Supreme Court of Canada
Schofield v. Emerson Brantingham Implement Co., (1918) 57 S.C.R. 203
Date: 1918-10-08
Charles J. Schofield (Plaintiff) Appellant;
and
The Emerson Brantingham Implement Company (Defendant) Respondent.
1918: May 16, 17; 1918: October 8.
Present: Sir Charles Fitzpatrick C.J. and Davies, Idington, Anglin and Brodeur JJ.
ON APPEAL FROM THE SUPREME COURT OF SASKATCHEWAN.
Sale—Principal and agent—Written contract—Modification by written consent of principal—Representations by agent.
The appellant ordered from the respondent "one of your Big Four 30 h.-p. Gas Traction Engines." The agreement provided that the order was "made upon the express condition that" it "contains all the terms and conditions of the sale * * *" and "cannot in any manner be changed, altered or modified without the written consent of the officers" of the company respondent. After one of of respondent's agents had concluded a trial of the engine, appellant was not satisfied with its performance; but the agent represented to him that "the engine would get better with wear and that if it was not right, the company would make it right." Thereupon appellant paid $600 in cash, gave notes for the balance of the purchase price and signed a satisfaction paper certifying that the engine had been "properly put in order."
Held that, upon the evidence, the engine supplied was not the engine ordered, as it could not develop its rated horse-power.
Per Idington and Anglin JJ.—According to the system adopted by the company respondent, such assurances by its agent were authorised notwithstanding the terms of the contract and were apparently confirmed by respondent which, without any demur, protest or reservation of rights, sent its employees to make extensive repairs to the engine.
Per Davies J. dissenting.—In the face of the express stipulations of the written contract, the respondent's agent had no power, by his representations to the appellant, to bind the respondent and alter the contract.
Judgment of the Supreme Court of Saskatchewan, 38 D.L.R. 528; [1918] 1 W.W.R. 306, reversed, Davies J. dissenting.
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APPEAL from a decision of the Supreme Court of Saskatchewan en banc reversing the judgment on the trial in favour of the plaintiff.
The material facts are stated in the above head-note.
C. E. Gregory K.C. for the appellant.
Geo. F. Henderson K.C. and Fleming for the respondent.
The Chief Justice.—The appellant's order to the respondents was for
one of your Big Four 30 h.-p. Gas Traction Engines.
The jury found that the engine was not capable of developing its rated horse-power; that the appellant made known to the respondents the particular purpose for which he required the engine so as to shew them that he was relying on their skill and ability to furnish him with an engine suitable for his purpose; that the engine was not reasonably fit for that purpose, being defective by reason of its lack of horse-power. There was evidence on which the jury could make these findings.
I do not myself understand how it can be maintained that the appellant was not ordering a 30 h.-p. engine. Mr. Justice Elwood thinks that if the order was not for "a" 30 h.-p. engine but for "your" 30 h.-p. engine, the latter did not need to be a 30 h.-p. engine; in fact that the respondents 30 h.-p. engines were not necessarily of 30 h.-p. This seems to me rather a strained meaning to put on so slight a difference of language and to be one that would not readily occur to ordinary persons dealing with the respondents.
Reading the order with the findings of the jury, I
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come to the conclusion that the respondents did not deliver such an engine as was called for by the order.
This really disposes of the case, for it eliminates the difficulties presented by the conditions of the contract which were what troubled the learned judge who rendered the judgment appealed from. Mr. Justice Elwood, after pointing out that it was only after receiving certain assurances and representations from the respondents' agent that the appellant consented to sign exhibits 1 and 2 and to pay $600 and sign the notes, says:—
Those representations were untrue. I am therefore of opinion that the appellant's acceptance is not binding upon him and it did not constitute him a purchaser of the engine.
Having found, however, that the engine was the one ordered, the learned Judge thinks that the agent had no authority to change the contract, as he would be doing, by making the representations he did because clause 8 of the contract provides that the order
contains all the terms and conditions of the sale and purchase of said engine and cannot, in any manner, be changed, altered or modified without the written consent of the officers of the said company.
