Wilkinson v Barclay

 

Wilkinson v Barclay

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All ER 1946 Volume 1

Preamble

SALE OF GOODS

KING’S BENCH DIVISION

ATKINSON J

15, 16, 17, 18 JANUARY, 1 FEBRUARY 1946

Sale of Goods – Delivery of lesser quantity – Rights of purchaser – Prescribed and non-prescribed conditions – Inconsistency –Control of Timber (No 21)

Order, 1941, SR & O 1941 No 2088 arts 1(1), (2), 6, Sched III.

The defendant invited tenders for the sale of a stock of home-grown timber in lots. The sale was subject to the Control of Timber (No 21), Order 1941. The

invitation to tender described each lot, gave the estimated measurement in cubic feet and the maximum price per foot-cube. It then went on to refer to the

Control of Timber Order and to the licence under which the sale was made and set out the prescribed conditions of sale, on which alone the sale could be

made. Finally, as permitted by the prescribed conditions of sale, certain non-prescribed conditions of sale were incorporated, among which was the following:

“The lots are offered where and as they are and each lot will be considered as being tendered for separately, and the sum offered will be subject to no

allowance for any faults, defects, errors of description, measurement, quantity or for any cause and without any warranty whatever.” The prescribed

conditions provided that in the event of inconsistency the prescribed conditions should prevail. Tenders remitted by the plaintiff for a number of lots were

accepted, and the plaintiff paid to the defendant, in accordance with the contract before delivery, an amount based on the estimated measurements set out in

the invitation to tender. On delivery the plaintiff discovered a considerable shortage. In an action by the plaintiff for the recovery of the amount overpaid it

was contended on behalf of the defendant that the non-prescribed condition was a bar to the action:—

Held – (i) Although the non-prescribed condition excluded the right to reject and the right to claim damages for short delivery, it did not deprive the plaintiff

of his right to recover money paid for timber which had not been delivered.

􀂭 387􀀉

(ii) even if it did, and in so far as it did, it formed no part of the contract because it was inconsistent with the prescribed conditions.

Notes

The purchaser of timber bought by tender for lots expressed to be of “estimated” quantity is held to be entitled to recover what he has paid for timber not in

fact delivered. The material condition provided that the “sum offered” should be subject to no allowance for error in measurement or quantity but the “sum

offered” is held not to be the same thing as the “price paid.”

As to Delivery of Less Goods than Contracted for, see Halsbury, Hailsham Edn, Vol 29, p 126, para 153; and for Cases, see Digest, Vol 39, pp 559–561,

Nos 1664–1678.

Cases referred to in judgment

Covas v Bingham (1853), 2 E & B 836, 39 Digest 401, 377, 2 CLR 12, 23 LJQB 26, sub nom Bingham v Covas, 22 LTOS 97.

Wallis, Son & Wells v Pratt & Haynes [1911] AC 394, 39 Digest 477, 996, 80 LJQB 1058, 105 LT 146.

Beck & Co v Szymonowski & Co [1924] AC 43, 39 Digest 467, 925, 93 LJKB 25, 130 LT 387, HL, affg, SC sub nom Szymonowski & Co v Beck & Co [1923] 1

KB 457, CA.

Action

Action to recover money paid by the plaintiff to the defendant for timber which had not been delivered. The facts are fully set out in the judgment.

Frederick Hallis for the plaintiff.

T F Davis for the defendant.

Cur adv vult

1 February 1946. The following judgment was delivered.

ATKINSON J. This is an action brought by the plaintiff to recover three sums of money paid to the defendant for timber bought from the defendant but

which has never been delivered, and the claim is based on failure of consideration. The plaintiff is a timber merchant and the defendant is receiver and

manager of a company known as the Western Lumber Co Ltd. In March 1944, the defendant put into the hands of the auctioneers, Messrs Joseph Hibbard &

Sons, the task of disposing of the company’s stock of home-grown timber. The bulk of it was lying in a yard at Catford and the rest at the Britannia Wharf,

Millwall. The sale was to be by public tender in lots; that means that details of the timber to be sold were sent by the auctioneers to a number of possible

purchasers who were asked to tender for the timber or such part of it as they required. It may have been advertised as well.

