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IH.&C.90.

HORSFALL V. THOMAS

813

v. THOMAS. May 5, 1862.If a person purchases an


article which is to be manufactured for him, and the manufacturer delivers it
with a patent defect which may render it worthless, if the purchaser has had an
opportunity of inspecting it, but has neglected to do so, the manufacturer is not
guilty of fraud in not pointing out the defect.The defendant employed the
plaintiff to make for him a steel gun for which he was to pay by two bills of
exchange. The plaintiff delivered the gun with a defect in it which the plaintiff
might have seen on examination, and which would have justified him in refusing
to receive it. The defendant without examining the gun accepted and delivered
to the plaintiff the bills of exchange. Afterwards the plaintiff, in a letter to the
defendant, stated that the gun was of the best metal all through and had no weak
points that the plaintiff was aware of. The gun was tried and at first answered
well, but after repeated trials burst in consequence of the defect in it. The
plaintiff having sued the defendant on one of the bills, he pleaded that he was
induced to accept the bill by the fraud of the plaintiff. Held, that there was no
evidence for the jury in support of the plea.

HORSFALL AND ANOTHER

[S. C. 31 L. J. Ex. 322; 8 Jur. (N. S.) 721; 10 W. R. 650; 6 L. T. 462: at Nisi
Prius, 2 F. & F. 775. Distinguished, Archbold v. Lord Howth, 1866, Ir. R. 1 C. L.
629. Dissented from, Smith v. Hughes, 1871, L. R. 6 Q. B. 605. Applied, Carlisle
v. Salt, [1906] 1 Ch. 341. Discussed, Shepherd v. Croft, [1911] 1 Ch. 530.]
Declaration on a bill of exchange, dated the 2nd July 1860, drawn by the plaintiffs, by the name and style of " The Mersey Steel and Iron Company," upon and
accepted by the defendant for payment to the plaintiffs of 2331. 10s. twelve months
after date.
Plea (inter alia). That the defendant was induced to accept the bill by the fraud,
covin and misrepresentation of the plaintiffs.
At the trial, before Pollock, C. B., at the London Sittings after last Hilary Term,
it appeared, by the evidence of the defendant in support of the plea, that the plaintiffs
carried on the business of iron founders at Liverpool under the name of the Mersey
Steel and Iron Company. In the year 1859 the defendant applied to the plaintiffs to
make for him a cannon, for the purpose of testing some experiments which he was
desirous of submitting to the consideration of the War Office. A long correspondence
took place between the parties as to the terras, but at length the agreement was entered
into contained in the following letters :
[91] " Berkeley Square, Tuesday Afternoon,
" 30th August"
"Dear Sir,I had the pleasure of an interview with Mr. M'Neil this morning
respecting the 68-pounder 95 cwt. gun. It appears there has been some misunder-

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HORSFALL V. THOMAS

1 H. & C. 92.

standing with regard to the terms of payment. My object simply was to avoid
having to pay the money this year (in case I should not receive any from the Government), my expenses having been already so heavy. I intended that one-half should
be paid at the commencement of the year and the remainder six months afterwards.
If you can only make the gun on condition of payment this year, I must distinctly tell
you that (unless, of course, it is paid for by the Government) it would be entirely out
of my power to do so. I should be glad if you would undertake to make the gun, but
should feel obliged if you will let me know whether you can do so or not at your
earliest convenience, as I have to return an answer to the War Office respecting it.
Yours very truly,
"LYNAL THOMAS.
"G. H. Horsfall, Esq.
" P.S.Of course, if the Government pay for the gun before the beginning of next
year, I should remit the money to you forthwith ; that, or any other arrangement not
entailing the payment this year, I am willing to enter into, but it must be done at
once."
The plaintiffs wrote in answer as follows:
"September 1.
. " Dear Sir,Your favour of Tuesday to Mr. G. R. Horsfall has been handed to us
by him, requesting us to reply to it as it is a business matter. In reply, we shall be
happy to supply you with a steel forging fora 68-pounder 95 cwt. gun, for the sum of
3241., payment to be made by bill, half at six months and half in twelve months, with
the understanding that if the .Government pay you before these [92] stipulated times,
that you hand over the amount to ua in settlement of the bills. We could, if you please,
turn and bore the gun (by the latter we mean rough boring) for the further sum of 481.
You are aware that we have no machinery for rifling grooves, but no doubt you would
be able to get that done at Woolwich. Trusting this arrangement will be satisfactory,
we remain, &c,
.
" T H E MERSEY STEEL AND IRON COMPANY,
"L. Thomas, Esq.