The judge points out that under the authority of Wallis Son & Wells v. Pratt & Haynes, and many other authorities, the appellant would have been entitled to recover damages if what the respondents had delivered had been something different from what was ordered.
I am entirely in agreement with the learned judge except that, as above stated, I am of opinion that the engine delivered was not such as was called for by the order.
It is a consequence of these differing premises that it follows that the conditions of sale have no application.
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I would allow the appeal and restore the judgment at the trial.
Davies J. (dissenting)—In this case I have the misfortune to differ from my colleagues, being of the opinion that the appeal should be dismissed and the judgment of the appeal court confirmed.
I was satisfied at the conclusion of the argument that the whole case turned upon the question whether Winterhalt, the expert who was sent by the company to give the machine purchased by Schofield, the plaintiff, the actual trial provided for by the written contract of sale, had any authority to make a new contract, as it is alleged he did, or to in any way alter the original written one signed and made between the company and the plaintiff.
A full study of that contract has satisfied me that he had no such power and that the statements he made to the plaintiff, and on which the latter says he relied, could in no wise alter or change that written contract. The contract, in fact, expressly provides for just such a case as the one before us of a subordinate officer or agent of the company altering or attempting to alter, in any way, the contract of sale made by the company.
Clause 8 states that the order and agreement
contains all the terms and conditions of the sale and purchase of the said engine, fixtures and equipment, and cannot, in any manner, be changed, altered or modified without the written consent of the officers of the company.
It is not contended that any such consent was obtained to the alleged changes made in the contract by Winterhalt, the expert sent to give the engine and machine the trial provided for by the contract, and I am unable to find how these representations can constitute a new contract or in any way bind the company.
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After Winterhalt had given the engine the trial which was accepted by all parties as the equivalent of the three days' trial stipulated for in the contract, the plaintiff signed the satisfaction paper certifying that the company's expert had
properly put in order, adjusted and started my model Big Four "30" Gas Traction Engine so that everything works satisfactorily to me.
He also paid the agent $600 and signed the notes for the balance of the purchase money, and relying as he said upon Winterhalt's statements, did not return the machine to the company within the time stipulated in the contract if it was found at the trial of the machine not to develop the horse-power or to do the work it was guaranteed to do.
At the time these documents were signed the evidence of the plaintiff was to the effect that the engine was not working properly in that it apparently did not develop sufficient horse-power to do the work it was supposed to do.
Plaintiff, with full knowledge of these facts; signed the satisfaction certificate and the notes and paid the cash, $600, to Winterhalt, and when asked at the trial why he did so said:
From the guarantee he told me that the company would stand behind the engine and make it right if it was not right, and that it would develop more power with use. "Oh, yes," he said, "it would develop more power with use, after it got smoothed up."
It seems to me, therefore, that his whole case rests upon these statements and promises of Winterhalt.
If, in the face of the express stipulations of the written contract, it could be successfully contended that Winterhalt had such power to bind the company and alter the contract made by them the plaintiff would have gone a long way to establish his case.
If he had no such power, and it seems to me clearly
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and beyond reasonable doubt that he had not, then plaintiff must fail.
I am specially impressed with the reasons for judgment given by Mr. Justice Newlands with which I concur and would dismiss this appeal with costs.
Idington J.—It seems to me that this case presents a system of doing business which has been devised to deprive respondent's customers of all rights save such as it may graciously recognise.
It has framed an order for intending purchasers of any of its 30 horse-power engines to sign as the first step in purchasing.
The order is for a shipment of such engine to a point named for the purpose of trying it there for three days. Then an agent of the respondent is to meet there the intending purchaser and demonstrate on land selected by him the efficiency of the engine.
The experienced agent who fails to demonstrate the cardinal facts of the whole transaction
(a) that the engine will develop its rated horse-power at the draw-bar
(b) that the engine, if rated at 30 or more horse-power will furnish ample and steady power to drive any 36-inch cylinder threshing machine, complete with self-feeder, weigher and blower,
from any cause whatsoever, must be possessed of such adroitness as to ingratiate himself with the customer and persuade him that such demonstrations have taken place and that he is satisfied and has no longer any excuse for delaying the handing over of the cash and notes stipulated for.