The sale was of necessity subject to the Control of Timber (No 21) Order of 1941. That Order provided by art 1(2):

‘No person shall dispose of or agree or offer to dispose of any timber … except under the authority of and in accordance with a licence granted, or a

special or general direction issued, by the Minister of Supply.’

Similarly by sub-clause (1) no person is to acquire timber except on the same terms. The heading to art 6 is Home-Grown Timber:

‘(1) No person shall buy or sell or agree or offer to buy or sell any home-grown timber … at any price exceeding the maximum price provided

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Preamble

therefor by this Article, nor upon any terms not provided for in that maximum price: except such additional terms as are allowed under and in

accordance with the provisions of the Fourth Schedule to this Order, and such other terms as may be permitted under the authority of and in accordance

with a licence granted, or a special or general direction issued, by the Minister of Supply.’

In order to ascertain the terms upon which timber can be sold one has first to look at the terms provided in the maximum price order. They are contained

in the Third Schedule, which refers us back to a Schedule in an earlier Order, [The Control of Timber (No 17) Order, 1940] where there are four provisions,

the first of which is: “All prices are per cubic foot unless otherwise stated,” and then there are various other conditions which I do not think refer to this case.

The further permitted terms would be ascertained from the licence granted and were known as prescribed conditions of sale. One of the prescribed

conditions of sale permitted the contracting parties to incorporate other conditions of sale called non-prescribed, but provided that if there were any

inconsistency, the prescribed conditions should prevail. That is the background of any transaction in timber.

Messrs Hibbard prepared and distributed their invitation to tender. It is 􀂭 388􀀉 a printed document. There were 68 lots of timber described and the great

bulk of them, as I have said, were at Catford. The first column on the left has the lot number. The next column is headed “Description” and each lot is

described. The third column is headed “Estimated feet cube” and contains the number of cubic feet estimated for each lot. The fourth column is headed:

“Maximum price per foot cube.” There were 58 lots at Catford and 10 at Britannia Wharf. The third page of the document refers to the Control of Timber

Order, the one that I have just read, and to the licence under which the sale was made; and it sets out several provisions with the heading in big type

“Prescribed Conditions of Sale,” which are, as I have said, a necessary part of the contract because they are prescribed as the conditions on which alone the

sale can be made. On the fourth and last page there is a heading “Non-Prescribed Conditions of Sale,” and there follow eleven conditions, and then comes the

form of tender to which I will refer in greater detail later on.

Hibbard has explained why the quantities were only estimated and not ascertained with any certainty or reasonable certainty, and also how the estimates

were arrived at. He said that normally on such a sale each plank or board is measured and the cubic content ascertained by calculation. But this is a lengthy

business and he said that during the war they had not the labour available to do it and he had therefore to make some sort of an estimate himself, and this is

how he did it. The lots are of two kinds. About 40 of them consisted of butts and second lengths and about 27 of stacks of straight-edged planks. A butt is

that part of a trunk nearest to the ground of no particular length—that would depend on the size of the tree and I suppose the best place for cutting. In this case

the butts seem to have varied from 8ft to 15ft. The second length is the next part of the tree above the butt, the length again varying according to the nature of

the trunk. The butts and second lengths had been cut through into planks of various thicknesses—1 in up to 3 ins—but the butts and the lengths, which were

called logs by the witnesses, were lying with the planks all in position so that from a distance the appearance would be that of a pile of uncut logs. Obviously

it would be no easy task to estimate the cubic content.

Taking lot No 1 which consists of 19 oak butts and second lengths cut through to 1 in and 1 1/4ins—I do not know whether that means there were 19 butts

and 19 second lengths, or whether it covers both the number of butts and the number of second lengths—what he said was this:

‘I selected on of the visible logs which seemed to me to be a fair average size of what was in the lot. I then measured the length of that log. I

selected a board or plank either a quarter of the way down or a quarter of the way up, and because I thought that would fairly represent the average

width of the plank in that tree. I measured that plank in three places.’

