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Rogers Pyatt Shellac Co. Vs. John King and Co., Ltd. - Court Judgment

LegalCrystal Citation
CourtKolkata
Decided On
Judge
Reported inAIR1926Cal564,95Ind.Cas.1042
AppellantRogers Pyatt Shellac Co.
RespondentJohn King and Co., Ltd.
Cases ReferredJamal v. Moolla Dawood Sons
Excerpt:
tort - goods shipped destroyed--ship still at port of, loading--damages, measure of--obligation to minimise damage, extent of. - .....obtain alike in tort and in contract, it follows that damages must be assessed by ascertaining the market value of the goods at the port of discharge, that is, at philadelphia. but in the carriers' cases the damages are estimated at the date of the breach, that is, when delivery of the goods ought to have been given; in the present case at the time when the tort was committed. i am, of course, aware of cases where a collision has occurred, and cargo has been lost at sea by the tortious act o a third person. in such cases different considerations arise, for ex necessitate rei at the time and place of the collision restitution by way of replacement is impossible, and the effect of the tort is to frustrate the contract of carriage, e. g., the thyatira (1883) 8 p. d 155 : 52 l.j. adm. 83 :.....
Judgment:

1. This, suit raises an issue of law of some nicety relating to the measure of damages in tort.

2. On the 18th August 1921 the plaintiffs were given a Bill of Lading for 602 bags of shellac shipped by them on the SS. 'City of Agra' then lying in the Port of Calcutta, and bound for Philadelphia. On the same day a fire broke out in the hold in which the shellac was stowed owing to the negligence of the defendants' servants in the course of executing certain repairs to the ship. The result of the fire was that' 602 bags of the plaintiffs' shellac were damaged. Subsequently the shellac was sold, at Calcutta and the net proceeds of the sale amounted to Rs. 97,946. On the 26th August 1921 the SS. 'City of Agra' sailed from Calcutta, and completed the discharge of her cargo at Philadelphia on the 22nd October 1921. On or about the time when the 'vessel discharged her cargo it was stated that the market price of the shellac at Philadelphia was higher than the market price of the shellac in Calcutta on the day when the fire occurred. On the 7th September 1921 the plaintiffs sent the Bill of Lading and the invoices for the goods to their own office at Philadelphia. The issue which falls for determination is whether the plaintiffs are entitled to recover the market price of the goods at Calcutta on the date when the tort was committed, or the market price of the same at Philadelphia at the time when the goods were discharged.

3. Now, what is the test by which damages for tort are to be measured? The rules relating to compensation for breach of contract are set oat in Section 73 of the Contract Act (IX of 1872), and in substance are the same as the corresponding rules in the English Law.

4. 'Speaking generally as to all wrongful acts whatever arising out of tort or breach of contract, the English Law only adopts the principle of restitutio in integrum, subject to the qualification or restriction that that damages must not be too remote, that they must be, in other words, such damages as flow, directly and in the usual course of things from the wrongful act. To these the law super adds in the case of breach of contract (or to speak according to the view taken by some jurists, the law includes, under the head of these very damages, where' the case is one of breach of contract) such', damages as may reasonably be supposed to, have been in the contemplation of both parties at the time they made, the, contract as the probable result of its breach. With this single modification or, exception, which is one that applies to cases' of breach of contract, the English Law only permits the recovery of such damages as are produced immediately and naturally-by the act complained of': per Bowen, L. J., in The Argentino (1888) 13 P. D. 191 at p. 200; 58 L.J.P.D. & A. 1 : L.T. 914 : 37 W.R. 210.

5. In Sundermull v. Ladhuram Kaluram : AIR1924Cal240 . I ventured to point out that The general principles thus enunciated require, in my opinion, explanation or amplification, for, as in contracts special damages which the parties, at the time when the contract was first entered into, contemplated might result if a breach of the contract was committed, become reasonable and natural in the circumstances relating to that particular contract, so in the case of tort, if, at the time when it is committed the tort-feasor knows, of as a reasonable person in the circumstances ought to have known, that the commission of the tort may reasonably Cause damages which would not usually result from the commission of the wrongful act, there damages become, and are deemed to be, the reasonable and natural consequences of the tort which has been committed.'

