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N. Roy and Co. Vs. Surana, Dalal and Co. - Court Judgment

LegalCrystal Citation
SubjectCommercial
CourtMumbai
Decided On
Case NumberO.C.J. Suit No. 1124 of 1917
Judge
Reported in(1921)23BOMLR1119
AppellantN. Roy and Co.
RespondentSurana, Dalal and Co.
Excerpt:
contract-indent, construction of-custom of trade-importer must make clear his liability to his constituent under the contract.;the importer may confine himself to buying only against orders received : in which case he may undertake with the indentor to supply the goods if and when they arrive at the indent price, making his own profit and commission if agreed upon before as well, or he may give his constituent's name to his vendor so that the latter has the option to establish privity of contract with the constituent by invoicing to, or drawing on him, when the importer only gets his commission, and it is immaterial whether he gets it from both the vendor and purchaser or from one of them.;if the importer buys on his own account as well as for his constituents then it is necessary for him.....macleod, j.1. the plaintiffs stated in their plaint that, on the 16th june 1917, by a written indent they requested the defendants to order out fifteen tons zinc chloride 980 at 105 per ton free bombay harbour from the defendants' friends in england on certain terms and conditions mentioned in the indent.2. on the 25th june the defendants informed the plaintiffs that their order had been placed with their manchester friends at plaintiffs' limit. under the indent shipment was to be as early as possible subject to shipping.3. on the 11th august the plaintiffs wrote asking whether the goods had been shipped. in september the defendants informed the plaintiffs that the goods were shipped and were expected to arrive in bombay shortly. the plaintiffs wrote again on the 13th and 17th september.....
Judgment:

Macleod, J.

1. The plaintiffs stated in their plaint that, on the 16th June 1917, by a written indent they requested the defendants to order out fifteen tons Zinc Chloride 980 at 105 per ton free Bombay Harbour from the defendants' friends in England on certain terms and conditions mentioned in the indent.

2. On the 25th June the defendants informed the plaintiffs that their order had been placed with their Manchester friends at plaintiffs' limit. Under the indent shipment was to be as early as possible subject to shipping.

3. On the 11th August the plaintiffs wrote asking whether the goods had been shipped. In September the defendants informed the plaintiffs that the goods were shipped and were expected to arrive in Bombay shortly. The plaintiffs wrote again on the 13th and 17th September asking for information regarding the arrival of the steamer and on the 26th September they wrote asking for the invoice of the goods.

4. Thereafter they heard that the goods indented for or a great portion thereof had arrived in Bcmbay by the SS. Ogilvie and SS. Keeling and that the defendants had entered into an agreement to sell the goods to some other merchant. Accordingly they submitted that the defendants were not entitled to Hell the goods indented for by the plaintiffs and asked-

(1) for delivery of all the goods which had arrived in Bombay in respect of the plaintiffs' order;

(2) for an injunction restraining the defendants from delivering the goods which had arrived either by the Ogilvie or the Keeling to any other person until the defendants' order had been satisfied;

(3) for an option, if the goods had been disposed of, either to claim damages or an account of profits.

5. The plaint was admitted on the 4th October and on the same day a rule nisi was granted for an injunction as prayed for in the plaint.

6. In his affidavit in support of the rule Ghellabhai, a partner in the plaintiffs' firm, stated that to the best of his belief his firm was the first to place the first indent for Zinc Chloride with the defendants on the 16th June and that plaintiffs' order was placed with Messrs. Service, Reeve & Co., the defendants' Manchester friends. The SS. Ogilvie had arrived about a week back bringing ten tons Zinc Chloride bearing the defendants' mark S.R. & Co. He was also informed that the defendants had received a certain quantity of Zinc Chloride per SS. Keeling and had agreed to sell ten tons thereof to Messrs. Varjivandas, Chunilal & Co. at Us. 125 per cwt. (about 175 a ton) leaving aside the indenting merchants including the plaintiffs so as to secure the profit.

7. Himatlal, a partner in the defendants' firm, in his affidavit of the 6th October, set out at length the case for the defendants which is practically the same as that set out in the written statement.