" per WILLIAM CLAY."

The defendant wrote in answer, assenting to these terms.


Some correspondence afterwards took place between the defendant and the plaintiffs
with reference to some flaws which appeared in the gun during its boring. In consequence of these flaws, the bore was, with the consent of the defendant, increased from
6 to 7 inches. It was also agreed that the plaintiffs should rifle the gun, for which
they were to receive, in addition, 951., making the price of the gun 4671. On the
2nd July, 1860, the defendant, in pursuance of the agreement, accepted two bills of
exchange for 2331. 10s., payable respectively at six and twelve months after date. The
gun was delivered, by the defendant's directions, at Woolwich. On the 12th July the
defendant wrote to the manager of the Company, stating that he had seen the gun,
and was very much pleased with its appearance; and he asked for some drawings of
the rifling. These were sent, on the 17th July, to the plaintiff's agent in London, in
a letter which he communicated to the defendant, and which concluded as follows:
" The gun is of the best metal all through, and has no weak points that we are aware
of, and we hope it will turn out all that Mr. Thomas can desire." After the first trial
of the gun, the defendant wrote to the manager of the Company as follows :
"22nd September, 1860,
" Saturday Afternooon.
" My dear Sir,The trial of the gun commenced on Friday, but [93] there was only
time to fire four rounds, you will be glad to hear, with the most perfect success. The
largest charge used was 25 lb. with a shell of 174 lb. weight. The precision was admirable. The remainder (five) are to be fired on Tuesday afternoon, when I hope to tell you
of a good range, as the higher elevations are to be used on that day, I have written to
Liverpool to acquaint them with the result this post. The gun shews no sign of a strain.
Everybody expected to see it fly to pieces the first shot. If the wish was father to
the thought, they must have been woefully disappointed.Yours very truly,
" LYNAL THOMAS.

" The greatest range, I believe (for I have not yet seen the list), was something
over 4000 yards (some hundreds) at 10, but the shot fell into the water, and could
not be exactly estimated. They cut pretty furrows in the sand."

1H.&O.94.

HORSFALL V. THOMAS

815

"26th Sept. 1860.


