1. This appeal arises out of a suit for damages for non-acceptance of goods agreed to be sold to defendants by plaintiffs. The Subordinate Judge dismissed the suit. The plaintiffs appeal.
2. The plaintiffs and defendants are merchants of Madura dealing in yarn and cloth. On 20th August, 1918, Ex. A was executed for the purchase of 50 bales (each of 20 bundles) of ' double deer yarn (Palukka)' at Rs. 21 per bundle, the defendants being represented by broker K.M. Nagasami Iyer. Ex. I is the corresponding entry in defendants' Chitta of the same date. Rs. 100 was paid as earnest money and Rs. 25 was to be paid as advance for each bale. Ex. B is the letter of plaintiffs, dated 24th August, 1918, acknowledging the receipt of Rs. 1,250 as advances and promising to intimate the arrival of the bales from Bombay. It shows that the bales contracted for were out of the bales ordered for by the plaintiffs' Bombay firm from the dyeing factory at Pedlad.
3. The plaintiffs got Pedlad yarn from Bombay in September 1918. On the 23rd September, by Ex. C, plaintiffs gave intimation to defendants that they had 20 bales ready for delivery out of those contracted for in August, Answer 2 to the interrogatories served on the plaintiffs shows that 50 bales arrived in Bombay on 14th August and they arrived in Madras in September ; 30 bales on 18th and 20 bales on 22nd September. The defendants waited for some time and took delivery of 5 of the bales on 5th October and another 5 of the bales on 114th October. The plaintiffs gave notice by Ex. D, dated 21st October, 1918, that the remaining 30 bales (according to the contract Ex. A) were ready for delivery. The defendants did nothing. By Ex. E, dated 7th January, 1919, the plaintiffs gave notice that if the balance of 40 bales were not received, they would be sold at defendants' risk. There was no reply from the defendants. The plaintiffs alleging that the goods have been sold on 9th March, 1919, and after a further notice, dated 27th March, 1919, (Ex. F.), filed the present suit on 6th August.
4. From the above history of the case it is clear the defendants' attitude was one of silence. The reason for this was obviously the continuously falling market which was conceded and assumed by both parties in the argument before us. The defendants must be regarded as having broken the contract without giving any reason for the breach.
5. In the written statement their plea is that, after the goods were accepted on 5th October, 1918 and 14th October, 1918, some of the said bales were opened and it was found that ' the packets are not those of 10 lbs. weight which the parties agreed to supply to the defendants. Nor is the yarn of 20 counts. They are of the 8 112 lbs. weight' ... 'that matter was reported by the defendants to the plaintiffs on 17th October, 1918 and the contract was cancelled.' These sentences, I have quoted, practically constitute the whole defence. It is clear from this that, so far as the balance of 10 bales offered by Ex. C, and not accepted and the 30 bales offered by Ex. D, there is no other defence except the cancellation of the contract. But, at the time of the first hearing, the defendants raised only the third issue, viz., whether the goods tendered were not of the description in the agreement dated 4th August, 1918 and no issue was raised about cancellation of the contract by mutual consent.
6. To prove their plea on the 3rd issue, the defendants produced one of the bundles out of the bales supplied to them and this was tested by an expert to whom it was sent by the Court. He examined 12 skeins (1 skein=120 yards; 1 hank=7 skeing=840 yards. A bundle contains 10 packets. A packet weighs lb lb. The number of hanks in a packet determines the count. If there are 20 hanks in a packet so that the weight of a hank is 1 lb. by 20 and the weight of a skein is 1000 grains by 20, or 50 grains, the count of the yarn is 20. If the skein weighs less, the count is higher.) The expert found in the present case that the average of the weight of the skeins examined by him is 40.8 grains and the count is therefore 24.4. When we remember that a bale consists of 20 bundles, or 200 packets or (according to the average of the expert) 4,880 hanks or 34,160 skeins, it is difficult to regard an examination of 12 skeins as a test of 34,160 skeins. If a bale is of the right kind of yarn of No. 20 count it ought to contain 4000 hanks or 28,000 skeins. Even if one may assume that the bale out of which the 12 skeins examined by the expert is all of yarn of an average 24.4 count, it is difficult to assume that the other nine bales contained yarn of the same average count. Even the 12 skeins examined by the expert show considerable variety ranging from 23.2 to 25.5.
