latter appearing to be a reasonable indemnity to B. against his liability to C. Grebert Borgnis v. Nugent (1885), 15 Q. B. D. 85.

4. A. agrees to sell to B. a floating boom derrick, which he supposes B. wants for the usual purpose of using it as a coal store, but which B. intends to use as a means of transhipping coals. A. delays delivery. B.'s loss of profit, had he intended the purpose supposed by A., would be 4207.; as a fact he incurs a greater loss. B. may recover 4201. from A. Cory v. Thames Ironworks Co. (1868), L. R. 3 Q. B. 181.

5. A. agrees to make for B. by a certain time a particular part of a machine, called a "gun," the machine itself being deliverable by B., to A.'s knowledge, under a contract of sale with C. A. delays delivery to B., and C. rejects the machine, which is of value only as old iron. B. is entitled to recover from A. the loss of profit on his contract with C., the expenditure in making other parts of the machine, and the cost of painting it to preserve it. Hydraulic Engineering Co. v. McHaffie (1878), 4 Q. B. D. 670.

ILLUSTRATIONS [of failure of consideration].

1. A., a job warehouseman, sells to B. a number of pieces of prints lying in A.'s warehouse. B. pays the price of the goods in advance. The goods had, in fact, been stolen, and B. is compelled to restore them to their owner. B. may recover from A. the price so paid, in an action for money had and received. Eichholz v. Bannister (1864), 17 C. B. N. S. 708.

2. A. sells to B. what purports to be a foreign bill of exchange. A. does not indorse the bill and the sale is without recourse. B. pays A. the price of the bill. The bill turns out to be worthless, because in fact a domestic bill, and therefore invalid without a stamp. At the time of the sale both A. and B. are ignorant of the defect. B. may recover the price of the bill from A. in an action for money had and received. Gompertz v. Bartlett (1853), 2 E. & B. 849.

3. A., a stockbroker, sells to B. scrip in the "Kentish Coast Railway Co." B. pays A. the price of the scrip. The scrip, not having been issued or authorized by the company, turns out to be worthless. B. cannot recover from A. the price, if the scrip sold is that which he intended to buy. Lamert v. Heath (1846), 15 M. & W. 486.

4. A. sells to B. two parcels of terra japonica, one of 25 tons, the other of 150 tons, at the rate of 188. per cwt. On the faith of the invoices, B. accepts bills for the value of the whole quantities said to have been shipped. A., in fact, ships, and B. accepts, parcels of 24 tons and 132 tons respectively. B. may recover from A. the price paid for the deficient quantity. Devaux v. Conolly (1849), 8 C. B.

640.

PART VI.

SUPPLEMENTARY.

S. 54.

implied terms

tions.

55. Where any right, duty, or liability would Exclusion of arise under a contract of sale by implication of law, and condiit may be negatived or varied by express agreement or by the course of dealing between the parties, or by usage, if the usage be such as to bind both parties to the contract.

S. 55.

Express agreement.

Course of dealing.

Usage.

The effect of this section is to preserve intact the general principles and rules of construction applicable to contracts of sale. The implication of law as to the intention of the parties with regard to their contractual rights and obligations may be displaced by evidence of the terms of the contract agreed upon by the parties, either expressly, or by implication from a previous course of dealing between them, or the usage of trade. It is, in fact, competent to the parties to make whatever bargain they please-modus et conventio vincunt legem. The most important illustrations under this Act of rights and obligations created by implication of law are the implied conditions and warranties under ss. 12-15, and the rights of the unpaid seller under s. 39. By express agreement. For the general application of the maxim expressum facit cessare tacitum, the reader must be referred to the notes collected under Wigglesworth v. Dallison in Smith's Leading Cases (9th ed.), Vol. I., p. 569; and to Broom's Legal Maxims (6th ed.), p. 606.

With regard to the effect of an express agreement on a right arising by implication of law, e.g., lien, Lord Westbury says, in Chambers v. Davidson (x) :-" Lien is given by implication of law. If, therefore, a mercantile transaction, which might involve a lien, is created by a written contract, and security given for the result of the dealings in that relation, the express stipulation and agreement of the parties for security exclude lien, and limit their rights by the extent of the express contract that they have made. Expressum facit cessare tacitum."

