Murji and Another v Dattu (Civil Appeal No. 75 of 1954) [1955] EACA 305 (1 January 1955)

Full Case Text

### COURT OF APPEAL FOR EASTERN AFRICA

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

# (1) NURMOHAMED MURJI (2) HASHAM MOHAMEDALI & SONS LTD., Appellants (Original Plaintiffs)

# HUSSEINALI GULAMHUSSEIN DATTU, Respondent (Original Defendant). Civil Appeal No. 75 of 1954

(Appeal from the decision of H. M. High Court of Tanganyika, Harbord, J.)

Sale of goods—Sale by description—Commercial description of goods—Accept- ance of goods—Repudiation—"Black pepper"—Sale of Goods Ordinance (Cap. 214), sections 13 (1) (c), 16 (b), 20 and 59 (b).

The seller sold a quantity of "black pepper" by auction to the buyer at the price of Sh. $3/10$ a lb. The buyer purported to repudiate the sale on the ground that the goods were dried berries of the pepper tree and not berries of the trueblack pepper vine (piper nigrum). The seller gave notice of his intention to resell the goods which were resold at a lesser price and the seller then brought the instant suit claiming (inter alia) the difference in price realized at the sale and resale. The seller succeeded before the court of first instance but on first appeal, theappellate Judge took the view that the sale was one by description as "black pepper", that the goods sold were not in fact "black pepper" and that there was thus, a breach of condition. He also held that the buyer had not accepted the goods and had not therefore, disentitled himself to his right to treat the contract as broken, and, could repudiate the bargain.

On second appeal it was (*inter alia*) argued by the seller (1) that the contract: was for the sale of goods commercially known as black pepper and (2) that the buyer had accepted the goods and was, thus, not entitled to repudiate the contract.

The buyer relied on the fact that the goods were not known botanically as. black pepper. The seller called evidence that both chemically and commercially the goods were within the description of black pepper, that the market price of the produce of the *piper nigrum* was Sh. 27 to Sh. 28 a lb., and that the goods were available for inspection before the auction and were inspected and tasted by would-be buyers.

By section 13 (1) (c) of the Sale of Goods Ordinance, so far as material. herein: "Where the contract of sale is for specific goods, the property in which. has passed to the buyer, the breach of any conditions to be fulfilled by the seller can only be treated as breach of warranty and not as a ground for rejecting the goods and treating the contract as repudiated, unless there be a term of the contract, express or implied, to that effect." Section 59 (b) of the same Ordinanceprovides that a sale by auction is complete when the auctioneer announces its. completion by the fall of the hammer or in any other customary manner. The property in the goods had, in this case, passed to the buyer.

Held $(8-7-55)$ .—(1) There was no breach of condition of sale by the seller. The sale was oneby description, and commercially, the goods were within the description of "black pepper", the quality of which was not warranted, buyers being required to exercise their own judgment thereon. That the goods were not botanically known as black pepper was not conclusive of the real question for consideration, namely, whether the goods sold were- within the description of "black pepper" as used and understood by spice dealers where: the auction was carried out.

(2) Having regard to sections 13 (1) (c) and 59 (b) of the Sale of Goods Ordinance, there had been an acceptance of the goods. After acceptance, it is too late to repudiate, the buyer's remedy then being to sell the goods at best and to sue for any loss suffered by him.

Appeal allowed.

Cases referred to: Joseph Travers & Sons Ltd. v. Longel Ltd. (1948) 64 T. L. R. 150; Arcos Ltd. v. E. Ronaasen & Son (1933) A. C. 470; Wallis Son & Wells v. Pratt & Haynes (1911) A. C. 394; Nichol v. Godts (1854) 23 L. J. C. L.

## Master (Dastur with him) for appellants.

#### Rattansey for respondent.

SIR NEWNHAM WORLEY (Vice-President).—This is an appeal from an appellate judgment and decree of the High Court of Tanganyika which set aside a decree passed by the District Court of Dar es Salaam in the appellants' favour. As the matter in suit concerns the sale of certain goods and as the parties have in the two appeals changed their respective capacities, I shall refer to the present first appellant as the seller and to the present respondent as the buyer. The real owner and vendor of the goods was the first-named appellant, the second-named appellant having been joined only as a formal party and a nominal owner because the goods in suit were imported from the Belgian Congo under the authority of the company's licence. The seller and buyer both trade in spices in Dar es Salaam.

The relevant facts are simple, but the evidence on one crucial point, namely, what is the commercial meaning of "black pepper" is not as clear as one could wish, partly, I think, because its significance was not understood by the learned Magistrate.

