1. The plaintiffs agreed to buy and the defendants to sell certain goods and entered into a contract. The important part of the contract ( I will leave out the earlier part with its usual preliminaries ) is:
Ghaghrapat (cloth cases or bales 19 'Gin' at Re. 0-10-3, inches 34. The above-mentioned goods which are to arrive are sold (to you). Those purchased by us from Graham & Co. are sold to you. Shipment thereof January or February. And there are to be) two to three months in addition. To be delivered early if arrive early. To he delivered as and when the same may be received. To be delivered on the safe arrival of the steamer. Interest (at) eight annas. 'Sai' (allowance) (at) Rs. 2 per case. Fresh clause:-If the goods to arrive come 'late' the purchaser is to take (delivery of the same).
2. The case has never been separately tried and we have been dealing with it on the pleadings, the correspondence which ensued between the parties and the contract itself, the important part of which I have just read out. The contract was made on the 15th of September 1917. In July of the following year, i. e., 1918, correspondence between the parties began. It appears that by that time certain goods had been shipped by Graham & Co. to the defendants and it was known to the defendants that the goods were not by any means exactly of the description given in the contract. A sample arrival of the goods within the stipulated period; supposing the ship had been sunk, is it conceivable that under this contract the plaintiff could have claimed damages? As I said before if the seller likes to guarantee the arrival, there is nothing to prevent him from doing so. But that is not what one would expect a prudent man would do, certainly not in September 1917. It seems to me that the onus is really thrown on the plaintiff to show that his seller guaranteed the arrival of the goods and one would require plain wards in the contract to show that the seller had acted in such an imprudent fashion. It would be a different matter if the contract had been for the sale of so many tons or bales of a particular commodity of a particular shipment. Assuming', therefore, that the goods contracted for did not arrive, in my opinion the defendants were absolved from performing their contract and delivering the goods. The plaintiff, therefore, cannot make any claim for damages for non-delivery. The defendants' counter-claim on the ground that the plaintiff was bound to take delivery with the allowance, his counsel said, would not be pressed if I found in the defendants' favour on the question of the construction of the contract.
3. The suit will, therefore, be dismissed. 1 may note that the suit has really been tried on a demurrer and, if my decision is reversed, it will still be open to the defendant to prove the custom set up in the written statement and to prove his counter-claim. Plaintiff will have to pay defendants' costs of the action. was sent by the defendants to the plaintiffs, and the defendants suggested that an allowance should be made; that the plaintiffs should take the goods with an allowance. This the plaintiffs declined to agree to on the ground that the goods, which were thus offered them, were not the goods they had contracted to take. Subsequently the goods arrived. The plaintiffs refused to take delivery of them, and now they have brought this suit claiming that the defendants have broken the contract and are liable to pay damages.
4. Independently of any evidence at all, we may take certain things for granted, because it is inconceivable that this contract could have been entered into if those things did not exist. One is that the plaintiffs and the defendants in connection with the contract must have discussed the quality of the goods they were bargaining about and must have discussed, or at any rate the matter must have been mentioned, the kind of goods the defendants had bought from Graham & Co. and which it was anticipated Graham & Co. would send them. Another thing we may take to be undoubted is that the goods to which the correspondence referred and the goods which actually arrived in the end were the goods the defendants had bought from Graham & Co. and were the goods which the defendants had in mind when they entered into this contract with the plaintiffs and were the goods which the defendants represented to the plaintiffs and the plaintiffs believed, to be the goods that they were contracting to buy. Having assumed as much as this, it remains to interpret the contract. We do not know actually what was the contract between the defendants and Graham & Co., nor do we know what passed between them in the way of correspondence, or what shipping documents there were. They have not been put in. We merely have to construe the contract in the light of its own words and the circumstances that have been mentioned. It does not help us that both the parties have at different times attributed quite different meanings to the contract, and in the case which has been argued before us they do not seem, especially the defendants, to rely on the meaning which they originally gave to the contract. This certainly is rather to be regretted when we remember that the contract is supposed to express the intention of those who are parties to it; and if those who are parties to it are either so unwilling to disclose their true intention or so uncertain about it that they cannot be consistent in the intentions they assort, there must be some little difficulty in arriving at the real meaning. Undoubtedly that is so. We have to make the best we can of the material before us.
