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Moll Schutte and Co. Vs. Luchmi Chand - Court Judgment

LegalCrystal Citation
SubjectContract
CourtKolkata
Decided On
Case Number04.02.1898
Judge
Reported in(1898)ILR25Cal505
AppellantMoll Schutte and Co.
RespondentLuchmi Chand
Cases ReferredYule & Co. v. Mahomed Hossain
Excerpt:
contract - sale of unascertained goods--breach of contract--power of re-sale--contract act (ix of 1872), section 107--damages. - .....a shock to mercantile men to be told that when a clause like this has been introduced into a mercantile bargain no effect can be given to it, i hope that is not the law. i do not think it is the law. if such a clause as this were only to become operative if and when the property in the goods had passed to the defaulting purchaser, the operation of such a clause would, probably, not be effective in many cases. but i do not think such is the meaning of the clause. as i have said before, the first question must be answered in the affirmative.4. that being so the second question submitted to us does not arise, and the third question, when the matter was before us originally was abandoned by the learned counsel who appeared for the defendant. as regards the costs we can only give such.....
Judgment:

Maclean, C.J., O'Kinealy, Trevelyan, Ghose and Ameer Ali, JJ.

Maclean, C.J.

1. If it had not been for one passage in the judgment in the case of Yule & Co. v. Mahomed Hossain (1896) I.L.R. 24 Cal. 124 I should scarcely have thought that the point which we have to decide, and which has been submitted to us, was susceptible of serious argument. The passage I refer to is at page 128 of the report, and it is as follows:

To such a case as this neither Section 107 of the Contract Act nor the proviso for re-sale in the contract itself can have any application, as no such power is required to enable a man to sell his own goods.

2. I may point out in passing that that passage scarcely appears to me to have been necessary for the decision of the case, having regard to the real question which was then submitted by the reference. The question we have first to decide is the first question submitted to us in the reference. In my opinion that question ought to be answered in the affirmative. Section 107 of the Contract Act has, in my judgment, no bearing on this case. I base my decision on the terms of the contract between the parties. Here the parties, two mercantile men, perfectly competent to contract, have made their own bargain, and one of the terms of that bargain is that if there were any such default on the part of the purchaser as is mentioned in Clause 1 (as there was) the vendor was to have the right to re-sell the goods, and any loss or deficiency arising from such re-sale, with interest thereon at the rate of 12 per cent, per annum, was to be paid by the purchaser to the vendor. We are told upon the authority of the passage in the case to which I have referred, and upon that authority alone, that such are sale is bad, and that the course which the vendor (the plaintiff) took in this case was not justified under the contract. I am quite unable to assent to that view. There is nothing in the contract which is contrary to public policy. It is a perfectly good contract. It is not an unreasonable contract for two mercantile men to have made, and having made it why should not effect be given to it It is said that the term 'resell' can only apply to a case where the property has passed to the purchaser, and that that term pre-supposes a previous valid and effectual sale. In the ordinary acceptation and use of the term there was a sale to the defendant, and the bargain was that if he did not pay the purchase-money the plaintiff might re-sell the goods and hold the defendant responsible for any loss. There is nothing in the contract about the property having or not having passed, or that the re-sale was only to be made if it had passed.

3. The clause was intended to provide for the very case which has arisen, and I think it would be rather a shock to mercantile men to be told that when a clause like this has been introduced into a mercantile bargain no effect can be given to it, I hope that is not the law. I do not think it is the law. If such a clause as this were only to become operative if and when the property in the goods had passed to the defaulting purchaser, the operation of such a clause would, probably, not be effective in many cases. But I do not think such is the meaning of the clause. As I have said before, the first question must be answered in the affirmative.

4. That being so the second question submitted to us does not arise, and the third question, when the matter was before us originally was abandoned by the learned counsel who appeared for the defendant. As regards the costs we can only give such costs as are provided for by the Rules, and this we do, and order the defendant to pay to the plaintiffs such costs.


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