8. In para 2 he details the course of business pursued between his firm and indentors. The indentors having given the offer for certain goods on the defendants' printed indent form, the defendants communicated with their frieiads abroad to ascertain whether they could profitably purchase such goods. If they ascertained they could, they sent an acceptance of his offer to the indentor. The relationship between themselves and the indentor was that of principal and principal and this was also the relationship between themselves and their friends abroad. The defendants sent their own invoices to the indentor. The shipping documents were made out in the defendants' name and the drafts were drawn on and paid by the defendants.

9. Before the 16th June the defendants had purchased twenty- five tons Zinc Chloride from Messrs. R. Head & Co of Manchester on their own account.

10. After receiving the plaintiffs' indent the defendants succeeded in booking ten more tons with R. Head & Co. and ten tops with R. Reeve & Co. of London. On the 25th June they accepted the plaintiffs' offer. They sold the remaining five tons, to arrive from S. Reeve & Co., to other merchants in Bombay.

11. Seventeen and a half tons had arrived per SS. Keeling from R. Head & Co. and ten tons per SS. Clan Ogilvie from S. Reeve & Co. The seventeen and a half tons were on account of the twenty-five tons purchased by the defendants, for themselves, before the 16th June. The defendants were ready and willing to deliver to the plaintiffs five tons Ex. SS, Clan Ogilvie when they could ascertain the actual weight in each drum as their invoice from Messrs. S. Reeve & Co. only stated the gross weight of all the drums. The plaintiffs were given to understand in September that some of their goods were expected to arrive by the Clan Ogilvie. He admitted that ten tons Ex. SS. Keeling had been sold to Messrs. Varjivandas, Chunilal & Co.

12. On the 8th October, an order was made on the rule that the defendants should deliver what they admitted as belonging to the plaintiffs and should be at liberty to sell or deal with the rest of the goods as they pleased.

13. Thereafter the plaintiffs took delivery of five tons Ex SS. Clan Ogilvie.

14. The following issues were raised by the defendants:-

(1) Whether the suit was maintainable as framed?

15. This was due to the fact that the plaintiffs' firm consisted of Ghellabhai Mansukhram and a family firm in which there were minors. That firm can be considered as one partner, so there was nothing in the point raised by the defendants.

(2) Whether the plaintiffs were entitled to fulfilment of their contract from any other goods than those received under an order placed subsequent) to or pursuant to the indent of 16th June 1917 ?

(3) Whether the defendants were not always ready and willing to fulfil their part of the contract out of the goods received in respect of the plaintiffs' orders ?.

(4) Whether the defendants had disposed of the plaintiffs' goods as alleged ?

(5) Whether the plaintiffs were entitled to damages ?.

16. And the following issues were raised by the plaintiffs;-

(6) Whether the plaintiff's were not entitled to fifteen tons oat of the 1919 cargo which arrived by the SS. Keeling ?

(7) Whether the 15 tons out of the first twenty-five tons were not ordered by the defendants pursuant to the plaintiffs' instructions ?

17. The only oral evidence given was that of Ghellabhai for the plaintiffs and of Himatlal for the defendants. They were both unsatisfactory witnesses who appeared to me to trim their stories of what happened in June according to the facts of October, and the facts discovered on inspection of documents. Ghellabahi in his evidence set up an entirely new case to that stated in the plaint He said that In April-May 1917 he suggested to Himatlal that the defendants' firm should import chemicals, and he asked Himatlal to telegraph for offers for ten tons Caustio Soda and fifteen tons Zinc Chloride to R, Head &Co.;

18. On the 9th May defendants cabled to Messrs. R. Head & Co. offering, i. e., asking prices, for fifteen tons Zinc Chloride and twenty tons Caustic Soda.

19. On the 15th Messrs. R. Head & Co. replied offering Chloride at 92-10-0 and Caustic Soda at 40-15-0. Himatlal communicated this reply to the witness who instructed him to offer 85 for Chloride.