It will be realised, the bark still being on the tree, that the size of these planks would vary as trunks do, and one measurement he said would be no use, so he

takes three measurements one a little distance from each end and one in the middle, averages those three measurements and takes that as the average width of

not merely that plank but of every plank in the log. He then multiplies the length of the log by this average width by the thickness and by the number of

planks in the log and so arrives at a cubic content for that log. He then multiplies that by the number of logs in that lot, whether they are butts or whether they

are second lengths. He agrees that this was a very rough and ready way of doing things, that it was not a recognised method, that it was no more than an

expert guess; and he said:

‘“If I got within 20 per cent. of the accurate measurement I should be doing my measurement as well as I could do it. When a complaint was made

that there was a shortage of 25 per cent.” He said, “I knew it might very well be true.“’

The stacks of straight-edged timber were stacks of planks which had been cut along to sizes of an even width. They were much more easily dealt with

and he measured samples of these planks and he thinks that his method with these stacks ought to bring him within 5 or 6 per cent of the true cubic content.

The form of tender itself appears on the last page and is in these terms:

‘To Messrs. Stoy Hayward & Company, Chartered Accountants, 103, Cannon Street, London, E.C.4. I/We offer to purchase the stock of timber,

etc., subject to your conditions of sale, as follows:’

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Then every lot is set out and printed from lot No 1 “for the sum of (blank) per foot cube”; and the person tendering has to fill in that gap the price he is

offering per cubic foot for the stack of timber.

There were three separate tenders by the plaintiff in this case. The first was on 12 April 1944, and was an offer for 17 lots, the same price being offered

for every one. In the original tender which I have 5s 6d is filled in in the gap for the 17 lots which the plaintiff wanted to buy. There was a little cross put

alongside the 5s 6d and at the bottom were these words:

‘With Mr. Barclay’s recommendation I will take all the lots crossed at 5s. 6d. per cube. (Signed) W. Wilkinson.’

So there is a plain offer for the stock at so much per cubic foot—the stock, that is, in each of the lots indicated. On 18 April that offer was accepted by letter:

‘We have to inform you that your tender was accepted and we herewith enclose two sale notes, both of which will you please sign with your name

and address and return to us together with banker’s draft of £1,139 12s., and the necessary timber control licence to purchase. We will then issue a

delivery order to you forthwith.’

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One of the conditions of sale was that lots had to be paid for by banker’s draft within 24 hours of the tenderer submitting his timber control licence to

purchase, so the plaintiff at once got his licence to purchase and forwarded the licence and the necessary draft. The receipt he was asked to sign (and which he

did sign) was prepared by the auctioneers and is headed: “Sale by public tender under the Control of Timber (No 21) Order, 1941” and refers to the licence.

Then the left hand column has the amount 5s 6d, then the lot No, then the price worked out by multiplying the estimated number of feet by the price

offered—because that is what has to be paid—and for that first contract the sum demanded was £1,139 12s, and the money was paid. The next two contracts

are made in just the same way. On 1 May 1944, there was an offer for 39 lots indicated at 2s 6d per cube foot in every case, and that was accepted on the same

date. On 15 May there was acceptance of the third offer, which was a small one for the 6 remaining lots, for£90 17s 6d. Again I think the offers in every case

for that lot were for 2s 6d except for one small lot which was 1s 6d. It has been agreed in this case that all these three contracts are in exactly the same

position, and that if the plaintiff is entitled to succeed—if he proves a breach of the first—so he is entitled to succeed on the second and third if he proves a

breach of those.

Having entered into this first contract and got his delivery order, the plaintiff went to take possession and he wisely enough had the timber very carefully

measured and checked board by board. He found that there was a shortage on his first delivery of some 25 per cent and on 10 May he wrote to Messrs

Hibbard:

‘I wish to inform you that my men when checking goods at Catford found a shortage of about 25 per cent., and I would be greatly obliged if you

could send along to have same measured.’

