN TRADING AGENCIES, Appellants (Original Defendants) $v$ .

# CHANDE BROTHERS LIMITED, *Respondents* (Original Plaintiffs) Civil Appeal No. 13 of 1952

(Appeal from the decision of The H. M. High Court of Tanganyika—Bell, J.)

Sale of Goods Ordinance, Tanganyika, section 32 (3)—Offer and acceptance— Implied condition part of goods of inferior quality-Whether a difference in description-Interest prior to suit application of Indian Interest Act, 1839—Damages—Market value—Remoteness.

In January, 1939, the appellants offered respondents a quantity of beans as per sample supplied at a specified price. Their offer was not accepted and after selling some elsewhere in March they made a further offer to respondents of the remainder of the beans the description being "mixed coloured beans of fair" average quality" of Congo origin. The respondents did not accept this second offer but made a counter-offer referring to the prior second offer and omitted to describe them as "f.a.q.". The appellants accepted the counter-offer. Payment was thereupon made but whilst the beans were being weighed about half the bags of beans were found to be damp and mouldy and not of f.a.q. The respondents accepted the good quality beans and rejected the rest. They sold the accepted beans at a profit of Sh. 100 per bag.

The respondents alleged that it was a condition of the contract of sale should be f.a.q. and that the appellants had committed a breach of contract. They claimed a refund of the purchase price of the rejected beans and damages for loss of profit which they would have made on a resale. The trial Judge found for them and gave judgment: $-$ ·

(a) For the contract price of the rejected beans.

(b) Interest thereon at 9 per cent thereon from rejection date to suit date.

(c) Sh. $15,300$ damages for breach of contract.

(d) Interest thereon at 9 per cent from suit date to judgment.

(e) Costs and interest at 6 per cent from decree to payment.

*Held* $(18-8-52)$ .—(1) That the term of f.a.g. was an implied term of the contract.

(2) That the question whether "inferior quality" was a difference in description was a question of fact.

(3) That the beans rejected not being f.a.q. the respondents were right in accepting part and rejecting the remainder.

(4) That the Indian Interest Act, 1839, did not apply to Tanganyika and the award of interest $(b)$ and $(d)$ had therefore to be set aside.

(5) The respondent having failed to prove the existence of a market was entitled to nominal damages only.

Appeal dismissed so far as it relates to paragraphs $(a)$ and $(e)$ of the High Court. judgment and allowed in respect of paragraphs $(b)$ , $(c)$ and $(d)$ .

Cases referred to: Aitken, Campbell & Co., Ltd., v. Boullen and Gatenby, (1908)<br>S. C. 490; William Barker (Jnr.) & Co. v. Ed. T. Agius, Ltd., (1927) 43 T. L. R. 751;<br>Moore & Co. v. Landauer & Co., 37 T. L. R. 452; London Plywoo

## O'Donovan for appellants.

#### Salter for respondents.

JUDGMENT (delivered by DE LESTANG, J. (Kenya)).—This is an appeal from the decision of the High Court of Tanganyika in the following circumstances: -

The appellants and respondents are inter alia produce dealers carrying on business in Dar es Salaam. In January, 1949, the appellants had at the Belbase godowns, Dar es Salaam, 410 tons of mixed coloured beans of Belgian Congo origin which they were endeavouring to sell and for that purpose had employed one, Mr. Bhagwanji Becher. Some time before the 26th January, 1949, Mr. Becher supplied two samples of beans to the respondents, and on 26th January the appellants offered in writing to sell the lot of beans to the respondents in these terms:-

"Dear Sirs,

We offer you with option up to 31st of January, 1949, 4 p.m. the following commodities: —

#### BELGIAN CONGO MIXED BEANS

Quality: As sample.

Quantity: $410$ tons.

Price: Sh. 450.

Delivery: Immediate (the goods are lying at the Belbase godowns) and at these godowns.

Payment: In sterling currency, cash against delivery.

