and if the result of his inspection be unsatisfactory, or if he distrust his own judgment, he may, if he chooses, require an express warranty. In such a case it is not an implied term of the contract of sale that the goods are of any particular quality or are merchantable (p).

2ndly. Where there is a sale of a definite existing chattel, specifically described, the actual condition of which is capable of being ascertained by either party, there is no implied warranty as to quality (q).

3rdly. Where a known, described, and defined article is ordered of a manufacturer, although stated to be required by the purchaser for a particular purpose, still, if the known, described, and defined thing be actually supplied, there is no warranty that it shall answer the particular purpose intended by the buyer (r).

4thly. Where a manufacturer or a dealer contracts to supply an article which he manufactures or produces, or in which he deals, to be applied to a particular purpose, so that the buyer necessarily trusts to the judgment or skill of the manufacturer or dealer, a warranty is inferred that the said article shall be reasonably fit for the purpose to which it is to be applied. In such a case, the buyer trusts to the manufacturer or dealer, and relies upon his judgment (8).

*5thly. Where a manufacturer undertakes to supply goods manu[* 176] factured by himself, or in which he deals, but which the vendee has not had an opportunity of inspecting, it is an implied term in the contract that a merchantable article shall be supplied (†).

6thly. Another class of cases is that of goods bought under a specified commercial description by sample or even after inspection of bulk. Here it is an implied term, notwithstanding the sample or inspection, that the goods shall reasonably answer the specified description in its commercial sense. The sample in any such case is looked upon as a mere expression of the quality of the article, not of its essential character, and notwithstanding the bulk be fairly shown or agree with the sample, yet if from adulteration or other cause, not appearing by the inspection or sample, though not known to the seller, the bulk does not reasonably answer the description in a commercial sense, the seller is liable. So that neither inspection of bulk nor use of sample absolutely excludes an inquiry whether the thing supplied was otherwise in accordance with the contract (u). (516)

(p) Parkinson v. Lee, 2 East, 314.
(q) Barr v. Gibson, 3 M. & W. 390.
(r) Chanter v. Hopkins, 4 M. & W. 399;
Ollivant v. Bayley, 5 Q. B. 288.

(8) Brown v. Edgington, 2 M. & Gr. 279.
(t) Laing v. Fidgeon, 4 Camp. 169, 6 Taunt.

108; Shepherd v. Pybus, 3 M. & Gr. 868; Bigge v. Parkinson, 7 H. & N. 955; Jones v. Just, L. R. 3 Q. B. 197.

(u) Mody v. Gregson, L. R. 4 Q. B. 49, 55-6; Macfarlane v. Taylor, L. R. 1 Sc. App. 245.

(516) With regard to quality upon sales of goods, the general rule is, that the law does not imply a warranty. See Sexias v. Woods, 2 Caines, 48; Swett v. Shumway, 102 Mass. 369; S. C., 3 Am. Rep. 471. The rule is caveat emptor (Otts v. Alderson, 10 Smedes & Marsh. [Miss.] 476; Kingsbury v. Taylor, 29 Me. 508; Dean v. Mason, 4 Conn. 428; Winsor v. Lombard, 18 Pick. [Mass.] 59); which, however, does not apply to cases of fraud. Irving v. Thomas, 18 Me. 418. But in order to constitute a warranty upon a sale it is not necessary that the representation should have been intended by the vendor as a warranty. If the representation is clear and positive, not a mere expression of opinion, and the vendee understands it as a warranty, and, relying upon it, purchases, the vendor cannot escape liability by claiming that he did not intend what his language declared. Hawkins v. Pemberton, 51