In November, 1950, the seller imported from the Congo seven bags containing approximately 1,192 lb. of "black pepper" and on 16th or 17th November of that year, on his instructions, an auctioneer sold these goods by auction in the King's Warehouse, Dar es Salaam. The seven bags were sold in one lot and knocked down to the buyer as highest bidder at Sh. $3/10$ per Jb. The buyer signed a note or memorandum of the sale in the following terms:-

"I/we the undersigned have purchased one lot of approximately $1,200$ lb. Black Pepper at Sh. $3/10$ per one lb. on the following conditions:—

- (1) Terms cash. - (2) The purchaser to pay appropriate customs duty and other charges and clear the goods. - (3) No guarantee is given for the quality or quantity of goods sold. - (4) Purchaser will obtain Import Permit. - (5) The purchaser is responsible for his purchases as soon as the lot is knocked down to him.

#### Sd. H. G. DATTU."

He was apparently given credit and did not immediately remove the goods.

On 18th November, 1950, he purported to repudiate the sale by a letter addressed to the auctioneer in the following terms:-

"With reference to the seven bags black pepper sold by you in the auction on the 17th instant, have not been proved to be the black pepper as enclosed copy of certificate from the Department of Agriculture, Dar es Salaam and as such I regret to inform you that I cannot accept the goods."

The copy certificate annexed reads: —

#### TO WHOM IT MAY CONCERN

This is to state that a sample of small black berries submitted to this. office by Messrs. H. Gulamhussein Dattu for identification are assumed to be the dried berries of *Schinus Molle* (pepper tree). They do not appear to be berries of the *true* black pepper (*piper nigrum*).

> Sd. $?$ Senior Agricultural Officer."

The name of the signatory (if any) does not appear on the copy.

On or about 12th February, 1951, the seller gave the buyer notice of hisintention to resell and the goods were in fact resold on 20th March, 1951, by auction and fetched Sh. 2092/50. The seller then brought a suit in the District. Court claiming Sh. 2501/90, as the difference between the prices realized at the sale and resale, plus customs duties and rent paid.

By his written statement of defence the buyer traversed the seller's assertion that he was always ready and willing to deliver black pepper to the buyer and alleged that "the only articles of which delivery was tendered were dried berries which were not black pepper".

The learned Resident Magistrate found as facts—

- (a) that black pepper is the fruit of the pepper-vine (*piper nigrum*); - (b) that the seven bags contained seeds or berries of a different plant, the pepper tree (Schinus Molle).

He appears to have thought that the sale was not a sale by description but a sale of the goods "such as they are": see Benjamin on Sale, 8th Ed. 615 and Joseph Travers & Sons, Ltd. v. Longel Ltd. (1948) 64. T. L. R. 150 at p. 153. He says: "When goods are sold by auction it is not by description or sample. The person buying is present and he can inspect the goods... the goods are there for inspection and the buyer bids the price he thinks they are worth." These statements are too general: a sale at auction may be by sample (e.g. produce sold in large quantities) but more often is of goods as described in a catalogue, though, if the description is not relied upon, it will be a sale of goods "such as they are". We need not however concern ourselves further with this point because the learned Judge on first appeal found that the sale in this case was by description, and we cannot disturb that finding except to inquire whether, as the appellant alleges, the learned Judge misdirected himself as to what the description was.

The learned Magistrate applied the proviso to section 16 $(b)$ of the Sale of Goods Ordinance (Chapter 214 of the Laws of Tanganyika, 1947), which corresponds to section 14 (2) of the Sale of Goods Act, 1893. But, as is pointed out in the judgment of the High Court, if the goods sold did not correspond with the description, then section 16 $(b)$ is irrelevant. Goods sold by description must also be merchantable if within the terms of section 14 (2) of the Act, but that is no substitute for the requirement to correspond with the description: see Benjamin on Sale, 8th Ed. p. 621 and Arcos Ltd. v. E. A. Ronaasen & Son (1933) A. C. 470 per Lord Buckmaster at p. 474: —

"If the article they have purchased is not in fact the article which has been delivered they are entitled to reject it, even though it is the commercial equivalent of that which they have bought."

This rule applies equally to goods sold by description at auction: see Hart, Law, of Auctions 3rd Ed. 76. I respectfully agree with the following passage in the judgment of the High Court:-

"To give opportunity for inspection does not relieve a vendor from the obligations and risks he places; himself under when he sells by description. The proviso to section $16i(b)$ of the Sale of Goods Ordinance has no bearing upon the question; 'defect' is one thing, 'nature' another."