7. We are not dealing with the 10 bales accepted and paid for by the defendants. We are informed as to those, a separate suit has been filed by the defendants for breach of warranty.
8. But as to the other 40 bales the Sub-Judge, having regard to the fact that the 10 bales actually delivered did not contain yarn of No. 20 count and seeing that plaintiffs have not produced samples of packets from the 40 bales, held that the plaintiffs have not proved that the 40 bales answered to the description in the contract and found the issue against plaintiffs. He also held that there is no proof that the goods were from Pedlad factory. As to this, it is enough to observe that no such plea was raised in the written statement even as to the 10 bales delivered and the only complaint made related to the count and weight.
9. On these facts the plaintiffs' vakil first contended that the goods tendered in pursuance of Ex. C complied with the terms of the contract. He relied on the evidence of P.W. 2 and D. Ws. 2 and 3 and sought to draw the following inferences :-That the Pedlad factory was only turning out one kind of orange-dyed yarn marked count 20, a bundle of which is marked as weighing 10 lbs. That, as a matter of fact, its count is not exactly 20 but over it. That, for all practical purposes, counts from 20 to 25 are regarded as the same by the people who deal in them. That, the subject of the contract before us, is really not yarn of exactly 20 counts or bundles of 10 lbs. but what the Pedlad factory was turning out with labels of 20 counts and 10 lbs. I have a strong suspicion that this contention of the appellants is probably true, but unfortunately the pleadings have not been framed on such a basis. As soon as the defendants pleaded that the goods delivered on 5th and 14th October did not answer to the description in the contract, the plaint must have been suitably amended or the issues should have been made to cover what the plaintiffs now suggest. This was not done. Another difficulty is that the evidence is far too meagre to justify findings in favour of the appellants. The point raised by them requires that more persons engaged in the trade should be examined to prove the trade usage. Incidentally, I am also constrained to observe that evidence is not recorded so as to make the evidence intelligible. For instance, I would refer to P.W. 2. ' His master ' sells count No. 20.' The packet goes by the name of 10 lbs. packet. There is no other goods of that denomination.' Now seeing that a packet of count 20 must weigh 10 lbs., the words ' goes by the name of' are meaningless. Nor can there be other goods of that denomination. What was meant was: 'A yarn marked ' count 20 ' whether it is really that count or not is the only thing available in the market and there is no other ; if we find it actually to be count 24.4 this does not matter. This is all that is known as count 20 and 10 lbs. weight.' This meaning is not brought out in the deposition. Similar sentences in the evidence of D. W. 1 and D. W. 3 are similarly recorded. But, as I said, on the pleadings and the meagre evidence, it is not possible to record the finding the appellants require. One can only hope that he will gain by this experience in the other case.
