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Mahomedally Ebrahim Pirkhan Vs. Schiller, Dosogne and Co. - Court Judgment

LegalCrystal Citation
Decided On
Reported in(1889)ILR13Bom470
AppellantMahomedally Ebrahim Pirkhan
RespondentSchiller, Dosogne and Co.
principal and agent - goods ordered through commission agents--contract of agency--contract of sale--form of action. - maharashtra scheduled castes, scheduled tribes, de-notified tribes (vimukta jatis), nomadic tribes, other backward classes and special backward category (regulation of issuance and verification of) caste certificate act (23 of 2001), sections 6 & 10: [s.b. mhase, a.p. deshpande & p.b. varale, jj] caste certificate petitioner seeking appointment against the post reserved for member of schedule tribe his caste certificate was invalidated subsequently held, his appointment would not be protected. the observations/directions issued by supreme court in para 36 of judgment in the case of state v millind reported in 2001 91) mah. lj sc 1 is not the law declared by supreme..........mahomedally ebrahim pirkhan, against the defendants, who carry on trade in bombay as merchants and commission agents under the style of schiller, dosogne & company, and are a branch of a french firm, trading in paris under the same name, who are agents for certain manufacturers of zinc, to recover damages 'on account of the defendants having failed to perform their contract for the delivery of 48 casks of zinc sheets.' the facts of the case as found by the judge of the (small cause court are, that plaintiff, on the 27th june 1887, ordered out a quantity of zinc sheets through the defendants' firm in bombay by an indent in the following form: 'i hereby request you to instruct your agents to purchase for me (if possible) the under mentioned goods on my account and risk upon the terms.....

Chareles Sargent, C.J.

1. This reference from the Small Cause Court is one of considerable importance, and arises out of a suit brought by the plaintiff, Mahomedally Ebrahim Pirkhan, against the defendants, who carry on trade in Bombay as merchants and commission agents under the style of Schiller, Dosogne & Company, and are a branch of a French firm, trading in Paris under the same name, who are agents for certain manufacturers of zinc, to recover damages 'on account of the defendants having failed to perform their contract for the delivery of 48 casks of zinc sheets.' The facts of the case as found by the Judge of the (Small Cause Court are, that plaintiff, on the 27th June 1887, ordered out a quantity of zinc sheets through the defendants' firm in Bombay by an indent in the following form: 'I hereby request you to instruct your agents to purchase for me (if possible) the under mentioned goods on my account and risk upon the terms stated below.' On 2nd August 1887, the plaintiff consented to increase his limit of price from Rs. 13 to Rs. 13-2 per cwt., subject to reply by wire within eight days. On 4th August the plaintiff received the following letter from the defendants' firm.--'We have the pleasure to inform you that our home firm has reported by wire of the 3rd inst. concerning your esteemed orders as follows: Indent No. 586; Article 48 casks zinc sheets; increased limit, Rs. 13-2 per cwt--Remarks Placed at your increased limit. This information having been received by wire, is subject to correct transmission, interpretation, and confirmation by letter. Awaiting your further commands.' On 29th October 1887, plaintiff was informed by the defendants that they had been informed by their home firm that the maker being full with orders could not deliver the goods in due time, and would ship as soon as he possibly could. Plaintiff was asked to let them know whether he agreed to the extension of time, or wished to cancel the indent. This led to a correspondence, as to which it is unnecessary, for the purposes of this reference, to say more than that it closed with the plaintiff insisting on his right to be paid for the difference between the price of the first shipment, and what he would have to pay in the market, where the price had gone up to Rs. 16 per cwt. The Judge rejected the claim, on the ground that the plaintiff's contract with defendants was one of agency, and not of vendor and purchaser, and that the defendants could only be held liable for negligence in carrying out plaintiff's orders, which would be a different cause of action. The questions referred to us are (1) whether the defendants' letter to plaintiff of 4th August 1887, did not amount to an undertaking by the defendants to deliver to the plaintiff according to the indent; (2) whether, consequently, the relation of vendor and purchaser was not thereby established between the defendants and the plaintiff.

