Schumacher v Straumann v Jemal Gallizia [1924] SLSC 3 (1 December 1924)

133 SCHU.lLiCHER and STRA.vlU.XX

11. JE:i\L\L and GALLI:0Ll. - - Appellants. ht Deconfxr l:J24. - llesponrlenbs. Action for damages for fraudulent misrepresentation in sale of a launch - Jlatter antecedent to and dehor::. a written contract inadmissible in ab.~ence of fraud-Simplex conwnendatio Pur chase of launch "in the condition as she stands " Arti cle sold " with all faults." The facts of this case are sufficiently ~;et out in the judgment. App eal from a judgnwnt of Pur('cll, C.J. , in the Supreme Court of the Colony of Sierra Leone. Wright for the Appellants cites:- Powell on Evidenre, 9lh Eel., pp . 180-181. Benjamin on Sale, 4th Eel.. pp . 617-618 . Kain v. Old, 2 B. and {)., p.

627. Pickering r. ])awson. 4 Taunton. p.

119. Can on Fraud and :Mistake, :3nl Eel., pp. 47-49. ITalsbury, Vol. 20, p.

670. Smith v . Chadwick, 20 Ch. D., p.

81. Smith 1:. Chadwick, 9 ..\.C .. p. 190 . Redg ra >e 't'. Hurd, 20 Ch . D. , p .

1. Cullen v . Knowlt's (1898), 2 Q.B., p.

380. Odgers on Plt'nding, pp. 174-175. Pilley v . Robinson, 20 Q.n. D., p. 1

55. In re Matthew~ (1905), 2 C'h .. p.

460. Kendall '1'. IIamilton. 4 ~\.C., p .

504. Rul es of Supreme Court, Order 16, rules 11 and

12. Thompson for the Respondent cites : Order 30, rule

1. Order 16, rule

13. Sheehan v. Gren.t E ast<'rn Railw ay. 16 Ch. D., p.

59. White Book, 1915 Ed. , p.

213. Abouloff v. Oppenheimer. ~0 W.R., p.

430. Colonial Securities Trust Co. v . .l£assey, 65 L.J. , Q.U., p. 1001. SCHUMACHER & STRAtn!A:"N v. J};~JAL & GALLIZIA . 134 Drummond v. Van Iugen, 12 ~LC., p. 284 . Powell on K>i<lence, ()th .Ed., p.

472. Dobel r. Sten•ns, 0 H. a nd C., p. 62:3. Schneider r . Heath. ·1 Campb ell, p.

506. Baglehole t•. \Yallers, 3 Campbell, p. 154 . llalsbury, Law:; of England, \"' ol. 20, p. 729 . Ward v. Hobbs, -!8 I1.J., C.P., p.

