Coutts Trotter, J.
1. This is a case of considerable general importance and, accordingly, although the sum of money involved is not large it has been brought as a test case to this Court. The plaintiffs, the Clan Line Steamers Ltd., are a Company incorporated under the English Companies' Act having their registered office and their head place of business in Glasgow. They own a line of steamers which ply between English ports and the east calling, among other places, at ports in Southern India, among them Madras, and Cocanada on the Coromandel coast in Godavari District. The defendants are a District Municipality constituted under the Madras District Municipalities Act of 1884, and they have demanded a profession tax from the plaintiff Company.
2. The tax has been paid by the plaintiff Company under protest and they now sue to recover it. The claim is for three instalments, but I need only concern myself with the third which was demanded on the 18th January last and paid on the 30th, the other two being time-barred. The tax is leviable under Section 53 of the Statute on every person who, within the Municipality, exercises any one or more of the arts, professions, trades, or callings specified in Schedule A. Schedule A, class I, will cover the plaintiff Company either under (i) as carrying on business as a Company or under (ii) as shipowners, if they can be said to carry on business within the Municipality at all.
3. The question is ultimately one of fact, but the facts must be examined in the light of their legal significance, and this has been discussed in a number of cases in England. I need not concern myself with the few Indian cases that were cited, because they do not profess to add anything to the principles derivable from the English authorities. Before going to those authorities I will state the broad outlines of the facts of this case. I shall have to go into them in greater detail hereafter The agents for the Clan Line in Madras are Messrs. Gordon Woodroffe and Co. It is not disputed that the Clan Line carry on business in Madras and they in fact pay profession tax to the Madras Corporation. It is said that they also carry on business in Cocanada through a firm of Messrs. Ripley and Co. Ripley and Co. are a firm of merchants at Cocanada, and for the past eleven years they have had an arrangement with Gordon Woodroffe and Co., as representing the Clan Line, whereby they disburse the Clan Steamers at Cocanada, negotiate with the shippers for shipment of their cargo on Clan boats and receive payment by commission. The question is whether their activities at Cocanada, to use a non-committal phrase, constitute a carrying on of business there by the Clan Line within the meaning of the authorities.
4. These authorities fall into two classes, which I may call for the sake of brevity the tax cases and the jurisdiction cases As pointed out by Cotton, L.J., in Erichsen v. Last (1882) 8 Q.B.D. 414, 46 J.P. 357, there is a clear distinction between the two classes of cases, a distinction which I shall endeavour not to lose sight of, but I do not think that the jurisdiction cases must be wholly rejected. It seems to me that they contain enunciations of principle which can be applied at least mutatis mutandis to the other class of oases. The first case is Erichsen v. Last (1882) 8 Q.B.D. 414 : 51 L.J.Q.B 86 : 45 L.T. 703 itself. The question there was, whether a foreign telegraph Company established at Copenhagen was liable for income tax in the United Kingdom as exercising a trade within the United Kingdom. The Company had cables with terminals at Newbiggin and Peterhead worked by employees of the Company at Newcastle and Aberdeen respectively. It had a London office where messages were received for transmission via Denmark to various places abroad. It was held that they carried on a business in the United Kingdom, and I think the gist of the decision is contained in the following passage from the judgment of Brett, L.J.: 'I should say that, wherever profitable contracts are habitually made in England, by or for foreigners, with persona in England because they are in England, to do something for or supply something to those persons, such foreigners are exercising a profitable trade in England, even though everything to be done by them in order to fulfil the contracts is done abroad.' The next case is Werle v. Colquhoun (1888) 20 Q.B.D. 753 : 36 w.R. 613. Werle and Co. were a French firm of wine merchants, in fact the proprietors of Veuve Clicquot Champagne, and the question was whether they carried on business in England through their agents Fenwick Parrot and Co. in Frenchurch street. The ground of the decision was clearly this: that contracts for the purchase of wine were made by Fenwick Parrot and Co. in England though they were transmitted to Werle and Co. to be executed from France. Lord Esher, M.R., says thus at page 760: 'Upon the authority of that case [viz., Erichsen v. Last (1882) 8 Q.B.D. 414: 45 L.T. 703, if authority is required, but certainly on the facts of the present case, I have not a doubt that here there was a trade carried on in England where the contracts were made. The making of contracts in such a case as the present is the whole substance and essence of the trade, and so the appellants exercised a