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L.N. Lakshmana Aiyar and Ors. Vs. V.V.C. Ramalinga Mudaliar and Sons' firm, through their partner Chinnappa Mudaliar (11.12.1924 - MADHC) - Court Judgment

LegalCrystal Citation
SubjectContract
CourtChennai
Decided On
Reported inAIR1925Mad888; (1925)48MLJ522
AppellantL.N. Lakshmana Aiyar and Ors.
RespondentV.V.C. Ramalinga Mudaliar and Sons' firm, through their partner Chinnappa Mudaliar
Cases ReferredRamier v. Rana Cheena Mana Navanna Oona and Brothers
Excerpt:
.....sent a notice to the plaintiffs that they were treating the failure to accept delivery of the goods tendered by the plaintiffs as amounting to a repudiation of the whole contract. the conduct of the defendants shows that they did accept the breach by failure to accept delivery of the goods as a breach of the whole contract and they subsequently did not treat the contract at all as subsisting. if the money was paid and delivery taken at once as proposed, no doubt the breach would have been waived, but as the plaintiffs failed to accept the offer it fell through and the original breach of contract remained. in these circumstances, i agree with my learned brother that the contract was broken by the plaintiffs by not taking delivery when the three bales were tendered and their failure..........of verifying the facts. as it stands, it is an unconditional assertion by the defendants that the goods tendered were of the description mentioned in the contract and, unless there is anything to show the contrary, we must take it that they were of the description in the contract.3. a second objection is taken that the contract provides 'for the receipt of bales through the said persons,' namely, the purchasing merchants in the chain of contracts, namely, lakshmana iyer and sons, the defendants' vendors, and k. m. subbier and sons, the vendors of lakshmana iyer and sons, and it is argued that, unless each of these merchants actually took delivery of the bales and had physical possession thereof, there would be a breach of the contract in delivering those bales. reliance is placed on.....
Judgment:

Phillips, J.

1. In this case the plaintiffs have brought the suit to recover the advance of money paid in respect of a contract for yarn. The contract is evidenced by Ex. A and was entered into on the 19th August, 1918. Plaintiffs agreed to purchase 50 bales of Madura Meenakshi Brand Yarn No. 40 at Rs. 14-7-0 per bundle. On the 23rd of September, the defendants sent intimation to the plaintiffs that two bales according to the contract had arrived and on the 1st of October they gave intimation of arrival of another bale. Plaintiffs sent no answer to this intimation and consequently on nth October, 1918, defendants wrote a reminder in which they said that their vendors Lakshmana Iyer and Sons had intimated that the terms of the contract would be enforced and added ' we too give intimation to you accordingly.' In this letter they asked the plaintiffs to pay for and take delivery of the bales at once. A similar request was again made on 16th October, 1918, and finally a third letter was written on 30th November, 1918 asking the plaintiffs to pay the money with interest on receipt of the letter and take delivery of the said bales. After that there was no further correspondence in the matter and what happened has to be inferred from the conduct of the parties. Plaintiffs sent no reply at all to any one of these letters either orally or in writing, but ignored them completely.

2. The first question we have to determine is whether there was a proper tender of the goods by the defendants. Ex. B informs the plaintiffs that 'two bales out of the bales mentioned in our Varthamanam letter of 19th August, 1918, have arrived.' An objection to this was taken that it does not give any description of the bales so as to enable plaintiffs to ascertain what the bales were. But inasmuch as it refers to the contract of the 19th August under which the bales were tendered, it is quite clear that it amounts to a tender of contract goods and it was open to the plaintiffs, if they suspected the truth of that assertion, to ask for an inspection or for an opportunity of verifying the facts. As it stands, it is an unconditional assertion by the defendants that the goods tendered were of the description mentioned in the contract and, unless there is anything to show the contrary, we must take it that they were of the description in the contract.

3. A second objection is taken that the contract provides 'for the receipt of bales through the said persons,' namely, the purchasing merchants in the chain of contracts, namely, Lakshmana Iyer and Sons, the defendants' vendors, and K. M. Subbier and Sons, the vendors of Lakshmana Iyer and Sons, and it is argued that, unless each of these merchants actually took delivery of the bales and had physical possession thereof, there would be a breach of the contract in delivering those bales. Reliance is placed on Bowes v. Shand (1877) LR 2 AC 455 a case in which goods had to be sent by shipments on a particular date and it was held that, when they were shipped on a later date, they did not answer the description in the contract.' Another case relied on is Ramier v. Runa Cheena Mana Navanna Oona and Bros. (1923) 19 LW 654 to which I was a party and it was there held on the recitals in the contract note that it was one of the conditions precedent that there should have been actual delivery to each of the purchasers in turn. The contract in that case is somewhat more particularised than in this and 1 hold that the language of the contract was such that it was capable of bearing this interpretation of a condition precedent as held by the other Judge in the case, and consequently did not dissent from his view. After hearing arguments in this case 1 now feel that perhaps 1 should have given effect to my doubt in the matter, but in this case I am clearly of the opinion that there is no condition precedent as to delivery. The goods ordered were the goods which came from the Mill and those very goods were tendered by the defendants. There can, therefore, be no mistake in the description as was the case in Bowes v. Shand (1877) LR 2 AC 455 and also in another case in this Court i. e, Sivarama Iyer v. Subbier and Sons (1920) 15 LW 9. Here the goods were the same and the only argument that could be put forward is that there was a condition precedent, namely that those goods should be carted from warehouse before they were actually delivered to the plaintiffs. 1 do not think it can be contended that that was an essential condition of the contract and that simply because goods had not been put into a cart and taken out again two or three times, these goods could be refused as not answering to the description in the contract. A similar case has recently been decided by another Bench of this Court, Appeal No. 150 of 1922, and there the view was taken [dissenting from Ramier v. Runa Cheena Mana Navanna Oona and Brothers (1923) 19 LW 654that physical delivery to each merchant in turn was unnecessary. With that view 1 agree. The tender, therefore, was good and, by refusing to accept the goods, plaintiffs have committed a breach of the contract.