Harbord, J., took the view that the sale was a sale by description as "black pepper" but that the thing sold was not in fact "black pepper", in other words, that there was a breach of condition. He therefore held that the case was governed by the case of Wallis, Son & Wells v. Pratt and Haynes L. R. (1911) A. C. 394 and held, further, that the buyer had not accepted the goods and had not, therefore disentitled himself to his right to treat the contract as broken by the seller's. non-performance and to repudiate his bargain. He accordingly allowed the appeal with costs.

The main grounds of the appeal to this Court are: $\rightarrow$

- 1. That both the learned Judge and the trial magistrate misdirected themselves on the evidence, in that— - (a) there was evidence to support a finding that what was sold was not black pepper; and - (b) they failed to realize that the contract was for the sale of goods $(b)$ which are commercially known as black pepper. - (2) That the learned Judge misdirected himself in law in holding that the buyer had not accepted the goods and was entitled to repudiate the contract.

The first of these grounds involves consideration of the evidence led, and I will start with the only witnesses called for the buyer: they were Mr. Robertson, a Government Agricultural Officer and Mr. Robertson's clerk. Mr. Robertson, speaking as a scientific expert, said that botanically black pepper is the whole fruit of the pepper vine (*piper nigrum*). He also examined the contents of some envelopes which he had received from his clerk and thought they were the seeds. of the pepper tree (Schinus Molle). His clerk gave evidence that he received the samples in the envelopes from the buyer some time in 1950: one sample was given to the Agricultural Officer at the time and the remainder given to Mr. Robertson in June, 1952: The buyer did not give evidence and Mr. Master has pointed out that there was no evidence to connect these samples with the goods bought at the auction and therefore no evidence to justify the trial Magistrate's finding that the seven bags contained seeds of the pepper tree. That is a perfectly valid point and were there any real question as to whether the bags contained the fruits of *piper nigrum*, it might be a substantial one. But in truththe point was not taken at the trial because the seller has, as I understand the case, never contended that he was selling that article: as Mr. Dastur, who represented him at the trial, put it "It is nowhere alleged that plaintiff intendedto sell genuine black pepper". The phraseology was not very happy, perhaps, but the meaning is clear.

Mr. Robertson's evidence is important because both courts below have. based their finding of fact on his description of what is botanically known as black pepper. But in my view this was by no means conclusive of the realquestion which had to be considered, namely, were the goods sold within the meaning of the description "black pepper" as that is used and understood by

spice dealers in Dar es Salaam? On that aspect Mr. Robertson was of little assistance: he admitted that he was speaking as a botanical expert only: he did not know the commercial names of the samples he had examined; he did not know how the commercial world graded black pepper or whether different kinds of seeds or fruits were sold as black pepper. He was, however, able to say that the seeds of Schinus Molle were used as an inferior substitute for what he called "genuine black pepper" in South Africa; and also that there was a very obvious difference between the genuine black pepper and the seeds of Schinus Molle.

On the other hand the seller put in evidence a certificate of analysis by a Government Chemist of a sample, proved to have been taken by the auctioneer from the goods sold. The certificate is dated 30th January, 1951, and reads: -

"With reference to your letter of 17th January, the sample alleged black pepper has been examined with the following results: $-$

| Moisture | | $\cdots$ | $\mathcal{L} \times \mathcal{L} \times \mathcal{L}$ | $18.9$ per cent | |--------------------------|---------------|----------|-----------------------------------------------------|----------------------| | $Ash \quad . \quad .$ | $\sim$ $\sim$ | | $\mathcal{L}^{\infty}(\mathcal{L}^{\infty})$ | $6.3$ per cent | | Alcohol extract $\ddots$ | | | $\cdot$ | $\cdot$ 9.9 per cent | | Piperine | | | | $9.1$ per cent |

Miscroscopic examination shows stone cells and starch masses characteristic of black pepper.

Though I am not a botanist the chemical evidence leads me to believe that the sample is genuine black pepper.

### Yours faithfully,

W. E. Collection, Government Chemist".

This certificate does at least show that the goods sold were, chemically, within the description of black pepper and it is rather remarkable that it appears to have been entirely overlooked by the magistrate.

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The seller himself gave evidence and called the auctioneer and two merchants who were present and made bids at the auction. The substance of their evidence, which was uncontradicted, was that in November, 1950, the current market price. for "India pepper" or "genuine black pepper" (which expressions I understand to mean the dried fruits of *piper nigrum*) was between Sh. 27 and Sh. 30 per lb.: that the bags were open for inspection; that about fifty or sixty persons were present mostly dealers in spices; that they were drawing samples and tasting them. The evidence of Hemraj Vasanji, one of the dealers, was particularly important because, although rather confused by the use of the term "genuine black pepper" which he was not asked to explain, the gist of his evidence was that, among the spice traders in Dar es Salaam, the description "black pepper" was used to cover all the samples which were shown to him. He said:-

"We call them all black pepper. . . . Black pepper is sold as black pepper and all are genuine".