If he happen to have some doubts, the agent may represent to him
that the engine would bet getter with wear and that if it was not right the company would make it right,
and thereby get, as the agent in question herein, by such representations got, $600 in cash and promissory
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notes to the amount of $3,150, and take his departure carrying with him also a certificate got by the same means.
The only thing then supposed to be left in the contract to which the purchaser can look is the following:
Sixth.—It is mutually agreed that said engine, fixtures and equipment are purchased upon the following warranty only, viz.:
(a) Should any parts (except electrical parts) prove defective within one year from the date of purchase of said engine on account of inferior material or workmanship, and such parts be returned to the Big Four Tractor Works, Winnipeg, Manitoba, transportation prepaid thereon, and be found by the company to be defective on account of inferior material or workmanship, said company will furnish new parts in lieu of some defective parts on board cars at Big Four Tractor Works, Winnipeg, Manitoba.
(b) Should any of the hardened cut steel bevel gears on said engine break or wear out within five years from the date of the purchase of said engine, said company, after satisfactory proof upon demand therefor, will replace them by delivering such parts on board cars at Big Four Tractor Works, Winnipeg, Manitoba.
(c) Should the engine frame break or wear out within five years from the date of said purchase, said company will, after satisfactory proof, upon demand therefor, replace said engine frame by delivering the same on board cars at Big Four Tractor Works, Winnipeg, Manitoba.
It is to be observed that none of these provisions cover any possible defect, involving the discovery of any original defect after settlement procured by the blandishment of the agent bringing it about.
In such event the respondent falls back upon the provisions of the eighth clause which is as follows:—
It is further agreed that this order and agreement is given and accepted and the sale and purchase of said engine, fixtures and equipment are made upon the express condition that this order and agreement contains all the terms and conditions of the sale and purchase of said engines, fixtures and equipment and cannot, in any manner, be changed, altered or modified without the written consent of the officers of the said company, and that the sending of any person by the company to repair or operate said engine or the remaining of the person sent to start said engine, after the expiration of said three days' trial, shall in no manner waive, modify or annul any of the terms or conditions hereof. The company shall not be responsible for any delay in shipping
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said engine caused by accidents, strikes or other unavoidable circumstances, and that this order and agreement is not to be binding upon the company until approved by the said company by a duly authorised representative thereof signing the same.
And when, as will presently appear, some engine may have failed to fulfil the expectations of the respondent, and the acceptance thereof induced by the assurances of the demonstrating agent is relied upon in an action as herein occurred, the respondent by virtue of said clause whenever it suits its purpose repudiates all liability and claims such agent had no authority to give such assurances.
It, therefore, becomes important in this case to know if such a claim of want of authority is in fact true.
We have the evidence of one Cole, examined under a commission on behalf of respondent, which seems entirely to destroy this pretension.
He tells of nineteen years' experience and that he had been in the employment of respondent since 1912, which antedates the representation relied upon by appellant as given by Winterhalt, another agent engaged by respondent.
He further speaks as follows:—
Q.—State, Mr. Cole, your connection with the defendant company and your duties as such. A.—I have to deliver new—I deliver new outfits, go out and deliver and demonstrate them, and, well we are what are commonly called troubleshooters or experts. If a man has any trouble with his engine we are supposed to go and adjust it, repair them, etc.
Q.—Your time, then, is largely taken up in first demonstrating new engines and then going around and clearing up troubles that inexperienced operators may have with the engines? A.—Yes, sir.
Q.—In doing so do you ever find that the trouble is caused from the engine itself, or is it always, in your opinion, with the inexperienced operators? A.—It is not always with the inexperienced operators. You know, building the number of engines we do, one will occasionally get by the shop.
Q.—And that is the reason why they hire somebody to repair such
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engines so they will operate? A.—Yes, sir. But I should judge that three-quarters of the trouble is from inexperienced operators.
