Unless the contract was executory.

Street v. Blay.

Judgment of

King's Bench.

the price on the ground of breach of Warranty, except in case of fraud or express agreement authorizing the return, or on a mutual rescission of the contract; but he may give the breach of Warranty in evidence in reduction of damages (b).

And it would appear that where a contract is executory only, as where a Horse is ordered of a party, and he contracts to supply one fit for a certain purpose, the buyer may rescind the contract after he has received the Horse, if he does not answer that purpose, provided he has not kept it longer than was necessary for trial, or exercised the dominion of an owner over it, as by selling it.

This was decided in Street v. Blay (c), and as it is a very important and leading case, it will be given together with a considerable portion of the judgment delivered by Lord Tenterden. The facts of the case were these. The plaintiff, on the 2nd of February, sold a Horse to the defendant for 437. with a Warranty of Soundness. The defendant took the Horse, and on the same day sold it to one Bailey for 451. Bailey, on the following day, parted with it in exchange to one Osborne; and Osborne, in two or three days afterwards, sold it to the defendant for 307. No Warranty appeared to have been given on any of the three last sales; the Horse was, in fact, Unsound at the time of the first sale, and on the 9th of February the defendant sent the Horse back to the plaintiff's premises, requiring the plaintiff to receive him again as he was then lame; but the plaintiff refused to accept him. The question for consideration was, whether the defendant, under these circumstances, had a right to return the Horse, and thereby exonerate himself from the payment of the whole price?

After taking time to consider, Lord Tenterden, in dethe Court of livering the judgment of the Court, said, "It is not necessary to decide whether in any case the purchaser of a specific chattel, who, having had an opportunity of exercising his judgment upon it, has bought it with a Warranty that it is of any particular quality or description, and actually accepted and received it into his possession, can afterwards, upon discovering that the Warranty has not been

(b) According to the law of Scotland, it appears that there would be an absolute right to return the horse upon the discovery of the breach of warranty, without any specific stipulation to that effect. Couston v. Chapman, L. R.,

2 H. L. (S. C.), 250, per Lord Chelmsford.

(c) Street v. Blay, 2 B. & Ad. 456; and see Dawson v. Collis, 10 C. B. 523; and Ollivant v. Bailey, 5 Q. B. 288.

complied with, of his own will only, without the concurrence of the other contracting party, return the chattel to the vendor and exonerate himself from the payment of the price, on the ground that he has never received that article which he stipulated to purchase."

cussed.

"There is indeed authority for that position. Lord Lord Eldon's Eldon, in the case of Curtis v. Hannay (d), is reported to opinion dishave said, that he took it to be clear law, that if a person purchases a Horse which is warranted Sound, and it afterwards turns out that the Horse was Unsound at the time of the Warranty, the buyer might, if he pleased, keep the Horse and bring an action on the Warranty, in which he would have a right to recover the difference between the value of a Sound Horse and one with such defects as existed at the time of the Warranty; or he might return the Horse and bring an action to recover the full money paid; but in the latter case the seller had a right to expect that the Horse should be returned in the same state as he was in when sold, and not by any means diminished in value. And Lord Eldon proceeds to say, that if it were in a worse state than it would have been in, if returned immediately after the discovery, the purchaser would have no defence to an action for the price of the article." "It is to be implied (says Lord Tenterden) that he would have a defence in case it were returned in the same state, and in a reasonable time after the discovery. This dictum has been adopted in Mr. Starkie's excellent work on the Law of Evidence (e), and it is there said that a vendee may in such a case rescind the contract altogether by returning the article, and refuse to pay the price or recover it back if paid.”

"It is however extremely difficult, indeed impossible, to reconcile this doctrine with those cases in which it has been held that where the property in the specific chattel has passed to the vendee, and the price has been paid, he has no right, upon the breach of the Warranty, to return the article and revest the property in the vendor, and recover the price as money paid on a consideration which has failed, but must sue upon the Warranty, unless there has been a condition in the contract authorizing the return, or the vendor has received back the chattel and has thereby consented to rescind the contract, or has been guilty of a fraud which destroys the contract altogether.

(d) Curtis v. Hannay, 3 Esp. 83.

(e) Starkie on Evidence, part iv.

p. 645.

Evidence in

mitigation of damages.

Unfitness for

purpose.

In Weston v. Downes (f), Towers v. Barrett (g), Payne v. Whale (h), Power v. Wells (i), and Emanuel v. Dane (j), the same doctrine was applied to an Exchange with a Warranty as to a Sale, and the vendee held not to be entitled to sue in Trover for the chattel delivered by way of barter for another received. If these cases are rightly decided, and we think they are, and they certainly have been always acted upon, it is clear that the purchaser cannot by his own act alone, unless in the excepted cases above mentioned, revest the property in the seller, and recover the price when paid, on the ground of the total failure of consideration; and it seems to follow that he cannot by the same means protect himself from the payment of the price on the same ground."

"On the other hand the cases have established, that the breach of the Warranty may be given in evidence in mitigation of damages, on the principle, as it should seem, of avoiding circuity of action (k); and there is no hardship in such a defence being allowed, as the plaintiff ought to be prepared to prove a compliance with his Warranty, which is part of the consideration for the specific price agreed by the defendant to be paid."