10. The next question is : whether the defendants, by their breach in not taking delivery of the other 10 bales (relating to Ex. C) after accepting the first ten bales and not caring to respond to the offer in Ex. D, have committed such a breach of the contract as to amount a waiver of all conditions precedent binding on the plaintiffs. The appellants rely on Braithwaite v. Foreign Hardwood Co. (1905) 2 K B 543. In that case there was a repudiation by the defendants on October 5 long before the goods arrived. The Bill of Lading arrived in October 30, and the plaintiffs not accepting the repudiation by the defendants (dated 5th October) tendered two Bills of Lading to the defendants who refused to accept it or pay for the rosewood comprised in it. The goods arrived on November 9, and were sold by the plaintiffs as against the defendants. Collins, M.R. said with reference to the second repudiation at p. 551 : ' In my opinion that act of the defendants amounted in fact to a waiver by them of the performance by the plaintiffs of the conditions precedent which would otherwise have been necessary to the enforcement by him of the contract which I am assuming he had elected to keep alive against the defendants notwithstanding their prior repudiation, and it is not competent for the defendants now to hark back and say that the plaintiff was not ready and willing to perform the conditions precedent devolving upon him, and that if they had known the facts they might have rejected the instalment when tendered to them. The defendants are not in a position now, by reason of their after-acquired knowledge, to set up a defence which they previously elected not to make. We must in such a case, look to see whether, at the time of each alleged breach, each side was ready and willing to perform the conditions of the contract which it lay upon them to perform, and there was clearly a breach by the defendants, for they had by their own act absolved the plaintiff from the performance of the conditions of the contract.' Mathew, L.J. said at page 554 : ' But they repudiated the whole contract and b'y so doing clearly absolved the plaintiffs from the performance of conditions precedent which in the ordinary course he would have been obliged to perform.' Cozens-Hardy, L. J. agreed. Mr. Ananithakrishna Aiyar, who appeared for the defendants, contended that Braithwaite's case (1905) 2 K B 543. cannot apply for two reasons : (1) In that case there was an express repudiation on the 5th October, and at or about October 30th; (2) the anticipating breach of 5th October is the crux of that case ; the case was also disapproved by the House of Lords. As to the first point, the distinction sought somewhat resembles the distinction sought to be made out in Taylor v. Oakes, Ron-coroni and Co. (1922) 127 L T 267. Bankes, L.J. says at page 271 : ' But Mr. Merriman seeks to distinguish this case by endeavouring to convince us that a distinction must be drawn where the repudiation consists of a curt and impolite disclaimer of the existence of a contract and a very polite statement that, under circumstances over which the buyer has no control, he is unable to take the goods.' Mr. Ananthakrishna Aiyar's distinction is not between ' impolite ' and ' polite ' repudiation but between ' express ' and ' implied ' repudiation. The implied repudiation by silence resembles a ' polite ' repudiation. But it stands on the same footing as an express repudiation. The second point raised by him requires more careful consideration. It is clear that, according to Collins, M. R., the contract was kept alive up to October 30, by the plaintiff's non-acceptance of the earlier repudiation and the waiver of the conditions precedent is the result of the later act. Mathews, L. J. seems to be of the same opinion though his view is not very explicit. In Taylor v. Oakes, Roncoroni and Co. (1922) 127 L T 267. Greer, J. seems to have felt some difficulty as to the application of Braithwaite's case. His view seems to be that, if specific goods were actually tendered on the second occasion and were not substantially of the kind contracted for, the defendants in Braithwaite's case (1905) 2 K B 543. would not have been liable. For this view, he relies on Ridgway v. The Hungerford Market Company 3 Ad & EII 171 and Boston, Deep Sea Fishing and Ice Company v. Ansell (1888) LR 39 Ch D 339. which are cases of master and servant and thinks that the principle applies equally to a contract for the sale of goods. He gets over the difficulty by explaining that, in Braithwaite's case (1905) 2 K B 543. the second offer by plaintiff was not an actual tender of the goods but a mere offer to tender them and therefore the offer is not an actual breach of contract. One may observe here that the second offer is of the actual Bills of Lading relating to certain specific goods on the ' Spheroid ' and the goods were not only ascertainable but were afterwards identified and their nature known. I confess that the difficulties in understanding Braithzvaite's case (1905) 2 K B 543. are not solved by Greer, J.'s explanation of it. On appeal, Scrutton, L.J. and Atkin, L. J. refused to be drawn by Greer, J. into a discussion of Braithwaite's case (1905) 2 K B 543. They ware of opinion that, on the facts of the case before them, the point did not arise. In that case, by letters which passed between the parties in December, the defendants stopped delivery of the balance of the goods and refused to accept them. There was neither tender of specific goods, nor tender of a Bill of Lading relating to actual specific goods, the nature of which was afterwards known. Such a repudiation was held to be ' anticipatory. ' Bankes, L. J. said: 'It seems to me, after the decision in Braithwaite's case (1905) 2 K B 543. which binds this Court, that where there has been a repudiation by way of anticipatory breach, etc. ' His view seems to be that the second repudiation in Braithwaite''s case (1905) 2 K B 543. is also an anticipatory breach, and he agreed with Greer, J.'s view --a point into which the other Lord Justices refused to be drawn. According to them, on the facts, it was a clearer case than Braithwaite's case (1905) 2 K B 543 and that was enough. In my opinion the present case is a a fortiori case and the difficulties in understanding Braithwaite's case (1905) 2 K B 543. need not affect it. It is, in my opinion, on all fours with the facts of Taylor v. Oakes, Roncoroni and Co. (1922) 127 L T 267.
