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The Secretary of State for India in Council, Represented by the Collector of Nellore Vs. T.S.P.L. Palaniappa Chetty and ors. - Court Judgment

LegalCrystal Citation
SubjectContract
CourtChennai
Decided On
Judge
Reported in7Ind.Cas.226
AppellantThe Secretary of State for India in Council, Represented by the Collector of Nellore
RespondentT.S.P.L. Palaniappa Chetty and ors.
Cases ReferredChanter v. Hoptins
Excerpt:
contract - warranty--contract or sale of wood--notification inviting tenders--measurement given and also approximate weight in tons--shortage in weight-damages--nature of contract--warranty as to weight. - .....various kinds varying in girth. then the notification goes on to invite tenders at so much per 100 cubic feet of each class excepting a certain class which according to the notification is to be sold in bundles. amongst the conditions of sale we find the following in condition (c): 'that the wood shall be delivered by volume measurement as detailed below and no claim for compensation for shrinkage of stacks will be admitted.' then we have details referring to five kinds set out: and then as against the names of the five kinds, we have, starting with class (1), 100 cubic feet. then follow these figures 1-13/20 tons. and so on with regard to the other four classes of jungle wood: 100 cubic feet is mentioned with reference to each class and then figures representing a ton and fraction of a.....
Judgment:

Arnold White, C.J.

1. This is an appeal from a decree of the District Judge in favour of the plaintiffs in an action for damages for breach of contract. The contract in question was a contract between the plaintiffs and the Government for the sale by Government to the plaintiffs of firewood. The 2nd issue in the case was 'whether the delivery of wood by the defendant under the agreement referred to in the plaint was to be by volume or by weight ?' The third issue was whether the defendant failed to supply the full quantity of wood as per the said agreement ?' The 4th issue was whether the defendant is answerable for the shortfall, if any, by weight ?' At the hearing of the suit before the District Judge, the District Judge stated that the point for decision was whether the defendant warranted the weight of the wood,' and held that there was a warranty as to the weight of the wood purchased by the plaintiffs. It has been contended before us that there was a contract of warranty with reference to the weight of the wood. It is not suggested that there was any warranty outside the contract of sale. Therefore, in dealing with this question (I propose to deal with that question first), it is necessary carefully to consider what were the terms of the contract between the parties, as they appear in the written documents. The first document I need refer to is an invitation to tender which was published in the Gazette. So far as it is material for the purpose of the question we have to decide, the tender is in these terms. Tenders are invited for the purchase of about 8,500 tons more or less of jungle wood of certain kinds. Then there are six kinds of jungle wood which are set out in the margin to the notification, the various kinds varying in girth. Then the notification goes on to invite tenders at so much per 100 cubic feet of each class excepting a certain class which according to the notification is to be sold in bundles. Amongst the conditions of sale we find the following in condition (c): 'That the wood shall be delivered by volume measurement as detailed below and no claim for compensation for shrinkage of stacks will be admitted.' Then we have details referring to five kinds set out: and then as against the names of the five kinds, we have, starting with class (1), 100 cubic feet. Then follow these figures 1-13/20 tons. And so on with regard to the other four classes of jungle wood: 100 cubic feet is mentioned with reference to each class and then figures representing a ton and fraction of a ton are set out alongside the hundred cubic feet.

2. Now the plaintiffs' tender, which is Exhibit B in the case, is in these terms. It refers to the advertisement in the Gazette and then it says: 'I beg respectfully to offer the following rates for the several sorts of wood therein specified.' Then he sets out the various sorts of wood. With regard to the first sort his offer is Rs. 5-12-0 per 100 cubic feet. With regard to the second sort his offer is Rs. 4-7-0 per 100 cubic feet and so on. In his offer he merely sets out the price in rupees which he is prepared to pay for every 100 cubic feet of the particular kind of wood. There is no reference to weight in his tender.

3. Then we have another document, Exhibit C, which is the acceptance by Government of the tender made by the plaintiffs and there we have again the various kinds of wood set out and the prices in rupees which the plaintiffs say they are willing to pay for 100 cubic feet of the particular kind of wood. Again there is no reference in it to weight.