#### PAN AFRICAN TRADING AGENCIES. Sd. B. Israel."

A sample of beans accompanied the offer and it is common ground that this sample, as well as the two samples supplied earlier by Mr. Becher, was of beans known in the produce trade as of "fair average quality" (f.a.q.). The offer not having been accepted, the appellants disposed of approximately 40 tons of the beans elsewhere. On 10th March, however, they again offered the remainder of the beans to the respondents in these words: $-$

"We offer you the following lot of 4,562 bags of mixed coloured beans of Congo origin, which is lying at present ready in Belbase, Dar es Salaam: -

Description: Mixed coloured beans of fair average quality, of Congo origin.

Quantity: 4,562 bags—about 370 tons.

Packing: In sound single bags.

Price: E. A. Sh. 400 (Four hundred shillings E. A. currency) per ton of 1,000 kilos net, or Sh. 380 per ton of 1,000 kilos net if payable in Belgian Congo currency. Payment is to be made either in East African currency in Dar es Salaam-in this case the price is Sh. 400 per ton or in Belgian<br>Congo Currency in which price is Sh. 380 (three hundred and eighty) per ton, whatever you may choose. Mode of payment in either of the currencies is at your discretion.

Payment: Cash against delivery.

Weighing: To be weighed by Belbase, Dar es Salaam.

This offer is firm for your reply on or before 7 p.m. of 14th March, 1949, and is binding to us until the time and date mentioned, i.e. 7 p.m. 14th March, 1949, after which we are free from engagement.

#### Yours faithfully,

### PAN AFRICAN TRADING AGENCIES.

$(Sg.)$

$?"$

Stamp. Sh. 1. Dar es Saalam. 10.3.49.

The respondents did not accept this second offer but on 15th March, the day after the offer expired, they made a counter-offer to the respondents as follows: $\longrightarrow$

"We refer to your offer for about 370 tons—4,562 bags of mixed beans of Congo origin, which were lying ready in Belbase, Dar es Salaam, and have to inform you that none of our buyers has been able to accept the offer as they have found the price very high and therefore not workable.

We now give you our firm counter-offer for this lot of 4,562 bags of mixed beans at Sh. 350 (three hundred and fifty shillings) per ton of 1,000 kilos net, payment to be made here against delivery, in East African shillings. This counter-offer is firm and valid up to 4 p.m. of 18th March, 1949, after which time it is not binding to us. Should you accept our offer the following will be the terms of the contract:-

370 tons in 4,562 bags of mixed coloured beans of Congo origin, at present lying at Belbase, Dar es Salaam. Price at Sh. 350 (Shillings three hundred and fifty East African currency) per ton of 1,000 kilos net packed in sound single bags.

Weighing: To be weighed by Belbase, Dar es Salaam.

Delivery: Soon.

Payment: Cash against delivery in East African Shillings in Dar es Salaam.

We now await your reply on or before 4 p.m. of 18th March, 1949, after which we are free from this offer."

On the 18th March the appellants accepted the counter-offer by their letter which reads as follows:-

"With reference to your firm counter-offer of 15th March, 1949, for about 370 tons (4,562 bags) mixed beans of Belgian Congo origin which are lying ready in Belbase, Dar es Salaam, and to inform you that we agree with your terms which are as follows:-

370 tons in 4,562 bags of mixed beans of Congo origin at present lying in Belbase, Dar es Salaam.

Price at Sh. 350 (shillings three hundred and fifty East African currency) per ton of 1,000 kilos net, packed in sound single bags.

Weighing: To be weighed by Belbase. Dar es Salaam.

Delivery: Soon.

Payment: Cash against delivery in East African shillings in Dar es Salaam

Please call at this office at your earliest convenience for the delivery of the relative documents in your hand ..."

On the 19th March the respondents paid Sh. 129,500 for the goods. In order, however, to ascertain the correct price the goods had to be weighed, and whilst this was being done it was discovered that of the 4.562 bags of beans, 2.504 were of f.a.q., while 2,508 bags were damp and mouldy and not of f.a.g. The respondents accordingly accepted the 2.504 bags which were good and rejected the rest. The respondents subsequently sold the accepted beans at a profit of £1,000 while the rejected beans fetched Sh. 30,000 when sold by order of the Court.

