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P.L. Rangiah Chettiar Vs. Parthasarathy Iyengar - Court Judgment

LegalCrystal Citation
SubjectContract
CourtChennai
Decided On
Reported inAIR1947Mad258; (1946)2MLJ401
AppellantP.L. Rangiah Chettiar
RespondentParthasarathy Iyengar
Cases ReferredDayabhai Dipchand v. Dulabhram Dayaram
Excerpt:
- - 6. it is well-known that such contracts are being assigned every day in the market in madras;.....made to j. h. tod v. lakshmidas puruskotamdas i.l.r. (1892) bom. 441 and to jaffer meher ali v. budge-budge jute mills, co.i.l.r. (1906) cal. 702 29th july, 1946.3. section 40 of the indian contract act is in these terms:if it appears from the nature of the case that it was the intention of the parties to any contract that any promise contained in it should be performed by the promisor himself, such promise must be performed by the promisor. in other cases, the promisor or his representatives may employ a competent person to perform it. it is obvious that there is nothing personal about such a contract as this. the only objection raised against the assignment is that the seller is under an obligation to deliver the goods and that he cannot compel the purchaser to look to another man.....
Judgment:

Chandrasekhara Aiyar, J.

1. In this second appeal preferred by the defendant, the only question which arises for decision is whether a contract to sell goods could be assigned by the seller so as to enable the assignee to sue for damages for breach of contract on tender of performance by him. Both the Courts held that the goods were tendered within the due date by the assignee and that the defendant committed breach in not accepting delivery and in not paying the price, and that he was therefore liable for damages. They overruled the legal objection.

2. For the appellant reliance is placed on the general proposition of law that a promisor cannot assign his liabilities under a contract and that a promisee cannot be compelled by the promisor or by a third party to accept anyone but the pro-misor as the person liable to the promisee. Some of the leading English cases on the subject were cited in this connection, viz., British Waggon Co. v. Lea (1879) 5 Q.B.D. 149 Tolhurst v. Associated Portland Cement .1940 A.C. 1014 Dairies v. Collins 1945 All.E.R. 247 as explaining the reason for the rule and as specifying the exceptions ingrafted in it. Reference was also made to J. H. Tod v. Lakshmidas Puruskotamdas I.L.R. (1892) Bom. 441 and to Jaffer Meher Ali v. Budge-Budge Jute Mills, Co.I.L.R. (1906) Cal. 702 29th July, 1946.

3. Section 40 of the Indian Contract Act is in these terms:

If it appears from the nature of the case that it was the intention of the parties to any contract that any promise contained in it should be performed by the promisor himself, such promise must be performed by the promisor. In other cases, the promisor or his representatives may employ a competent person to perform it.

It is obvious that there is nothing personal about such a contract as this. The only objection raised against the assignment is that the seller is under an obligation to deliver the goods and that he cannot compel the purchaser to look to another man for the discharge of his obligation. So is a buyer under an obligation to pay the price. The buyer's right under the contract to get the goods on payment of the price has been held to be capable of assignment because it falls within the definition of an actionable claim. See Jaffer Meher Ali v. Budge-Budge Jute Mills, Co. I.L.R. (1906) Cal. 702 affirmed in Jaffer Meher Ali v. Budge-Budge Jute Mills Co. I.L.R. (1906) Cal. 289 also Hansraj v. Nathoo I.L.R. (1907) Bom. L.R. 838. It is difficult to see any distinction in principle between the buyer's right and the seller's right on the subject of assignment. The buyer is under an obligation to pay the price before he can ask for the delivery of the goods; the seller is under an obligation to deliver the goods before he can ask for payment of the price. The one right is as much an actionable claim as the other and if this is correct, the transfer is permitted. Such difficulty as exists has been got over in some of the English cases by taking the view that the very nature of the contract might show that it was not intended that the party should personally perform their obligations or that it was within their contemplation that what was undertaken by a party could be got done by him by a deputy or nominee. As was done in Tolhurst v. Associated Portland Cement Manufacturers (1900), Associated Portland Cement Manufacturers (1900) v. Tolhurst 1903 A.C. 414 we can hold, without doing any violence to the intention of the parties, that the suit contract is one which must have been contemplated by them as capable of being performed on both sides by their assigns or representatives. In Leake on Contracts (8th edition) there is this passage at page 905, supported by the authority of British Waggon Co. v. Lea (1879) 5 Q..B.D. 149 and Tolhurst v. Associated Portland Cement Manufacturers (1900), Associated Portland Cement Manufacturers (1900) v. Tolhurst 1903 A.C. 414 :

But a contract that certain acts shall be done or goods supplied, without regard to the persons engaged, is assignable; and upon performance of all the conditions stipulated for, the assignee is entitled to the benefit of the contract....

4. There is this note to be found in Pollock and Mulla's Contract Act (7th edition) at page 249, that it was yet to be decided whether the right of the seller to call for payment of price on delivery of goods is an actionable claim and as such assignable Mr. Govindarajachari the learned Advocate for the respondent was able to refer to the decision in Dayabhai Dipchand v. Dulabhram Dayaram (1871) 8 Bom.H.C.R. (A.C.J.) 133 of Westropp, C.J., and another Judge as upholding an assignment of his shares by a seller of his rights under a contract.

5. If there is, no objection to the seller getting some one else on his behalf to deliver the goods to the buyer, there is equally no objection to his being authorised to file a suit as the seller's deputy or nominee or agent to enforce his rights. It is not a transfer of a mere right to sue for damages : it is a transfer of the rights under a contract which is still to be performed on both sides--not after it was broken and a claim for damages has arisen.

6. It is well-known that such contracts are being assigned every day in the market in Madras; to recognise or give effect to the argument for the appellant would be to upset this wide spread practice which can be said to have grown almost into a commercial usage.

7. The second appeal is dismissed with costs.

8. (No leave).


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