Within the scope of one or other of the foregoing propositions a state of facts involving a question as to implied warranty of goods sold will probably be found to fall, and where title or quality is expressly warranted the remarks made at a former page (x) are applicable. A question, however, of much practical importance, and by no means free from difficulty, here presents itself. Every contract of sale involves two things, the bargain and the transfer of the property to which it has relation (y), and whether an action is brought for the non-delivery or non-acceptance of the goods, or in respect of their [* 177} defective quality, a criterion may be needed for determining the measure of damages applicable for such breach of contract. Generally speaking, it is that amount of pecuniary loss which might be reasonably expected in the ordinary course of things to flow from the non-fulfilment of the contract, and to be the natural consequence of it. (517) Damage, however, which actually flowed from the breach of contract may chance to be irrecoverable. Thus the buyer of an article may have sustained a loss from the non-delivery of such article, which he intended to apply to a special purpose, and which, if applied to that special purpose, would have been productive of a certain special amount of profit. Yet the seller cannot be called upon to make good that loss, if it was not within the scope of his contemplation that the thing would be applied to the purpose from which such special profit might result. But the seller should pay damages only to the extent to which he contemplated that, in the event of his not fulfilling his contract by the delivery of the article, the profit which would be realised if the article had been delivered would be lost to the other party—to that extent he ought to pay; for the buyer has lost the larger amount, and there can be no hardship or injustice in making the seller liable to compensate him in damages so far as the seller understood and (x) Ante, p. 156. (y) Crane v. London Dock Co., 5 B. & S. 317.

a

N. Y. (6 Sick.) 198; S. C., 10 Am. Rep. 595. See Beals v. Olmstead, 24 Vt. 114; Shull v. Ostrander, 63 Barb. 130; Dunham v. Barnes, 9 Allen (Mass.), 352. In South Carolina and Louisiana a sale for a sound price is held to imply a warranty of soundness against all faults and defects. Melanchon v. Robichaux, 17 La. Rep. 97; Dewees v. Morgan, 1 Martin (La.), 1; State v. Gaillard, 2 Bay (S. C.), 19; Whitefield v. McLeod, id. 380; Timrod v. Shoolbred, 1 id. 324. See Smith v. Rice, 1 Bailey (S. C.), 648; Thompson v. Lindsay, 3 Brev. (S. C.) 305. But this implied warranty does not extend to defects which are apparent, and which might be discovered by simple inspection, unless fraud has been employed to conceal them. Dillard v. Moore, 2 Eng. (Ark.) 166; Richardson v. Johnson, 1 La. Ann. 389. And see Whitefield v. McLeod, 2 Bay (S. C.), 380.

A warranty is not to be implied from the fact that the seller knows the purpose for which the article is purchased. Bartlett v. Hoppock, 34 N. Y. (7 Tiff.) 118; Mason v. Chappell, 15 Gratt. (Va.) 572; Deming v. Foster, 42 N. H. 165. And it is held that the mere exhibition of a sample at the time of sale does not of itself amount to a warranty that the bulk is of the same quality, if the buyer has an opportunity to inspect the goods. Beirne v. Dord, 5 N. Y. (1 Seld.) 95; Hargous v. Stone, id. 73; Waring v. Mason, 18 Wend. 425. See Beebe v. Robert, 12 id. 412; Andrews v. Kneeland, 6 Cow. 354; Williams v. Spafford, 8 Pick. (Mass.) 259; Merriman v. Chapman, 32 Conn. 146.

(517) In an action for breach of warranty, or for deceit in a sale of chattels, the rule of damages is held to be the difference between the actual value of the chattels and the value which they would have borne if they had conformed to the warranty. See Woodward v. Thatcher, 21 Vt. 580; Page v. Parker, 40 N. H. 47; Cary v. Gruman, 4 Hill, 625; Overbay v. Lighty, 27 Ind. 27; Moulton v. Scruton, 39 Me. 287; Houghton v. Carpenter, 40 Vt. 588; Worthy v. Patterson, 20 Ala. 172; Whitmore v. South Boston Iron Co., 2 Allen (Mass.), 52.

believed that the article would be applied to the ordinary purposes to which it was capable of being applied (z).

2. Guarantie.

2. A guarantie is a mercantile instrument of much practical importance, which may be under seal, though it is oftener evidenced by writing not under seal. It is within the scope of the fourth section of the Statute of Frauds, which, inter alia, enacts that "no action shall be brought whereby to charge the defendant upon any special * promise [*178] to answer for the debt, default, or miscarriages of another," unless the "agreement" upon which such action is brought, or some memorandum or note thereof be in writing signed by the party to be charged therewith, or some person thereunto by him lawfully authorized. (518)

The party signing a guarantie thereby undertakes that he will, on the happening of a contingency, become answerable for the debt or default of a third person, and any such undertaking or engagement must, by virtue of the statute, be in writing; if verbal only, "no action shall be brought whereby to charge the defendant" thereupon.