I might add here, to complete the picture, that the two offers of the appellants and the counter-offer of the respondents related to the same lot of beans from which a small parcel had in the meantime been sold locally. It is also a fact that the appellants knew that the respondents were purchasing the beans for export.

The respondents alleged that it was a condition of the contract of the sale that the beans should be of f.a.g. and that the appellants committed a breach of contract in supplying beans of which nearly 50 per cent was not of f.a.g. and they claimed a refund of the purchase price of the rejected beans and damages for loss of profit which they would have made on a resale of the beans. The learned trial Judge found for the respondents on all these issues.

With this brief history of this case I now turn to the appeal itself. The first and third grounds of appeal which may be taken together read as follows:-

- "1. That the learned Judge erred in holding that the appellants contracted with the respondent for the sale of goods of fair average quality; ... - 3. That the learned Judge erred in hodling that the appellants committed any breach of contract..."

It is common ground that if it was a term of the contract that the beans should be of f.a.q. then the appellants were in breach because nearly half of the beans which they delivered was admittedly not of that quality and the question therefore is whether the learned trial Judge was right in finding that the sale was on the basis that the beans were of f.a.q.

Mr. O'Donovan, whilst conceding that the learned trial Judge was right in looking at the two unaccepted offers, contends that he ought not to have imported any of their terms into the concluded bargain which, he submits, is wholly contained in the counter-offer and acceptance.

He further contends that even if the respondents were under the impression that the appellants warranted the beans to be f.a.q. such was not the intention of the appellants and that in these circumstances the parties were not ad idem and there was no concluded contract. This latter contention rests particularly on the evidence of Mr. Israel, the manager of the appellants' firm, that he accepted the counter-offer which was for a lower figure because the condition f.a.g. had been omitted. The learned trial Judge did not express any opinion on Mr. Israel's evidence but it must, I think, be inferred from his finding that the sale was subject to the condition f.a.q. that he did not accept Mr. Israel's evidence on this point and I think rightly so. Mr. Israel had no reason to believe that the beans were otherwise than of f.a.q. and indeed it will be recalled that on 10th March, eight days only previous to the conclusion of the bargain, he had described the beans as of f.a.q. in his second offer to the respondents. Why, therefore, should he suddenly, without any apparent reason, be prepared to sell his beans without any warranty as to quality?

It is contended that the fact that he accepted a lower price supports Mr. Israel's evidence. I do not think it does. It must be remembered that the second offer itself was Sh. 50 less per ton than the first offer without any appreciable difference in the quality of the beans. A further reduction, therefore, of Sh. 50 per ton would not be unexpected considering the difficulty the appellants were experiencing in disposing of the beans.

In support of his contention that the contract is wholly contained in the counter-offer and acceptance, Mr. O'Donovan relies on the fact that the counteroffer purports to set out all the conditions of sale which are repeated in the acceptance also and argues that the omission of any reference to quality in those documents was deliberate inasmuch as Mr. Chande, the Director of the respondent company, said in evidence that the expression f.a.q. was so important and usual in this type of contract that he would never think of leaving it out of any contract. It is indeed a little surprising that the description f.a.q. was omitted from the counter-offer and acceptance and the finding of the learned trial Judge that Mr. Chande forgot to insert it in the counter-offer cannot be accepted in the face of the evidence of Mr. Chande himself who stated he did not "repeat f.a.q. because that was understood". Nevertheless, having regard to the history of this transaction, in particular to the fact that in previous offers, and by means of samples, the same lot of beans had been described as of f.a.g. and that there was no reason to suppose that they were otherwise than f.a.g., it is putting it at its lowest, impossible for this Court to say that the learned trial Judge was wrong in inferring that such a condition was implied in the contract.