business in England.' Fry, L.J., at page 761 says: 'They do not make merely an occasional contract through these agents, but they are in the habit of making contracts through them. Those contracts are so made in England. Now, pausing there, it appears to me that a most important part, perhaps the most essential-part, of the business of a champagne merchant was exercised by the appellants through the intervention of their agents within the United Kingdom.' There was a distinct finding in that case that the agents did not merely make themselves the channel for the transmission of orders which could only be accepted by the principals in France, but actually concluded contracts binding on the principal. This is clear from what Lord Esher says on page 758: 'The agent is, if he can, to obtain orders for the purchase of the wine at the fixed price. It is suggested that he had no authority to receive these orders as contracts, but that all he could do was to forward them to Rheims for acceptance there. It seems to me that the inference is irresistible to the contrary.' The next case is Grant v. Anderson (1892) 1 Q.B. 108 : 61 L.J.Q.B. 107. That was a jurisdiction case, the question in which was whether a writ against a Scottish firm could be served upon their London agent. In it appears clearly the distinction between the tax cases and the jurisdiction cases, which I take to be broadly this: that a person is liable to be taxed if he carries on business within the jurisdiction but he can only be sued if he can be said to have a place of business within it. At the same time the Judges both in the Divisional Court and in the Court of Appeal clearly intimate that, in their opinion, the state of things in that case did not amount even to carrying on business in London, apart from the question of having a place of business there. There the defendants had an agent named McCallum with a London office. He obtained orders for them in London which he transmitted to Scotland to his principals to accept or not as they chose. Lord Esher slays at page 116: 'If he gets an order which they accept; he gets a commission, but if they do not accept it, he gets no commission. When he gets an order he has no power himself to accept it; all he has to do is to send it on to Scotland, that the defendants may say whether they will accept it or not, and in most oases, if they do accept it, they deal directly with the person giving the order.' A little later he says: 'His business is to obtain orders which are in law and in fact mere proposals.' Grainger & Sons v. Gough (1896) A.C. 325. 60 J.P. 692 was another case of a French champagne merchant, in this instance Roederer and Sons. This was a tax case. The decision again went on the broad ground as to whether contracts were made for the sale of Roederer's wine in England. See Lord Herschell at page 334 and Lord Watson at page 340, and specially the observations of Lord Herschell at page 335: 'In the first place, I think there is a broad distinction between trading with a country and carrying on trade within a country. Many merchants and manufacturers export their goods to all parts of the world, yet I do not suppose any one would dream of saying that they exercise or carry on their trade in every country in which their goods find customers. When it is said, then, that in the present case England is the basis of the business, that the wine was to be consumed here, and that the business done would remain undone but for the existence of the customers in England, I cannot accept this as proof that M. Roederer carries on his trade in this country. It would equally prove that every merchant carries on business in every country to which his goods are exported.... How does a wine merchant exercise his trade? I take it, by making or buying wine and selling it again, with a view to profit. If all that a merchant does in any particular country is to solicit orders, I do not think he can reasonably be said to exercise or carry on his trade in that country. What is done there is only ancillary to the exercise of his trade in the country where he buys or makes, stores, and sells his goods.' The La 'Bourgogne' (1899) A.C. 431 : 8 Asp. M.C. 550was a jurisdiction case, but inasmuch as it decided that the defendants had a place of business in England, it is obviously a case that can be relied upon by the present defendants for the less wide proposition that the business was carried on within the jurisdiction, if the facts are truly analogous to the facts of the present case. A French Steamship Company were lessees of an office in London of which they paid the rent, where they established a certain Fanet with the title of Agent General. In that capacity he secured freight and passage engagements, collected freight and transmitted it to the Company, paid dues and forwarded and delivered goods carried by the Company. It was held that the business that was named on by him was the business of the Company. Dunlop Pneumatic Tyre Co. v. Actien Gesellschaft Fur Motor &c.; & Co. (1902) 1 K.B. 342 : 71 L.J.K.B. 284 : 86 L.T. 472 : 18 T.L.R. 229 was a very peculiar case and was a jurisdiction case. A foreign firm took a stand at the Crystal Palace cycle show and installed in charge of it an agent to exhibit its goods and take orders for