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E.V. Ram and Co. Vs. John Bhatt and Co., Ltd. - Court Judgment

LegalCrystal Citation
Decided On
Reported inAIR1928Mad873; 108Ind.Cas.644
AppellantE.V. Ram and Co.
RespondentJohn Bhatt and Co., Ltd.
- .....the defendants have proved that their claim is not barred by limitation in view of these acknowledgments and we must accept that as proved.22. we may add here that the learned counsel for the respondents pointed out that there is no definite evidence to prove the amount of the counter-claim in respect of the 23 tons of bars. the trial judge has given a decree for rs. 4,168-7-9 apparently based on certain figures before him and no objection has been taken in appeal to the amount. we must take it therefore that the figure is one accepted by both parties and confirm it accordingly.23. in the result both the appeals are dismissed with costs.

Phillips, Offg. C.J.

1. These appeals relate to several contracts entered into by the plaintiffs' firm with the defendants' firm in London, and it will be simpler to deal with each of these separately.

2. The first dispute is with reference to a contract for 150 tons of steel bars. It is the plaintiffs' case that the contract was concluded with the defendants at the rate of 29-10-0 a ton but the defendants' contention is that the contract was never completed, and that is the finding of the learned trial Judge. We have been taken through the correspondence on the point consisting mainly of cablegrams in Code and beginning in December 1919 and going on till March 1920. The most important telegrams are Exs. A (4) to A (12). In Ex. A (4) the plaintiffs offered a rate of 27-10-0, but in reply the defendants quoted a price of 28-10-0. Then the defendants wired out that they could not send 150 tons but that they could send sections of not less than 5 tons, each size, ' subject to reply received here January 31st.' There has been some discussion as 'to whether these words ' subject to reply,' etc, refer to what precedes them or to the portion of the telegram coming after them, but we think there can be no doubt that they refer to the portion preceding. No reply was received by 31st January. But a telegram of 27th January was received in February and then the defendants stated that they could not accept the order except in terms of the telegram of 22nd January which prescribed 31st January as the date within which acceptance had to be made. On 9th February the plaintiffs wired that they accepted the terms of the previous telegram and they contend that that constitues a final contract. Inasmuch as the reply was not received by the defendants before 31st January, the terms offered by them prior to that date could not be binding and, accordingly, they wired on 3rd March as follows:

Booked order-subject to reply received here. Round 15 tons; square 25 tons; flat 60 tons. Shipment per steamer during April-May 31-10-0. This is the best we can do, cannot repeat under 33-10-0.

3. It is the defendants' contention that the words ' booked order ' stand alone and refer to their offer contained in their telegram of 19th February and that the subsequent words relate to an independent offer by the defendants for quite a different consignment. That this cannot be so is clear from the fact that the defendants merely specified the bars as round, square and flat without reference to the specification lists furnished to the plaintiffs and without giving any sizes of the bars, It is impossible to believe that a business firm would have made such a very indefinite offer and, as the words are quite consistent with a reference to the previous correspondence in which specifications and sizes have been quoted, we are clearly of the opinion that the words ' round,' ' square ' and ' flat '' refer to the specifications of the original order and the defendants merely meant that they could supply 15 tons of round, 25 tons of square and 60 tons of flat, in accordance with the previous specifications. If that is so, there can be no doubt that the contract was never completed, for there has never been any proper acceptance of the terms contained in that telegram. As I above observed it is impossible to refer these words to an independent offer and, if they are read as relating to the previous offer and correspondence thereon, it is not suggested that the contract was complete. The defendants rely also on the fact that the plaintiffs never replied to their letters in which they had stated that they presumed that these words did not refer to a previous offer; but we do find that on 16th March, the defendants wired, 'Reference to our telegram of 3rd, we understand bars not required.' In answer to that the plaintiffs wired, ' Bars our specification required;'' but they had already been informed that bars, to their specification could not be supplied. It would perhaps have been wiser on the part of the defendants to write in detail explaining that this contract could not be completed as wanted by the plaintiffs; but the effect of the whole correspondence is undoubtedly that no contract was completed. This is the view of the trial Judge and certainly, after perusing the correspondence very carefully, we must come to the same conclusion. There are ambiguities in the telegrams; but if they are read consecutively and carefully, the only conclusion is that this contract was never completed, and, therefore, the defendants have committed no breach thereof.