The second ground of appeal is that the learned Judge erred in holding that the respondents were entitled to reject a portion only of the goods. The decision of this question depends on the true construction of section 32, subsection 3, of the Sale of Goods Act (Tanganyika Territory), which provides $that: -$

"Where the seller delivers to the buyer the goods he contracted to sell mixed with goods of a different description not included in the contract, the buyer may accept the goods which are in accordance with the contract and reject the rest, or he may reject the whole."

Mr. O'Donovan contends that an inferiority in quality, as was the case here, in respect of approximately half of the goods, is not the same as a difference in description and that in the former case the purchaser is only entitled to accept or reject the whole of the goods but he cannot accept a part and reject the rest. He bases his contention on a narrow meaning of the word "description" and on the Scottish decision of *Aitken Campbell & Company, Ltd. v. Boullen & Gatenby*, (1908) S. C. 490. Unfortunately this decision is not available in any of the Law Reports in the library. It is quoted in Hailsham, vol. 29, page 128 as authority for footnote $(n)$ which reads as follows:-

"Inferiority in quality may not be a difference in description. Thus the inclusion in the delivery to make up the contract quantity, of goods of the same kind, but of inferior quality, is not necessarily a mixture under the Sale of Goods Act, 1893 (56 & 57 Vict. c.71), S.30 (3), and the buyer has no right of selection, though he may reject the whole delivery."

Footnote (n) however, expressly refers to footnote (a) which reads: $-$

"This principle applies where part of the goods come up to contract specification, and some do not. The goods delivered are treated as a delivery of less than the contract quantity of contract goods mixed with other goods and this rule and the rule in ibid., section 30 (1) (see pages 126, 127, ante). apply concurrently; see William Barker (Jnr.) & Co. v. Ed. T. Agius, Ltd., (1927) 43 T. L. R. 751: 39 Digest 467, 926."

Again, under the word "Description" in volume 2 of "Words and Phrases Judicially Defined", page 75, Lord Low is quoted as saving this in the Scottish case under reference.

"I think that the word 'description' is there (in section 30 of the Sale of Goods Act. 1893) plainly used to denote the kind of goods contracted for, and that the right of partial rejection conferred upon the buyer applies only to cases where goods of the kind contracted for are mixed with goods of a different kind, and not to cases where all the goods are of the kind contracted for, but part of them is not of such good quality as the seller was bound to supply."

Mr. O'Donovan's contention appears also to receive support from the following passage in Benjamin on Sale, Eighth Edition, at page 718:-

"The word 'description' in section 30 $(3)$ is to be strictly construed. Thus, where goods of the kind ordered were delivered, but some of them were of inferior *quality*, *held*, that the case was not within section 30 (3), and the buyer could not accept such part only of the goods as was according to the contract, and reject the rest; his remedy is to accept or to reject all."

The Scottish case is quoted as authority for this proposition.

See also Chalmers, Sale of Goods, page 104.

Mr. Salter, on the other hand, relies on note $(o)$ in Hailsham which I have already quoted and on a number of cases: viz. Henry William Barker (Jnr.) & Co. v. Ed. T. Agius Ltd., (1927) 43 T. L. R., page 751; Moore & Co. v. Landauer & Co., 37 T. L. R., 452; London Plywood & Timber Co., Ltd. v. Nasic Oak Extract Factory & Steam Sawmills, Ltd., (1939) 2 K. B. 343; Arcos, Ltd. v. E. A. Ronaasen & Son, (1933), Appeal Cases 470. To this list may be added the case of Raahe $O/Y$ . Osakeytio v. Goddard, (1935), 154 L. T. 124, where it was held that the buyer might reject the whole under section 30 (3) of the English Act if part of the goods did not comply with the contract specification as to quality.

