Court case[1921] 3 KB 387

The defendants sold the plaintiffs 3,000 tins of condensed milk to be shipped from New York. About a thousand tins arrived bearing the label 'Nissly', which infringed the registered trade mark of the Nestlé company. Nestlé threatened proceedings and the customs authorities detained the tins; the plaintiffs could obtain them only by removing the labels, after which the unlabelled tins fetched a much lower price. They sued for the loss.

The Court of Appeal held for the buyers. 'Right to sell' means more than ownership: a seller who can be restrained by injunction from selling the goods in the state in which they are has no right to sell them. The defendants were in breach of the implied condition as to title. Atkin LJ also held the warranty of quiet possession broken, since the buyers' possession was disturbed by the lawful claim of the trade-mark owner, and the tins were not of merchantable quality in that condition.