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Cohen and anr. Vs. Cassim Nana - Court Judgment

LegalCrystal Citation
SubjectContract
CourtKolkata
Decided On
Judge
Reported in(1876)ILR1Cal265
AppellantCohen and anr.
RespondentCassim Nana
Cases ReferredCort v. The Ambergate Railway Co.
Excerpt:
damages, measure of - action for breach of contract--collateral contract. - .....of large quantities of marketable goods, more especially when the goods are to be delivered from time to time over a long period, it rarely happens that the seller has the goods in his actual possession. in contracts by a mine owner for the supply of coals, or by manufacturers for the supply of marketable manufactured articles, or by timber merchants for the supply of timber for large undertakings, the subject of sale has generally to be worked, or manufactured, or obtained, as the contract provides; and yet in all such cases, the seller, in the event of the buyer's non-acceptance at the time mentioned in the contract, has a right to recover damages from him, ascertained according to the ordinary rule. if in each of such cases the court was bound to enquire what it cost the mine owner.....
Judgment:

Richard Garth, C.J.

1. There is no doubt in this case as to the plaintiffs' right to recover; and the only question is as to the amount to which they are entitled.

2. It is admitted that the defendant refused to accept the bags, which were to have been delivered on the 28th February, and on the 15th and. 31st March 1875; and it was found as a fact by the learned Judge in the Court below, and we entirely agree with him in so finding, that the plaintiffs were ready and willing to deliver the bags on these above dates.

3. It was proved, on the part of the plaintiffs, that these gunny bags were marketable articles in Calcutta; and Mr. Alexander Landale, who is a broker, stated that the greater portion of the gunny bag business passed through his hands, and that, in the month of February 1875, the price of Borneo gunny bags was from Rs. 20 to Rs. 21 per 100; at the middle of March, Rs, 20; and at the end of March, Rs. 19 per 100. This witness does not appear to have been cross-examined, and no evidence was offered by the defendant to contradict or qualify his statement.

4. Here then we have a contract, by which the plaintiffs agreed to supply the defendant with certain marketable goods at specified periods, and a breach of that contract by the defendant in not accepting the goods, which the plaintiffs were prepared to deliver at three of those periods. What then is the measure of damages to which the plaintiffs are entitled

5. According to the ordinary and well-established rule, they would, under such circumstances, be entitled to recover the difference between the contract price of the goods and the market price at the time of the breach: see the judgment of the Exchequer Chamber in Barrow v. Arnaud 8 Q.B. 605. But the learned Judge in the Court below has considered that, in this particular case, the ordinary rule did not apply, and for this reason: The plaintiffs, although prepared to deliver the goods in accordance with the contract, never had them in their actual possession, nor could they have procured them in the general market. Their only means of obtaining them was under a contract which they had entered into with the Barnagore Company, upon the terms (amongst others) that they should pay for them in cash, which cash they looked to obtain on each delivery from the defendant. Mr. D.G. Landale, the Manager of the Company, stated in evidence, that he was quite ready to supply the bags upon either receiving cash or holding the shipping documents as security. These circumstances appear to have led the learned Judge to the conclusion that in this case the ordinary rule for assessing the damages did not apply; and that the proper course was to endeavour to ascertain the extent of the plaintiffs' actual loss, having regard to the terms of his contract with the Barnagore Company. He then proceeds to say in his judgment that he finds no materials in the evidence which enable him to form an opinion of the plaintiffs' actual loss; and in the result, he awards them Rs. 500, avowing at the same time that he arrives at that sum upon no particular principle or estimate.

6. We cannot think that this is a correct or legal mode of assessing the amount of damages; and we are unable to discover any good reason why the terms of the plaintiff's' contract with the Barnagore Company should affect the question of damages, or why the ordinary rule of assessment should not be adopted in this case. It was undoubtedly quite right to enquire into the arrangement between the plaintiff's and the Barnagore Company in order to ascertain whether the plaintiffs were ready and willing to deliver the bags on the days specified; but that question having been decided in the plaintiffs' favour, it is difficult to see how the terms of that arrangement could possibly affect the question of damages as between the parties to this suit. As long as the plaintiff's were prepared to deliver the goods, it appears to us immaterial how and where they obtained them, or at what price. Whether they cost the plaintiffs much or little, they were entitled to receive from the defendant the contract price, and in the event of the defendant's non-acceptance, they had a right to charge him with the difference between that price and the market price at the time of the breach. In contracts for the supply of large quantities of marketable goods, more especially when the goods are to be delivered from time to time over a long period, it rarely happens that the seller has the goods in his actual possession. In contracts by a mine owner for the supply of coals, or by manufacturers for the supply of marketable manufactured articles, or by timber merchants for the supply of timber for large undertakings, the subject of sale has generally to be worked, or manufactured, or obtained, as the contract provides; and yet in all such cases, the seller, in the event of the buyer's non-acceptance at the time mentioned in the contract, has a right to recover damages from him, ascertained according to the ordinary rule. If in each of such cases the Court was bound to enquire what it cost the mine owner to get the coals, or the manufacturer to make the articles,--or the merchant to buy the timber, the enquiry would not only be endless, but it would be introducing a novel, and we consider, an incorrect, principle of ascertaining the extent of plaintiffs' loss.

7. In the case of Cort v. The Ambergate Railway Co. 20 L.J.Q.B. 460 : S.C. 17 Q.B. 127 which appears to have been somewhat relied upon in the Court below, it will be found that the goods, which were the subject of sale, were not marketable articles, nor was it suggested in the course of the argument that they were so. The contract there was for the supply of several thousand tons of railway chairs, which, from their very nature, would not be bought and sold in any general market, and, consequently, the ordinary rule affecting marketable articles would not apply to such a contract.

8. In this view, we are of opinion that the ordinary rule does apply, and we therefore award the plaintiffs the sum of Rs. 3,900, claimed in the plaint, which is a somewhat smaller sum than the evidence would warrant.

9. The appeal is decreed with costs on scale No. 2.


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