" My dear Sir,The trial is over. Yesterday's results were even betterj: 28 lb.
of powder was fired with a shell of 174 lb. weight, at an angle of 37|- degrees. The
gun shews no sign of strain anywhere. Heaven knows what a range we got, but
something very large. I shall get the official report, I hope, to-morrow, when I will
let you know. I only know that it is greater than Armstrong's 7-inch gun considerably.
The precision was beautiful, considering there was only a common sight on the gun,
and that not adjusted properly. I shall not write to Liverpool until I get the report,
but you can tell them.Yours truly,
" LYNAL THOMAS."
The defendant's acceptance, payable at six months' date, was duly paid on 5th
January 1861. The Government required that the gun should be further tried, and
accordingly in June, 1861, further trials took place. Six rounds were fired, and at
the seventh round the gun burst. The defend-[94]-ant afterwards wrote to the
manager of the Company as follows:
"London, June 29th, 1861.
"My dear Sir,My large gun was tried again yesterday, and after six rounds
(21 lb. to .23 lb. of powder) it flew to pieces. On examining the remains, the metal
in the bore presented a remarkable appearance, and it is scarcely possible to conceive
that the gun could have stood what it did, so defective and unsound was the metal.
But the weakest point, and that which probably gave way the first, was immediately
behind the trunnions ; here there were strong longitudinal flaws which appear gradually
to have opened, so that with much smaller charges of powder the gun must eventually
have gone, and before many rounds could have been fired. I applied immediately at
the War Office for permission to replace it with another gun, with which to continue
the experiments, which, I may observe, were for the purpose of testing my system,
and not your metal alone, and which, prior to the bursting of the gun, shewed results
even more remarkable than those of the last trial; an increase, indeed, in both range
and accuracy was obtained; so that I believe there will be no opposition offered to
the substitution of another gun in place of the first. Under these circumstances you
will no doubt wish, on your own account, to supply a perfectly sound facsimile of the
last for this purpose. I understand you to say that you could construct a perfectly
sound gun by means of a new process, and I believe that, if the metal were sound,
nothing could burst the gun. I should feel much obliged by a speedy reply, as I
have my arrangements to make with the Minister of War.Yours faithfully,
" W. Clay, Esq.,
"LYNAL THOMAS.
"Mersey Company, Liverpool."
The defendant's counsel, in his opening address to the jury, stated that, after the
gun burst,'it was discovered that [95] the breach end of the chamber was all soft and
spongy, and that a metal plug had been driven into the breach over this soft part ;
that it would be proved by scientific evidence that this plug caused the bursting of
the gun, and had rendered it practically useless. The defendant's counsel then contended that, inasmuch as the plug could not have been put into the gun without the
plaintiff's knowledge, their statement that " the gun was of the best metal all through,
and had no weak points that they were aware of," was false and fraudulent, and that,
the defendant having been induced by this false and fraudulent representation to
accept the bills, the plaintiffs could not recover.
The learned Judge was of opinion that, even if the facts stated by the defendant's
counsel were proved, the defendant would not be entitled to a verdict on the plea of
fraud : that as the plaintiffs had supplied the defendant with a gun, which, according
to his own statement, possessed considerable merits, the circumstance that it burst
after repeated trials, in consequence of the insertion of the plug in the breach, was
only ground for a cross action. His lordship then directed a verdict for the plaintiffs
for the amount of the bill and interest.
Bovill, in the present term, obtained a rule nisi for a new trial on the ground of
misdirection in stopping the case and directing the jury that the facts opened and
proposed to be proved, viz., that the gun had been knowingly, intentionally and
fraudulently plugged, would not be any defence to an action on the bill.
Edwards James and Aspinall shewed cause (April 28). The facts relied on by the
defendant afford no answer to the action. There was no fraud on the part of the