The general principle which emerges from these cases is that section 32, sub-section 3, of the Sale of Goods Ordinance applies and there is right of rejection when the goods delivered do not comply with the contract specification, whether such specification relates to quality, size, mode of packing, and so forth. No attempt was made in any of these cases to limit or restrict the meaning of the word "description" in the section and it is pertinent to note that the Scottish case was never referred to. In the absence of a full report of the Scottish case on which Mr. O'Donovan relies, which possibly is good law in Scotland but not in England, I would not be prepared to hold, in the light of the English authorities quoted by Mr. Salter, that a difference in quality must invariably take the case out of section 32, sub-section (3) of the Sale of Goods Ordinance. I think that it must be a question of fact in each case whether quality affects the description of the goods or not, and this seems to be a view of the learned editor of Halsbury, because he says in the first sentence of note $(n)$ that "inferiority in quality may not be a difference in description". That being so, the question in each case is whether the goods delivered were of the description contracted for. In other words, in the present case, does the condition that the beans should be of f.a.g. form part of the description of the beans or not? If it does, then there is a right of rejection of part under section 32, sub-section (3); if not, there is no such right of rejection because that right is restricted to cases where there is a difference in description. Applying this principle to this case, it seems to me that it was a specification of the contract here that the beans should be of f.a.g. and that this expression formed part of the description of the goods. The fact that the expression "f.a.q." appeared in the second offer under the heading "Description" supports this view, but I do not think it would be correct to say that beans which are f.a.q. or beans which are not are of the same kind or description.

I therefore hold that the learned trial Judge was right in holding that the respondents had properly exercised their right of rejection of part of the goods in this case.

It only remains for me to consider the question of damages. The learned Judge gave judgment for the respondents for—

(a) Sh. $30,101/50$ by way of repayment for the rejected beans;

- (b) interest thereon at 9 per cent per annum from 19th March, 1949, till date of suit; - (c) Sh. 15,300 by way of damages for breach of contract in respect of the $\frac{1}{2}$ 2,058 bags of rejected beans: - (d) interest on that sum at 9 per cent per annum from the date of the suit till judgment; - (e) costs of the suit and interest thereon at 6 per cent per annum from the date of decree till payment.

It is, I think, well settled that when a seller breaks his contract to deliver, the buyer may sue for damages for non-delivery, and if the price has been prepaid, recover it back. Apart from special damages the proper measure of damage in such a case is the difference between the contract price and the market or current price of the goods at the time of delivery. (Section 51 (3), Sale of Goods Ordinance.) A seller who delivers the contracted goods mixed with goods of another description is in the same position as a seller who has broken his contract to deliver. Therefore, in the present case, apart from the question of special damages, the respondents were entitled to a refund of the purchase price of the rejected beans and to the difference between the contract price of the beans and their current value at the time of delivery. It follows, therefore, that the learned Judge was right in ordering a refund of the price of the rejected beans as in (a).

As regards (b), it is conceded that unless the Indian Interest Act 32 of 1839 applies to Tanganyika Territory, the Court was not empowered to allow interest prior to the date of the suit. As the Indian statute clearly does not apply to Tanganyika Territory, the award of interest must be set aside.

The damages under $(c)$ were calculated on the basis of the respondents being able to make a profit of Sh. 100 per ton on a re-sale of the rejected goods had they been up to contract. Granted that the appellants knew that the beans were for export; granted also that the respondents resold the accepted lot of beans at a profit of Sh. 100 per ton. Nevertheless, it does not necessarily follow that they would have succeeded in reselling all of the rejected beans at that profit and it seems to me, therefore, that the loss of profit allowed was problematical and consequently too remote. As Lord Esher, M. R., said in Rodocanachi v. Milburn, (1886) 18 Q. B. D. 67:-

"It is well settled", says Lord Esher, M. R., in Rodocanachi v. Milburn, "that in an action for non-delivery or non-acceptance ... 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 respondents were accordingly only entitled to the difference between the contract price of the beans and the current value at the time of delivery. There is unfortunately no finding by the learned trial Judge if there was a market value for the beans at the relevant time and if so, what it was. What constitutes a market was explained by James, L. J., in Dunkirk Colliery Company v. Lever, (1878) 9 Ch. D. 20 at page 25.