To fall within the statute, however, the promise must be to answer for the debt, default, or miscarriage of another person for which that other remains liable; ex. gr., the defendant, in consideration that the plaintiff would deliver his horse to A., promised that A. should redeliver him safe; this was held to be a collateral undertaking for another, and therefore not enforceable by action without writing; for "where the undertaker comes in aid only to procure a credit to the party, in that case there is a remedy against both, and both are answerable according to their distinct engagements; but where the whole credit is given to the undertaker, so that the other party is but as his servant, and there is no remedy against him, this is not a collateral undertaking” (a). The difference indeed is obvious between a guarantie and a substitution of liability-between the case where the liability of the party originally liable is extinguished and determined, and the case where there is an assumption of liability upon a contingency - the contingency, viz., of some one else making a default in payment (b). A promise within * the statute must be [*179] made to that person to whom another is or is about to become chargeable (c).

The policy of that particular clause of the 4th section of the Statute of Frauds now spoken of, obviously was to diminish fraud and perjury, which either had been found by experience, or were judged likely to arise from trusting to evidence of less authority than that of a written document, for fixing upon a defendant responsibility for a debt or default for which another person was primarily liable. The clause in question was at first thought to have effected its object, but a mode of evading it was devised by shaping the demand, not upon a special promise of the defendant — which alone is within the letter of the statute - but upon a wrong or tort occasioned to the plaintiff by some false or fraudulent representation of the defendant, made in order to induce him (the plaintiff) to contract with some third person, evidence

(z) Per Cockburn, C. J., Cory v. Thames Iron Works Co., L. R. 3 Q. B. 190, and cases there cited; Ogle v. Earl Vane, L. R. 3 Q. B. 272.

(a) Birkmyr v. Darnell, Salk. 27; Mallet v. Bateman, L. R. 1 C. P. 163, shows that a

contract to give a guarantie must be in writing.

(b) Forth v. Stanton, 1 Wms. Saund. 211. (c) Hargreaves v. Parsons, 13 M. & W. 561; Cripps v. Hartnoll, 4 B. & S. 414.

of such representation when oral only and insufficient therefore, by reason of the statute, to support an action ex contractu, being relied upon to sustain an action founded upon tort (d). A practice thus crept in of fixing a person with the debt of another by verbal evidence of a representation as to the solvency or trustworthiness of that other, and proof that credit was given on the faith of that representation, and damage sustained consequent on its incorrectness (e). To support such an action proof of fraud was of course needed (ƒ), but a jury would be prone to infer fraud from very slight and insufficient proofs. In order therefore to remedy the inconvenience resulting from the systematic evasion of the Statute of Frauds thus resorted to, an evasion for repression of which our common law was ineffectual, Lord Tenterden introduced into the [*180] statute 9 Geo. 4, c. 14, a section (the 6th) enacting that no action* shall be brought whereby to charge any person upon any representation made concerning the credit, trade, or dealings of any other person to the intent that such person may obtain credit, money, or goods upon it, unless such representation be made in writing, signed by the party to be charged therewith.

There can be no doubt that the above clause of Lord Tenterden's Act has operated beneficially, has prevented much vexatious litigation, and has put a stop to the attempts which had before been successfully made to elude the provisions of the Statute of Frauds having reference to guaranties. This section affects the nature of the evidence which must be adduced to support an action for false representation, not the general principles of law upon which it rests. To sustain such an action there must be injury and damage, and, if proof of these be present, the jury will have to say whether the former produced the latter, for the damage laid and relied upon by the plaintiff must have resulted not too remotely from the alleged injury in order that an action for false representation may be maintainable. Further, as regards the evidence requisite to support such an action: If a comparison be instituted between the 6th section of Lord Tenterden's Act and the 4th section of the Statute of Frauds, we shall find that under the former statute no action can be maintained against a man for falsely representing his friend to be a person of substance, or as one to whom credit might fairly be extended, unless such representation be in writing, signed by himself; whereas, under the 4th section of the Statute of Frauds, one may be sued on an ordinary guarantie to be answerable for another's debt if the promise to pay be given in writing, signed by his authorised agent, i. e., on the Statute of Frauds a person is exposed to be charged by the verbal statement of another that he had authority to sign; under Lord Tenterden's Act this is not so (g).

[*181]

*The word "agreement," used in the 4th section of the Statute of Frauds, has been held to include the consideration as well as the promise which it supports (h), and in construing a guarantie worded by persons unskilled in legal technicalities, a question often arose of this kind: Did

(d) Lyde v. Barnard, 1 M. & W. 101.