******
Q.—Mr. Cole, you were asked the question if you didn't state to the plaintiff after you had finished your repairs on his engine that if he got into any more trouble the company would take care of him, I wish you would state what authority you had, and what authority you had at that time from the company, in the nature of your employment, to make representations to people as to what the company would do for them, if you had any authority? A.—Well, it is customary when a man goes out, if the purchaser has had trouble, and he goes out and he is a little sore, to tell them that the company will take care of them, because they always do, as in this case they sent Hill back. I was working on another job and they sent Hill.
Q.—I understand. If a man sends in a complaint, the company sends a man to take care of the trouble? A.—Yes, sir.
Q.—It is the custom of the company to keep all their engines in working order? A.—Yes, sir.
******
Q.—In fact, you have got no authority from the company to tell a man that they will take care of him? A.—Yes, we have that authority, to assure a man that he will be taken care of.
Q.—You know that that is the custom of the company to take care of them? A.—Yes, sir.
Q.—And you just assumed that they would do so in this instance? A.—Yes, sir.
Q.—And you were correct, so far as you know, in assuming that? A.—Yes, sir.
The latter part of this examination was in re-examination and evidently intended to evoke a reply denying authority.
It requires considerable assurance to stoutly contend in face of this evidence that there was no authority from the respondent to Winterhalt, (who was engaged in exactly the same capacity as Cole had occupied for years), when he gave the assurances which induced the acceptance of the engine in question, after only a two days' instead of three days' trial, and the giving by appellant of the cash and notes in question herein. But there is further evidence in the case from which it would be the fair inference that such assurances were fully authorised, notwithstanding the terms written in the contract, for all the appellant had to do when the
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engine in question broke down a few days after the settlement with Winterhalt, and he had gone was to notify the local selling agents of the fact and as, of course, the head office at Winnipeg was informed and, without any demur on its part, sent this Mr. Cole to the appellant's place to see and remedy what was wrong, and he did so accordingly and sent a report to the head office of his having done so to appellant's satisfaction. And, again, something much more serious went wrong and the like course was pursued with the like results which cost hundreds of dollars. Yet there was not the slightest effort at repudiation or appearance of the respondent resting upon the contractual provisions now relied upon. Can there be a doubt that these ready responses were pursuant to the assurances given by Winterhalt, and later by Cole himself repeated, I think, and in part fulfilment thereof? What had to be rectified did not fall within the terms I have quoted above from the contract.
Or is the form of contract supposed to prohibit not only agents from making some unwarranted contract, but also preclude the possibility of any later contractual relations between the parties thereto, unless reduced to writing?
If the latter alternative is relied upon it fails, for the two-fold reason that it is beyond the range of the meaning that ordinarily would be attached to the language used, and in the next place that the system adopted holds out to the public those experts as possessing the power of giving such assurances.
Another suggestion occurs to me, that it might be held fraudulent to devise such a trap for capturing the unwary.
As fraud has been rejected by the jury in the sense
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in which it was submitted I need not follow the suggestion.
Its rejection, however, renders it all the more incumbent upon respondent to observe in an honourable manner the obligations resting upon one so holding out its agent to the public, and I do not think a contract made some months before, does preclude respondent from later on adopting another system than that contemplated thereby, or the other party from reaping the benefit and relying upon it.
The respondent, after observing the assurances given by responding to the calls I have already referred to, on a third occasion refused to do so, when it became imperatively necessary to stand behind its written and verbal contracts, and its engine in question when that collapsed as it were a short time later.
The appellant, having failed to get any proper result, consulted solicitors who, as such, wrote respondent and pointed out to it the history of failures, and a second time, on the 10th June, 1913, pointing out that fact and the failure of the last attempt of respondent's experts to make the engine serviceable and that it had never given satisfaction and had proven so unsatisfactory that they must demand its replacement by an engine properly fitted for the purpose.
In this they intimated that if not notified what was to be done their client would draw the engine to Webb and leave it there.
Respondent replied from Winnipeg on the 24th June asking them to furnish proof that they were the duly authorised attorneys to act for Mr. Schofield. Until then they would not go into the matter in detail.
Appellant wired confirmation of their authority and got in reply letter of 30th June written in an abusive and insolent tone, and threatening suit when his first
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note fell due. No answer was made to the suggestion of drawing the engine to Webb to leave it there as would be in accord with what the written agreement provided for.