4. The second point relates to a contract for 5 tons of brass ingots in respect of which the defendants asked for a further deposit but no deposit was sent. It is contended on behalf of the plaintiffs that they had already deposited 100 in 1919,' and under the terms of sale, Ex. C (9), no further deposit could be demanded of them. One of the terms of sale is that payment is to be made in one of three ways, the third being

by our drafts on you at 30 or 60 days, sight, if a remittance on account is made with each order of not less that 10 per cent.

5. There is a note after this stipulation as follows:

Instead of remittances with each order, a deposit is preferred of not less than 100 on which we allow interest at 6 per cent. if made in cash. Government bonds suit better.

6. It is the plaintiffs' case that the amount of the deposit so long as it was not less than 100 was left to them and one such deposit would cover all transactions however large. No doubt, the wording of the note is somewhat ambiguous and the above meaning is a possible one; but another possible meaning is that the deposit of not less than 100 should be in place of the remittance of 10 per cent. on each order. It is certainly difficult to believe that the defendants would prefer a deposit of 100 only in the case of contracts which might amount to several thousand pounds to a remittance of 10 per cent. with each order. We think, therefore, that the alternative meaning of the proviso must be adopted, viz., that it was for the defendants to ask for a deposit of not less than 100 on 'each order, if they so wished. The evidence of Mr. Mansfield is that this was the course of business adopted by the firm and, as it is in accordance with the probable intention of the parties, we must accept his word. The learned Judge's decision on this point is therefore correct and the plaintiffs are not entitled to damages for breach of contract in respect of these five tons of brass,

7. The third contract relates to 100 tons of British steel bars. Admittedly the contract was completed on 18th January by Ex. A (3), a telegram from defendants to plaintiffs as follows:

Referring to your telegram of the 19th booked order 100 tons British. Fully expect shipment per steamer during February.

8. To this order 77 tons were shipped and arrived in Madras in July and August and were accepted by the plaintiff. The balance of 23 tons was shipped about 12th August and arrived in Madras in September, but the plaintiffs refused to accept delivery. It was argued first that the words. ' Fully expect shipment per steamer during February,' amount to a contract to ship in February, but that is clearly untenable in view of the words 'fully expect.' This was a mere expression of the intention of the shippers to ship in February, if possible;. but it certainly guards against any contention that that was a definite term of the contract. Mr. Mansfield for the defendants says that there was difficulty in getting goods made to specification at about that period and there were difficulties about shipping, and consequently the question remains as to whether the contract was performed within a reasonable time. So far as the 77 tons are concerned, the plaintiffs did write and complain that they had arrived late but did not suggest that they had not come within a reasonable time and certainly did not attempt-to repudiate the contract when they received these goods in August and they knew that 23 tons more were to be shipped and on 13th August, the defendants-sent a telegram stating that 23 tons had been shipped on the Suex Maru. The plaintiffs took no exception to this; but when the drafts in relation to these goods were presented for acceptance on 1st September, the plaintiffs refused to accept them and finally refused to pay the amounts thereunder. To explain their refusal the plaintiff sent a telegram on 1st September as follows:

Suex Maru bars have been refused. Will pay cost excluding extra. Arrange with bank.

9. It would appear that, owing to fluctuations in the trade, the defendants charged 30 shillings a ton extra for freight and this is the amount that the telegram referred to as 'extra.' A letter-was written by the plaintiffs on the following day in which a complaint was made that this 30 shillings per ton extra, had been charged, and they stated that the dealer to whom they had sold the goods had been complaining of the great delay and would refuse to accept them if the extra charges were not remitted. They therefore asked the defendants to wire to the back to accept payment of the drafts excluding extra charges adding:

We hope you will kindly do this, in which case we will somehow try to induce out dealer to accept the goods. Otherwise there is no chance of his accepting the goods and consequently we will also be obliged to decline the goods

10. We see, therefore, that the plaintiffs themselves did not suggest that the delay was any ground for non-acceptance but only the delay coupled with the extra charges. They wrote again on 23rd September complaining for the first times that the sizes of the bars varied from those given in the invoice adding:

But for this the dealer would probably not have refused these goods.

