1 of 237 DOCUMENTS

DICK BENTLEY PRODUCTIONS, LTD. AND ANOTHER v. HAROLD SMITH

(MOTORS), LTD.

COURT OF APPEAL

[1965] 2 All ER 65, [1965] 1 WLR 623

HEARING-DATES: 3 March 1965

3 March 1965

CATCHWORDS:
Warranty -- Breach -- Sale of motor car -- Misrepresentation as to mileage of secondhand car -- Purchaser induced
thereby to buy car -- Whether warranty or innocent misrepresentation.

HEADNOTE:
If a representation is made in the course of dealings for a contract for the very purpose of inducing the other party
to act on it, and if it actually induces him to act on it by entering into a contract, that is prima facie ground for inferring
that the representation was intended as a warranty; but the maker of the representation can rebut this inference, if he can
show that he was innocent of fault in making it and that it would not be reasonable for him to be bound by it (see p. 67,
letter D, post).
B. told S., acting on behalf of the defendant company that he (B.) was looking for a well vetted Bentley car. S.,
having found a Bentely car, informed B., whom he had told that he (S.) was in a position to find out the history of cars.
B. saw the car. S. told him that it had been fitted with a replacement engine and gear box and had done only twenty
thousand miles since then. B. bought the car. The representation of mileage was untrue, but not fraudulent. S. had not
in fact ascertained what mileage the car had done. In an action by B. for breach of warranty,
Held: the representation amounted prima facie to a warranty, and the inference of a warranty was not, in the present
case, rebutted; accordingly, the plaintiff was entitled to damages.
Oscar Chess, Ltd. v. Williams ([1957] 1 All E.R. 325) distinguished.
Appeal dismissed.

NOTES:
The Law Reform Committee in their Tenth Report (Innocent Misrepresentation), which was presented to
Parliament in July, 1962 (Cmnd. 1782) recommended, in paras. 18 and 27 (5), that "any person who has, either by
himself or his agent, induced another to enter into a contract with him by an untrure representation made for the purpose
of inducing the contract should be liable in damages for any loss suffered in consequence of the representation, unless
he proves that up to the time when the contract was made he (or his agent, if the representation was made by the agent)
believed the representation to be true and had reasonable grounds for his belief". The proposition stated at letter B
above is in accord with this recommendation, and the present case illustrates absence of reasonable grounds for
believing that the representation was true.
As to the question whether a representation by a seller of goods amounts to a contractual stipulation, as a condition
or warranty, see 34 HALSBURY'S LAWS (3rd Edn.) 40, 41, para. 65; and for cases on the subject, see 39 DIGEST
(Repl.) 512-515, 544-573.

CASES-REF-TO:

Chess (Oscar), Ltd. v. Williams, [1957] 1 All E.R. 325; [1957] 1 W.L.R. 370; 39 Digest (Repl.) 514, 559.
Heilbut, Symons & Co. v. Buckleton, [1911-13] All E.R. Rep. 83; [1913] A.C. 30; 82 L.J.K.B. 245; 107 L.T. 769; 35
Digest (Repl.) 56, 495.

