Edinburgh United Breweries, Ltd, and Another v. Molleson and Another

Subject_1 Title to Sue Subject_2 Reduction Subject_3 Right of Sub-Vendee to Reduce Original Contract.

Contract Subject_4 Construction — Sale Dependent on Amount of Profits — Resolutive Condition.

Fraud — Misrepresentation — Implied Truthfulness of Business Books — Responsibility for Falsification of Books by Clerk. Facts: A entered into a contract of sale with B, who re-sold the subjects at a profit to C, to whom A conveyed them. It subsequently appeared that a fraud had been perpetrated upon B, for which A was civilly although not personally responsible. C, with the concurrence of B, brought an action against A for the reduction of the contract between A and B and of the disposition from A to C—the contract between B and C not being impugned.

Opinion expressed that had B offered to take back the subjects and repay C in full, or even had repaid the profit and assigned his right to sue to C, he or his assignee would have had a good title.

Held that the “arrangement” referred to the preliminary steps towards the completion of the contract, and did not mean the contract of sale, executed or unexecuted, and that said contract was not conditional upon the profits being as stated; but that upon the books, if honestly kept, being examined, and the purchaser satisfied as to the profits, the condition was fulfilled, and that the contract was not open to reduction, except on the ground of fraud, after payment of the remainder of the price.