11. No complaint is made of the delay in delivery; nor is any such complaint made in the further letter of 7th October which stated that the dealer rejected the goods because the size of the bars were not according to the invoice. It is not quite intelligible how the dealer was able to find out the sizes of bars of which the plaintiffs had not taken delivery. In any case, this point is not now pressed and neither in the trial Court nor here is it suggested that the bars were not according to specification. What is relied on here is the delay in delivery. The first question that arises is whether there was an unreasonable delay. The parties apparently knew that shipments were liable to be delayed and the plaintiffs accepted 77 tons so late as August 1920 and did not intimate to the defendants that that was the latest date that they could accept; nor did they suggest to the defendants that no further delivery would be accepted. A telegram had been sent by the defendants on 13th August intimating shipment and on 19th August the plaintiffs wrote a letter to the defendants in which they made no reference to the late delivery of these 23 tons. Similarly in the letter of 2nd September, complaining of delay and of the extra-charge, there is no suggestion that the plaintiffs would not accept the goods which were then on the high seas on the ground of delay. It was clearly therefore not at the time the opinion of the plaintiffs that the goods would not be delivered within a reasonable time and this is a very important point to be taken into consideration in deciding whether delivery in September was or was not within a reasonable time. We would, therefore, hold that there was no unreasonable delay and, consequently, the plaintiffs were not justified in refusing to take delivery. It may also be observed that at the date of delivery the prices of itself, and this may account for the plaintiffs not taking exception to the date of delivery. Even if there had been delay, we think the case would be governed by the principle in Braithwaite's case, but it is- unnecessary to discuss that point.

12. In connexion with this contract there was a counter-claim by the defendants in respect of these 23 tons which were resold at the risk of the plaintiffs and loss accrued. The learned Judge in his judgment did not specifically give a decree on the counter-claim but the application for review was subsequently made and in his order thereon he granted the defendant's counter-claim. This is the subject-matter of O.S. A. No. 55 of 1926. It-is not now contended, in view of the learned Judge's order, that the review was not justified; but it is contended that the defendants were guilty of such grave delay in presenting their application for review that it should have been rejected. The circumstances of the case are very peculiar. The trial closed somewhat hurriedly and the defendants gave up one of their counter-claims in order to avoid prolonging the trial over the Christmas vacation after which the trial Judge would not be available as he was. proceeding on leave to England until the following July. From July till December the counsel for the defendants was absent in England and his presence was absolutely necessary in order to justify the ground of review, for it was largely on the note endorsed on Mr. Mockett's brief that the application was based. Notice of the defect in the judgment was given to the Registrar at a very early date and when the case came on for trial an affidavit was filed by plaintiffs stating that there was a note on the plaintiff's vakil's brief to a contrary effect and consequently Mr. Mockett's evidence was essential to the defendants. The application for review might have been filed together with an application for postponing proceedings for six months and possibly this would have been the better course. However, in the peculiar circumstances of this case, we are not prepared to say that 'the learned Judge was wrong in holding that there was reasonable cause for the delay in making the application. On the merits his review order is not disputed. O.S. Appeal No. 55 of 1926 therefore fails and is dismissed with costs.

13. The next contract relates to 260 kegs of nails. The first contention taken for the appellants is that these were not shipped within the proper time, namely within six weeks of the date of the contract. A reference to the date concerned shows that the shipment was within six weeks and there is no force in this contention which was therefore given up.

14. The next objection taken is that the defendants were not justified in re-selling these nails at the plaintiff's risk. The price of the nails was payable in January 1921 and as a matter of fact it was not until 27th January that two bills were dishonoured. The nails were actually sold on 28th April and it is suggested that this delay of three months was unreasonable in view of the fact that the market was a falling market and, therefore, the plaintiffs are not liable for loss sustained thereby. It was argued that after 4th November there was no reason why defendants should not have sold as soon as they were aware of the dishonouring of the bills on 27th January. There was however considerable correspondence between the parties beginning in December 1920 and going on till the end of March 1921 and during this period the plaintiffs were asking for time 'to meet the bills for various contracts entered into by them, giving as an excuse the fall in exchange and also the death of the father of a dealer to whom one of the consignments had been sold. Finally, on 30th March, plaintiffs wired: ' In view of market declining do you recommend selling nails?' Defendants' answered on 1st April ' Nails, if you do not protest; they will sell on our account.' There was the end of the negotiations on the point and as the nails were actually sold by the National Bank of India on 28th April after sending due notice 'of the sale to the plaintiffs it is impossible to say that there was any undue delay. This objection therefore fails.