5. The position, however, when reached, is simple; though it may be difficult to arrive at it. If there was an absolute contract for sale, or if there was an absolute contract for sale subject to one condition which was that the goods which the defendants had bought from Graham & Co. should arrive, then the plaintiffs are entitled to say: 'You agreed to sell us certain goods. Every condition provided for has been fulfilled. But you have not given us the goods.' In that case they would be entitled to damages. But if the contract was not a contract absolute for sale but was based on a mutual understanding that the goods which were to be offered to the plaintiffs were the goods which Graham & Co. were to send to the defendants, then if the plaintiffs refuse to receive the goods, though they may be perfectly right in so doing, they are not entitled to damages, because everything contemplated between the parties has then been fulfilled It would be possible to occupy a very considerable amount of time by analysing the contract sentence by sentence but I am reluctant to do that; and I think I can express my conclusion sufficiently clearly, perhaps more clearly, without doing it. The contract is not one in common form. It was a contract entered into to meet very peculiar circumstances. Those circumstances were the commercial circumstances of September of the year 1917, and the commerce with which we are concerned was a commerce between England and India. It is therefore necessary to recall that in September 1917 England was only emerging from the most severe period of submarine peril and that the effects of the war on commerce, manufacture and trade generally had reached, although not the highest pitch of inconvenience, a very high pitch of inconvenience indeed It is only necessary to remember these things to understand that traders if they were, as they are supposed to be, sensible men, would make their terms, with a full understanding of the extraordinary risks involved in bringing to completion the arrangements they embarked upon. Like the Judge, the present Chief Justice, who tried the case on the judgment in which this particular case was settled, I feel quite certain that no sensible commercial man could at that period have entered into a contract of the nature the plaintiffs ascribe to this particular one. It seems to me, and on this point I really do not feel a shadow of a doubt, that what the parties intended what they both had in contemplation, and what they intended the written contract to show, was an intention that the defendants should offer to the plaintiffs nineteen bales out of those which Graham & Co. were sending to them; and that the bales should be as near the description stated in the contract as possible. I dare say the contract contemplated that if the plaintiff's were quite justly dissatisfied with a tender of goods on the ground that the goods were nowhere near the description contained in the contract, then they might repudiate the bargain altogether. But I feel perfectly certain that neither of the parties ever contemplated for a moment that there should follow, on a, repudiation of 'that kind, any right on the part of the plaintiffs to recover damages.
6. This opinion I have reached on a very careful consideration of the words of the contract and of the uncertainties they so clearly imply, in the light of the known circumstance of the time.
7. I think the appeal should be dismissed with east.
8. This is an appeal in substance, though not in form, from the judgment of my Lord the Chief Justice in Suit No. 15 of 1919. The decision is in the nature of a demurrer, that is to say, that admitting all the facts stated in the plaint the plaintiffs are not entitled to recover the damages they claim. The formal issue, which is not in the Paper Book but which was No. 1 (a) in the Suit No. 15 of 1919, and which by agreement between the parties in the Court below was also to be raised in the present case, is as follows:-
Whether on a proper construction of the contract the plaintiff are entitled to any damages in the event of the goods contracted for failing to arrive.
9. The particular contract sued on in this case is not in the Paper Book, that is to say the official translation is not in the Paper Book. We have an official translation of the contract in the other suit but not in this one. However, it was in evidence in the Court below and we have obtained for our own use a copy of this official translation.
10. Now, it is quite clear that the goods contracted to be sold were ginned goods. The goods which have been tendered to the defendants are unginned goods. The plaintiffs plead in effect that these were not the contract goods. They say in paragraph 3:-
The defendants having failed to deliver the contract goods and having insisted upon the plaintiffs accepting goods different to the contract goods.
11. Then that is treated as a breach of contract for which the plaintiffs claim damages. The decision of the learned Judge in Suit 15 is that if that is so then the condition precedent in this contract, viz,, the arrival of the goods, was never fulfilled and, therefore, the contract was at an end.
12. The point, therefore, which arises for our decision, is: Was the arrival in Bombay of ginned goods of this description a condition precedent of the contract ?
13. Before passing to the contract, I will say that at the trial of the action it suited neither party to take this point. The plaintiffs wanted damages. The defendants, on the other hand, wanted the plaintiff's to accept the goods with an allowance of Rs. 1-6-0, the goods admittedly being off sample. At the trial they agreed that the case* was governed by the decision in Suit No. 15 and that a decree for the defendants should be taken accordingly. In effect, therefore, the decision of the learned Judge was that they were both wrong, and that the contract was at an end.
14. Now, there are several expressions in this contract which may import words of contingency. The expressions are:- 'Goods which are to arrive,' 'to be delivered as and when the same may be received,' 'to be delivered on the safe arrival of the steamer,'' and 'if the goods to arrive come late the purchaser is to take delivery of the same.' On the, somewhat similar contract that he had before him the view of the learn ed Chief Justice was as follows:-
It seems to me that the only construction that can be put on these words is that they mean that the seller has contracted that he will only give delivery when the goods do arrive and that if the goods did not arrive at all then he could not give delivery and there would be no liability put upon him to pay damages for their non-arrival That seems to me to be the plain grammatical sense of those words. And as a matter of fact, I cannot imagine any person who had indented for goods from England or any other part of the world as. road, contracting in any other form, considering the numerous chances there then were of the non-arrival of the goods within the stipulated period; supposing the ship had been sunk, is it conceivable that) under the contract the plaintiffs could have claimed damages?