The reply to that letter did not come until 15 May when Messrs Hibbard wrote:

‘We are duly in receipt of yours of the 10th inst. with respect to the alleged shortage in quantity in the lots you purchased, but we have to refer you

to (1) that the quantities according to the tender were estimated only and were so printed; also to (2) condition 5 of the non-prescribed conditions of sale.

We shall esteem it a favour if you will kindly let us know as soon as you have removed all the timber at Catford …’

In other words they took up the position that the contract was governed by condition No 5, one of the non-prescribed conditions, and that the effect of that

condition was that the plaintiff—who had paid on the estimated quantity—could recover nothing back however little timber there was in fact in that lot; and

from first to last the defendant has refused to take any step to assist the plaintiff in the measuring of the timber delivered; he has left it to the plaintiff (who has

had it very carefully checked I think in every case) and with one exception, which I will come to later, the defendant has refused to take any part in the

measurements which the plaintiff has made.

Evidence was called before me to prove the shortage. Taking the first contract it was proved that all the timber they had went to three different

customers. What are called specifications—rather complicated documents for the uninitiated to understand—were put in showing the actual measurements of

every piece of timber received by the plaintiff; and I am satisfied 􀂭 390􀀉 that there is no reason whatever for doubting the accuracy of those measurements.

As soon as the details were ascertained with regard to every contract, copies of the specifications were sent to the defendants so that at the earliest opportunity

he had the precise measurements before him, and I repeat the defendant never took the trouble to check a single one of them. The result in my judgment is

this: The plaintiff has proved that under the first contract he paid for 4,144 cubic feet and in fact received 3,281.8 cubic feet so that there was a shortage of

862.2 cubic feet. As to the second contract, I am satisfied there was a shortage of at least 1,560 cubic feet—7,096 cubic feet were paid for and 5,532.47 cubic

feet delivered, so there was a shortage of at least 1,500 cubic feet for which the plaintiff had paid 2s 6d per cubic foot. As to the third contract there is very

little doubt about the figure there because the shortage was all on one lot which ought to have contained 240 cubic feet and in fact contained only 195 cubic

feet. So that the amount which the plaintiff has overpaid and which he claims in this action is £437 19s.

The whole point in this case is whether a condition which I will read prevents the plaintiff from claiming that money. That condition was this:

‘The lots are offered where and as they lie and each lot will be considered as being tendered for separately and the sum offered will be subject to no

allowance for any faults, defects, errors of description, measurement, quantity or for any cause and without any warranty whatever.’

I have not the slightest doubt (and I question whether it was intended to be seriously argued) that if it were not for that condition beyond all question the

plaintiff would be entitled to recover this money. There is an offer for the stock. That does not mean the estimated stock; it means what it says, an offer for

the stock at so much per cubic foot which was accepted. The plaintiff paid for a certain number, less was delivered, and quite plainly there has been a failure

of consideration as to the missing timber.

In the course of the argument counsel for the defendant referred me to the case of Covas v Bingham. In that case there had been a written contract for the

purchase of “the cargo” of the Prima Donna, “now at Queenstown, as it stands, consisting of about 1,300 quarters Ibraila Indian corn, at the price of 30s per

imperial quarter,” cost, freight and insurance to a safe port in the United Kingdom, “the quantity to be taken from the bill of lading, and measure calculated at

220 quarters = 100 kilos. Payment cash, on handing shipping documents.” Payment was made against documents for the amount stated in the bill of lading

and according to the bill of lading there ought to have been 220 quarters. In fact far less was delivered—the cargo consisted of less—and the purchaser was

claiming the overpayment. It was held that on the construction of the contract the parties agreed to buy and sell the cargo at a price to be calculated from the

quantity stated in the bill of lading and not to depend upon the actual quantity.