6. In Admiralty Commissioners v. Valeria Owners (1922) 2 A. C. 242 at, p. 248 : 92 L. J.K.B. 42. Lord Dunedin observed that:

Restitutio in integrum is a phrase which is properly applied when you wish to express a condition which is imposed upon a person seeking to rescind a contract. I do not think it can be properly applied to questions of tort; and the illustration I give is a very simple one. If by some-body's fault I lose my leg and am paid damages can anyone in his sensessay I have had resitutio in integrum? The true method of expression, I think, is that in calculating damages you are to consider what is the pecuniary sum which will make good to the sufferer, so far as money can do so, the loss- which he has suffered as the natural result of the wrong done to him.

7. In Hobbs v. London & South Western Railway (1875) 10 Q.B. 111 at p. 121 : 44 L.J.Q.B. 49 : 32 L.T. 352 : 23 W. R. 520. Mr. Justice Blackburn, as he then was, observed that.

It is a vague rule, and as Baron Bramwell said, it is something like having to draw a line between night and day; there is a great duration of twilight when it is neither night nor day.

8. In The Mediana (1800) A.G. 113 at p. 116 : 69 L.J. Q.B. 35 : 48 W.R. 398 : 82 L.T. 95 : 16 T.L.R. 194 : 9 Asp. M.C. 41. Lord Halsbury, Lord Chancellor, stated that

The whole region of inquiry into damages is one of extreme difficulty. You very often cannot even lay down any principle upon which you can give damages; nevertheless it is remitted to the Jury, or those who stand in place of the Jury, to consider what compensation in money shall be given for what is a wrongful act. Take the most familiar and ordinary case: how is anybody to measure pain and suffering in moneys counted? Nobody can suggest that you can by any arithmetical calculation establish what is the exact amount of money which would represent such a thing as the pain and suffering which a person has ' undergone by reason of an accident. In truth, I think it would be arguable to say that a person would be entitled' to no damages for such things. What manly mind cares about pain and suffering that is passed? But nevertheless', the-law recognises that as a topic upon which damages' may be given.

9. Difficult though the task may be it is my duty to appraise the loss which the plaintiffs have suffered by the negligence of the defendants. Applying the rules propounded in the above decisions I am clearly of opinion that the claim must be limited to such loss as the plaintiffs sustained on the date when the tort was committed, for

In cases where, as in the present, the damage is fixed and definite, and due to conditions determined at a particular date, the amount of damage is assessed by reference to the then existing circumstances and' subsequent changes would not afffect the result

per Lord Buckmaster in SS. Celia v. Volturno (1921) 2 A.C. 544 at p. 549 : 90 L.J.P. 385 : 27 Com. Cas. 46 : 37 T.L.R. 969, see also Mercer v. Jones (1813) 3 Camp. 477.; Ewbank v. Nutting (1849) 7. C.B. 797 : 137 E.R. 316 : 78 R.R. 830; Reid v. Fairbanks (1853) 13 Q.B. 692 : 1 C.L.R. 787 : 22 L.J.C.P. 206 : 17 Jur. 918 : 138 R.R. 1371 : 93 R.R. 695; Henderson v. Williams (1895) 1 Q.B. 521 at p. 530 : 64 L.J.Q.B. 308 : 14 R. 375 : 72 L.T. 98 : 43 W.R. 274; France, v. Gaudet (1871) 6 Q.B. 199 at p. 203 : 40 L.J.Q.B. 121 : 19 W.R. 622. and The Zelo (1922) P. 9 : 91 L.J.P. 57 : 126 L.T. 351 : 38 T.L.R. 69.

8. The ruling of Abbot, C. J., in' Greening v. Wilkison (1825) 1 C. & P. 685 at p. 626 : 28 R.R. 790, to the contrary, in my opinion, cannot now be regarded as in accordance with law.

9. In order to estimate the loss which the plaintiffs have suffered it is necessary, therefore, to ascertain the actual value of the goods on the 18th August 1921, the date on which the fire occurred; for it is not suggested that the defendants at that time were aware of any special loss which might befall the plaintiffs if they were negligent in executing the repairs to the SS. 'City of Agra', and

Under ordinary circumstances the direction to the Jury would simply be to ascertain the value of the goods at the time of the conversion, and in case the plaintiff could, by going into the market, have purchased other goods of the like quality and description, the price at which that would have been done would be the true measure of damages.