4. Now we come to the actual contract between the parties, which is Exhibit D. That recites that the plaintiffs have agreed to purchase 8,500 tons of wood from the Government at the prices per 100 cubic feet with respect to the different kinds of wood which are stated in their tender and in the document Exhibit C accepting their tender. That is the recital and there is no reference to weight in the recital. Then the first paragraph of the agreement is: 'I shall take delivery of the several classes of wood by volume measurements as detailed below, and no claim for shrinkage of stacks will be admitted.' Then we have the various kinds of wood once again set out, the 100 cubic feet again stated in connection with each particular kind of wood and we have again the weights re-appearing in tons alongside the 100 cubic feet with' regard to each particular kind of wood. The second paragraph of the agreement is: 'I shall remove the wood in quantities not less than 500 tons a month after delivery, and shall not allow any wood to stand at the canal banks for over a month from date of delivery.' The fourth paragraph of the agreement is ; 'I shall bind myself to pay the value of each delivery of wood according to the stipulated rates within one week of advice and before the wood is removed.' That is as far as I need go for the moment for the purpose of considering whether there is to be read into this contract a collateral agreement which operates as a contract of warranty.

5. We do not find any definition of warranty in the Contract Act. But the definition which is given by Lord Abinger in Chanter v. Hoptins 4 M.& W. 399 : 1 H. &H; 377 : 8 L.J. Ex. 14 : 3 Jur. 58 is in these terms : It is defined as 'an express or implied statement of something which the party undertakes shall be part of a contract, and though part of the contract, yet collateral to the express object of it''. Whether a statement is intended as a collateral agreement which amounts to a warranty or not must be determined according to the circumstances of each case. Looking at the circumstances of this case by the light of the provisions of the Contract Act, I have to consider whether it can be said that the contract between the parties in this case does contain a statement which amounts to a contract of warranty. If anything, it is, as I have said, an express warranty. But the sections of the Contract Act which relate to implied warranties may be referred to. Section 110 of the Contract Act relates to an implied warranty of goodness or quality. It is not that sort of warranty. Section 111 is an implied warranty of soundness. It is not that sort. Section 112 is an implied warranty that the bulk is equal in quality to the sample. It is not that sort. It is not Section 113 that there is an implied warranty that the goods are commercially known by a certain denomination. It is not Section 114. The question is: Is there an express warranty? I cannot read into this contract a warranty that every 100 cubic feet measurement of timber weighed the amount in tons, which, in the notification, is to be found set out alongside the 100 cubic feet.

6. It seems to me that the real question in the case is what was the contract between the parties, apart from any question of suggested warranty Was it a contract to sell timber by weight or was it a contract to sell timber by measurement Was it weight or was it bulk I have already read the documents and it is not necessary for me to refer to them again.

7. I do not think I need pause to consider whether the plaintiffs are entitled to recover seeing that they accepted and retained the goods. I do not think it will be suggested on behalf of Government that if the contract was to sell by weight and if the plaintiffs show that the weight of the timber delivered to them is not equal to the weight mentioned, then they are not entitled to a refund. So I will not consider any legal difficulty of that sort, but simply deal with the case on the basis as to whether the contract was to sell by weight or to sell by measurement, The conclusion I have come to, although the matter is not altogether free from doubt, is that the contract was to sell timber by measurement and by measurement only. In Exhibit D, the actual agreement between the parties, the contract is that the plaintiffs will buy these various kinds of timber at so much per 100 cubic feet with reference to each class of timber. I may also refer to the plaintiffs' own tender in which they offer to pay so much for every 100 cubic feet. In it they say nothing about the weight.