Now when it is examined it is quite plain that that case is against the defendant because there was not the slightest attempt to argue that the original

estimate of about 1,300 quarters was to be the quantity paid for. The point was that construing the contract as a whole both parties agreed to be bound by what

was in the bill of lading and in his judgment Erle J said ((1853) 8 E & B 836, at p 844):

‘This contract is to be construed, according to the general rule, by giving effect if possible to every part of it. It begins “Sold ‘the cargo’ as it stands,

consisting of about thirteen hundred quarters Ibraila Indian corn, at the price of thirty shillings per impl. quarter.” Had it stopped there, it would have

been a sale per quarter, and the price would have depended on the actual measurement.’

That is exactly this case, leaving out condition 5. But the judge went on to say: (ibid):

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‘But then it goes on ‘the quantity to be taken from the bill of lading.’’

and based his decision on that. So far as the decision is any guide in this case, it makes it quite clear that apart from the condition, the plaintiff would be

entitled to receive back the money which he had overpaid. Moreover the position in this case is strengthened by the terms of the Order which provide that the

sale has to be per cubic foot; if you buy a lot whatever it may contain—as counsel for the defendant contends was done in this case: for 􀂭 391􀀉 example that

the first lot was bought for £91 6s, whatever it contained—a purchase of that sort would be a plain breach of the Order. It would open the door inexpressibly

wide to an escape from the terms of the maximum price order. If a man has a turkey to sell and the maximum price is 5s 8d per lb, and he estimates the weight

at 20lbs, and I buy it and it weighs only 12lbs, the price is much higher than it should be at 5s 8d per lb, and the seller would have no defence whatever to a

prosecution; he would have received very much more than he is entitled to under the Order.

It is not an easy condition to construe but there are several well established principles for the construction of conditions incorporated in contracts of sale

of this kind. The first to which I shall refer is laid down in the case of Wallis v Pratt. It is a principle with which everyone is very familiar and I will read just

one paragraph from Lord Alverstone’s judgment. This was a case, it will be remembered, where they sold common English sainfoin on the condition that the

sellers “give no warranty expressed or implied as to growth, description or any other matters.” The seed delivered was not common English sainfoin but giant

sainfoin, a different seed, and the point was whether the condition protected the sellers. In referring to the various sections of the Act Lord Alverstone CJ said

this ([1911] AC 394, at p 398):

‘These sections have been all very clearly dealt with by the learned counsel at the Bar, and, as has been pointed out, in each and all of those sections

there is the distinction between “warranty” and “condition” and the different consequences flowing from the one stipulation and the other. My Lords,

all I can say is I think it is quite impossible to suggest that in the year 1906, when these parties made a contract whereby they required that the goods

should be common English sainfoin, and the sellers put in a stipulation that they would not give any warranty, express or implied, it was intended that it

was always to be understood that they were not making themselves liable in regard to any condition as to the goods or for the consequences of a breach

of the condition.’

—in other words if you merely exclude liability for breach of warranty, you are not excluding liability for breach of a condition.

I was referred to another case, Szymonowski v Beck, a decision of the Court of Appeal. There goods had been sold subject to the following condition:

‘The goods delivered shall be deemed to be in all respects in accordance with the contract, and the buyers shall be bound to accept and pay for the

same accordingly unless the sellers shall within fourteen days after arrival of the goods at their destination receive from the buyers notice of any matter

or thing by reason whereof they may allege that the goods are not in accordance with the contract.’

I need do no more than refer to two passages from the judgments in this case, the first from that of Bankes LJ ([1923] 1 KB 457, at p 464):

‘A buyer has, in the event of his seller breaking his contract, a prima facie right to avail himself of one or other of several alternative remedies, and

if the seller desires by a clause in the contract to restrict the buyer’s right to those remedies he must say plainly whether he intends to deprive the buyer

in certain events of all those remedies or only of one or more of them, and if so of which.’

The second passage is one from the judgment of Scrutton LJ (ibid, at p 466):

‘… if a party wishes to exclude the ordinary consequences that would flow in law from the contract that he is making he must do so in clear terms.’

That case went on appeal to the House of Lords, and that view was upheld.