4. The next question arises whether by this breach they have repudiated the whole contract. We see that a tender was made on two occasions of separate lots of yarn and that, on three subsequent occasions, the defendants wrote reminders, in effect fresh tenders, to the plaintiffs and received no reply at all. What inference could the defendants draw except that the plaintiffs did not intend to carry out the contract? The market was falling and plaintiffs had good reason for refusing to carry out the contract and, consequently, this was a very legitimate inference. Defendants consequently never tendered any more goods and this fact is sufficient to show that they accepted this repudiation when coupled with the fact that they retained the advance given by the plaintiffs. It is thus clear that they treated the contract as at an end as they were justified in doing. This does not necessarily forfeit the advance paid by the plaintiffs at the time of the contract, but it appears from the finding of the Subordinate Judge that, if defendants had claimed damages they would have been enabled to make good their claim for a very much larger amount than the advance they received; consequently plaintiffs are not entitled to any refund of this advance.

5. The appeal is allowed and the plaintiffs' suit dismissed with costs throughout.

Krishnan, J.

6. I agree with my learned brother that this appeal succeeds and that the suit should be dismissed with costs as ordered by him. My learned brother has dealt with the points raised by the learned vakil before us on the question whether the tender was a proper tender or not. But the learned Subordinate Judge has taken two other objections which may also be noticed; he says because Exs. B and C, documents under which the intimation of arrival of goods was given to the plaintiffs, did not mention exactly where the goods were and also because they did not show that the defendants had got the bales in their disposal or control, the two letters Exs. B and C could not be treated as proper letters of tender. I am unable to agree with the view taken by the Subordinate Judge. It was not necessary for the defendants to have intimated to the plaintiffs exactly where the goods were to be found. If the plaintiffs wanted to know where those goods were it : could have been easily done by their asking as to where the goods were and they could have then gone and inspected the goods. . As a matter of fact, they took no steps whatever. They ignored all the letters from the defendants.

7. As regards the second point there is nothing to show that, if the plaintiffs wanted the delivery of the goods and were prepared to pay for the goods, there would have been any difficulty in giving them delivery. The bales were evidently with Subbier because they were afterwards sold by Subbier and he was under a contract to supply to Lakshmana Iyer and Sons and Lakshmana Iyer to the plaintiffs. This objection could not, therefore, be said to be well founded. The other objections to the tender have already been dealt with by my learned brother. I may add that for the disposal of this case it is sufficient for us to rely upon the recent ruling of the learned Chief Justice and Srinivasa Aiyangar, J. in Appeal No. 150 of 1922. They held that it was not necessary for the defendants to have actually got physical possession of the hales. The view to the contrary taken by Venkatasubba Rao, J., in Ramier v. Rana Cheena Mana Navanna Oona and Brothers (1923) 19 LW 654 has not been followed in that case and with all respect to the learned Judge I do not think it is right, if he meant to lay down generally that in all cases of this kind of contract it is necessary for the person selling to get actual possession of the goods before he could make a proper tender. It may be on the facts of that particular case the ruling can be supported; but it is not necessary for me to express an opinion on that point.

8. Then as regards the tender of the 47 bales which the Sub-Judge thinks should have been tendered I am in agreement with my learned brother that it was not necessary as the repudiation of the contract by the plaintiffs in not having taken delivery of the three bales shows that they were not going to accept any goods at all. Their conduct was not peculiar to the particular three bales, but indicated generally that they were not going to be bound by the contract; and that, for a very good reason, because the market was going down very rapidly and it was in their interests to get out of the contract. It was not necessary on the part of the defendants to have actually sent a notice to the plaintiffs that they were treating the failure to accept delivery of the goods tendered by the plaintiffs as amounting to a repudiation of the whole contract. If they were keeping alive the contract they should have under Section 39 of the Contract Act sent an intimation to that effect, but to accept the breach as putting an end to the contract, further intimation is not necessary. The conduct of the defendants shows that they did accept the breach by failure to accept delivery of the goods as a breach of the whole contract and they subsequently did not treat the contract at all as subsisting. The letter of the 30th November on which much reliance has been placed by the learned vakil for the plaintiffs as showing that the contract was kept alive up to that date docs not seem to have such effect. It was a conditional offer which the defendants made to the plaintiffs to waive the breach committed by the plaintiffs. If the money was paid and delivery taken at once as proposed, no doubt the breach would have been waived, but as the plaintiffs failed to accept the offer it fell through and the original breach of contract remained. In these circumstances, I agree with my learned brother that the contract was broken by the plaintiffs by not taking delivery when the three bales were tendered and their failure showed that they were treating the contract as broken and it was not thereafter necessary for the defendants to tender any goods in pursuance of the contract. The question, therefore, whether goods were available to make such a tender or not is quite irrelevant.

9. As regards damages, it is clear that, if the defendants were entitled to damages, the same would be much more than the money in their hands as advance paid by plaintiffs. I agree that the suit must be dismissed and the appeal allowed with costs.


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