INTRODUCTION:
Appeal. This was an appeal by the defendants from a judgment of His Honour JUDGE HERBERT given on July 3,
1964, at Westminster County Court, whereby it was adjudged that the plaintiffs should recover £ 400 damages. The
grounds of appeal included, as the first ground, that the judge was wrong in law in holding that the statements of fact
made by the defendants to the second plaintiff prior to the sale of the motor car in question were warranties.
The plaintiffs by their re-amended particulars of claim (dated, as re-amended, Feb. 12, 1963) alleged that by an
agreement made partly in writing and partly orally in or about January, 1960, between the second plaintiff on behalf of
the first plaintiff, or by the second plaintiff ("Mr. Bentley") and one Harold Smith ("Mr. Smith") acting on behalf of the
defendants, the defendants agreed to sell and the first plaintiff, or Mr. Bentley, agreed to buy a second-hand motor car
for the sum of £ 1,850. The plaintiffs further alleged that Mr. Smith represented or warranted five matters, of which the
fourth was that the car had covered only twenty thousand miles since the fitting of a replacement engine and ancillary
parts and gearbox, and that, relying on these representations or warranties the first plaintiff or Mr. Bentley bought the
motor car. There was also an allegation that the representations were made fraudulently. Damages limited to £ 400
were claimed. The defendants by their amended defence admitted that certain statements were made by Mr. Smith,
including a statement that to the best of his belief the car had done only twenty thousand miles since the replacement of
the engine and ancillary parts and gearbox, but denied that the statements amounted to warranties or representations and
averred that the statements were made honestly in the belief that they were true. The defendants denied fraud. They
counterclaimed, for works ordered by the plaintiffs and carried out by them, £ 189 16s. 6d. The county court judge held
that Mr. Smith was not dishonest and that the defendants were not guilty of fraud, but that certain representations
(including the statement as to mileage) were untrue and amounted to warranties. The county court judge accordingly
gave judgment for the plaintiffs for £ 400 on their claim. He gave judgment on the counterclaim for the defendants for
£ 77 1s. 2d. The defendants appealed. The case is reported only on the issue whether there was a representation
amounting to warranty.

COUNSEL:
C. W. G. Ross-Munro for the defendants. Graham Eyre for the plaintiffs.

PANEL: Lord Denning, M.R., Danckwerts and Salmon, L.JJ.

JUDGMENTBY-1: LORD DENNING, M.R.

JUDGMENT-1:
LORD DENNING, M.R.: The second plaintiff, Mr. Charles Walter Bentley, sometimes known as Dick Bentley,
brings an action against Harold Smith (Motors), Ltd., for damages for breach of warranty on the sale of a car. Mr.
Bentley had been dealing with Mr. Smith (to whom I shall refer in the stead of the defendant company) for a couple of
years and told Mr. Smith he was on the look-out for a well vetted Bentley car. In January, 1960, Mr. Smith found one
and bought it for £ 1,500 from a firm in Leicester. He wrote to Mr. Bentley and said: "I have just purchased a Park
Ward power operated hood convertible. It is one of the nicest cars we have had in for quite a long time." Mr. Smith had
told Mr. Bentley earlier that he was in a position to find out the history of cars. It appears that with a car of this quality
the makers do keep a complete biography of it.
Mr. Bentley went to see the car. Mr. Smith told him that a German baron had had this car. He said that it had been
fitted at one time with a replacement engine and gearbox, and had done twenty thousand miles only since it had been so
fitted. The speedometer on the car showed only twenty thousand miles. Mr. Smith said the price was £ 1,850, and he
would guarantee the car for twelve months, including parts and labour. That was on the morning of Jan. 23, 1960. In
the afternoon Mr. Bentley took his wife over to see the car. Mr. Bentley repeated to his wife in Mr. Smith's presence
what Mr. Smith had told him in the morning. In particular that Mr. Smith said it had done only twenty thousand miles
since it had been refitted with a replacement engine and gearbox. Mr. Bentley took it for a short run. He bought the car
for £ 1,850, gave his cheque and the sale was concluded. The car was a considerable disappointment to him. He took it
back to Mr. Smith from time to time. [HIS LORDSHIP referred briefly to some work done on the car continued:]
Eventually he brought this action for breach of warranty. The county court judge found that there was a warranty that it
was broken, and that the damages were more than£ 400, but as the claim was limited to £ 400, he gave judgment for the
plaintiffs for that amount.
The first point is whether this representation, namely that the car had done twenty thousand miles only since it had
been fitted with a replacement engine and gearbox, was an innocent misrepresentation (which does not give rise to
damages), or whether it was a warranty. It was said by HOLT, C.J., n(1) and repeated in Heilbut, Symons & Co. v.
Buckleton n(2):