816

HORSFALL V; THOMAS

1 H. & C. 96.

plaintiffs. They undertook to make for the defendant a steel gun for the purpose of
his experiments, and he obtained what he bargained for. The gun, when first tested,
answered every [96] purpose for which it was required, and it was not until after
repeated trials, and in consequence of extreme pressure, that it burst. [Pollock, C. B.
I thought that, even if there was fraud on the part of the plaintiffs, it would be no
answer to the action; and that view is supported by the recent case of Clarke v.
Dickson (E. B. & E. 148). Fraud may. be of the most glaring description, and yet so
ineffectual as to produce very slight damage. Here the object of the defendant was
to ascertain whether a gun of that description would carry an immense weight of
metal a great distance; and he has had the benefit of a trial. Bramwell, B. If one
party wishes to avoid a contract on the ground of fraud, he must put the other party
in the same situation in which he was when the contract was entered into.] The
representation relied upon by the defendant as fraudulent was not made until the
17th July, which was after the gun had been delivered and the bills accepted.
[Martin, B. There was no contract by the plaintiffs that the gun should not have
a plug in it.] Their contract was to construct a steel gun : they made no representations as to its quality. If any representation is to be inferred from the delivery of
the gun, it is simply that it was a gun according to the contract, that is, a steel gun.
Whether or no the plug was a defect is not the question. The defendant, in his letter
in which he informs the plaintiffs that the gun had burst, does not attribute it to the
plug, but to the unsoundness of the metal. In his first letter, he states that the gun
was tried with the most perfect success, and shewed no sign of a strain. In his next
letter he says, that the results were even better. Lewis v. Cosgrave (2 Taunt. 2), which
is relied upon by the defendant, was the case of an express warranty.
Bovill and Honyman, in support of the rule (May 2). The defendant was
prepaFed to prove at the trial, not only [97] that the gun was unsound, but that the
plaintiffs, with knowledge of its unsoundness, had taken effectual means to conceal
the defect from the defendant and practised a fraud upon him. [Pollock, C. B. No
gun is ever perfect in all its parts. The question is whether this gun had not answered
the purpose for which it was bought. At all events the defendant had the use of the
gun, and he has no right to keep it and refuse to pay for it.] The fragments are
worthless. [Pollock, C. B. That cannot be assumed. There is no evidence that
the defendant offered to return the gun, or took any step to rescind the contract.
Wilde, B., referred to Street v. Blay (2 B. & Adol. 456).] It is not denied that the
defendant had the use of the gun, and some benefit from it, but that does not preclude
him from setting up as a defence that the bill was obtained from him by fraud. In
Byles on Bills, p. 94, 9th ed., after stating that a partial failure of consideration is no
answer to an action on a bill of exchange, it is said : "But if fraud can be shewn, it
is otherwise as between the parties, for there is then no contract." [Pollock, C. B.
The evidence tendered was, not that the bill was obtained by fraud, but that it was
given in part payment of a contract which was fraudulent. There is a wide distinction between being induced to accept a bill by a fraudulent misrepresentation, and
accepting a bill in payment of a contract in which there is some fraud.] The concealment of the defect in the gun is evidence for the jury of fraud. If the plaintiffs had
told the defendant that the gun was unsound, he would not have accepted the bill.
[Bramwell, B. The defendant must not only shew that a fraud was practised upon
him, but that he was induced by that fraud to accept the bill. Now, the defendant
had not seen the gun, or at all events had not examined it, when he accepted the bill.]
At the time when the plaintiffs [98] must have known that the gun was unsound, they
represented to the defendant that it was " of the best metal all through, and had no
weak points that they were aware of." Where a contract is void on the ground of
fraud, the plaintiff cannot recover upon ic, though he may recover on a new implied
contract arising from the retention of the goods : Grown&ell v. Lamb (1 M. & W. 952),
Campbell v. Fleming (1 A. & E. 40), and notes to Citter v. Powell (Smith's Lead.
Cas. 20).
Cur. adv. vult.
BRAMWELL, B., now said. This was an action by the drawer against the acceptor
of a bill of exchange : and there was a plea that the bill was obtained by the fraud
of the plaintiffs. The facts, opened by the defendant's counsel and partly proved (so
far as is necessary to refer to them), were these: The plaintiffs contracted with the
defendant to make for him a gun, which he was to pay for by two bills of exchange,

1H.&C.99.