11. The next case I need discuss is British and Beningtons, Ltd. v. N. W. Cachar Tea and Co. (1923) AC 48. Only Lord Atkinson and Lord Sumner delivered judgments. Lords Buckmaster and Carson agreed with Lord Sumner. Lord Wrenbury merely concurred. On the disposal of the case before them, there was no difference of opinion;. It was only about the proper interpretation of Braithwaite's case (1905) 2 K B 543. that Lord Sumner thought some criticism had to be made. Lord Atkinson after pointing out that ' readiness and willingness ' includes the capacity to perform [citing Lord Abinger in De Medina v. Norman (1842) 9 M & W 820.] proceeds to cite Lord Mansfield in Janes v. Barkley (1781) 2 Doug 684 and Lord Campbell in Cort v. Ambergate, etc., Ry. Co. (1851) 17 Q B 137. for the position that the condition of ' readiness and willingness ' is satisfied by the offer of the plaintiffs to perform. The latter case is of a case of ' railway chairs ' which were not actually made but which presumably could be made at short notice. He then refers to Braithwaite's case (1905) 2 K B 543 and quotes Collins, M. R.'s opinion with approval. Lord Mansfield's sentence in the case of jones v. Barkley (1787) 2 Doug 684 was thenquoted : 'The party must show he was ready ; but, if the other stops him on the ground of an intention not to perform his part, it is not necessary for the first to go further. ' Lord Sumner, after remarking at p. 70 that the decision in Braithwaite's case (1905) 2 K B 543. is not quite easy to understand and that his recollection of it is not as clear as Scrutton, L. J.'s (both appeared in the case), says at p. 71 : ' Furthermore, it does not anywhere appear that, even if the first cargo might rightly have been rejected, the seller could not have found another exactly conforming with the contract, which he might have duly tendered and so have put himself right. ' This sentence shows that, far from disagreeing with Braithwaite's case (1905) 2 K B 543. Lord Sumner applies its principle and does not go in favour of the defendants, even as far as Greer, J. in the Law Times case. The only reservation he makes is : ' If the sellers had become wholly and finally disabled from performing essential terms of the contract altogether ' at the time of breach, such a fact is open to the defendant in defending a suit for damages, though he did not state it at the time of the repudiation and this is all that he could have meant when earlier he said : ' If he had repudiated, giving no reason at all, I suppose all reasons and defences in the action, partial or complete, would be open to him. ' He then adds, ' What he says is, of course, very material upon the question whether he means to repudiate at all, and, if so, how far, and how much, and on the question in what respects he waives the performance of conditions still performable in future or dispenses the opposite party from performing his own obligations any further ' (page 72).
12. In my opinion Lord Sumner has not dissented from Braithwaite's case (1905) 2 K B 543 and the last case is good law. The present case is a clearer case. There is no evidence to show the nature of the good's in the 10 bales (offered by Ex. C but not received by the defendants) and in the 30 bales (offered by Ex. D). I cannot assume in favour of the defendants that the yarn in these bales is of 24 count only. The only reason for such an assumption is that no other yarn (orange dyed at Pedlad) exists--an assumption I refused to make at an earlier stage of the case in favour of the appellant. I must assume that Pedlad factory can supply all counts of yarn (orange dyed) and it does not follow from the fact that the 10 bales accepted on 5th' and 14th October are of 24 count, that the other bales which have never been identified since could be only of 24 count and the 30 bales offered by Ex. D would also turn out to be of 24 count. It follows that plaintiffs were always not only willing to perform the contract but if, at any time, the goods they delivered turned out not to be of the correct kind could have set it right. All conditions were waived by the defendants by their repudiation. In this case there is no evidence to support any suggestion that the plaintiffs were totally unable and disabled to perform the contract altogether.