20. On the 25th May defendants cabled ' accepted Caustic twenty tons and offer ten tons Chloride at 85.'

21. On the 30th May R. Head & Co. offered Chloride at 101 per ton.

22. Himatlal showed witness this reply and witness told him to offer 95.

23. On the 2nd Juno defendants cabled 'counter-offer Zinc fifteen tons 95.'

24. On the 5th June R. Head & Co. cabled ' Chloride subject unsold 100 ton.'

25. Defendants cabled on the 6th June ' Accepted fifteen tons Chloride 100.'

26. Himatlal told witness that 105 was being asked for and witness told Himatlal to accept 105.

27. The plaintiffs' case now is that their order was booked on the 6th June for fifteen tons Zinc Chloride at 105 per ton.

28. On the 10th June defendants cabled ' confirmed fifteen tons Zinc Chloride,.. further offer twenty tons Caustic ten tons Chloride.,'

29. On the 11th R. Head & Co, cabled ' Booked altogether fifty tons Caustic...2,5 tons Chloride.'

30. On the 13th defendants confirmed this and asked for all the goods by one shipment.

31. On the 15th R. Head & Co. cabled that delivery in one lot was impossible as shipments were effected as the goods were delivered.

32. On the 16th June defendants cabled 'Accepted (? offer) further 20 tons Chloride...immediate shipment.'

33. On the 20th R. Head & Co. cabled 'Booking ten not thirty more Chloride.'

34. It may be as well to state here that the defendants had also been in communication with Service, Reeve & Co.

35. On the 29th May they offered for ten tons Zinc Chloride at 85 a ton.

36. On the 4th June Messrs. S. Reeve & Co. cabled Chloride 78, but that must be a mistake as defendants cabled on the 5th June counter-offering 100.

37. Messrs. S. Reeve & Co. replied on the 8th 'Chloride... 100'.

38. On the 10th June defendants cabled ' accepted ten tons Zinc Chloride 100.'

39. On the 16th June they cabled' referring our telegram ten Chloride and Caustic understood confirmed.'

40. On the 18th Messrs. S. Reeve & Co. cabled 'await our confirmation ' and on the 21st June they cabled that the Chloride was booked.

41. Defendants confirmed this on the 22nd June.

42. On the 16th June, therefore, the position was that defendants had booked twenty-five tons Chloride with R. Head & Co, and had accepted an offer from S. Reeve & Co. of ten tons though from defendants' cable of 16th it seems that they were not quite sure of these ten tons and did not consider the purchase complete until the 21st.

43. On the 16th June the plaintiffs signed the indent Exh. A.

44. The following are the most important printed clauses.

1. I request you to order the whole or part of the undermentioned goods from your friends at Manchester on my account and risk.

2. For the reimbursement 1 authorise you cr your friends either to draw on me through any Bank at 30 days' sight, document to be delivered against) payment with interest at nil per annum and I bind myself to accept such draft and pay the same on or before maturity or I agree to pay you cash your invoice amount on arrival of the steamer.

3. In default of non-acceptance or non-payment of such draft you are at liberty to land the goods and sell them on my account as may appear best to you, and I agree to make good any loss arising from such re-sale and forfeit any advantage from such re-sale.

7. Yon will not be responsible for goods bought by telegrams until the same have been confirmed by letter. You will not be responsible for non- delivery of the goods by the makers and you shall cot be held responsible for any loss or inconvenience that may original e by non-fulfilment of the contract after it is accented by wire or by letter.

9. If the goods or any portion of them be shipped prior to the time stipulated, I will not have the right to cancel any portion of the order.

14. It shall be optional with you to give me your invoice or your agents and I will not be entitled to production of maker or your agents etc. original invoices or any other vouchers.

45. Then in mss.

Made in England fifteen tons Zinc Chloride 980 at 105 per ton free Bombay Harbour war risk extra.

Shipment. As early as possible subject to shipping.

Commission. A buying commission of two and a, half per cent. to be allowed be Surana, Dalal & Co. on the above price of , 105 per ton.

46. The defendants on the 25th June sent to the plaintiffs what is called a confirmatory letter Exh. C as follows :

47. In print.

We have received the following report from our Manchester friends by cable which we communicate to you without any engagement. In case of telegram is must be understood that the same is subject to confirmation by letter.