He also said speaking of the goods in suit-

"It was sold as black pepper. It was told us that it came from Congo".

In the face of this evidence and particularly having regard to the wide differential between the current price of "genuine black pepper" and that offered for the pepper sold at this auction, it is, I think, impossible to suppose that the buyer was in any way misled by the description given. Indeed he has never said that he was, but has sought to rely entirely on the botanical description of black pepper. He has not attempted to refute the evidence that the goods sold are commercially known as black pepper and were auctioned and bought as such.

It follows that the present case is distinguishable from the case of *Wallis* $v$ . Pratt (supra): in that case, the contract was for the sale of "common English sainfoin" but "giant sainfoin", a different and inferior article, was supplied and it was never at any stage of the case suggested that this was commercially within the description "common English sainfoin". There was accordingly a breach of condition which was not covered by the clause of the contract which excluded warranty "as to growth, description or any matters".

Mr. Rattansey cited the case of Nichol v. Godts (1854) 23 L. J. C. L. 314 but, properly understood, it is against him. In that case the contract was for the sale of oil, described as "foreign refined rape oil, but warranted only equal to samples". The plaintiff delivered oil which was not foreign refined oil, but which corresponded with the samples. It was held that the defendant was not bound to accept this oil, as he was entitled to the delivery of oil answering the description of foreign refined rape oil, and that the statement in the contract as to samples related only to the quality of the oil. There are two passages in the judgments in the Court of Exchequer which are helpful: Pollock C. B. at p. 315 says: "If the plaintiff could show that by the general usage of merchants the oil in question was denominated foreign refined rape oil, and the jury had so thought, he would be entitled to the verdict". And Platt B., at the same page of the report, says: "The plaintiff agreed to sell foreign refined rape oil, and if the jury had found that the article sold had been called in the market by that name, the defendant would have been bound to accept it." Parke B., concurred. See also Josling v. Kingsford (1863) 13 C. B. (N. S.) 447: 143 E. R. 177.

In the instant case, the seller did in my view, show that the goods sold were called in the market by the name of black pepper. The quality was not warranted: the buyers were to exercise their own judgment on this, which they did by inspection and tasting. Their assessment of the quality was reflected in the prices bid. If Hemraj Vasanji is to be believed the quality was further indicated by the auctioner's announcement that it was black pepper from the Congo. I think the courts below did misdirect themselves on this issue and the seller is therefore entitled to succeed on his first ground.

In my view he would in any case succeed on his second ground, namely, that the learned Judge on first appeal did misdirect himself in holding that the buyer had not accepted the goods and was therefore entitle to repudiate. The point is in my opinion governed by section 59 (b) and section 13 (1) (c) of the Sale of Goods Ordinance (which correspond to sections 52 (2) and 11 (1) (c) of the Act). Section 59 (b) provides that a sale by auction is complete when the auctioneer announces its completion by the fall of the hammer or in other customary manner; and section 13 (1) (c) provides, so far as is material to my present purposes: -

"Where the contract of sale is for specific goods, the property in which has passed to the buyer, the breach of any conditions to be fulfilled by the seller can only be treated as breach of warranty and not as a ground for rejecting the goods and treating the contract as repudiated, unless there be a term of the contract, express or implied, to that effect."

Mr. Rattansey, for the buyer, conceded that the property in the goods passed when they were knocked down to him by the auctioneer; section 20 rule I and see Dennant v. Skinner (1948) L. R. 2 K. B. 164. It has not been suggested that there was any express or implied term such as is contemplated by the last part of section 13 (1) (c). That being so, the buyer was relegated to his action for damages. "The question of acceptance does not arise where the property in the goods has passed to the buyer": see Benjamin op. cit. p. 750 and The Bog Lead Mining Co. v. Montague (1861) 10 C. B. N. S. 481: 142 E. R. 539 per Willes, J., at p. 543. Assuming therefore that the learned Judge was correct in finding that the goods sold did not fulfil the description he was wrong in holding that after accepting the goods the buyer could repudiate. His remedy was to sell the goods at best and sue for any loss he suffered.

Accordingly, I would allow this appeal, set aside the decree of the High Court and restore the decree of the District Court. The appellant in this Court should have his costs of the trial and of both appeals.

SIR BARCLAY NIHILL (President).—I agree and have nothing to add. An order will be made as proposed by the learned Vice-President.

HOLMES. J.—I also agree.