them. It was held that, during the show, the Company had a place of business in England. Again the chief test applied was whether or no contracts were concluded binding upon the Company at the stand. In Lovell and Christmas v. Commissioner of Taxes (1903) A.C. 46 : 97 L.T. 651the appellants carried on a business of provision commission agents, having produce consigned to them from New Zealand which they sold on commission. They made advances through New Zealand, Banks to the consignors of the produce against the security of the shipping documents. They kept a salaried servant in New Zealand, who made an arrangement with the shippers as to the produce they would send and fixed the amount of the advance that was to be made. It was held that the business was not carried on in New Zealand but that the business was the selling on commission in the London market. This is a strong case, because the appellants actually kept a salaried servant devoting his whole time to their affairs in the country where the tax was sought to be levied. The reason for the decision I conceive to be that Messrs. Lovell and Christmas were not themselves purchasers of the goods but only agents to sell on commission. It is difficult to see how it could be argued that there was not a making of contracts by the Company in New Zealand. There were at least the contracts involved in the advances made against the shipping documents, which must have entailed on the New Zealand shippers the obligation to repay any sum by which the price realised by the produce in London might fall short of the advance made against it. I take it that their Lordships must have held that the transactions regarding the advances were so subsidiary and ancillary to the main business of sale in London that it was right to regard the Company as substantially carrying on their business in London and nowhere else. I regard the decision as a clear indication that it is the duty of a Court to look at the question broadly and in substance rather than fix on some small incident in the conduct of the business and say 'here is a feature of your business which involves your entering into some contracts within this jurisdiction, therefore you carry on business here.' Saccharin Corporation v. Chemische Fabrik von Heyden Actiengesellschaft (1911) 2 K.B. 516 does not assist me not merely because it is a jurisdiction case but because, as is apparent from the judgment of the Lords Justices, it turned entirely on the weight to be attached to different parts of the evidence in the case. One important feature of it was that the agent apparently had in his possession and control a stock of his principals' goods of which he could dispose without nonsuiting them. Aktiesselskabet Dampskib 'Hercules Grand Trunk Pacific Railway (1912) 1 K.B. 222 : 28 T.L.R. 28 only decided, that if the directors of a Company transact their financial business within the jurisdiction, it does not avail them that their railway undertaking is situated and carried on outside it. 0' Kura v. Forsbacka Jernverks Aktiebolag (1914) 1 K.B. 715 : 30 T.L.R. 242 is a jurisdiction case, but there is one passage in the judgment of Buckley, L.J., which, I think, has an important bearing on the present case. In that case the defendants were a Swedish Corporation who employed in London as agents the firm of C. & J. Svedburg. C. & J. Svedburg were the London branch of C. & J. Svedburg at Stockholm in Sweden. At page 720 the learned Lord Justicesays: 'Whenever they (i.e., C. and J. Svedburg) sell the defendants' steel they do so expressly as agents and after submitting the inquiry to their Stookholm house, who in turn obtain from the defendants the price and terms upon which they are prepared to sell. When the agents in London have obtained the price and terms they submit them to the buyers, and if the buyers accept them, they then sign the contract as agents for the defendants. The agents have never sold any steel manufactured by the defendants except as agents and in the manner indicated. They have no control over the way in which the defendants do their business and have no general authority from them with regard to making contracts.' It is clear that the learned Lord Justice was not considering the question as to whether they had a place of business merely but as to whether they were carrying on a business, for he says at page 718: 'if the acts relied on in this case amount to a carrying on of a business, there is no doubt that those acts were done at a fixed place of business.' Therefore the sole question for determination was whether that which took place amounted to a carrying on of a business in London and the decision of the Court of Appeal was that it did not. In Thames and Mersey Marine Insurance Co. v. Societa di Navigazione a Vapore del Lloyd Austriaco (1914) 111 L.T. 97 : 80 T.L.R. 475 the decision was adverse to the foreign firm on very strong facts. The following observations of Buckley, L.J., seem to me to have some bearing on the present question: 'The test in each case is to find the answer to the following question, does the agent in carrying on the foreign Corporation's business make a contract for the foreign Corporation or does the agent in carrying on the agent's own business sell a contract with the foreign Corporation?'