48. The words 'Manchester' and 'cable'1 are typewritten in blank spaces.

49. Beneath are typewritten particulars under three heads.

Order Description of goods. Report.1024 fifteen tons Mine Chloride at & 105 Placed subject to(Number of indent) per ton free Bombay Harbour. war risk insuranoe extra and subject toworks approval when licensed and subject to freightavailable in time,otherwise the goodswill be shipped whenever freight avail- able, and you are liable to take deliverywhenever shipped which please note.

50. It will be remembered that Himatlal in his affidavit of the 6th October said that it was defendants' practice to accept an order only when they had ascertained that they would purchase the goods at an advantage to themselves. He has said in Court that this letter of confirmation was sent because they had received the telegrams of the 20th and 21st from R. Head & Co. and S. Reeve & Co. and this confirms the statement in his affidavit. But it m obvious that the letter of confirmation was misleading. They had not placed the plaintiffs,' order at 105 per ton nor had they received any report in the terms stated in the letter which as a matter of fact was made up from various telegrams received before the 16th June. If they had told the truth the defendants would have written to the plaintiffs that they had succeeded in buying the goods in England and could deliver them to the plaintiffs at their price subject to arrival. However that may be the contract was made on the 25th June. The question for determination is, whether the plaintiffs had a right to demand delivery of their fifteen tons when the Keeling and the Ogilvie arrived towards the end of September with seventeen and a half and ten tons respectively of Chloride consigned to the defendants. In seeking for the answer to that question no benefit will be gained by any attempt to decide whether the defendants were principals or agents.

51. In Paul Beir v. Chotalal Javerdas ILR (1904) 30 Bom. 1; 6Bom. L.R. 948. the defendants had accepted an indent which was drawn in very similar terms to the indent in this suit, though the terms were more diffusely expressed and no commission was charged to the indentor. The defendants had purchased at a lower figure than that mentioned in the indent and the plaintiffs contended that they were liable to account as agents. Jenkins, C.J. said (p. 18):

For the defendant it is argued that the legal relation constituted by this document is that of principal and agent, with the incidents including the agent's liability to account) which that relation ordinarily involves. The plaintiffs, on the other hand, maintain that the contract is one of purchase and sale, so that no liability to account can arise: and alternatively they con bond that, if the contract is one of agency, they are by the custom of trade under no obligation to account. It appears to me that the method of approaohing the case, which these rival contentions invite, is unsatisfactory: each is based on too superficial a view of the position; the case is (in my opinion) not one to be decided by an attempt to bring the contract within the one or the other of the two categories of sale or agency; the provisions of the document are equivooal, some lean towards the one relation, some towards the other. Therefore we must examine the document as a whole and in its several parts, and also the surrounding circumstances, for thus only (as it appears to me) can it be determined whether or not an obligation to account exists. To place the Court in full possession of these surrounding circumstances the plaitiffs proposed to lead evidence in order to show that according to com-mercial usage in Eombay, when business was done on indents like the present, accounts were never given, as the profits were the importer's remuneration, and that this has been repeatedly recognized even by the defendant.

52. The learned Chief Justice then reviewed the evidence which had been recorded regarding the alleged custom and concluded (p. 23) that:

According to the custom of trade in Bombay, when a merchant requests or authorises a firm to order and to buy and send goods to him from Europe at a fixed price nett, free godown including duty, or free Bombay Harbour, and no rate of remuneration is specifically mentioned, the firm is not bound to account for the price at which the goods wore sold to the firm by the manufacturer.