HORSFALL V. THOMAS

817

one at six, the other at twelve months' date. The gun was made, and delivered at
Woolwich in pursuance of the defendant's directions, but he made no examination of
it. The plaintiff drew on him the bills of exchange, one of which was paid, and on
the other this action is brought. According to the opening of the defendant's counsel
(and it may be assumed, for the purpose of this decision), there was such a defect in
the gun as would have justified the defendant, had he he known it, in refusing to
accept the gun. Further, that the plaintiffs or their workmen had done something
to the gun which would conceal the defect from any person who did not carefully
inspect it. The gun was received by the defendant, and fired several times. At first
it answered extremely well, but afterwards, as it was said, in consequence of the defect,
it burst and became worthless.
[99] Upon this statement of counsel being made and partially proved, my Lord
was of opinion that there was no evidence for the jury in support of the plea of fraud,
and he directed a verdict for the plaintiffs. A rule for a new trial was obtained on
the ground of misdirection, and the question is whether there was any evidence for
the jury in support of that plea. We are of opinion that there was not, and that my
Lord was right in the view he took of the case.
One matter relied on by the defendant (and which struck me forcibly on the
application to me at Chambers to stay the execution) was, that the plaintiffs or their
workmen had done something to the gun which concealed the defect in it; and had it
turned out, upon the defendant's inspection of the gun, that what was done to it was
done for the express purpose of concealing, and did in fact conceal, the defect from
him; there might have been evidence of a fraudulent intent. But the defendant
never examined the gun, and therefore it is impossible that an attempt to conceal
the defect could have had any operation on his mind or conduct. If the plug, which
it was said was put in to conceal the defect, had never been there, his position would
have been the same; for, as he did not examine the gun or form any opinion as to
whether it was sound, its condition did not affect him. Indeed, the defendant's counsel
were obliged to concede that, as regards the question of fraud, the fact that the plug
was put in the gun might be left out of consideration ; and they were therefore compelled to say that the plaintiffs having told the defendant that the gun was of the
best metal all through, and had no weak points that they were aware of, at the same
time knowing that there was a defect in it which impaired its value and might render
it worthless, were guilty of a fraud. We are of opinion that that proposition is not
maintainable. If it be true in that sense, it is true in every sense, and [100] therefore we are called upon by the argument for the defendant to affirm, as a general
proposition, that wherever a manufacturer makes for a purchaser a chattel, and there
is a patent defect in it which either impairs its value or may render it worthless,
although the purchaser has neglected to inspect it, if the manufacturer conceals the
defect he is guilty of fraud. We are of opinion that no such proposition can be
supported; and that it would be mischievous if it were so. To constitute fraud,
there must be an assertion of something false within the knowledge of the party
asserting it, or the suppression of that which is true and which it was his duty to
communicate. Here there was no assertion of an untruth, and the only question is
whether there was a suppression of anything which the plaintiffs were bound to make
known to the defendant. Now, the manufacturer of an article is not always bound to
point out its defects to the purchaser. If, indeed, there be a defect known to the
manufacturer, and which cannot be discovered on inspection, he is bound to point it
out; but if there be a defect which is patent, and of which the purchaser is as capable
of judging as the manufacturer, he is not bound to call the attention of the purchaser
to it. It would be mischievous if he were, for in such case he would be bound to
point out everything which might by any possibility be considered a defect; and the
consequence would be that if the manufacturer, for prudence sake, pointed out some
flaw which made no difference whatever in the value of the article, the purchaser
would immediately say, " There is a defect, I must have an abatement of the price."
Whether or no the plaintiffs committed a fraud may be tested in this way. Suppose
the defendant had examined the gun, and seen the defect in it, but nevertheless
accepted it, there would clearly have been no fraud on the part of the plaintiff because
he did not point out the defect. So if he [101] had seen the defect and rejected the
gun. Then suppose the defendant had examined the gun and not seen the defect,
would there have been any fraud ? If that depends upon his means of knowledge, and

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1 H. & C 102.

the degree of diligence he used to find out the defect; here he had the means of
knowledge, and, if he had diligently applied it, by the hypothesis he woujd have
discovered the defect, because it was patent. Therefore it cannot be said there is any
fraud in the manufacturer when the purchaser sees the defect, and either accepts or
rejects the article, or does not see it because he has not used sufficient diligence to
discover it. Then is there any fraud in the manufacturer where the purchaser has an
opportunity of inspecting the article and seeing the defect in it, but neglects to do so?
To hold that there is would be to make fraud in the manufacturer dependent on the
sense and prudence of the purchaser in inspecting the article and judging for himself,
instead of accepting it without first examining it. These considerations seem to me
to shew, as a matter of demonstration, that the maker of an article in which there is
a patent defect is not guilty of fraud because he does not simply tell the purchaser of
it, but merely says, " There is the article; judge for yourself whether it is according
to your order," and the purchaser does not think fit to do so.
For these reasons my brother Martin and myself are of opinion that my Lord was
right, and that there was no evidence of fraud. My brother Wilde did not hear the
whole of the argument, and therefore gives no opinion.
POLLOCK, C. B. I entirely concur in the judgment delivered by my brother
Bramwell.
Rule discharged.