8. The difficulty which has arisen in this case is, no doubt, due to the fact that whereas the Government purports to sell by measurement in their recital to their contract, in this contract they do not only refer to wood measuring so much but they refer to the various kinds of wood measuring so much and weighing so much. Then again in the condition with regard to the removal of timber, they do not say we require you to remove so many thousand or hundred cubic feet a month,' but they say 'we require you to remove 500 tons a month.' That is, they put it not in terms of cubic feet, but in terms of tons. The case made in the written statement with regard to that, is this. The defendant says: 'Under the agreement entered into with the 3rd plaintiff, wood was to be delivered over and paid for by volume and not by weight. The weights of the wood given in condition No. 1 of the agreement are approximate and were intended only for purposes of calculation with reference to condition No. 2'. Now condition No. 2 is the term of the agreement with reference to the removal. Mr. Napier argued that the reason why the amount of the wood to be removed was expressed in terms of tons and not in terms of cubic feet was that it was necessary to have some common denominator which would apply to all the various of wood which differed in weight and in girth. I am not quite sure that I followed this and I cannot help thinking that the real reason for stating the weight was not so much the convenience of the Government as the benefit of the purchaser because we find in the notification for the next year, which has been put in evidence, it is put thus :-- 'The following figures considered to be the equivalent of each class of wood in tons are given for the benefit of intending bidders. It must be clearly understood, however, that these weights are only approximate, that they are given merely as a rough guide and that no claim for compensation will be admitted in case they are found later to be incorrect.' There is no doubt the note was added because the contention had been put forward that the plaintiffs bought by weight and not only by measurement. It cannot, of course, be said that the Government did not intend the figures as to weight to be at any rate approximately accurate and I think it may also fairly be said that the plaintiffs in entering into the contract relied upon the accuracy of these figures. I am prepared to go as far as that. That, of course, is not conclusive. It is still necessary for me to determine what is the real contract.' Was it a contract to sell by measurement only with a certain amount of information as to weight then in given gratuitously by the Government, or was it a contract to sell by measurement and by weight The conclusion I have come to is that it was a contract to sell by measurement only. I come to that conclusion on the terms of the documents themselves. I think that the conclusion is supported by Exhibit J series, which are the various forms of the bills which were sent in to the plaintiffs and which were paid by the plaintiffs. There we get the cubical contents and their equivalent in tons. That to some extent supports Mr. Napier's contention that the tons although they purported to be accurate were rather in the nature of conventional or arbitrary figures for the purpose of working out this particular contract. If it was intended to be anything in the nature of a warranty or if it was intended that the contract should be by weight as well as by measurement, then the heading which one would have expected to be found after the cubical contents' would be not 'equivalent tons' but 'weight'. This being the conclusion I have come to in regard to the contract between the parties, I must hold that the learned Judge was wrong in the view he took and that the plaintiffs' suit ought to be dismissed. But in view of the fact that the defendant's own witness, as I understand his evidence, in the report put in by him proves that the weights stated by Government in their notification as the equivalent to the weight of the 100 cubic feet of the particular kind of wood in question were not accurate, and as, I think, the plaintiffs were entitled to rely upon these figures as being accurate, the order I would make as to costs is that each party should bear his own costs.

Abdur Rahim, J.

9. I regret I am unable to agree with the learned Chief Justice in his view of the transaction which has resulted in this action. The question which we are asked by the learned Government Pleader to decide is what was the contract between the plaintiffs and the Government. The contract is to be gathered mainly from four documents, Exhibits A, B, C and D. Exhibit A is a notification issued by the Government inviting tenders for the purchase of certain quantity of jangle wood. It begins with this statement tenders are invited for the purchase of about 8,500 tons more or less of jungle wood of the kind noted in the margin that may be cut in 1902--1903 at so much per 100 cubic feet of each class except sulli wood which will be sold in bundles.' The 3rd paragraph of Exhibit A lays down the conditions of sale and here we find under sub-paragraph (c) that the wood shall be delivered by volume measurement as detailed below and no claim for compensation for shrinkage of stacks will be admitted. Then the different classes of wood are mentioned, the classes being ascertained according to the difference in girth of the pieces. Against each class the measurement by volume i.e., 100 cubic feet and the weight in tons of each 100 cubic feet of different classes of wood are given. Sub-paragraph (d) says the removal shall be made in quantities not less than 500 tons a month after delivery.' Exhibit B is the offer by the plaintiffs : and there, no doubt, the weight of the different kinds of wood is not stated. But the offer is made with distinct reference to Exhibit A in which the description of the goods intended to be sold is set out in detail as already mentioned. Exhibit C is a letter addressed to the plaintiffs by the Forest Officer of the Government accepting the former's tender and there reference is made to Exhibit B which, as I have pointed out, refers to the Notification Exhibit A. Then we come to Exhibit D, a document which is described as the agreement and which finally embodies the contract between the parties. From these documents it seems to me to be plain that the wood which is sold is not only described by volume measurement but also by weight. Reference was made by the learned Government pleader to documents marked as Exhibit I series, which, are delivery receipts for goods delivered to the plaintiffs. There, no mention is made of the weight of the goods. But, on the other hand, we find in Exhibit J series, which are the bills issued to the plaintiffs for the value of the goods sold to them that the weight of the wood is mentioned.