53. This is merely the recognition of the general principle that where there is a usage of a particular trade, parties who engage in that trade must be taken to introduce the terms of that usage by implication in their contract. It will be noted that the defendants urged that the indentor was brought into direct relationship with the manufacturer and much was sought to be made of the fact that in some instances invoices had been sent direct to the indentor, but the learned Chief Justice considered that in none of the instances specified had the fact been of value because in them the indents had been addressed direct to the home firm. For the plaintiffs it was argued that they looked for their profits to the difference between the indent price and the price at which they bought, and Jenkins, C.J. considered that it made no difference if the importing firm received commission from the manufacturer. To instance the danger of generalising on this matter I may refer to a recent case which was tried before me in which the indent (in very similar terms to the one in that case) wan not addressed to the manufacturer but still the invoice was addressed to, and the, drafts Were drawn on, the indentor while the importing firm admitted their only profit was the commission they received from the manufacturer, while in an unreported case of J. Oorio v. Panduji Rowji (1915) Appeal No. 47 of 1914, on a similar indent as the invoices were addressed to, and the drafts were drawn on, the indentor, the Appeal Court held that as soon as the order was placed privity was established between the manufacturer1 and the indentor.

54. The question, therefore, which may arise under the contract created by the indent and its acceptance will vary according to the course of business pursued by the acceptor with his correspondent in Europe and it is this uncertain factor combined with the equivocal terms of the contract which makes it undesirable to attempt to put he contract in one or the other of the two categories of sale or agency. Each question must be decided according to the terms of the contract and its surrounding circumstances. Looking at the documents in this case, it would appear there was an order given by the plaintiffs on the 16th June which the defendants informed them on the 25th June had been placed. The plaintiff's then would only be entitled to delivery of the goods arriving pursuant to the placing of their order. They would not be entitled to demand delivery of similar goods arriving pursuant to some other order. A consideration, however, or the oral evidence may throw a different light on the rights and liabilities of the parties under the contract.

55. Now the evidence of Ghellabhai was to the effect that in April or May he suggested to Himatlal that defendants should order from their Manchester friends chemicals on the plaintiffs' account and that he was told by Himatlal on the 6th June that his orders for fifteen tons Chloride and ten tons Caustic Soda had been placed with Messrs. R. Head & Co. of Manchester.

56. In cross-examination he said that plaintiffs' firm had dealings with R. Head & Co. but there was a dispute which was not settled so he asked the defendants to order the goods. There was correspondence about the dispute (This had not been produced). He signed the indent because defendants asked him to sign it though the order had already been booked. He asked the defendants for a letter of confirmation but that was a matter of form. He instructed his solicitors to that effect and they took down notes. Counsel was instructed orally for the drawing of the plaint as the plaintiffs were in a hurry. It was a mistake when he said in his affidavit that plaintiffs' order had been placed with Messrs. S. Reeve & Co. He thought the order had been placed with R. Head & Co. He mentioned S. Reeve & Co. as he saw their names as exporters in the manifest and thought they were a Manchester firm. He had seen the bills of lading of the seventeen and a half tons per SS. Keeling on the 5th October. The exporters were 11. Head & Co. He did not see R. Head & Co. at the top of the bills of lading.

57. Then he was referred to his indent of the 12th June for Caustic Soda and he said the order for that had been accepted also on the 6fch June. On the 12th the indent for the Chloride had not been prepared. He had been asking for it since the 6th June. He had asked Himatlal about four times but there was no correspondence on that subject. Apart from all other considerations if Ghellabhai had told his solicitors that the contract was made on the 6th June and the indents Exh. A and Exh. C were only documents formally recording that contract, they must have told counsel and the plaint must have been drawn accordingly, and counsel could not possibly have drawn the plaint as it stands, relying on an order given on the 16th June and accepted of the 25th. Moreover the indent should have been post-dated to the 6th June.

58. Fortunately the truth of the story can be tested by Ghellabhai's affidavit of the 4th October. By that time he knew the Keeling and the Clan Ogilvie had arrived. He had ascertained by inspecting the manifest of the Clan Ogilvie that she had brought ten tons of Chloride consigned by S. Reeve & Co. to the defendants, but he did not know how many tons had been brought by the Keeling or who were the consignors. Then he also knew that the defendants had sold ten tons Ex SS. Keeling to a third party. So he swore that his order had been placed with S. Reeve & Co. in order to claim delivery of the ten tons Ex SS., Clan Ogilvie. It is inconceivable that he could have made this statement if he had known in May /June that the defendants were corresponding with R, Head & Co. of' Manchester, had seen some of the telegrams sent by them and bad been told by Himatlal on 6th June that his order had been placed with R. Head & Co. The statement is perfectly consistent with the knowledge he derived from Exh. C that his order had been placed with defendants' Manchester friends. He claimed the ten tons Ex Clan Ogilvie as he knew the consignors and thought they might be a Manchester firm and also claimed the balance from what had arrived by the Keeling.