The evidence of Mr. Harriston, an expert, who seems to have been well qualified for his task, and who is admitted on argument before us to have discovered what was wrong with the engine in the condition in which Mr. Cole had left it tells how he proceeded. It would seem, from Mr. Harriston's inspection, that he took the engine apart and found that a piston in use in one of the cylinders which Mr. Cole, on behalf of respondent, had substituted for the first one was far too tight to work at all usefully and that twenty-five per cent. of the supposed 30 horse-power was thereby to be deducted from what was intended.
Needless for me to go into further detail. It is only necessary to do so thus far to shew exactly the nature of the legal problems that have arisen as the result of the circuitous scheme of business which puts forward for use a rigorous form of contract designed on the one hand, if possible, on occasion to shelter the respondent from all risk of liability or responsibility for anything but the demonstration of the specified horse-power as above quoted, and on the other hand, securing approbation by instructing its agents to give the assurances of its standing behind the engine and maintaining its efficiency to do the work expected of it yet abandon customer, agent, and all else if too troublesome.
Can such a scheme become successful in law with such findings of fact as the answers of the jury to the questions submitted to them furnish? And specially when read in light of the evidence I have referred to and quoted in part? I cannot think so.
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The questions submitted to the jury and their answers are as follows:—
Q.—Did the defendant's agent, Luce, represent to the plaintiff (a) that this engine in question was a simple engine that any one could run after three days' experience? A.—Yes. (b) That it would draw eight breaking ploughs on the plaintiff's land? A.—Yes.
Q.—If so, were either of these representations false, and if so, which? A.—Yes (a).
Q.—If false, did Luce know they were false? Or were they made recklessly, careless whether they were true or not? A.—No.
Q.—Was the plaintiff induced to enter into the contract by either of these representations? A.—Yes.
Q.—Did the plaintiff accept the machine? A.—Yes.
Q.—Was the engine capable of developing its rated horse-power? (a) As delivered? A.—No. (b) After Cole repaired it. A.—No.
Q.—Did Winterhalt represent to the plaintiff that the engine would get better with wear and that if it was not right the company would make it right? A.—Yes.
Q.—If so, were said representations or either of them made fraudulently? A.—No.
Q.—Were the moneys paid and notes given as a result of these representations or were they given because the plaintiff was then satisfied with the engine with the exception that it did not pull as well on kerosene as gasoline? A.—Because of representations made.
Q.—Did the plaintiff make known to the defendants the particular purpose for which he required the engine so as to shew that he was relying on their skill and ability to furnish him with an engine suitable for his purpose? A.—Yes.
Q.—Was the engine reasonably fit for that purpose? (a) as delivered? A.—No. (b) after being repaired by Cole? A.—No.
Q.—If not, wherein was it defective? A.—ack of horse-power.
Q.—If the engine was not reasonably fit for the purposes for which it was purchased, what damage did the plaintiff suffer thereby? A.— Recovery of notes as they stand.
Q.—Was the engine retained by the plaintiff as the engine delivered under the contract? A.—Yes, kept by reason of the representations made.
It seems to me that despite all the attempts by the written contract to deprive appellant of any remedy, that the assurances of the agent were duly authorised, and were so acted upon, after getting the fruits thereof, by the respondent, in its subsequent dealings with the appellant in relation thereto, as to estop it from setting up the prior contract or anything restricting the appellant
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from asserting his right to rely upon said assurances.
It is not the mere collecting agent or expert demonstrator's authority which, doubtless, was what was had in view in making the provisions against agents variations now relied upon, that has to be passed upon, but the power of the head office in Canada to contract, save in writing, that is in question.
I have no doubt as a result of a perusal of the evidence bearing thereon that it had ample power and was held out to the public as having ample power to do such acts as to rescind the written contract now relied upon, to accept at any time a return of the engine, the property in which had never passed out of respondent, and in short to do anything it pleased relative thereto without a single piece of writing being used.