13. It follows that plaintiffs are entitled to a decree for damages in respect of the 40 bales.
14. On the terms of Ex. B, the dates of breach were 23rd September, 1918 (for the 10 bales) and 21st October, 1918 (for the 30 bales) and it is not open to the plaintiffs to argue that the breach was at a later date. On the 23rd the price was Rs. 19 per bundle. We have nothing to do with the results of the re-sale in March. It follows that plaintiffs are entitled to a decree for 200 x 2 plus 600 x 5-14-0, i.e., 3,925 minus Rs. 1,000 (given as advance), i.e., Rs. 2,925 with subsequent interest at 6 per cent, up to this date and 6 per cent, on the aggregate amount from this date to the date of payment, getting and paying proportionate costs throughout.
15. It is admitted that the contract with which we are concerned in this case was made on 20th August, 1918 and was to the effect that plaintiffs should supply to defendants at Madura 50 bales of 20 count yarn from the Pedlad factory, each bale to contain 20 bundles and each bundle to weigh 10 lbs., and that defendants should take delivery of the bales on payment at the rate of Rs. 21a bundle, that is Rs. 420 a bale. Defendants pleaded that one of the terms of the contract was that the 50 bales should be delivered within a month from the date of the contract. An issue was framed on that plea but was not pressed by defendants at the trial. The Subordinate Judge's finding in effect was that no time was fixed for the performance of the contract by plaintiffs. It was therefore plaintiffs' duty to supply the 50 bales within a reasonable time. There is undisputed evidence that by their notice, Ex. C, plaintiffs informed defendants on 23rd September, 1918 that 20 bales were ready for delivery at Madura and by Ex. D on 21st October, 1918, that the remaining 30 bales were ready for delivery there. Defendants took delivery of 5 bales out of the first lot of 20 bales on 5th October, 1918 and of 5 other bales out of the same lot of 20 on 14th October, 1918. Defendants did not take delivery of the remaining 10 bales of the first lot of 20 bales or of the second lot of 30 bales : they did not even inspect these 40 unaccepted bales nor did they send to plaintiffs any written communication about them.
16. There is evidence that out of the 10 bales of which defendants took delivery some of the yarn was not of the contract description. D. W. 2, a weaver, has given evidence that he bought 10 bundles of this yarn from defendants and found it to be 24 count yarn, not 20 count. D. W. 3, another weaver, says that he bought 10 or 20 bundles of the yarn and found it to be 24 count yarn. There is also expert evidence that a bundle from one of the 10 bales accepted by defendants was found to contain yarn of 24 counts or 26 counts, according as the dye was taken into consideration or not, and that the bundle weighed only 8 1 2 lbs. instead of 10 lbs. D. W. 1, the; manager of defendants' firm, says that he complained on 17th October, 1918 to Rayulu, the senior partner of plaintiffs' firm (who died before the trial) that the yarn in the 10 bales accepted was not of the contract description and cancelled the order for the remaining 40 bales, to which cancellation Rayulu agreed. The Subordinate Judge says in his judgment that there is good ground for believing that D. W. 1 complained to Rayulu about the yarn, but that he does not believe that the contract was cancelled by consent, as alleged by D. W. 1. It has been argued here for plaintiffs that D. W. i's evidence that he complained to Rayulu about the yarn should not be believed at all, as no question about this was put at the trial to plaintiffs' two gumasthas, P. Ws. 1 and 2, who are said by D. W. 1 to have been present at his conversation with Rayulu. Mr. Ananthakrishna Aiyar for defendants has said nothing about this part of the case, and I think that D. W. 1's evidence that he complained about the yarn to Rayulu may be disregarded.