2. It was contended for the plaintiff that the indent, and the letter of 4th August 1887, constituted a contract for sale by the defendants on behalf of the manufacturer of zinc in Paris, and that the case, therefore, fell within the ruling in Thomson v. Davenport 9 B&C.; 78 and Paterson v. Grandasequi 15 East. 62, that when an agent enters into a contract for a foreign principal, the agent is liable on the contract as the party to whom the other contracting party is supposed to give credit. But this indent is in form only a letter of instructions to the defendants to buy for the plaintiff, and in the letter of 4th August the defendants only inform the plaintiff that his instructions have been carried out by 'placing' his order, by which must be understood that a contract of purchase had been entered into with some manufacturer of zinc It would be straining language to hold that these documents amount to a contract of sale entered into by the plaintiff with the defendants, on account of a foreign manufacturer. The indent contemplates the purchase by the defendants through their agents in Paris, and the transaction, so far as the indent by itself is concerned, is the same as if the plaintiff had written to the defendants at Paris instructing them to buy for them Tile nature of such a dealing g between a merchant in one country and a commission agent in another is discussed at great length in Ireland v. Livingston L.R. 5 H.L.C. 395. That case came in succession before the Court of Queen's Bench the Exchequer Chamber, and the House of Lords. The defendant was a merchant carrying on business in Liverpool, and instructed the plaintiffs, commission agents at the Mauritius, to purchase for him 500 tons of sugar, to cover cost, freight and insurance, '50 tons more or less of no ,moment, if it enables you to get a suitable vessel.' The plaintiffs were unable to execute the orders at the maximum price fixed, except to the extent of about 393 tons, and, having shipped these to England, drew bills against the shipment, which were refused acceptance by the defendant, on the ground that a shipment of less than 400 was not a compliance with the order, and he was, therefore, not obliged to accept the sugar, or honour the draft. An examination of the judgments of the twelve Judges, who took part at some stage or other in the action, shows that, with the exception of Mr. Baron Martin, the transaction between the parties was regarded by the Judges as one between principal and agent, and was construed as such, and this was the view finally adopted by the House of Lords in deciding the case for the plaintiffs. Mr. Baron Martin, however, who had been a member of the Exchequer Chamber, and was also summoned to give his opinion in the House of Lords, held the relationship of the parties to be one of vendor and vendee, and construed the instructions, on that assumption, in favour of the defendant. Mr. Justice Blackburn, in delivering his opinion in the House of Lords, whilst agreeing with the majority of the Judges, made the following remarks, which were much relied on by counsel for the plaintiff. He says At p. 408: 'It is quite true that the agent who, in thus executing an order, ships goods to his principal, is, in contemplation of law, a vendor to him. The persons who supply goods to a commission merchant sell them to him, and not to his unknown foreign correspondent, and the commission merchant has no authority to pledge the credit of his correspondent for them. There is no more privity between the person supplying the goods to the commission agent and the foreign correspondent than there is between the brickmaker who supplies bricks to a person building a house and the owner of that house. The property in the bricks passes from the brickmaker to the builder, and, when they are built into the wall, to the owner of that wall and just so does the property in the goods pass from the country producer to the commission merchant; and then, when the goods are shipped, from the commission merchant to his consignee. And the legal effect of the transaction between the commission merchant, and the consignee who has given him the order, is a contract of sale passing the property from the one to the other and, consequently, the commission merchant is a vendor, and has the right of one as to stoppage in transitu. I, therefore, perfectly agree with the opinion expressed by Baron Martin in the Court below, that the present is a contract between vendor and vendee; but I think he falls into a fallacy when he concludes there from that it is not a contract as between principal and agent. My opinion is, for the reasons I have indicated, that when the order was accepted by the plaintiffs there was a contract of agency, by which the plaintiffs undertook to use reasonable skill and diligence to procure the goods ordered at or below the limit given, to be followed up by a transfer of the property at the actual cost, with the addition of the commission; but that this superadded sale is not in any way inconsistent with the contract of agency existing between the parties, by virtue of which the plaintiffs were under the obligation to make reasonable exertions to procure the goods ordered as much below the limit as they could.' These remarks of Mr. Justice Blackburn, which were doubtless open to misconstruction, were afterwards the subject of discussion in Cassaboglou v. Gibb L.R. 1 Q.B. Div. 797 where the plaintiff, a merchant in London, sought to make the defendants, commission agents in Hongkong, liable as vendors for the difference between the market value of the opium ordered by the plaintiff and that actually sent. But the Court held that the plaintiffs could not treat the defend-ants as vendors, but only as agents who would be liable only for the actual loss sustained by the plaintiffs through their negligence, and which was admittedly less than what the plaintiffs claimed. Brett, M.R., says At p. 803: 'Lord Blackburn has not said that as long as the contract of principal and agent is executory, the principal can sue the agent, and make him pay as though the contract were that of vendor and purchaser. He has considered the point with reference to two matters only--one with regard to the theory of passing the property in the goods, and the other as to the power of stopping the goods in transitu.' he same view was taken by Lord Justice Fry. This must be regarded as a conclusive authority, that the relationship between the parties continues throughout, except for certain special purposes, to be one of principal and agent. There might, of course, be a practice of the trade, by which the commission agent is understood to guarantee the performance of the contract by the foreign manufacturer, but no evidence was given of such custom. The clause in the indent by which the defendants are enabled in cause of 'dispute as to inferiority of quality, time of delivery, or otherwise to cancel the order or refer it to arbitration,' would be inserted for the protection of the commission agent in either character, and, therefore, affords no reason for assuming the existence of any custom on the subject. We, must, therefore, answer the questions referred to us in the negative. Plaintiff to pay costs of the reference.

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