Assuming that the head office in and for Canada had such power to deal with the matter, there can be no doubt of the result; for it first directed its minor agents to give such assurances, acted upon them, led appellant to believe they were valid, and by virtue thereof presumed to make over, as it were, a good part of the engine which had been destroyed by the instructions of the respondent's agent having been followed.
In short the destruction of the machine resulted directly from the appellant's reliance upon the assurances given and his being induced thereby to trust respondent in its pretended and ineffective attempts at their fulfilment, without using adequate care and skill therein. Had he been bound and told to rely upon the letter of the writing, that destruction probably would have been averted by his calling in an expert such as Mr. Harrison when he would in all probability have got a more thorough examination of it, discovered the difficulty and had it rectified instead of
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having the engine so destroyed, as the result of trusting to the good faith of respondent.
Corporations, as well as men, may so act that their conduct will contractually bind them in the ordinary course of business. The respondent's conduct has been such as to be a ratification of what it knew had been contracted for even if the agent had no prior authority.
In any event the written contract has never been observed by it in demonstrating, as its terms require, the existence of 30 horse-power when that was to have been done. And that stands good yet unless displaced by a settlement improperly obtained if one can give heed to such contention as set up. And the more especially is that the case where respondent is estopped for the reasons I have set forth in trying to take advantage of part of its contract, excluding all else.
In either of these views I take I need not dwell upon the questions which otherwise might arise under the "Sale of Goods Act," or under the law apart therefrom, if different.
I see no difficulty such as the learned trial judge found in giving relief in way of rescission of the contract and directing the return of the notes and money if that is a more appropriate remedy than what he applied.
The facts are stated, and the law that suits them will maintain the action and the alternative prayer for relief, other than damages, if found appropriate, will be open to the court.
I would, therefore, allow the appeal with costs of the appellate court and here and direct judgment accordingly in such form as desired.
Anglin J.—The plaintiff sues for the return of cash and notes given by him as the purchase price of a traction engine from the defendant company—necessarily,
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I take it, on the basis of rescission of the contract of sale—and, in the alternative, for damages for breach of warranty as to the capacity and fitness of the engine. The defendant counterclaims for judgment on the notes.
The trial judge held the plaintiff not entitled to rescission, but, while he gave the defendant judgment on its counterclaim, presumably on the footing that the plaintiff should be held to have accepted the engine and was not entitled to rescission which, indeed, the learned judge says was not claimed, on the jury's findings he held the plaintiff entitled to damages in an amount equal to that represented by the notes and directed a set-off, presumably, though he does not so put it, as Mr. Justice Newlands says;
on the implied warranty of fitness.
On appeal the judgment for damages was reversed by the Supreme Court en banc which held, as I understand the opinions delivered by Elwood and Newlands JJ., that, although the plaintiff's giving of the cash and notes, after what was held to have been accepted by him as the three days' demonstration trial provided for by the contract, did not amount to a binding acceptance of the engine because induced (as found by the jury upon sufficient evidence) by a misrepresentation and an unfulfilled assurance of the agent who obtained them, his acceptance of the engine and its fulfilment of the requirements of the contract as to capacity were established as against him by his failure to return it under a provision of the contract making his retention of it for more than two days after the completion of the demonstration test
proof conclusive that said engine and equipment fulfilled the warranty in every respect and shall constitute an acceptance and purchase, etc.
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On the ground that the contract in express terms precluded any implied warranty of fitness under the Saskatchewan "Sales of Goods Act" (R.S. 1909, c. 147 s. 16), and contained no express collateral warranty thereof, the court further held that an action would not lie for breach of warranty.
Recovery on the ground of deceit, if otherwise open, was precluded by the jury's findings negativing fraud. Although this relief was not demanded in the statement of claim it would seem to have been treated as open to the plaintiff in the Appellate Division, had a case been made for it.
There is nothing to indicate anything in the nature of mistake or surprise on the part of the plaintiff in making the contract for the purchase of a "30 h.-p." tractor engine from the defendant, or fraud or overreaching inducing his execution of it. It was, therefore, when executed, clearly binding upon him according to its terms.