59. I do not think the point sought to me made by the plaintiffs regarding the word 'Manchester' as it appeared in the indent and Exh. C is material. If the contract goods arrived it would not make any difference whether the defendants' friends in Manchester or elsewhere had brought about their despatch. As a matter of fact it has been proved that the goods consigned by both R. Head & Co. and S. Reeve & Co. started from Liverpool. Ghellabhai could not have thought that the place where the defendants' friends carried on business was of any importance, as he must have known they would not be the manufacturers of the goods, and this is corroborated by the fact that in the indent for the Caustic Soda which, according to Ghellabhai, was booked with R. Head & Co. the word 'English' appears and not 'Manchester'.

60. Himatlal said that Ghellabhai did not mention Zinc Chloride before the 16th June. After he signed the indent the telegram B. 13 was sent to R. Head & Co. An indent had been given by the plaintiffs for Bleaching Powder from Japan on the 4th May and another for Caustic Soda on the 12th June. After he got the telegram, of the 20th June from R. Head & Co. Ghellabhai came to inquire about his indent for fifteen tons and witness told him ten tons had been booked with R, Head & Co, and he was doing his best to book the remaining five. He could not send a confirmation letter until he had. On the 23rd Ghellabhai saw him again and witness told him the five tons had been booked with S. Reeve & Co.

61. Now it seems obvious to me that after the pleadings were closed both Ghellabhai and Himatlal saw the difficulties which would arise if they were confined to their respective cases as therein set out.

62. If plaintiffs could only claim delivery of goods which arrived in pursuance of contracts made by the defendants after the receipt of the indent, then they could not claim delivery of any of the seventeen and a half tons Ex SS. Keeling. It was necessary, therefore, to endeavour to prove that plaintiffs' order was given prior to the contract made by the defendants for the seventeen and a half tons. It was argued that the fact that defendants called on the 9th May offering for fifteen tons Zinc Chloride taken with the fact that plaintiffs indented for fifteen tons was a corroboration of Ghellabhai's evidence that he suggested that defendants should make the offer of the 9th May. There is certainly a coincidence but it is not sufficiently strong to counterbalance the evidence against Ghellabhai's story.

63. In my opinion Ghellabhai's evidence as to the negotiations for the purchase of Zinc Chloride before the 16th June was wholly invented after he had had inspection of the telegrams which passed between the defendants and Messrs. R. Head and Co.

64. On the other hand the defendants having stated that Exh. C was written after they had booked ten more tons with R. Head & Co. and ten tons with S. Reeve & Co. (see Himatlal's affidavit of the 6th October) were bound to deliver according as the goods arrived whether consigned by R, Head & Co. or S, Reeve & Co. Himatlal in his affidavit gave no explanation why only five tons Ex SS. Ogilvie should be delivered to the plaintiffs as stated in para 7.

65. The Written statement was affirmed by another partner Shamlal. His name has not been mentioned either by Ghellabhai or Himatlal but he professes to have first-hand knowledge of the facts set out in paras 4, 5, 6, 7, and 8.

66. In para 5 he says :-

The defendants say that out of the aforesaid ten tons which arrived by the SS. Clan Ogilvie five tons were deliverable to the plaintiffs and five tans to the other merchants with whom the contracts had been entered into with reference to the other lot of ten tons. The defendants say that the plaintiffs are entitled to delivery of goods in fulfilment of their contract with the defendant only out of these which were and might be received in execution of the Said two later orders making up twenty tons.

67. To get out of this difficulty Himatlal swore that he told N. Ghellabhai after the 21st June that ten tons of the order had Ghellabhai after the 21st June that tea tons of the order had been booked with R. Head & Co. and that on 23rd june he told Ghellabhai the remaining five tons had been booked with S Reeve & Co. If Ghellabhai had been told this he would 1 think' have repeated it in his affidavit of the 6th October.

