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(Mulkoori) Gavariah and ors. Vs. Chenna Sariah and ors. - Court Judgment

LegalCrystal Citation
SubjectCommercial
CourtChennai
Decided On
Reported inAIR1927Mad340
Appellant(Mulkoori) Gavariah and ors.
RespondentChenna Sariah and ors.
Cases ReferredChinnery v. Viall
Excerpt:
.....there never was any power in the sellers to sue for the price of the goods at..........buyer the consideration) and therefore ex necessitate it must be allowed for in calculating the buyer's damages in his action, for otherwise the buyer would get the goods for nothing.6. so that in truth and in fact the sellers in this case never were in a position to perform their contract and, if they had brought an action upon it, then the answer would have been you cannot maintain your action because you had put it out of your power to give the consideration which you were paid for. in such a case what happens is that the contract for sale being unenforceable the entry on the credit side of the account ought to have been expunged and it is idle to say that by being a party to the entry of payment a man is estopped from saying that the amount was not paid. it is a mere paper record.....
Judgment:

1. This is a curious and in some ways rather an interesting case. The suit is really one on accounts, and the dispute arises about two entries in the account, one on the credit side and another of exactly the same amount in respect of the same goods on the debit side. The facts are these: that the present plaintiffs bought goods from the business represented by the defendants to the value of Rs. 13,471 but by arrangement credit was given by the sellers to the buyers and the goods were left in the custody of the sellers, the contract being that the sellers were entitled to get their money on giving delivery of the goods. What happened was, the sale having been about the 1st February, on the 3rd February the sellers pledged these goods with the bank of Madras as a cover for a debt of their own. The learned Judge has found and we agree with his finding that there is no evidence which can be believed that the buyers consented to this or indeed knew anything about it until late in October. What the learned Judge has done is this. He has treated the credit entry as being a proper credit but when he comes to the debit entry he says:

Oh, no, that is not so. The real damages--because this cross-entry must be in the nature of damages--are damages for conversion and therefore what I have to find is the value of the goods at the date of the conversion.

2. But he goes on to say:

I find that the real conversion was in October when letters passed between the parties, the buyer pressing for the goods and the goods not forthcoming as the sellers did not have them.

3. He says, therefore, as the value of the goods had very largely dropped in October instead of letting the debit entry stand at the original figure 13,471, the figure must be cut down to some Rs. 8,000 or 9,000. His view was that, as the property in the goods had passed on the day of the sale, therefore, on the principle of 'res perit domino' any loss must fall upon the owner, that is to say, the buyer to whom the property had passed. In our opinion the learned Judge misapprehended the law on the snbject, which is very clearly summarized in Benjamin on Sale. The real truth of the matter is that the entry of Rs. 13,471 on the debit side was not damages at all. It was simply an entry to cancel the other entry on the other side. In Chinery v. Viall [1860] 5 H. & N. 288 which was referred to, a man had sold some sheep upon credit in such circumstances very like these--that the property had passed to the buyer but the sheep remained in the charge of the seller; the seller improperly sold them to a third party and the decision of Baron Bramwell in that case is accepted by Benjamin and by the profession generally as completely laying down the true distinction between that case and another class of cases to which I will come presently. That was a suit for damages for trover and the learned Judge held that in computing the amount of damages to be paid by the tortfeasor the plaintiff must bring into the account the fact that he had never paid for the sheep, so that, if that value of the sheep at the time of the conversion was, say 120, and the buyer had bought them for 100, his loss is 20 because he would naturally have made the profit of 20 if he had paid the price of the sheep. The learned Judge points out that to give him as was contended the value of the sheep at the time of the conversion as his damages would simply be to give him a present of a flock of sheep for nothing.

4. Another case that was referred to was Gillard v. Brittan [1811] 8 M. & W. 575 That was a suit in trespass and there Lord Abinger said that you could not set off the price at which the goods in question had been previously sold to the plaintiff because the two causes of action relating to the goods were entirely distinct, so that damages in that case could be given for the trespass without regard to the purchase price. In Benjamin the distinction is pointed out between the two cases:

5. In Gillard v. Brittan [1811] 8 M. & W. 575 each party was entitled to his action: the seller for the price, the buyer for damages for trespass to the goods which had passed into his ownership and actual possession. But in Chinnery v. Viall [1860] 5 H. & N. 288 the ratio decidendi was that the seller could not, by reason of his conversion before delivery, maintain an action for the price (not being able to give the buyer the consideration) and therefore ex necessitate it must be allowed for in calculating the buyer's damages in his action, for otherwise the buyer would get the goods for nothing.

6. So that in truth and in fact the sellers in this case never were in a position to perform their contract and, if they had brought an action upon it, then the answer would have been you cannot maintain your action because you had put it out of your power to give the consideration which you were paid for. In such a case what happens is that the contract for sale being unenforceable the entry on the credit side of the account ought to have been expunged and it is idle to say that by being a party to the entry of payment a man is estopped from saying that the amount was not paid. It is a mere paper record regarding what he hopes will take place. On the other side of the account nothing is due at all to the buyer by way of damages. If the entry on the debit side were to be treated as representing damages for conversion of the goods, then I have no doubt that Mr. Krishnaswami Aiyangar is right in saying that the proper measure is not the value of the goods when they pass into his hands by the contract but the value of the goods at the time of the conversion. The actual conversion was on the 3rd February, as I have said. But Mr. Krishnaswami Aiyangar urged a point with which we will now deal very briefly viz., that by subsequent conduct the parties notified by the letter of October that the time for performance was extended and the real conversion was when the letter of the 27th October remained uncomplied with. We think that it is not correct and if these were damages in trover then the time ought to be fixed as being when the actual conversion took place. But the real answer to the case is--and we agree with Mr. Venkatramana Rao's argument on that--that there is no question of fixing damages in trover here at all, because at the time that the contract ought to have been fulfilled the sellers had put it out of their power to perform the condition precedent which was requisite for their success and the result is not that there is a good claim for the price of goods sold and delivered with a counter-claim for trover but there never was any power in the sellers to sue for the price of the goods at all. That being so, this appeal must be allowed and the decree amended by treating the entry on the debit side as correctly put in the account at the figure 13,471. There will be a decree for Rs. 7,501-3-0 with interest from 17th January 1911 and costs.

7. The cross-appeal (No. 82 of 1923) will be dismissed as the matter which was raised with regard to the liability of the sons does not arise.


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