"What I understand by a market in such a case as this is, that when the defendant refused to take the 300 tons the first week or the first month, the plaintiffs might have sent it in wagons somewhere else, where they could sell it, just as they sell corn on the Exchange, or cotton at Liverpool: that is to say, that there was a fair market where they could have found a purchaser either by themselves or through some agent at some particular place. That is my notion of the meaning of a market under those circumstances."

I have considered whether the case should not be remitted back to the learned trial Judge to decide these matters but it seems to me that as the evidence did not disclose the existence of a market it would be wrong to do so and that this appeal should be decided on the assumption that there was no market, the respondents having failed to prove one. In these circumstances they would be entitled only to nominal damages. I would therefore dismiss this appeal but set aside the orders contained in paragraph $(b)$ , $(c)$ and $(d)$ of the judgment of the High Court of Tanganyika. As each party has been partly successful I would order that each party should bear his own costs.

SIR NEWNHAM WORLEY (Vice-President).—The facts of and the circumstances surrounding the contract which is the subject-matter of this appeal are sufficiently stated in the judgment prepared by de Lestang, J., which I have had the advantage or reading. I do not propose to restate them and I will only add that the learned trial Judge found as a fact that the respondent purchaser had no reasonable opportunity of inspecting the bags in the interior of the stack until the stack was opened up in the course of weighing. It was then found that the interior bags were not of fair average quality. The respondents' Director, R. J. Chande, had previously taken some samples himself from the external bags of the stack which were of fair average quality: the evidence as to when he took these samples is not very clear but I think it is agreed that this was actually done after the contract had been concluded.

I should also perhaps refer to the admission by Mr. Israel, the appellant's manager, that he knew that the beans in question (which were not lawfully saleable in Dar es Salaam unless an import licence was obtained) were required for export, and that Mr. R. J. Chande had told him that the beans were required to be of fair average quality for the overseas purchaser.

It is not now disputed that the beans were sold for export and that, if it were a term of the contract that they should be of fair average quality, then the appellants were in breach of their contract, for the reason that nearly onehalf of the beans were admittedly not of that quality. The final offer of the respondent and acceptance by the appellant are contained in the two letters dated respectively 15th March, 1949 (exhibit A.3), and 18th March, 1949 (exhibit A.4). Neither of these contains any reference to quality in the description of the beans, and the answer to the question whether "fair average quality" was a term of the contract depends upon whether the Court must look at these two letters alone to find the terms and conditions or whether, as the learned Judge of the High Court held, relying on section 5 of the Tanganyika Sale of Goods Ordinance (Cap. 214 of the Laws of Tanganyika, 1947), the Court could look also at the previous offers made by the appellant (exhibits A.1 and A.2) and the conduct of the parties.

It is of course a wholesome and salutary rule relating to written contracts "that where parties agree to embody and do actually embody their contract in a formal document then in determining what the contract really was and really meant, a court must look to the formal document and to that document alone" (per Lord Blackburn in Inglis v. Buttery, (1878) 3 A. C. 552 at page 577); but Lord Blackburn goes on to say (pages 577 and 578):-

"Quite consistently with that, I think you may, while taking the words of the agreement, look at the 'surrounding circumstances'... and see what was the intention. You do not get at the intention as a fact ... but you see what is the intention expressed in the words, used as they were with regard to the particular circumstances and facts with regard to which they were used. The intention will then be got at by looking at what the words mean in that way, and doing that is perfectly legitimate . . . According to the sound rules of construction what we have to look at is, what when the parties used these words in the memorandum and specification did they mean by them?"