(e) Per Parke, B., Id.

(f) Post, chap. x.

(g) Lyde v. Barnard, 1 M. & W. 104.
(h) Wain v. Warlters, 5 East, 10.

(518) This provision of the statute of frauds is in force generally throughout the United States. Contracts of guaranty are to be construed in the same way as other contracts, and should receive a liberal interpretation. See Dobbin v. Bradley, 17 Wend. 422; Lawrence v. McCalmont, 2 How. (U. S.) 426, 429; Rindge v. Judson, 24 N. Y. (10 Smith) 64; Sickle v. Marsh, 44 How. 91.

[*182]

the consideration sufficiently appear on the face of the instrument, or was it to be necessarily inferred from the wording of it? (i) The difficulty experienced in solving this question has been removed by the 3rd section of the Mercantile Law Amendment Act (19 & 20 Vict. c. 97), enacting that no guarantie shall be deemed invalid to support an action by reason only that the consideration for the promise does not appear in writing or by necessary inference from the written document. (519) This statutory provision does not render a consideration unnecessary to a valid guarantie, it merely dispenses with the necessity of disclosing or indicating the existence of such consideration upon the instrument itself (k). Now as formerly will a guarantie of a past debt, unless supported by some other consideration, be inefficacious; now as formerly may a nice and difficult question arise upon a guarantie of this kind:-Do its terms clearly import that the defendant's promise was to guarantie a debt previously incurred? or do they point rather in this direction and to this understanding between the parties, that credit shall continue to be extended and additional goods be supplied or money be advanced by the plaintiff to the person guarantied? (1) Fraud and misrepresentation at its inception (m), or a * material alteration afterwards made in it (n), will vitiate a guarantie, and a guarantie given to or on behalf of a firm will, unless a contrary intention appear, cease upon a change in the constitution of the firm (0). 3. Another clause of the 4th section of the Statute of Frauds enacts that: "No action shall be brought to charge any person upon any agreement that is not to be performed within the space of one year from the makto be performed ing thereof, unless the agreement upon which such action shall be brought or some memorandum or note thereof shall be in writing, and signed by the party to be charged therewith, or some other person thereunto by him lawfully authorised." Agreements falling within this provision of the statute are not uncommon. Any contract of service does so which is to continue for a year, yet not to commence until a future day (p), or any contract for publishing a serial work meant to extend beyond a year (g). It was long since decided that an agreement falling within this statutory provision must be such as from its terms appears to be incapable of performance within the year. For instance, an action was brought upon an agreement by which the defendant promised for one guinea paid down to give the plaintiff so many on the day of his marriage. The defendant not having been married within a year, the question was whether the agreement ought to have

3. Agreement not within a year.

(i) It was held sufficient in any case, if the memorandum relied upon was so framed that any person of ordinary capacity must have inferred from the perusal of it, that such, and no other, was the consideration upon which the undertaking was given. Hawes v. Armstrong, 1 Bing. N. C. 765.

(k) The whole promise must still be in writing. Holmes v. Mitchell, 7 C. B. N. S. 361.

(1) Hoad v. Grace, 7 H. & N. 494; Wood v. Priestner, L. R. 2 Ex. 66, 282.

(m) Lee v. Jones, 17 C. B. N. S. 482. (n) Bank of Hindustan, China, and Japan v. Smith, 16 L. J. C. P. 241.

(0) 19 & 20 Vict. c. 97, s. 4.

(p) Bracegirdle v. Heald, 1 B. & Ald. 722. See Cawthorn v. Cordrey, 13 C. B. N. S. 406. (q) Roydell v. Drummond, 11 East, 142.

(519) Similar statutory provisions have been enacted in some of the United States. As to the proper rule in the absence of any statutory provision, see Union Bank v. Coster, 1 Sandf. 563; Church v. Brown, 21 N. Y. (7 Smith) 315; Cardel v. McNiel, id. 336; Dunning v. Roberts, 35 Barb. 463; Howland v. Aitch, 38 Cal. 133; Stephens v. Winn, 2 Nott & McCord, 372, n; Neelson v. Sanborne, 2 N. H. 414. In further illustration of the rule see Buckley v. Beardslee, 2 South. (N. J.) 570; Lent v. Padelford, 10 Mass. 230; Miller v Irvine, 1 Dev. & Bat. (N. C.) 103.