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Hiralal Ambalal Vs. Gopalji Kallianji - Court Judgment

LegalCrystal Citation
SubjectContract
CourtMumbai
Decided On
Case Number O.C.J. Appeal No. 58 of 1919
Judge
Reported in(1920)22BOMLR338
AppellantHiralal Ambalal
RespondentGopalji Kallianji
DispositionAppeal dismissed
Excerpt:
.....of 0-6-0 per piece. on appeal:-;confirming the decree of the lower court, that as the term of the plaintiffs' contract with defendants regarding delivery was subsequently varied and there was to be no delivery to defendants, there could not be a breach of contract on the part of the defendants by reason of their not taking delivery ;;(2) that the correct measure of damages would be such as would put the plaintiffs in the same position as if their contract with the defendants as varied had been carried out;;(3) that the plaintiffs were therefore, entitled only to the difference between rs. 11-8 0 and rs. 11-2-0 which would be 0-6-0 per piece.;williams brothers v. ed. t. agius limited [1918] a.c. 510 distinguished. - - 2. this case is one in which the plaintiff's sued for damages for..........the matter on a safer basis than mere inference. it shows that there was a modification of the original contract between themselves and the defendants because the plaint states:-' it was agreed that the defendants should pay messrs. mathuradaa morarji direct against delivery and should get the said messrs. mathuradas morarji to give credit to the plaintiffs for the amount paid.' that seems to me to justify any court in holding that the intention of the original contract that there should be delivery by the plaintiffs to the defendants was subsequently modified and there was in fact to be no such delivery. the delivery required to give effect to the modified contract between the plaintiffs and defendants would be a delivery by matchuradas, not by the plaintiffs, to the defendants, and.....
Judgment:

Heaton, J.

1. We do not think it necessary to call upon the respondents.

2. This case is one in which the plaintiff's sued for damages for the breach of a contract on the ground that the defendants, to whom they had sold certain goods, had failed to take delivery. When the case came on for hearing there was put in-certain correspondence, and it was admitted that there were three contracts relating to these goods. The first was the sale by Mathuradas to the plaintiffs, the second was the sale by the plaintiffs to the defendants which is the contract for the breach of which the plaintiffs sue, and the third was the sale by the defendants back to Mathuradas, the original vendor. It was further admitted that these contracts related to precisely the same goods. Counsel who appeared for the plaintiffs in the trial Court, there said that if the Court thought that on the admitted facts there was only a claim for differences he did not wish to contest the case further; and the Court gave judgment according to the evidence.

3. The main point taken in appeal is that this case must be decided exclusively on a consideration of the contract between the plaintiffs and defendants and the Court had no right to take into account any later contract between the defendants and Mathuradas, or to take into account the effect such a contract might have on the dealings between the plaintiffs themselves and the defendants.

4. Now, in the circumstances which I have stated, one would naturally infer, particularly as it is also admitted that the goods sold were in the go-down of Mathuradas and had been there all the time, that the understanding between the parties either was or came to be that there should not in fact be actual delivery. The goods had been sold to the plaintiffs, then to the defendants, then back to the original vendor who had them and had had them all the time. But of course it might be entirely wrong to draw this inference merely from the pleadings and the correspondence put in when no further evidence had been heard in the case. I will assume that it would be wrong, yet in this case the plaintiffs' plaint itself places the matter on a safer basis than mere inference. It shows that there was a modification of the original contract between themselves and the defendants because the plaint states:-' It was agreed that the defendants should pay Messrs. Mathuradaa Morarji direct against delivery and should get the said Messrs. Mathuradas Morarji to give credit to the plaintiffs for the amount paid.' That seems to me to justify any Court in holding that the intention of the original contract that there should be delivery by the plaintiffs to the defendants was subsequently modified and there was in fact to be no such delivery. The delivery required to give effect to the modified contract between the plaintiffs and defendants would be a delivery by Matchuradas, not by the plaintiffs, to the defendants, and that of course was rendered unnecessary by the contract between the defendants and Mathuradas by which the former sold the goods back to the latter.

5. On this state of facts, therefore, it seems to me quite impossible to assume that there could conceivably be a breach of contract on the part of the defendants by reason of their not taking delivery. That being so the only thing the defendants have failed to do is to pay the price. And I think the decree of the lower Court is correct and that the appeal should be dismissed with costs.

Marten, J.

6. The appellants' case here is really based on the case of Williams Brothers v. Ed. T. Agius, Limited [1918] A. C. 510 and it is said on the authority of that case that the trial Judge applied the wrong measure of damages in arriving at the figure that he did in the present case. Now, the House of Lords case decides that where there are three contracts very much the same as we have here, then as between the parties to the original contract No. 1, if there was a breach by the original vendor, the damages must be assessed in the ordinary way, viz., by ascertaining the difference between the contract price and the market price at the date of the breach, and not by reference to what the original purchaser purports to have done under his sale to another person under contract No. 2. That is the law laid down by the House of Lords.

7. Now, that authority would, I think, be binding upon us here if we merely had three contracts and nothing more. What differentiates in my opinion the present case from the House of Lords case is that here there was an express agreement between the plaintiffs and defendants that the contract between them should not be carried out in the ordinary way but that the de-fondants should pay Mathuradas, the original vendor. It will be remembered that there were three contracts of sale, viz., (1) Mathuradas to the plaintiffs, dated 4th September 1918, at Rs. 11-2-0; (2) plaintiffs to defendants, dated the 7th September 1918, at Rs. 11-8-0; and (3) defendants to Mathuradas, dated the 8th September 1918, at Rs. 11-12-0. I disregard the second range of prices in each contract, as the net result is the same. The agreement I have referred to as pleaded in paragraph 4 of the plaint is:- '' It was agreed that the defendants should pay Messrs. Mathuradas Morarji direct against delivery and should get the said Messrs. Mathuradas Morarji to give credit to the plaintiffs for the amount paid.' I regard that agreement as a variation of the contract No. 2, and that the two must be read together.

8. Now, that being so, what is the proper result if one assumes that the defendants broke their contract with the plaintiffs I should say that the correct measure of damages would be such as would put the plaintiffs in the same position as if their contract No. 2 as varied by the above agreement had been carried out. In that case, the plaintiffs get Rs. 11-8-0 minus Rs. 11-2-0 which equals annas 6. But annas 6 is what the learned Judge has given them in the Court below, and in my opinion that was the right rate per piece,

9. It follows that in my opinion the appeal must be dismissed with costs.


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