Now if it is permissible to look at the "surrounding circumstances" (and I understood Mr. O'Donovan to concede this much) then it is beyond doubt that up to the 14th March, 1949, the date of expiry of the appellant's offer made on 10th March in exhibit A.2, the parties were negotiating for the sale and purchase of one specific consignment of beans of fair average quality. Then comes the respondent's letter of the 15th March (A.3), which refers to the appellant's offer, rejects it on the ground that the price is too high and makes a counter-offer "for this lot" of beans at a lower price. That offer is accepted by the appellants in the letter exhibit A.4. I do not think that there can be any doubt that the bargaining was on the question of price only and was not on the question of the quality of the goods. The respondent had seen samples of the beans which were of fair average quality and was referring to an offer which described them as of that quality: there is no evidence to support any suggestion that he had any reason to think they were of any other quality. The respondent's manager testified that he "had not the faintest idea of the quality of the goods" and that he accepted the lower price because the condition as to quality was omitted. This evidence was, however, inconsistent with his having agreed to the description of the beans in exhibit A.2 as also with his admission that he was told they were required to be of that quality for export and although the learned trial Judge does not expressly make any finding on this evidence, I agree with my brother, de Lestang, J., that it is implicit in the judgment that he did not accept Mr. Israel's evidence on this point. I agree also with de Lestang, J.; that the learned Judge's finding that Mr. Chande "forgot" to insert the condition as to fair average quality in his counter-offer cannot be accepted. Mr. Chande's own explanation that he did not repeat it because it was understood is to be preferred for the reasons I have already given.

I have found more difficulty in coming to a conclusion on the second ground of appeal, namely, whether the respondents were entitled to accept those beans which were of fair average quality and to reject those which were not. This was undoubtedly an entire contract and the general rule is that in such case the buyer must accept all or none unless he can justify rejection of a part of the goods under some special provision. In the present case, the respondent seeks to justify under section 32 (3) of the Tanganyika Ordinance (which corresponds with section 30 (3) of the Sale of Goods Act, 1893); the sub-section reads:

"Where the seller delivers to the buyer the goods he contracted to sell mixed with goods of a different description not included in the contract the buyer may accept the goods which are in accordance with the contract and reject the rest, or he may reject the whole."

It is now well settled that this sub-section applies where part of the goods come up to contract specification and some do not and it would seem that in such case, sub-section (1) of the same section, will apply concurrently (see Wm. Barker (Jnr.) & Co. Ltd. v. Agius Ltd., (1927) 43 T. L. R. 751 and Halsbury's Laws of England; Hailsham Ed., vol. 29, page 128, note (o)).

But the difficulty lies in the question whether inferiority in quality can, either in law or in fact, amount to a difference in description. Considering the matter in the absence of authority I should have thought that it was a question of fact to be determined upon the circumstances of each case. It appears to me to be clear that a stipulation in a contract for goods to be of a particular quality is part of the description and, in a sale by description, there is an implied condition that the goods will correspond with the description (section 15 of the Sales of Goods Ordinance).

$\overline{ }$

No doubt an inconsiderable inferiority in quality should be ignored both by business-men and lawyers, just as negligible deviations from specified measurements will be ignored (see the speech of Lord Atkin in Arcos Ltd. v. Ronassen & Son, (1933) A. C. 470 at page 479; and Lord Warrington of Clyffe at page 477). Those speeches seem to me to support the view that it is a question of fact whether deviations in measurement are sufficient to amount to a breach of the conditions of the contract: and, if that is the correct view, I do not for my part see why the same rule should not apply to deviations in quality.

But the only direct authority on this question appears to be the Scottish case of Aitken, Campbell & Co. Ltd. v. Boullen & Gatenby, which de Lestang, J. has cited in his judgment, and which is cited in the leading text books as authority for the proposition that the word "description" in section 30 (3) of the Act is to be strictly construed and that where some of the goods supplied are of inferior quality that is not (or as is suggested in Halsbury not necessarily) a mixture of "goods of a different description". The Scottish law reports are not available in these Territories and I have not therefore had the advantage of studying the report of the case in question, but I observe that in Chalmers Sale of Goods, 12th edition, page 64, it is referred to as a case of sale by sample. If that were indeed the case and if the law of Scotland is on this point the same as the law of Tanganyika, then different considerations would apply and the case could be governed by section 15 (2) of the Act (section 17 (2) of the Ordinance) which provides: $-$

"In the case of a contract for sale by sample there is: $-$

(a) an implied condition that the bulk shall correspond with the sample in quality."