"It is to be observed, that although the vendee of a a particular specific chattel, delivered with a Warranty, may not have a right to return it, the same reason does not apply to cases of executory contracts, where an article, for instance, is ordered from a manufacturer, who contracts that it shall be of a certain quality, or fit for a certain purpose, and the article sent as such is never completely accepted by the party ordering it. In this and similar cases the latter may return it as soon as he discovers the defect, provided he has done nothing more in the meantime than was necessary to give it a fair trial" (1).

An interme

diate profit.

"The observations above stated are intended to apply to the purchase of a certain specific chattel, accepted and received by the vendee, and the property in which is completely and entirely vested in him."

"But whatever may be the right of the purchaser to return such a warranted article in an ordinary case, there

(f) Weston v. Downes, Doug. 23.
(g) Towers v. Barrett, 1 T. R.
133.

(h) Payne v. Whale, 7 East, 274.
(i) Power v. Wells, Doug. 34, n.
(j) Emanuel v. Dane, 3 Camp.

(k) Cormack v. Gillis, cited 7 East, 480; King v. Boston, 7 East, 481, n.; and see Dawson v. Collis, 10 C. B. 532.

(1) Okell v. Smith, 1 Stark. N. P. C. 107.

is no authority to show that he may return it where the purchaser has done more than was consistent with the purpose of trial, where he has exercised the dominion of an owner over it, by selling and parting with the property to another, and where he has derived a pecuniary benefit from it. These circumstances concur in the present case; and even supposing it might have been competent for the defendant to return this Horse, after having accepted it and taken it into his possession, if he had never parted with it to another, it appears to us that he cannot do so after the re-sale at a profit."

consistent

"These are acts of ownership wholly inconsistent with Acts of the purpose of trial, and which are conclusive against the ownership indefendant that the particular chattel was his own; and it with trial. may be added that the parties cannot be placed in the same situation by the return of it as if the contract had not been made, for the defendant has derived an intermediate benefit in consequence of the bargain, which he would still retain. But he is entitled to reduce the Damages, as he has a right of action against the plaintiff for the breach of Warranty" (m).

In another case, where the question of return was con- Confirmed by sidered, the law laid down by the Court of Queen's a later case. Bench was confirmed by the Court of Exchequer. And Mr. Baron Bayley said, "One party cannot rescind the contract unless the other party agrees to it. The contract of Warranty was open, and entitled the plaintiff to recover damages for the breach of it, but did not entitle him to return the Horse, and rescind the contract. In Street v. Blay (m), the law on this subject was fully considered by the Court of King's Bench, and it was there laid down that a purchaser has no right to return the article, unless there has been a condition in the original contract authorizing the return, or the vendor has subsequently consented to rescind the contract, or unless the case turn out to be one of fraud. According to Power v. Welles (n), if the contract is still open, you cannot maintain an action for Money had and received; I take the rule to be, that if the contract remains open, so as to give the party a right to recover damages for a breach of Warranty, he cannot maintain an action of Indebitatus assumpsit on the ground of the failure of consideration."

(m) Street v. Blay, 2 B. & Ad. (n) Power v. Welles, Cowp. 818.

456.

Goods are returnable

where there is fraud.

But not for

non-corre

spondence

And Lord Lyndhurst said, "There was a proposition in this case to rescind the contract, which the defendant was at first willing to accede to, but the agreement to rescind was never completed, therefore the contract remained open. One party alone could not, by his own act, rescind the contract. The case of Street v. Blay (0) seems to have been very much considered. That case shows that you cannot treat a contract as rescinded on the ground of the breach of Warranty, except there was an original agreement that the party should be at liberty to rescind in such case, or unless both parties have consented to rescind it. According to that decision, which is the most recent, your remedy was an action for damages" (p).

In an unconditional Warranty, the only ground on which goods are returnable is that of Fraud. And Mr. Baron Parke, referring to the case of Street v. Blay (0), said, "When a Horse is warranted sound, and turns out otherwise, the purchaser has no right to return him, unless the Warranty was fraudulent; his only remedy is an action on the Warranty; this has been lately settled, but the general impression formerly among the profession, and now amongst all others, is, that the purchaser is to return. the Horse" (q).

Upon the sale of specific goods, with a Warranty that they are equal to sample, the vendee cannot refuse to rewith sample. ceive them on the ground that they do not correspond with the sample, unless there be an express condition to that effect; but he must trust to a cross-action, or rely on the non-correspondence with sample as a ground for reduction of damages (").

Agreement

is to be returned if unsound.

But if on the sale of a Horse there be an express Warthat a Horse ranty by the seller that the Horse is sound, free from vice, &c., yet if it be accompanied with an undertaking on the part of the seller to take back the Horse and repay the purchase-money, and on trial he shall be found to have any of the defects covered by the Warranty, the buyer must return him as soon as he discovers any of those defects, unless he has been induced to prolong the trial by any subsequent misrepresentation of the seller, because in such case a trial means a reasonable trial (s).

(0) Street v. Blay, 2 B. & Ad. 456.

(p) Gompertz v. Denton, 1 Cr. & M. 207.

(1) Hilliard v. Orbell, Ex. Sittings, Jan. 11, 1834.

(r) Dawson v. Collis, 10 C. B. 523; Hayworth v. Hutchinson, L. R., 2 Q. B. 447; 36 L. J., Q. B. 370, per Cockburn, C. J.

(8) Adam v. Richards, 2 H. Bla. 573.