17. It appears that there was another suit between the parties in respect of the 10 bales accepted by defendants. In this suit plaintiffs claim damages for breach of contract in respect of the remaining 40 bales. It is contended for defendants that no damages are due from them as the 40 bales was not of the contract description and in effect therefore it was plaintiffs who were guilty of breach of contract in respect of these bales. It is admitted that defendants never even inspected the 40 bales, and the evidence offered in support of this contention is that which I have mentioned to the effect that some of the yarn and one of the bundles in the 10 bales which they accepted were not of the contract description. I agree with my learned brother that from the evidence that a comparatively small part of the 10 bales accepted by defendants was not of the contract description, we cannot infer anything regarding the other 10 bales of the first lot of 20 or regarding the 30 bales of the second lot. It is true that in the course of arguments here and also before the Subordinate Judge a contention has been put forward for plaintiffs that the subject of the contract was, not bales of yarn, literally of the contract description, but bales of yarn commercially known under that description but actually varying from it. The evidence to which plaintiffs' vakil points to support this contention is clearly insufficient and there is no mention of such a contention in the pleadings. I think this contention must be regarded as a false move in argument, for which plaintiffs cannot be penalised. On the evidence we do not know whether the 40 bales in question were of the contract description or not. All we know is that plaintiffs tendered them in performance of their part of the contract and that defendants failed to accept them and even to inspect them and merely ignored the tenders.
18. But, even if we assume for the sake of argument that the 40 bales in question were not of the contract description, the defendants' position is not really improved. As no time has been fixed for the delivery of the bales by plaintiffs, if defendants had inspected these 40 bales and had then found that they were not of the contract description, plaintiffs would have had time to supply other bales in place of those rejected and on the evidence there is no reason to suppose that they Would have found it impossible or even difficult to do so.
19. It is clear that defendants by their conduct refused to accept the 40 bales tendered by plaintiffs without even troubling to inspect them or to ascertain whether they were or were not of the contract description. Defendants were therefore guilty of breach of contract, for which plaintiffs are entitled to damages. In the circumstances I do not think it is necessary for plaintiffs to call in aid the decision in Braithwaite's case (1905) 2 K B 543. But I may add that in my opinion the weight of the decision in Braithwaite's case (1905) 2 K B 543. as an exposition of law has not been affected by either of the later cases mentioned before us. As I understand it, the principle of Braithwaite's case (1905) 2 K B 543. is that, if A contracts to buy goods of a certain description from B and refuses for other reasons to accept goods tendered by B as in performance of the contract he cannot escape liability to pay damages by proving afterwards that the goods tendered were not of the contract description. It is true that Lord Sumner in British, and Beningtons, Ltd. v. N. W. Cachar Tea Company and Ors. (1923) AC 48 and Greer, J. in Taylor v. Oakes, Roncoroni and Co.(1922) 127 LT 267. interpreted the decision in Braithwaite's case (1905) 2 K B 543. more narrowly ; but their remarks, though to be treated of course with the greatest respect, were obiter dicta. On the other hand Lord Atkinson in British and Beningtons, Ltd. v. N.W. Cachar Tea Company and ors. (1923) AC 48. interpreted Braithwaite's case (1905) 2 K B 543. in effect as I have stated it. But in the present case, as it has not been proved that the 40 bales in question were not of the contract description, and as, even if they were not of that description, plaintiffs had still time to supply others in their stead, the exact interpretation of Braithwaite's case (1905) 2 K B 543. does not appear to me of immediate importance to us.
20. The damages to which plaintiffs are entitled are the difference between the contract price of the 40 bales and the market price on the dates of the breach less Rs. 1000 paid by defendants in advance for those bales. According to Ex. B defendants were to take delivery on the day on which they received intimation of the arrival of the bales, and in the plaint the dates of. breach in respect of the two lots of bales have been given as 23rd September, 1918 and 21st October, 1918. Although plaintiffs allowed defendants some time for the removal of the bales and might reasonably do so and although defendants were very dilatory in taking delivery of those bales which they accepted, I do not think plaintiffs can now contend that the breach in each case should be assumed to have occurred at some later date and so increase the amount of damages due to them. I agree that the damages to which they are entitled are the difference between the contract price for 10 bales and the market price for 10 bales on 23rd September, 1918 plus the difference between the; contract price for 30 bales and the market price for 30 bales on 23rd October, 1918 minus the Rs. 1000 paid in advance. On principle I should prefer not to allow interest on the amount so calculated before the date of the suit ; but I do not wish to differ from my learned brother on that comparatively minor point. I agree that the parties should pay and receive proportionate costs in both Courts.