Any implied right or obligation will not, however, be displaced by an express agreement, where, upon the true construction of the contract, the express provision appears to have been superadded for the benefit of the buyer, as in the cases quoted in the note (y).

By the course of dealing-i. e., the evidence of former transactions between the same parties (z).

By usage. The maxim is, In contractis tacite insunt quæ sunt moris et consuetudinis. "With respect to contracts commercial, it has been long established that evidence of a usage of trade applicable to the contract, and which the parties making it knew

(x) (1866), L. R. 1 P. C. 296, 305; 4 Moo. P. C. C. N. S. 158.

(y) Per Willes, J., in Mody v. Gregson (1868), L. R. 4 Ex. at p. 53; Bigge v. Parkinson (1862), 7 H. & N. 955; 31 L. J. Ex. 301. See notes to ss. 14 (4), and 15 (2) (c), ante, pp.

100, 105, respectively.

(z) See Bourne v. Gatliff (1844), 11 Cl. & Fin. 45; Ford v. Yates (1841), 2 M. & G. 549; Cumming v. Shand (1860), 5 H. & N. 95; 29 L. J. Ex. 129.

or may be reasonably presumed to have known, is admissible for the purpose of importing terms into the contract respecting which the written instrument is silent" (a), the presumption being that "the parties did not mean to express in writing the whole of the contract, but a contract with reference to those known usages" (b). Evidence of trade usage is also admissible for the purpose not of incorporating new terms, but of explaining the terms used in the contract: "To supply, as it were, the mercantile dictionary in which you are to find the mercantile meaning of the words which are used " (c).

The usage must be lawful, established by evidence, and consistent with the nature and terms of the contract. "The true and appropriate office of a usage or custom is, to interpret the otherwise indeterminate intentions of parties, and to ascertain the nature and extent of their contracts, arising not from express stipulations, but from mere implications and presumptions, and acts of a doubtful or equivocal character. It may also be admitted to ascertain the true meaning of a particular word, or of particular words in a given instrument, when the word or words have various senses, some common, some qualified, and some technical, according to the subject-matter to which they are applied. But I apprehend that it can never be proper to resort to any usage or custom to control or vary the positive stipulations in a written contract, and, à fortiori, not in order to contradict them. An express contract of the parties is always admissible to supersede or vary, or control, a usage or custom; for the latter may always be waived at the will of the parties. But a written or express contract cannot be controlled, or varied, or contradicted by a usage or custom; for that would not only be to admit parol evidence to control, vary, or contradict written contracts, but it would be to allow mere presumptions and implications, properly arising in the absence of any positive expression of intention, to control, vary, or contradict the most formal and deliberate declarations of the parties" (d).

There is a distinction between an ordinary trade usage, which must be proved as a matter of fact until it is judicially recognized, and a trade usage which, having been judicially ascertained and established, becomes a part of the law merchant

(a) 1 Sm. L. C. (9th ed.) p. 58; notes to Wigglesworth v. Dallison.

(b) Per Parke, B., in Hutton v. Warren (1836), 1 M. & W. 475.

(c) Per Lord Cairns, in Bowes v. Shand (1877), 2 Ap. Ca. at p. 468.

(d) Per Story, J., in The Schooner Reeside (1837), 2 Sumner (U. S.), R. 567, 569.

S. 55.

S. 55.

Reasonable

time a question of fact.

S. 56.

Rights, &c. enforceable by action.

S. 57.

(preserved by s. 61 (2)), and is judicially taken notice of as a matter of law (e).

A few cases illustrating the interpretation of contracts of sale by reference to trade usage are collected in the note below (ƒ). If the usage be such as to bind both parties.-This clause embodies the rule laid down by the House of Lords in Robinson v. Mollett (g).

56. Where, by this Act, any reference is made to a reasonable time the question what is a reasonable time is a question of fact.