The jury, having found upon more than a mere scintilla of evidence that the engine delivered by the defendants was not capable of developing 30 h.-p., and the Appellate Court having accepted that finding, the case must be disposed of on the assumption that it is correct. I am, with respect, unable to assent to the view expressed by the learned judges of the Appellate Division that it was nevertheless the engine ordered. Not only was "30 h.-p." part of the description of the engine sold, but the contract expressly provided that the purchaser should not be bound to accept the engine unless after three days' trial in field work it should be demonstrated that it would develop 30 h.-p. at the draw-bar. Unless that condition of the sale was fulfilled the purchaser was entitled to reject the engine.
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Under such a contract I am unable to understand how it can be said that
the h.-p. the engine would develop was quite immaterial, so long as it was one of the defendants' "engines" known as "their Big Four 30 h.-p. Gas Tractor Engines."
With respect it seems to me that undue weight has been given to the word "your" and the vital words of the description, "30 h.-p.," emphasised by the express stipulation making it a condition of the sale that the engine should answer to them, have been denied the importance which the contracting parties so clearly attached to them. In my opinion the engine delivered was not that contracted for and on that ground alone the plaintiff would be entitled to succeed unless the peculiar provision of the contract, which made his retention of it for more than two days after the demonstration test "proof conclusive" that it answered the description and "an acceptance and purchase of it," or undue delay in repudiating after he became or should have been aware that it did not fulfil the condition of sale as to horse-power, and that the company could not, or would not, make it do so, had terminated his right of rejection.
When the defendants' agent, Winterhalt, concluded what appears to have been accepted as a three days' trial of the engine under the contract, according to the weight of the evidence the plaintiff was not satisfied with its performance. This is implied in the jury's answer to the 9th question. Winterhalt, however, represented that the engine would get better with wear and assured the plaintiff that if it was not right the company would make it right. The jury has found that this representation and this assurance induced the plaintiff to settle for the purchase price, although not satisfied with the demonstration of the engine's capacity,
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by paying the $600 in cash and giving notes for the balance of $3,150. The jury did not explicitly find that the representation was untrue and that the assurance had not been fulfilled, but both these facts are implied in their answers and are proper conclusions from the evidence.
I agree with Elwood J. that, although the jury negatived fraud on the part of Winterhalt, having regard to the relations between the plaintiff and the defendant company the latter cannot take advantage of a settlement so procured without implementing its agent's assurance. But I cannot understand why the plaintiff's retention of the engine, beyond the two days after the completion of the demonstration test, and until he finally rejected it, undoubtedly induced by the same representation and assurance, should bind him and constitute an acceptance of it if the giving of the $600 and the notes did not. In my opinion both are on the same footing.
The defendants invoke a provision of the contract to negative Winterhalt's authority as an agent to make any representation or give any assurance which would involve a departure from its express terms. Apart from the statement of their own agent, Cole, that it was customary for the company's agents and that they were authorised to give assurances to purchasers that the company would look after the engine and make it run satisfactorily, we have the indisputable facts that, when notified by the plaintiff that the engine had broken down, the company, without any demur, protest or reservation of rights sent its employees, Cole and Hill, on two distinct occasions to make extensive repairs and replacements of parts. It acted as it might have been expected that it would act in recognition of the obligation which Winterhalt's assurance would entail
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and the plaintiff may well have understood in attempted fulfilment of it, although it is, of course, quite possible that in doing so the company did not intend thereby to admit any liability to the plaintiff or to take a position in any wise inconsistent with its right to recover from him the purchase price of the engine. What occurred, however, prevents his retention and user of the engine being invoked as evidence of acceptance. On the whole I think it is the safer conclusion on this branch of the case that there never was a binding acceptance of the engine by the plaintiff, that he was entitled to reject it and that he sufficiently manifested his election to do so.
Moreover, although the contract treats the development of 30 h.-p. as a condition of the sale, it also speaks of this term as a warranty in clause 5, whereby retention of the engine for more than two days after the demonstration test is made
proof conclusive that said engine and equipment fulfilled the warranty in every respect.
The only term of the contract which could be regarded as "the warranty" referred to is the stipulation.
