A DEAL IN OIL.

Sun (Christchurch), Volume VI, Issue 1808, 29 November 1919, Page 11

A DEAL IN OIL.

LEADS TO LITIGATION.

WAS IT TRUE TO SAMPLE? I Sitting in banco in the Supreme Court this morning, his Honour Mr Justice Herdman heard an appeal against a decision of Mr S. F. McCarthy, S.M. The appellant was H. F. Stevens, wholesale chemist of Christchurch, and the respondents J. Montgomery and Co., grain merchants, of Christchurch. Stevens appealed from, tho decision' of the Magistrate, who had awarded Montgomery and Co. £lO6 !19/7, the price of two casks of olive oil at 25/- per gallon. j The appellant contended that the oil 'was not up to sample, and he appealed | against the decision of the Magistrate j because it was based on the,view that the sale was by description and not by sample. Mr O. T- J. Alpers appeared for the appellant, and Mr George Harper, for the respondent. Mr Alpers said that, as Montgomery and Co. were grain merchants, they knew nothing about oils. The two casks in question were merely a side line of j Montgomery and Co., and the only oil they had ever handled. In April, 1918, the respondent employed a broker to I sell the oil. This broker came to the I appellant with a sample of the oil, but Ihe did not disclose the name of .his I principal. The sample was Gallipoli I olive oil, second grade. Stevens told the broker that that grade of oil was useless to a chemist, and advised him to "try lit on a grocer." It was worth only 8/6 lor 10/6 a gallon. - Some months later | another broker, named Black, on behalf of the respondent, called on Stevens with a sample, which he called "Galilipoli olive oil." The appellant tested ] the sample, and, finding it to be pure j olive oil, agreed to buy it at 25/- a j gallon. No signed contract was preI pared at the time of the sale, but when ■ Black returned to his office he made out a sale note in which the oil was described as second grade. Black said that the same afternoon he left the sale note at Stevens's office, but the appellant contended that he had never received the sale note, and, in fact, had heard nothing about a sale note uufil the morning the case came on in the Lower Court. Some days after the sale was made the oil was delivered to Stevens, but he did not send an expert to test the oil in bulk, and it was not until he received complaints from customers that he knew the oil was not lup to sample. In this way appellant' 'lost his right of rejection. There was I one thing certain —that the sample of oil brought to Stevens by Black could not possibly have come out of the casks in question. His Honour: That is an extraordinary thing. Where did the sample come from?

Mr Alpers: That is one of the mysteries of the case. There is no suggestion of trickery on the part of the respondent, but an extraordinary mistake has been made somewhere. Montgomery and Co. sued Stevens for £lO6 19/7, this being the price of the oil at 25/- per gallon. Stevens considered the oil was worth 10/- a gallon, and so paid £4O into court. Mr Alpers submitted that the sale was made by verbal contract on sample, and not by the written contract set out in the sale note, which Stevens said he had never seen. Further, if the sale was by description, the oil did not agree with the description given by Black when ho made the sale, for Black had said nothing about the oil being second grade. Further, the sale note was erroneous, when compared with the verbal contract, for Black had added the words "second grade," and had omitted to insert the words "by sample." Black had been careless in delivering the sale note, for he merely left it on the counter in the office of Stevens, instead of handing it to a clerk or to Stevens himself.

Mr Harper said it was certain that Black had left the sale note at the office of Stevens. Counsel submitted that a mere exhibition of a sample at the timo of sale did not effect the contract, if it be subsequently evidenced by a bought-and-stflu note. ' His Honour: But suppose the contract ■was to buy oil that was not second grade. If the broker described the oil as second grnde in the sale note, surely the note would not be binding ojpf' the buyer. Mr Harper: No! Provided he returned the sale note as soon as possible. We must assume Stevens received the sale note, as the Magistrate held that Black had delivered it. His Honour: Are we to assume that? Here you have the evidence of Stevens that he never received the sale note. Mr Harper: That is not our fault. His Honour said he considered the whole case narrowed itself down to the delivery of the sale note. If Stevens had received the note, and, having seen the oil was described as second grade, had tV.ed to reject it, he would have teen out of court. However, as he had not received the note, it could not bind I him.

Mr Harper again contended that in law it must be assumed that Stevens had received the note. Black had delivered it at Stevens's office, and this corresponded to delivery through the post. For all they knew, the note may have been mislaid through the carelessness of a clerk, and it might still be tying in Stevens's office. In reply Mr Alpers contended that, as the sale note was erroneous, the onus of proof was on the respondent to show beyond doubt that the appellant received it. There could be no ratification without full knowledge. Further, even if Stevens had received the sale note and had seen that the oil was prescribed as second-grade oil, he would have been entitled to say, judging from the sample, "Tf Montgomery and Co. call this sample second-grade oil, then I am quite prepared to accept it." As Montgomery and Co. were not oil merchants, Stevens would bo justified in assuming that they did not know much about oil. As soon ns the appellant heard from his customers that the oil was not up to sample he rejected it. In'delivering his decision, his Honour said it seemed to him quite clear that what Stevens intended to buy was oil that corresponded to the samplo shown him by Black. He accepted the evidence of the appellant that he had not received the sale note, and that, ho thought he was buying oil according to sample". Therefore, the whole question was whether the delivery of the note at Stevens's office by Black was sufficient in the light of the subsequent acceptance of the oil by Stevens. His Honour thought it was not sufficient, and there was no evidence, as the Magistrate had stated in his judgment, that Stevens had received the sale note

an the contractural document. Tho ap peal was allowed, respondent being onl cred to pay £7 7/- costs.

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