5. These being the principles by which I am to be guided, the facts of the present case must be examined. I had before me two witnesses, Mr. Strouts, the manager of the Shipping Department of Gordon Woodroffe and Co., and Mr. Hunter, a partner in the firm of Ripley and Co., who is in charge of their Cocanada business. They have placed the whole of the relevant facts and documents before the Court, and their evidence, as one would expect, is not challenged in any respect. I do not think any question arises with regard to cargo discharged at Cocanada. As a matter of fact hardly any cargo is discharged at Cocanada, as it is almost exclusively an exporting town. If, by chance, any cargo does go there it is discharged from the ship into lighters provided by the holders of the bills of lading and it is not handled by Messrs. Ripley and Co. They may occasionally collect fright and transmit it to Gordon Woodroffe and Co., but I do not think' it is in evidence that they actually have done so, and Mr. Venkatasubba Bow did not invite me to draw any conclusion in his favour from anything that took place in regard to cargo discharged at Cocanada. The whole discussion ranged round the course of business with regard to cargo shipped at Cocanada. Ripley and Co. made the arrangement to act for the Clan Line Steamers with Gordon Woodroffe and Co. some ten years ago, and the letters evidencing that arrangement have been put in. They are themselves fairly large shippers. They get commission on their own shipments and a smaller commission on other people's shipments. In the important matter of booking space in outgoing ships for cargo to be embarked at Cocanada it is abundantly clear that they have no controlling voice whatever. Most of the arrangements for shipments are made by the Cocanada merchants with Gordon Woodroffe and Co. in Madras either directly or through shipping brokers in Madras. Sometimes the Cocanada shippers apply to Ripley and Co. to get them space on a Clan Line Steamer. Ripley and Co. have no authority to give space even for a box of cigars without the previous authorization of Gordon Woodroffe and Co. If application is made to them for cargo room they forward it to Gordon Woodroffe and Co. at Madras, and Gordon Woodroffe and Co. generally send what is called an engagement form to the intending shipper. If time is short, Gordon Woodroffe and Co. telegraph to Ripley and Co. instructions as to what amount of room is available for the proposed shipper. The course of business is clearly seen from a specimen letter dated the 30th August 1916 relating to SS. Maclachlan. On receiving authorization from Gordon Woodroffe and Co., Ripley and Co. issue a shipping order to the shipper. Armed with this he takes his goods to the ship, obtains the mate's receipt and in due course the bill of lading. The bill of lading is signed by Ripley and Co., for the Master. Occasionally it happens that goods are put on board in a slightly damaged condition. The shippers are, of course, anxious to obtain clean bills of lading and can only do so on signing indemnity forms. These are addressed to Ripley and Co., and a specimen was put in of a firm of Vavasseur and Co., Ltd., dated the 2nd May 1917. They also collect freight and disburse the ship. Most of the course of business is clear from the specimen account dated the 15th September 1917 relating to the voyage of the Clan Stuart. With regard to the disbursements a large portion of them consists in payments for stores supplied to the ship.
6. The evidence regarding these stores is that contracts are made by Gordon Woodroffe and Co. with the suppliers at Cocanada for certain rates for each article in the schedule. Ripley and Co. have nothing to do with the formation of those contracts. When the ship arrives off Cocanada, the Captain specifies what quantity he wants of each article. The goods are put on board by the contractor and Ripley and Co. pay the bill according to the scheduled rates in the contract.
7. Three points have been taken for the defendants. The first is with regard to the booking of cargo space. It is said that in those cases where the shipper applies at Cocanada to Ripley and Co. for cargo space and ultimately gets from them a shipping order, that constitutes a making of a contract by the Clan Line at Cocanada. It is said that the fact that Ripely and Co. cannot make the contract without the express authority of Gordon Woodroffe and Co. is not to the point, and that the fact remains that they do make the contract. The contention seems to be disposed of by the observations of Buckley, L.J., in 0'Kura v. Forsbacka Jernverks Aktiebolag (1914) 1 K.B. 715 : 83 L.J.K.B. 561 : 30 T.L.R. 242 which I have already cited. Even apart from that, I think the course of business here shows clearly that in the vast majority of cases the real contract is made direct with Gordon Woodroffe and Co. at Madras by means of the engagement form and that the shipping order is a mere piece of office machinery to carry out the contract contained in the engagement form. In the occasional case where the shipper applies so late as to necessitate telegraphic communication to Madras, I think that Ripley and Co. are and are recognised to be mere conduit pipes to obtain the assent of Gordon Woodroffe and Co. to the proposal of the shipper; and I do not think that Ripley and Co. can in any real sense be said to make a contract with the shipper.