n(1) In Crosse v. Gardner (1688), Carth. 90 and Medina v. Stoughton (1700), 1 Salk. 210.
n(2) [1911-13] All E.R. Rep. 83 at p. 92; [1913] A.C. 30 at p. 49. The words quoted were ascribed by
LORD MOULTON to HOLT, C.J. They appear in the judgment of BULLIER, J., in Pasley v. Freeman ((1789),
3 Term Rep. 51 at p. 57; 100 E.R. 450 at p. 453) where he said "... it was rightly held by HOLT, C.J., [in Crosse
v. Gardner (1688), Carth. 90; 90 E.R. 656 and Medina v. Stoughton (1700), 1 Salk. 210; 91 E.R. 188], and has
been uniformly adopted ever since, that an affirmation at the time of sale is a warranty, provided it appear on
evidence to have been so intended."
"An affirmation at the time of the sale is a warranty, provided it appear on evidence to be so intended."
But that word "intended" has given rise to difficulties. I endeavoured to explain in Oscar Chess, Ltd. v. Williams n(3)
that the question whether a warranty was intended depends on the conduct of the parties, on their words and behaviour,
rather than on their thoughts. If an intelligent bystander would reasonably infer that a warranty was intended, that will
suffice. What conduct, then? What words and behaviour, lead to the inference of a warranty?

n(3) [1957] 1 All E.R. 325, at pp. 328, 329.

Looking at the cases once more, as we have done so often, it seems to me that if a representation is made in the
course of dealings for a contract for the very purpose of inducing the other party to act on it, and it actually induces him
to act on it by entering into the contract, that is prima facie ground for inferring that the representation was intended as a
warranty. It is not necessary to speak of it as being collateral. Suffice it that the representation was intended to be acted
on and was in fact acted on. But the maker of the representation can rebut this inference if he can show that it really
was an innocent misrepresentation, in that he was in fact innocent of fault in making it, and that it would not be
reasonable in the circumstances for him to be bound by it. In the Oscar Chess case n(4) the inference was rebutted.
There a man had bought a second-hand car and received with it a log-book, which stated the year of the car, 1948. He
afterwards resold the car. When he resold it he simply repeated what was in the log-book and passed it on to the buyer.
He honestly believed on reasonable grounds that it was true. He was completely innocent of any fault. There was no
warranty by him but only an innocent misrepresentation. Whereas in the present case it is very different. The inference
is not rebutted. Here we have a dealer, Mr. Smith, who was in a position to know, or at least to find out, the history of
the car. He could get it by writing to the makers. He did not do so. Indeed it was done later. When the history of this
car was examined, his statement turned out to be quite wrong. He ought to have known better. There was no
reasonable foundation for it.

n(4) [1957] 1 All E.R. 325.

[HIS LORDSHIP summarised the history of the car, and continued:] The county court judge found that the
representations were not dishonest. Mr. Smith was not guilty of fraud. But he made the statement as to twenty
thousand miles without any foundation. And the judge was well justified in finding that there was a warranty. He said:
"I have no hesitation that as a matter of law the statement was a warranty. Mr. Smith stated a fact that should be
within his own knowledge. He had jumped to a conclusion and stated it as a fact. A fact that a buyer would act on."
That is ample foundation for the inference of a warranty. So much for this point.
 I hold that the appeal fails and should be dismissed.

JUDGMENTBY-2: DANCKWERTS, L.J.

JUDGMENT-2:
DANCKWERTS, L.J.: I agree with the judgment of LORD DENNING, M.R.

JUDGMENTBY-3: SALMON, L.J.

JUDGMENT-3:
SALMON, L.J.: I agree. I have no doubt at all that the learned county court judge reached a correct conclusion
when he decided that Mr. Smith gave a warranty to the second plaintiff, Mr. Bentley, and that that warranty was broken.
Was what Mr. Smith said intended and understood as a legally binding promise? If so, it was a warranty and as such
may be part of the contract of sale or collateral to it. In effect, Mr. Smith said: "If you will enter into a contract to buy
this motor car from me for £ 1,850, I undertake that you will be getting a motor car which has done no more than twenty
thousand miles since it was fitted with a new engine and a new gearbox." I have no doubt at all that what was said by by
Mr. Smith was so understood and was intended to be so understood by Mr. Bentley.
I accordingly agree that the appeal should be dismissed.

DISPOSITION:
Appeal dismissed.

SOLICITORS:
Harris, Chetham & Co. (for the plaintiffs); Goodman, Monroe & Co. (for the defendants).