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Toyo Menka Kaisha Ltd. Vs. Chabildas Nathubhai - Court Judgment

LegalCrystal Citation
SubjectContract
CourtMumbai
Decided On
Case NumberO.C.J. Suit No. 2553 of 1921
Judge
Reported in(1922)24BOMLR149
AppellantToyo Menka Kaisha Ltd.
RespondentChabildas Nathubhai
Excerpt:
.....on sale. the defendants contended that the date of the breach of contract as regards twenty-five bales of september delivery was at the end of september 1920, and that of twenty-seven bales of ready delivery was in september 1920; but that they were not liable to pay damages on the basis of rates prevailing in january or march 1921:-;(1) that the property in the goods did not pass to the defendants and the plaintiffs could not, therefore, rely on the auction sale in march 1921;;(2) that there was no understanding between the parties after due date that if the defendants failed to take delivery of the goods the plaintiffs were entitled to go into the market and sell at the then market price;;(3) that the whole of the forty-eight bales of which delivery was taken must be taken to be..........the measure of damages is the difference between the contract rate and the market rate at the due date for delivery under the original contract. in the present case i do not think that such express or implied consent is proved.6. the defendants have relied on the unreported case of phoenix mills, ld. v. madhavdas rupchand (1916) 24 bom. l.r. 142, (since reported). that was a much stronger case than the present, for there the goods were to be manufactured by the mills and nothing at all was done at the expiration of the due date. the court there held that the plaintiffs could only succeed if the terms of the contract had clearly been altered by mutual consent, and as that was not shown, the original contract came to an end when nothing was done under it within the contract period. the.....
Judgment:

Marten, J.

1. This is a vendors' suit in respect of fifty-two bales of yarn being the balance of one hundred bales sold to the defendants on the 13th September 1920, of which seventy-five were for ready and twenty-five for September delivery. The defendants pleaded that the plaintiffs were unable to give delivery of this balance, and that consequently the contracts were cancelled. This defence was abandoned at the trial, and the breach of contract admitted.

2. The only remaining question, therefore, is the measure of damages, but this gives rise to questions of some nicety which have been well argued on both sides.

3. Turning to the facts, in my judgment the property in the goods did not pass to the defendants. At the date of sale the plaintiffs had two hundred bales in their godown, and though one hundred were delivered the next day to another party, I think there was no appropriation of the suit fifty-two bales to the suit contract, and no assent by the defendants to any such appropriation. The case of Pignataro v. Gilroy [1919] 1 K.B. 459, on which the plaintiffs relied, is, I think, clearly distinguishable, for there a delivery order was sent and also a letter pointing out where the goods were. On the above finding, it follows that the plaintiffs cannot rely on the auction sale in March 1921.

4. Is then the date of breach in September or October as the defendants contend, or the 28th or 18th January as the plaintiffs contend Deliveries were taken and paid for by defendants as under :-

17th September, 24 bales,

4th October, 12 '

21st October, 12 '

________

Total 48 bales leaving

a balance of fifty-two.

Letters calling upon the defendants to take delivery were sent by the plaintiffs on the 13th October, the 9th and 21st December, and the 12th and 25th January. The only written reply is that of the 18th January in which the defendants set up their false cancellation story. The plaintiffs account for the delay by saying that the time was extended at the express request of the defendants' broker Dharamsey. But this they have not proved to my satisfaction. Such request is not pleaded. It is not mentioned in the correspondence. The plaintiffs' solicitors were not even told of it. Dharamsey is not called; his authority is questionable : and the plaintiffs' witnesses appeared so vague in their recollection that I cannot place any real reliance on this part of the plaintiffs' case. At most, according to them, no definite period was fixed. Only 'some time.'

5. How then am I to regard the two deliveries in October, and to which of the two contracts-if in fact there are two and not one-are the deliveries to be appropriated I think that on the pleadings both parties regarded these October deliveries as being made under the suit contract or contracts, and not under some new contract for extension of time and so on. It is not proved, for instance, that any interest, godown rent, or insurance premium, as from the due date was paid as set forth in the letter of 13th October. Nor were any damages paid for the difference in price at the two dates. I am unable, therefore, to infer, as Blackburn and Lush JJ. were able to do in Ogle v. Earl Vane (1867) L.R. 2 Q.B. 275, that the understanding between the parties was that if the purchasers were ultimately unable to take delivery, the vendors would be entitled to go into the market and sell 'at the then price' (see p. 284). Thai was the converse case of a vendor unable to give delivery at due date and a purchaser waiting, but I will assume in favour of the plaintiffs that there is no distinction in principle between the two. In the present case the plaintiffs' difficulty is, I think, with reference to 'the then price.' That there was some forbearance by the plaintiffs, I can understand, viz., what Mr. Justice Blackburn describes as waiting but not binding oneself to wait (see p. 282). On the other hand it is clear from Mutthaya Maniagaran v. Lekku Reddiar I.L.R (1912) Mad. 412 that this right to sell at 'the then price' is based on the express or implied consent of the purchaser (see p. 415), and that, in the absence of such consent, the measure of damages is the difference between the contract rate and the market rate at the due date for delivery under the original contract. In the present case I do not think that such express or implied consent is proved.

6. The defendants have relied on the unreported case of Phoenix Mills, Ld. v. Madhavdas Rupchand (1916) 24 Bom. L.R. 142, (since reported). That was a much stronger case than the present, for there the goods were to be manufactured by the Mills and nothing at all was done at the expiration of the due date. The Court there held that the plaintiffs could only succeed if the terms of the contract had clearly been altered by mutual consent, and as that was not shown, the original contract came to an end when nothing was done under it within the contract period. The judgment of Macleod J. is particularly valuable in pointing out the necessity for certainty as to the terms of any new contract, and as to the difficulty of inferring from mere delivery after due date what the altered rights of the parties are to be with reference to the undelivered goods. That difficulty I have felt to the full here.

7. In the result, therefore, I hold that the date of breach was eight days from the 13th September as regards the ready goods and the 30th September as regards the other goods, and that the whole of the forty-eight bales of which delivery was taken must be taken to be appropriated to the ready contract, as indeed is done in the particulars Ex. D to the plaint.

8. I understand that the parties are agreed upon the September market rates. There will, therefore, be a decree for the plaintiffs for damages to be calculated on the above basis. There will be interest on judgment at six per cent, and the defendants will pay the costs of the suit. The latter have put forward a deliberately false story as to the inability of the plaintiffs to give delivery of the suit bales, and their Mehta has only done his masters a disservice by going into the witness-box and repeating this false story.

9. I should perhaps mention that neither party relied on the words 'as per usual Mill terms' in the two contracts of 13th September, nor was any evidence led to explain what those words actually mean in the present case. The case, therefore, proceeded as if those words were not in the contract, though it is possible that they may afford some clue as to why the plaintiffs demanded interest etc. in the correspondence (see for instance the contract in the Phoenix Mills case).


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