On the assumption that the law is the same, it is indeed not clear to me how section 30 (3) of the Act (section 32 (3) of the Ordinance) was relevant to the decision. Probably this point would be made clear if one had the advantage of reading the report of the Scottish case, but in the present state of my knowledge I do not feel justified in accepting that case as an authority for the proposition that a deviation in quality cannot amount to a breach of condition, though I have come to this conclusion with considerable deference since the proposition has been accepted by the learned authors of the leading text books on Sale of Goods.

If then I am correct in thinking that the question is one of fact, there can be no doubt that in the case now before us, the inferiority of quality in the rejected beans was sufficient in degree to constitute a breach of the condition and to justify the respondents in treating the wet and mouldy beans as "goods of a different description" for the purposes of section 30 (3). I concur therefore with de Lestang, J., that the trial Judge was right in holding that the respondents had properly exercised their right of rejection.

On the question of damages, I also concur with and have nothing to add to what has been said in the judgment which just has been read. In the result therefore, I would dismiss the appeal so far as it relates to paragraphs $(a)$ and $(e)$ of the judgment of the High Court, namely:-

- (a) Judgment for the plaintiff (respondent) for Sh. 30,101/50, by way of repayment of the price paid for the rejected beans; and - (e) costs of the suit and interest thereon at 6 per centum per annum from the date of decree until payment.

But I would allow the appeal so far as it relates to paragraphs (b), (c) and (d) of the judgment, that is: $\rightarrow$

(b) Interest on the decretal amount from 19th March, 1949, till date of suit.

(c) Judgment for the plaintiff (respondent) for Sh. 15,000 by way of damages for breach of contract in respect of the 2.058 bags of rejected beans.

$(d)$ Interest thereon.

As regards the costs of this appeal, since both parties have succeeded on a substantial part of the matters in dispute, I think that the proper order should be that each party should bear their own costs.

SIR BARCLAY NIHILL (President).—I have had the advantage of reading both the judgments delivered by my learned brothers. I confess that in two respects this case has given me considerable difficulty. In the first place I was doubtful whether it was right to go outside the offer and acceptance of the 15th and 18th March so as to attach the condition "fair average quality" to the contract. Both my learned brothers as well as the learned trial Judge are of the opinion that this must be done, and I am not prepared to say that they are wrong. There is certainly evidence pointing to the fact that both parties when negotiating the price were always referring to the same goods, and on the whole I think it is unreasonable to suppose that the respondents would have deliberately left out the condition "fair average quality" from their offer but for the fact that it was well understood to both parties.

The second point, which has been dealt with fully in the judgments already. delivered, is whether the respondent was entitled to accept a part of the goods and reject the whole. The Scottish case, which we have not had the advantage of being able to study certainly supports the view that inferiority in quality in respect of goods of the same kind does not constitute a difference in description. However there is a good deal of authority which suggests the contrary and I am of the same opinion as the learned Vice-President that substantially it must be a question of fact in each case. In this case no difficulty arose in seeing at once the goods which did not accord with the description "fair average quality", for like the learned Vice-President I consider that it would be absurd to suggest that "fair average quality" was not a part of the description. It was the damp and mouldy bags which the respondent rejected, for this was a clear indication that their contents could not be up to "fair average quality". With a different kind of goods, such as maize in bulk, a buyer would necessarily have to elect whether to accept or reject the whole.

In William Barker (Jnr.) v. Agius, 43 T. L. R. 751 which concerned a cargo of coal briquettes, the contract provided that they should be of a certain size. Part of the cargo conformed to the description and part did not. The buyer accepted the part which conformed but when he subsequently found that the remainder did not conform purported to reject the whole. The Court found that he could not do this but it is clear from the judgment of Salter, J., that he had a right to reject the part although he had not validly exercised it. In Arcos

Counsel for the respondent has pointed out that any fresh application to this Court for leave to appeal would be out of time and that such being the case the applicant's only remedy will be to apply for special leave to appeal under the provisions of section 21 of the Order in Council. This may be so; it is a matter on which we are not called to give any ruling at this stage.

$\overline{z}$

The appeal is dismissed with costs.