68. In my opinion this story was invented after the written statement was filed.

69. The defendants, therefore, were in any event bound to deliver to the plaintiffs the ten tons which arrived Ex SS. Ogilvis But further the admissions Himutlal had to make in cross examination regarding the practice of his firm with regard to indents received from then- constituents in Bombay were wholly at variance with those set out in para 3 of the affidavit of the 6th October, namely, that they only accepted indents after they had ascertained that they could in their turn purchase the goods profitably Plain, indent for Bleaching Powder in May was confirmed before the defendants could have placed the order in Japan. Plaintiffs' indent for Caustic Soda of the 12th June was signed after the defendants had bought it themselves

70. On the 5th July Messrs. Chunilal, Kalyandas &. Co. signed an indent for two tons Zinc Chloride.

71. On the 7th July Messrs. B. Manilal & Co. signed an indent for five tons Zinc Chloride This was accepted in the usual from on the 11th July while Chimanlal's indent was acceped afterwards.

72. In all these four cases the suggestion in the letter, of confirmation that the indents had been accepted in consequence of the indentor orders having been placed in England or Japan was unfounded as the defendant in reality were agreeing to sell at the indentor, prices what they had already bought on their account.

73. Himatlal had to admit that it was quite a usual practice for importers to have the goods in hand or booked before they take an indent form and that the condition in the indent that the indentors should pay two and a half per cent,, commission was a kind of way of getting a higher price.

74. That appears to me to dispose of the defendants' case. They have used the same forms for entering into contracts with their constituents throughout and they cannot be allowed to 8av according as it suits them that they were only bound to deliver on a particular indent when they had made a contract in England against that indent. There can be little doubt that in this case if the market had gone down below 105 in October they could hare tendered the Chloride to the plaintiffs whether it was ordered before or after the indent or whether it came from Keeling or the Ogilvie. Indent business can be done in many ways but there is no reason why, whatever the method employed, the terms of the contract should not be set out plainly and straightforwardly.

75. The importer may confine himself to buying only against orders received. In which case he may undertake with the indentor to supply the goods if and when they arrive at the indent price, making his own profit and commission if agreed upon as well, or he may give his constituent's name to his vendor so that the latter has the option to establish privity of contract with the constituent by invoicing to, or drawing on, him when the importer only gets his commission, and it is immaterial whether he gets it from both vendor and purchaser or from one of them.

76. But if the importer buys on his own account as well as for his constituents then it is necessary for him to make it clear in his dealings with his constituents what his liabilities are under his contracts with them. If he does not take this precaution it cannot test with him to decide afterwards as the market falls or rises whether he shall deliver goods bought on his own account or goods which he says he has bought against a particular indent. The defendants never informed the plaintiffs that they had already ordered twenty-five tons Chloride on their own account. They accepted an order for fifteen tons shipment as early as pos sible making at the same time a false representation. What they had really done was to put themselves in a perfectly safe position before accepting the order. Their correspondence with B. Head & Co. and S. Reeve & Co. has not been produced and the defendants had to admit that they did not give the names of their constituents to their friends in England, who dealt solely with the defendants and drew on them for the invoice value of the goods dispatched. Such being the case when the Chloride arrived the plaintiffs were entitled to say 'Deliver to us under your contract' and the onus would lie on the defendants to show that the Chloride was not free. They cannot satisfy that onus by saying that they sold it on the 3rd October. The question at issue can also be tested in a manner which should be conclusive. Supposing the defendants had tendered fifteen tons Ex SS. Keeling, can it possibly be doubted that the plaintiffs could have been bound to accept them ?

77. In my opinion the plaintiffs were entitled in any event to delivery of the ten tons Ex SS. Ogilvie and further on consideration of the evidence I think they were entitled to delivery of their fifteen tons out of the total quantity which arrived by the Keeling and the Clan Ogilvie at the end of September.

78. As the plaintiff's have told a false story I shall only allow them their costs against defendants up to and including the filing of the written statement including the costs of the rule.


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