See ss. 11 (2), 18 Rule 4 (b), 29 (2) (4), 35, 37, 48 (3).

57. Where any right, duty, or liability, is declared by this Act, it may, unless otherwise by this Act provided, be enforced by action.

The object of this section seems to be, by providing a specific procedure for the enforcement of the rights created by the Act, to negative the possibility of procedure by way of indictment. Quare, as to the effect, if any, of this section upon the remedy against the sheriff under s. 26 (h).

Instances of liabilities under this Act are, e.g., the duty of the buyer under s. 37 to take delivery, and the duty of the carrier. under s. 46 (2) to re-deliver to the seller; and probably also the duty of the sheriff to indorse the date of the writ under s. 26 (1). See the note under that section, ante, p. 173.

(e) Blackb. p. 80. See also per Lord Campbell, in Brandao v. Barnett (1843), 12 Cl. & F. at p. 805; and per Cockburn, C.J., in Goodwin v. Robarts (1875), L. R. 10 Ex. at p. 346.

(f) Evidence of trade usage admitted (1) to incorporate new terms: Jones v. Bowden (1813), 4 Taunt. 847 (usage as to implied warranty); Syers v. Jonas (1843), 2 Ex. 111 (usage to sell by sample); Humphrey v. Dale (1857), E. B. & E. 1004; 26 L. J. Q. B. 137 (usage to make broker personally liable on contract); Field v. Lelean (1861), 6 H. & N. 617; 30 L. J. Ex. 168 (usage not to deliver

until payment); Johnson v. Raylton (1881), 7 Q. B. D. 438 (usage that goods supplied shall be the seller's own make) (2) to interpret the meaning of terms used: Smith v. Wilson (1832), 3 B. & Ad. 728 (“a thousand" of rabbits); Spicer v. Cooper (1841), 1 Q. B. 424 (pockets of Kent hops); Gorrissen v. Perrin (1857), 2 C. B. N. S. 681 ("bale"); Bowes v. Shand (1877), 2 Ap. Ca. 455 (where the methods and limits of such interpretation are considered).

(9) (1875), L. R. 7 H. I.. 802. (h) See Lely & Craies, "The Annotated Acts" [No. 2], p. 29.

58. In the case of a sale by auction—

S. 58.

(1.) Where goods are put up for sale by auction Auction sales. in lots, each lot is primâ facie deemed to be the subject of a separate contract of sale: (2.) A sale by auction is complete when the auctioneer announces its completion by the fall of the hammer, or in other customary manner. Until such announcement is made any bidder may retract his bid:

(3.) Where a sale by auction is not notified to be subject to a right to bid on behalf of the seller, it shall not be lawful for the seller to bid himself or to employ any person to bid at such sale, or for the auctioneer knowingly to take any bid from the seller or any such person: Any sale contravening this rule may be treated as fraudulent by the buyer:

(4.) A sale by auction may be notified to be subject to a reserved or upset price, and a right to bid may also be reserved expressly by or on behalf of the seller.

Where a right to bid is expressly reserved, but not otherwise, the seller, or any one person on his behalf, may bid at the auction.

A sale of goods by auction falls within the provisions of s. 4, which reproduces s. 17 (now repealed) of the Statute of Frauds. Lord Mansfield once expressed a doubt whether a sale by auction, owing to its publicity, was within the mischief contemplated by the Statute of Frauds (i), but the doubt has long since been set at rest (k).

The auctioneer is primarily the seller's agent (1); but the buyer at a public auction (m), by the act of bidding for the goods,

(i) In Simon v. Motivos (1766), 1 W. Bl. 599; S. C., 3 Burr. 1921.

(k) Hinde v. Whitehouse (1806), 7 East, 558, per Lord Ellenborough; Kenworthy v. Schofield (1824), 2 B. & C. 945; Maddison v. Alderson (1883),

8 Ap. Ca. at p. 488, per Lord Black-
burn.

(7) Benj. p. 247.

(m) Otherwise at a private sale, when the auctioneer is the seller's agent alone. Mews v. Carr (1856), 1

S. 58.