10. It was argued by Mr. Napier, as I understood him, that it is impossible to sell 100 cubic feet of wood of certain girth and at the same time to guarantee that it should be of so much weight. I fail to appreciate any difficulty, far less impossibility, in such an undertaking. At the time of the notification invting tenders, the wood had not been cut and, therefore, this is a case of sale of unascertained goods. If, on the other hand, the wood had been cut and stacked in sp many piles of 100 cubic feet each, and these piles were sold, that would be a sale of specific goods and any mis-description as regards the weight of those stacks might be treated as a surplusage and not as forming part of the contract. But in this case where the goods sold were unascertained, there Seems to be no reason why we should take only the volume measurement as the description of the goods intended to be sold and leave out the weight as mere arbitrary or conventional figures. There is absolutely no evidence in the case so far as it appears from the record, and no such suggestion even appears to have been made to that effect in the lower Court, that the weights mentioned in Exhibits A and D, such, as 1-13/20 tons, If tons and 39/40 ton were merely conventional and put down for some purpose or other but not intended to be a term of the contract. And if it be not impossible, as, in my opinion, it cannot be said to be impossible, to sell wood. which is still in the jungle by weight as well as by volume measurements, there seems to be no ground for leaving the weight out of account in dealing with the question, what was the contract between the parties. I am, therefore, of opinion that what the Government intended to sell and what the plaintiffs intended to buy was so much cubic feet of wood of different classes mentioned, weighing so many tons. That the weight of the wood would be a matter of considerable importance to the purchaser seems to me to admit of no doubt. It may even be of greater importance than mere bulk.

11. If then the weight no less than the volume measurement was part of the terms of the contract, the evidence proves that the goods supplied by the Government fell short of the stipulated weight as found by the District Judge. No question has been raised by Mr. Napier as to the form of the action--whether the proper remedy open to the plaintiffs was not to rescind the bargain and to sue for damages for breach of contract. But I am inclined to think that the District Judge was right in holding that this is a case of breach of warranty, the warranty, in my opinion, being One of quality within the meaning of the Contract Act. The weight of wood of this description would, as I have said, affect its quality and hence its value.

12. As regards the actual shortage of weight, the figures given by the District Judge are the figures which are spoken to by the District Forest Officer himself and the correctness of these figures cannot, therefore, be challenged. The damages given to the plaintiffs are based on these figures. The way in which the damages are assessed by the District Judge apparently is this : the plaintiffs bought so many tons of wood for so much and received so much less and the defendant is liable for the difference. No argument has been addressed to us as to whether that is the correct principle on which damages ought to be assessed in this case and I do not, therefore, propose to deal with any such question. I do not, however, agree with the District Judge that the plaintiff is entitled to any damages on account of loss of profits. He has given to the plaintiffs 8 annas per ton on this account. The Government did not know of any contract which the plaintiffs might have entered into with other persons in respect of this wood and the contract between them and the plaintiffs is not shown to have contemplated sale of the wood by the plaintiffs to other persons by the weight. I would, therefore, dismiss the appeal, except that the decree given by the District Judge will be modified by substituting the figures Rs. 1,833-11-0 for Rs. 2,107-11-0. The appellant must pay the costs of the appeal.

White, C.J.

13. The result is the decree is modified as above and in other respects the decree of the District Judge stands. The defendant must pay the costs of the appeal. The time within which the defendant shall satisfy the decree is six months.


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