If there is a sale of a fixed quantity of goods and there is a short delivery, the remedies of the purchaser are these: he can reject or he can take and pay for

what he receives at the contract rate, and he can claim damages for the non-delivery. If he has paid in advance and there is a short delivery he can recover the

price which he has paid for the goods not delivered.

Now let me see how far this condition excludes those remedies. The words are:

‘The lots are offered where and as they lie and each lot will be considered as being tendered for separately and the sum offered will be subject to no

allowance.’

It is quite plain that the sum offered is 5s 6d per cubic foot for the stock. It does not say “the price paid” or “the sum received.” It says “the sum offered”

which is quite different. The sum offered was 5s 6d per cubic foot 􀂭 392􀀉 for the stock which was there and the sum paid, taking the first lot, for example,

had been £91 6s for the lot. That was not “the sum offered” at all but was the price paid, and this condition refers only to “the sum offered.” The words are

very ungrammatical:

‘… and the sum offered will be subject to no allowance for any faults, defects, errors of description, measurement, quantity.’

—I suppose that means subject to no allowance for deficiency in quantity—“or for any cause and without any warranty whatever.” The word “warranty” is

used, but no word to cover breach of a condition.

It seems to me that what has been effected is this: if there is a short delivery as the amount was not a firm contractual amount, the plaintiff would not be

entitled to reject. Further than that he would not be entitled to claim damages for that which has not been delivered, and then seek to set off those damages

against the price, against the sum offered. He has to take what is delivered and pay for it; he has no claim for damages for short delivery. But there is not a

word there to my mind which deprives him of his right to recover that which he has paid for timber which has not in fact been delivered. If it was really

intended to let a purchaser understand that he had to pay for these lots on the basis that the estimated quantities were correct, it would have been very easy to

say so:

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‘… the sum paid will be subject to no deduction whatever because the amount set out in the specification is not in fact there …’

something of that sort. In fact nothing of the kind is there, and I think that this condition does not deprive the plaintiff of his right to receive money back for

timber which has never been delivered.

Supposing that I am wrong in that view, then a rather interesting situation arises. Supposing it does mean that nothing can be recovered for short

delivery, counsel for the plaintiff says that the condition would be inconsistent with the prescribed conditions of sale which incorporate the Order, and require

that the timber is to be sold at so much per cubic foot—that means at so much per cubic foot delivered, not at so much per cubic foot, the quantity being

guessed at by the seller.

Counsel for the defendant on the other hand says: if it means that, it would make it an illegal contract; the purchaser then has been a party to an illegal

contract and he cannot recover the money back. I do not think that argument is sound. I think that counsel for the plaintiff’s point is a perfectly good one in so

far as the condition is inconsistent with the prescribed conditions, it forms no part of the contract, and therefore the contract remains a perfectly legal contract

whereby the buyer is to pay at so much per cubic foot for the timber delivered.

There is this further point. It was impossible for the plaintiff to prove with regard to which of these lots the shortage occurred. There is a good 20 per

cent shortage on the whole, and it is, therefore, perfectly clear that there must have been a 20 per cent shortage and probably more on some. To illustrate this

let me take the first lot. If that were 20 per cent short delivered the price per cubic foot would be 6s 10d, and some fraction, and would be above the maximum

price, which is 6s 6d. It is perfectly plain that if the average under delivery is 20 per cent, on some of these lots the maximum price must have been exceeded.

That is another consideration which one has to bear in mind.

I base my judgment on this, that apart from the condition the plaintiff’s case would be clear. I hold that the condition does not deprive him of his right to

get his money back for what has not been delivered; and if it did, and in so far as it did, it formed no part of the contract because it was inconsistent with the

prescribed conditions. I give judgment, therefore, for the plaintiff for £437 19s, with costs.

Judgment for the plaintiff with costs.

Solicitors: Tarlo, Lyons & Co (for the plaintiff); Sidney Pearlman (for the defendant).

P J Johnson Esq Barrister.

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[1946] 1 All ER 394