281. S_\. WREY-COOKSON, J. 'l'his is an appeal by Lhc Defen1lants from a judgme n t of the learned Chief Justice by which they" ere found to ha\e made certain false and £r.mdulent \erbal representations to the Plai n tiff:; for the purpose of inducing them to agree, and which did in fact induce them to purchase a ·worthless steam launch . Tlte learned Chief Justice further found that the agreement was conduded by a certain letter from Plaintiffs to Defendants dated 28th July, 1920 (exhibit " C "), but that the lettet· of the day following from Defen~ants lo I>laintifts (exhibit "D ") (to both of "·hich I must again 1·e£er shortly) was " me1·ely part of a. ::.cheme by which Plaintiff;; were defrauded." i.e ., as I under stand this particular finding of the learned Chief ,r uslice - that lhi!> letter formed n o part of the "riting Lo which the agreement was (as Mr. Wright submitted) e\cntually reduC'ed. I baYe purposc•ly lost no time in r<'ferring- to these two letters as mu<'h oi' :lfr. ·wright's argume11t was direc·ted to them ancl, if )[r . \\ri ght is eorrect in the vie" lw maintains, it will not be neee .-s.try to eonsidN the l>eft>JHhnt,..' h o I'emaining grounds of appeal. I und<'r;:land lh<' efft>d of ?ll r. '\'right's argument on this point to be as l'ollows: -Tht> (\\·o letters in question must be regarded as the iult>ntion of lhe parti e:; to the :;ale and purC'hase of the hunch to reduce the terms of their ag-reement into w1•itin~ . That if this bt> conceded, it is clearly ::md well established law that we can onl~· look to what is contain<>d in those letters and shall not for any purpose, unless :fraud is Jli'OYecl, ~o outside tlwm. r.et me now turn to those two letters nud se<> what is "aiel in tht'm. 'rhe first reads as folJo,vs: - " Jcmal & Co., "Sierra Leone. "Frecto"n, 28th July, 1920. " )le~srs. Sc·humacher & Straumann, " City. ' Dear Sirs, "Referring to our verhnl C'Onversation of this morning '• we heg to cou:firm here" ith the purchase of your Steam 135 "Launch ~o. 488 al the price o£ ~475 (Four hundred and SclJUllA.cllEB ',, seventy-five pounds) . STRA!u_'<"N " We are returning to you the )!otor boat ' Switzer " ' land ' and the ' New Impl.'rial ' )lotor cycle, value £310, " whilst the rema ining balan('e of £165 will be paid to you " before the the l Oth of .August. 1920. and the second thus:- ":Me:-;srs. \V . . Jcmal & Co., " F reetown . " Dear Sirs, " Yours faithfully, "W. J EllA.L & CO." " Schumachcr & RtranmaJtn, " Rierra Leone. " Freetown, 29th July, 19:20. "We beg to acknowledge receipt of ~·out letter of 28th " instant confirming the purchase of our St<>am Launch " No. 488, at the price of £475, in the coudi lion as sl1e " stands, and we will put steam up this afternoon to p1·ove " to you the satisfactory run of the launch. .d..fl('r this " trial trip the launch is entirely in your hands and risks. "w~ accept the offer to return to us )!otor boat "'Switzerland ' ancl the 'New Imperial' :Motor-cycle " which ba•e been purchasecl by you from us sometime ago "at the price of £010. the rcmainin!l" halanre o{ £165, to "be paid on or about thC' l Oth of August. Hl20. "Yours faithfully, "F. SCHUMACHER & A. RTR.\111L\NN." Can there be any other ronclus ion than that they do, when read together. very dearly, thoug-h briefly. set out the terms by ,,·hicb th<> parti<>s had agreed to be bouncl? 'r he Plaintiffs confirmed their agreement to pur<'hase a speci fied steam launcl1 for a certain sum to be paid in a c-ertain manner, and the Defendants proooeded to amplify tl1ese terms by writing on the following day that it was to be clearly understood that the Plaintiffs were buying tl1e launcl1 as she stood, but subject to a trial trip a.fter which nll further responsibility for the condition of the launch would lie with the Plaintiffs . I can read nothing more nor less into those two letters. I h ave now to consider whether the law is as :lrr . Wright has argued that it is. A case whicl1 seems to me largely to decide the mal.ter in ~fr. Wright's favour, is that of Kain v. v. J•:.uAI:. & l1ALLIUA. i:iAWitCY· Cuo Kso~. J . ScnuloUcmr:R & STRA UlllANN "· JEMA.L & GA.LLIZIA . S.I.'II"RIIY· COOKSON, J. 136 Old (~ Barnewal! and Uresswell, p. 627'), where we find the. law very exactly stated by Abbott, C.J ., at page 6;:!4 (see Engl ish Reports, Y ol. 107, at page 519) in the following passage : " But i£ the contract be in the end reduced into writing, nothing " which is not found in the writing can be considered as part of " the contract," and the learned Chief Justice proceeds to say in effect that a buyer cannot show a matter antecedent to and dehors the writing unless he can also show that the seller by some fraud prevented him from discovering a fault which the seller knew to exist, nnd approves of what was laid down by Gibbs, C.J ., in Pickering v. Dawson (reported in English Reports, Vol. 128, at page 540). A passage very much in point to be found in that judgment is as follows:-" I hold that if a "man brings me a horse and makes any representation whatever " of his quality and soundness and afterwards we agree in writing " for the purchase of the horse, that shortens and corrects the " representations; and whatever terms are not contained in the " contract do not bind the seller and must be struck out of the " case." The head note to that case puts the law very clearly and tersely, as I have no doubt it stands, as follows: - " If a representation be made before a sale, o£ the " quality o£ a thing sold with full opportunity for a person " to inspect and examine the truth o£ the representation " and a contract of sale be afterwards reduced into writing " in which the representation is not embodied, no action " for deceit lies against the vendor on the ground that the " article sold is not answerable to that representation ''; nnd these very significant words are appended, viz., "whether " the vendor knew of the defect or not." I listened with great interest to Mr. Thompson in order to discover whether that clear expression of the law could be shaken, but unless Redgrave and Hurd is to the contrary nothing was said which impressed me. And I think with ~1r . Wright that that case does not go so far as to be authority such as to over rule the two cases just referred to. I agree that if looked into carefully it goes no further than this, viz., that a buyer who has examined the article cannot reply on misrepresent9.tion. Mr. Thompson endeavoured to show that there had heen fraud on the Defendants' part such as would void the sale altogether, and that it consisted in the instructions given by Defendants to certain of their workmen that if the Plaintiffs came and looked at 137 the launch they were to say it was a very good launch, but I do not tl1ink that these instructions amounted to any more than what the ])efendants might han' represented, and I have no doubt did represent to the l'laintiffs. But even so, such representations would not amount to more than the simplex commendatio which falls far short of what the law requires in tl1e matter of fraud. I can find no satisfactor~r evidence of the kind o£ active conceal ment which would he necessary in such a case as this. But even if there were such evidence I !;hould still have great difficulty in cxplaining away the words " in the condition as she stands " to which I have alrearly rE-ferred. Tho~e words appear to me to mea11 exactly what " with all faults " meant in such a case as Warcl t·. Tiobbs reported in .tO L.T.R. Thnt case went to the IIou!;e o£ Lords ntHl. during th<> course of his judgment, Lord O'Hagan said " the legal result (o£ those words) is stated very "plainly by Lonl Ellenhorough in the case of Baglehole t·. "Walters, the auth01:it~· of which l1as neve1·, so far as I know, " been caiiecl in que'ltion ": and tlu.•n he quotes Lorcl Ellen borough thus: "Wherf' an arlirle is sold with all faults I think " it is quite immaterial how many hclong<'d to it witl1in the " knowledge of thf' sel1er unless he nsNl some artifice to disguise "tlwm and to prevent 1l1rir bcin~ disrovered by the purchaser. " The very ohject of introducing c;uch a stipulation is to put the " purchaser on l1iF< guarcl and to throw upon him the bmden of "exnminin<r a~l fault;:; hoth <>erret and apparent." Indeed when once satisfied that onr o£ the terms of the agree ment in this rase as reduced to writing was the equivalent of the expres!'lion "n-ith all fault:;," tl1ere would have been little neces sity for adding fmther to this juclgment. I will conclude wii h a part o£ T,ord Selborne's judgment delivrred in the same ra~c (W ::ml t•. ITohbs), hera use they express my feelings in regard to the pr<'sent c·n~e. 'I'he passage r<'ads as follows:- " The argument which for some time most weighNl " with me was that for a man to sell to another, without " disclosing the fact, an article which he knows to be posi " tivel~· noxious and the other mnn does not know to be so, " even though he expressly negatives warranty and says the " purchaser must take his bargain '\'"ith all faults is an action " able wrong, T confess I should not be sorry if the law were " so, but I know of no authority for the propo-:ition that such " is the law . . . . .', ScHUMACHBR & 8TBAI7MANN v. JEM.A.L & GALLIZIA . SAWREY· COOKS..IS, J. 8CJIUl{AORJm & STRAUMANN 1/. JE~IAL & GALLIZIA. 5AW1t£Y· CoOKSON, J. lJS Such, tht>refore, being in my opm10n the clear law on the points considered, no otl1er ground o£ appeo1 need arise for decision, and for these reasons alone the appeal, though I have come to the conclusion with a certain amount of regret, must be allowed with costs. }IrDONNELL, Acting C .• T. I agree. BUTLER LLOYD, J. I agree.