8. The next point relied upon was that Ripley and Co. signed the bill of lading and it is said that, as they signed the contract of affreightment, that is conclusive of the matter. The bill of lading is no doubt evidence of the contract of affreightment and in most cases it is practically conclusive evidence of it; but it is never perhaps, and certainly very frequently not, the contract of affreightment itself. See per Lord Bramwell in Sewell v. Burdick (1885) 10 A.C. 74: 52 L.T. 445 and Scrutton on Charterparties and Bills of Lading, Article 3. It is not the contract of affreightment where there is a charterparty: nor I think where there is any antecedent document undertaking the carriage of the goods. In this case it is clear that the real contract of affreightment is contained in the engagement form or in the telegram of authorisation in the exceptional cases where there is no time to send an engagement form. I am, therefore, of opinion that there is nothing in the fact that Ripley and Co. sign the bills of lading to warrant the deduction that the Clan Line carry on business at Cocanada. The modern practice of having bills of lading signed by the local agents rather than by the captain is one of commercial convenience, it having become evident that the commercial side of the ship's business can be better transacted in an office with a proper clerical staff than by the master. But suppose that this case had arisen in the old days when the bills of lading were signed by the master who is unquestionably the agent of the shipowners, if the contention on this point for the Municipal Council were sound, it would follow that the Shipping Company transacted business within the meaning of the taxing Statutes at every port of call at which the master of the ship gives bills of lading. Such a conclusion to my mind is commercially too absurd to be accepted.
9. The last contention on behalf of the Municipal Council is a highly technical one and is based on that unfortunate Section 5 of the Indian Contrast Act. The argument is this: Suppose an intending shipper, to forward through Ripley and Co. a request for cargo space to Gordon Woodroffe and Co. at Madras; Gordon Woodroffe and Co. send an engagement form to Ripley and Co. at Cocanada, to hand on to the shipper. That form contains the acceptance and completes the contract. And it is argued that as the contract only becomes complete when the acceptance reaches the shipper, the contract is finally made at Cocanada, because Gordon Woodroffe and Co. could recall that at any moment before it reached the shipper: Ripley and Co. acted entirely under their orders, and therefore the posting of the engagement form at Madras to Ripley and Co. was not an irrevocable acceptance of the offer. The first thing I have to say about this is that there is no evidence that that has ever actually been done. Mr. Strouts says that the regular thing is to post the engagement form to the shipper direct and he knows of no instance where in fact it was sent through Ripley and Co. Mr. Hunter says that he can recall no actual instance either, but he pays quite frankly that he is not prepared to say that it never happened and that if Gordon Woodroffe and Co. did send an engagement form filled in with the name of a particular shipper at Cocanada he would, as a matter of course, hand it over to the shipper. Apart from that question of fact I think the argument though superficially ingenious is really unsound. If such a transaction took place I think the only possible inference is that the shipper, who knows that Ripley and Co. have no authority to accept or reject until they hear from Gordon Woodroffe and Co., must be taken to hand Ripley and Co. his request to be forwarded to Madras for acceptance or rejection there and not for acceptance or rejection at Cocanada. I think he may be regarded as selecting Ripley and Co. as a mere channel for ascertaining whether or no Gordon Woodroffe and Co. have accepted his offer in Madras. In any case I think that even if this case did occasionally happen once in a way and, did amount, in odd instances, to a contract being technically in law concluded in Cocanada, I ought to take the broader view in obedience to the authorities and look to see where in substance the business of making contracts of the Clan Line was carried on and controlled. That was clearly in Madras and I must hold that the Clan Line does not carry on the business of shipowners in Cocanada. That conclusion is not affected by the fact that Ripley and Co. put the name of the Clan Line on their office paper and describe themselves as its agents. More than one case shows that this is an immaterial factor.
10. There must be judgment for the plaintiffs for Rs. 50 and taxed costs. I will certify for two Counsel and costs of filing suit at Cocanada.