15. In the present case there is an additional clause which was not in the contract in Suit No. 15 and which apparently was not brought to the attention of the learned Judge. 1 refer to the words 'to be delivered on the safe arrival of the steamer.' Having regard to those words, the case of Hate v. Rawson (1858) 27 L.J.N.S.C.P. 189 might afford some argument that the contingency, the parties had in view, was the safe arrival of the steamer and not merely the safe arrival of the goods. It was put to counsel for the appellants whether he contended that the contract was in all events an absolute one. He admitted, and I think he was bound to make that admission, that at any rate the contract was contingent on the safe arrival of the steamer. It was then put to him: Supposing the goods were never shipped in England, what then? Counsel answered that as then advised it would probably be that the vendor in that event would not be liable for the goods, because, as counsel said, you cannot tell about the arrival of the steamer until the goods are shipped on the steamer. If you get to that point, it seems to me that it is only a comparatively small step to go from the case where no goods are shipped to the case where goods of a different description from the contract are shipped. It is not a case here of ginned goods, say slightly damaged by sea-water, or some bales damaged by sea-water, being tendered. It was the case of ginned goods and unginned goods, and the amount of the allowance that the defendants were willing to give shows the substantial difference between these two classes of goods.
16. Personally, on the construction alone, I respectfully agree with what the Chief Justice has stated in case No. 15 of 1919, and I think that what he there statsd applies to the present Case.
17. Now, this being my opinion on the construction of the con-tract apart from authority, is there any authority which prevents my taking that view? I think not, and that on the contrary such authority as there is tends to support the above view. This type of contract-I may describe it as a 'goods to arrive contract'-came into operation in Bombay to a large extent during the war. It may have arisen because of the great desire to get goods of any description and at any time from England. Contracts in this form have given rise, so far as I am aware, to a great deal of trouble in Bombay, and it is not surprising to find that there is really very little authority on this class of contracts. I can only express the hope that the Bombay merchants will modify this type of contract and will with the aid of counsel and their Merchants' Associations settle some common form of contract which will be free from the ambiguities which have led to the present and other litigation.
18. Turning then to such authority as one can find, perhaps the nearest statement on the point is that in Halsbury's Laws of England, Vol. XXV, p: 144. There it is stated in the note(q);-
Where there is a contract for the sale of goods to arrive, or 'on arrival,' in the absence of terms creating such a warranty, the seller does not warrant the arrival of the goods, but the contract is on both sides contingent on their arrival and when a particular ship is named, contingent both on the arrival of the shi in the ordinary course, and within the time stated, if any, and on the goods being on board; where there is a warranty that the goods are in a particular ship, the contract is subject to the single contingency of the arrival of the ship.
19. There are a considerable number of cases there referred to but I think counsel agree that there is no case precisely on all fours with the one we have to deal with.
20. Then, in Benjamin on Sale, Fifth Edition, pages 586 and 587, it is stated as follows:-
It appears from this review of the decisions that contracts of this character may be classified as follows:-
1. Where the language is that goods are sold 'on arrival per ship A. or ex ship A.' or 'to arrive per ship A. or ex ship A.' ( for these two expressions mean precisely the same thing), it imparts a double condition precedent, viz., that the ship named shall arrive, and, that the goods sold shall be on board on her arrival.
2. The language of the contract may, however, show that the words 'arrival' or 'to arrive' are used only in connection with the goods. In such a case this is only a single condition precedent, viz., the arrival of the goods. And semble that 'to be shipped', or 'on shipment per ship A. on arrival,' or 'to arrive.' import such a single condition.
21. Then No. 5 :-
Where the sale describes the expected cargo to be of a particular de-scrimption, as '400 tons Aracan Necrensie rice,' and the cargo turns out on arrival to be rice of a different description, the condition precedent is not fulfilled, and neither party is bound by the bargain.
22. It seems to me that the 5th proposition comes rather close to the present case. What was sold were admittedly ginned goods. What arrived were a different description, viz., un-ginned goods. According to the passage just cited, the result is that neither party is bound by the bargain.
23. After giving my best consideration to this case, I am of opinion that the judgment in the Court below was correct, and that this appeal ought to be dismissed with costs.
24. There is one point I should mention to show it has not been overlooked. The ground on which the defendant succeeded was not expressly pleaded; but, I think, having regard to the issues which were raised by agreement, that it must be taken that all such amendments were made in the pleadings as were necessary for the determination of the issue on which the case was decided, viz,, No. 1 A.