15. The last contention relates to a contract for hard spelter and it is contended that the plaintiffs entered into a contract for five tons of spelter, whereas the defendants shipped double the quantity, namely ten tons, and therefore plaintiffs were not obliged to accept the whole amount. On 25th March the plaintiffs sent a wire:

Ref. your tel. 16th ... Bars.Our specification ... Required.Will you accept wire nails. (0/9024-260 kgs.)60 ... ... Half the quantity.Hard-spelter 57 ... (0/42-10 T.).

16. In reply to that the defendant wired;

Wire-Nails ... (0/0024-260 kgs.).Booked order Hard Spelter (0/0042-10 T.).

17. The difficulty arises in this case over the words ' half the quantity ' the plaintiffs contending that they meant half the quantity of hard spelter as specified in. the list under No. 0/0042, such specification amounting to ten tons. On the other hand the defendants say that the words ' half the quantity ' would naturally ' refer to what preceded it, and although it is not suggested that a half of 260 kgs. of nails was sent, yet they took the indent for hard spelter to be 10' tons. It is quite clear that plaintiffs really meant five tons by their telegram as appears in a letter of 25th March 1920, written the same day as their telegram was dispatched. It is also equally clear that the defendants read the order as being for ten tons as is shown in their reply telegram of 29th March. The plaintiff's letter of 25th March was. not received by the defendants until after the spelter had been shipped and in the meanwhile on 1st April the defendants sent out an order, report-Ex. C (5),. in which they said:

Ten tons Hard 57 c. i. f. etc,.

18. Apart from the telegram sent by the plaintiffs their confirmatory indent of 8th-April 1920 is still more ambiguous. It-runs as follows;

Confirmatory Indent Not 0242. half the quantity, ten tons hard spelter, Madras, usual quantity

19. This is certainly a very ambiguous statement as presumably the usual quantity as specified in Indent No. 0042 is tent tons whereas they say they only wanted five tons. However this may be, we find that when the bills for payment of this order were sent out to Madras one bill was sent for the whole 15 tons and this was accepted by the plaintiffs. No doubt payment was subsequently refused, but. when the bill was presented for acceptance the plaintiffs took no exception to the amount of goods shipped. They had information from the defendants that ten tons were booked and later on that ten tons had been shipped, but they took no exception to this relying solely on their letter of 25th March bearing even date with their telegraphic order. In these circumstances it must be held that the plaintiffs finding that ten tons had been shipped in pursuance of their order were prepared to receive that amount' and confirmed the contract. If that is-so they cannot now complain that the shipment was not in accordance with the order.

20. It is also possible to support this view on another ground, namely, that the plaintiffs having used ambiguous terms in their order, terms which were misinterpreted by the defendants and such misinterpretation having been acted upon, it is not now open to the plaintiffs to contend that they did not make the offer as understood by the defendants. This principle and the cases supporting it appear in. Leake on Contracts at p. 155. Whether therefore the contract, as subsequently ratified by the plaintiffs, was in order from its inception, it is clear that by non-payment it is plaintiffs that have broken the contract.

21. The only other question to be dealt with now is the question of whether three of the counter-claims put forward by the defendants were barred by limitation. On the face of them they are clearly barred, because the claim was not made till more than three years from the date of the cause of action. Defendants however rely on acknowledgments made by the plaintiff's which save the bar of limitation and it is not now suggested that these acknowledgments are not proper acknowledgments such as would save limitation. The point that is taken in appeal is that the defendants failed in their pleadings to specify the actual documents on which they relied as a bar to limitation. This would have been a good plea to take in the trial Court and it would then have been open to the defendants to amend their pleadings if necessary. It was not so taken there and it cannot be taken now. The defendants have proved that their claim is not barred by limitation in view of these acknowledgments and we must accept that as proved.

22. We may add here that the learned Counsel for the respondents pointed out that there is no definite evidence to prove the amount of the counter-claim in respect of the 23 tons of bars. The trial Judge has given a decree for Rs. 4,168-7-9 apparently based on certain figures before him and no objection has been taken in appeal to the amount. We must take it therefore that the figure is one accepted by both parties and confirm it accordingly.

23. In the result both the appeals are dismissed with costs.

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