(a) that the engine will develop its rated horse-power at the draw bar.
(b) That the engine, if rated at 30 or more horse-power will furnish ample and steady power to drive any 36-inch cylinder threshing machine, complete with self-feeder, weigher and blower.
The company, having in its own contract treated this term as a warranty as well as a condition, cannot complain if it be so dealt with now. As a warranty it was not fulfilled and the plaintiff would be entitled to the full measure of damages which its breach entailed. The judgment of the learned trial judge might be supported on this ground also.
I find it unnecessary to consider a question much argued, viz., whether the terms of the contract exclude
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an implied warranty of fitness under the "Sales of Goods Act" arising from the fact found by the jury that the
plaintiff made known to the defendants the particular purpose for which he required the engine so as to shew that he was relying on their skill and ability to furnish him with an engine suitable for this purpose.
For these reasons, though not without some hesitation due to the acknowledgments of satisfaction signed by the plaintiff and his stupid plasticity, I concur in the allowance of this appeal.
Brodeur J.—This is a case concerning the sale of a gasoline tractor engine for the sum of $3,750. The action was instituted by the purchaser for the reimbursement of the money which he had paid on account and for the recovery of some notes which he had given, claiming that the machinery in question was not suitable for the purpose for which it was purchased and had not the horse-power called for.
The order for the machinery was in writing and was addressed to the respondent company, asking for "one of your Big Four 30 h.-p. Gas Tractor Engines." Much reliance is being put on the words "one of your Big 4 Engines" by the respondent company and by the judges of the Supreme Court en banc. They do not seem to attach much importance to the words "thirty horse-power."
It seems to me, however, with due deference, as if the horse-power of the machine was of the greatest importance. This respondent company is manufacturing engines of different classes and different strength, and when they undertake to sell one of their engines which they call "thirty horse-power," they are bound, as a condition of their contract, to deliver an engine capable of developing that quantity of horse-
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power. The word "your" in the description of the machinery does not alter that condition.
The company has sent on several occasions their experts or agents to try the machine and to develop that quantity of horse-power. They have never been able to reach the strength they had contracted for. However, after the trial had been made by one of their experts, it was found that the machine was not absolutely suitable; but it was represented to the purchaser that by and by the situation would improve and the machinery would develop the necessary power.
The purchaser, then, on the strength of those representations, agreed to give his note and to pay a certain sum of money. A few days after, during the same week, it was found that the machinery would not work.
New experts were sent by the company, but with no practical result. At last, the respondent had to give up the use of the machine, and is now suing for the recovery of his notes and of the money which he had paid.
The findings of the jury were all in favour of the appellant, and, in fact, the only ground that is relied upon by the company is that by a provision of the contract the company was not responsible for any representation which could be made by their agents.
I fully realise that on some occasions those provisions may be essential in order to prevent fraud; but in this case no such suggestion appears from the evidence and from the action of the appellant. On the contrary, he seems to have taken almost in every instance the word of the company or its representative. He seems to have acted with the most honest intent and it is a pity to see that the company is now trying to take advantage of a provision in its contract which
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should have been in only to meet some other cases or circumstances.
The company knew the purpose for which Schofield required the engine and he has certainly relied on their skill and ability to furnish him with an engine suitable for that purpose. The engine not having developed the quantity of horse-power for which it was sold, the respondent company has certainly not fulfilled its contract.
It is true that there was a settlement made but that settlement was obtained by continuous representations that the machine would develop the horse-power they contracted for. This engine, it was claimed, would get better with wear, etc. As a question of fact, the company sent after that settlement some experts to try and make it right. They have never succeeded, and it seems to me that the machine, having never been fit for the purpose for which it was purchased, and the settlement having been obtained under certain representations which proved absolutely incorrect, the respondent cannot avail itself of that settlement and the plaintiff should succeed.
The appeal should be allowed with costs of this court and of the court below.
Appeal allowed with costs.
Solicitors for the appellant: Seaborn, Taylor, Pope & Quirk.
Solicitors for the respondent: Mackenzie, Brown, Thom, McMorran, MacDonald, Bastedo & Jackson.
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