10. per Mellor, J., in France v. Gaudet (1871) 6 Q.B. 199 at p. 203 : 40 L.J.Q.B. 121 : 19 W.R. 622.

11. In the course of his argument, Counsel for the plaintiffs framed his contention in this wise. He urged that inasmuch as in cases where goods are lost in transit at sea, the damages recovered against the carriers are based upon the market price of the goods at the port of destination O'Hanlan v. Great Western Railway (1865) 6 B. & S. 481 : 34 L.J.Q.B. 154 : 18 L.T. 490 : 11 Jur. (n. s.) 797 : 13 W.R. 741 : M. & R. 1274 : 141 R.R. 482; Cooverjee Bhoja v. Rajendra Nath Mukerjee 2 Ind. Cas. 831 : 36 C. 617 at p. 625; Rodo Canachi v. Milburn (16) (1887) 18 Q.B.D. 67 : 56 L.J.Q.B. 202 : 58 L.T. 594 : 35 W.R. 241 : 6 Asp. M.C. 100. and Wertheim v. Chicontimi Pulp Co., (1911) A.C. 301 : 80 L.J.P.C. 91 : 104 L.T. 220 : 16 Gem. Cas. 297; Mitsui & Co. v. Watts : Watts & Co. (1917) A.C. 227 : 86 L.J.K.B. 873 : 116 L.T. 353 : 22 Com. Cas. 242 : 61 S.J. 382 : 33 L.L.R. 262 and the same principles as to assessment of damages obtain alike in tort and in contract, it follows that damages must be assessed by ascertaining the market value of the goods at the port of discharge, that is, at Philadelphia. But in the carriers' cases the damages are estimated at the date of the breach, that is, when delivery of the goods ought to have been given; in the present case at the time when the tort was committed. I am, of course, aware of cases where a collision has occurred, and cargo has been lost at sea by the tortious act o a third person. In such cases different considerations arise, for ex necessitate rei at the time and place of the collision restitution by way of replacement is impossible, and the effect of the tort is to frustrate the contract of carriage, e. g., The Thyatira (1883) 8 P. D 155 : 52 L.J. Adm. 83 : 49 L.T 406: 32 W.R. 276 : 5 Asp M.C. 147, The Notting Hill (1881) 9 P.D. 105 : 53 L.J. Adm. 56 : 51 L.T 66 : 32 W.R. 764 : 5 Asp. M.C. 241, gee however, Ewbank v. Nutting (1849) 7. C.B. 797 : 137 E.R. 316 : 78 R.R. 830. But such cases differ toto coelo from the present cifee where the tort is committed by a stronger to the contract at the port of loading before the voyage has commenced, and at a time when aha place where goods in lieu of the lost cargo readily can fee purchased in the market and loaded in the same, or in due course in another vessel. In the present case the general rule applies, and the loss sustained is the market value of the goods when and where the goods the damaged legs the proceeds of the gale of the damaged goods, and in addition stay freight, insurance premia, and other incidental expenditure which may have been lost. In such a case, the only further claim is to the hypothetical damages due to loss of market at the port of destination which may accrue if the goods are delayed in delivery. But such damages are 'not recoverable. The Parana, (1877) 2 P.D. 118 : 39 L.T. 388 : 25 W.R. 596 : 3 Asp, M.C. 399, The Noting Hill (1881) 9 P.D. 105 : 53 L.J. Adm. 56 : 51 L.T 66 : 32 W.R. 764 : 5 Asp. M.C. 241. At the close of his argument I understood that learned Counsel for the plaintiffs did not dispute the preposition that in this suit the damages must be measured by the actual value of the shellae at the date when the fire occurred. Assuming that such was the correct method of appraising the loss sustained by the plaintiffs?, learned Counsel urged that since the goods were loaded under a Bill of Lading for Philadelphia the value of the goods at the material date, that is, 18th, August 1921, was not the market value of the shellac in Calcutta, but the value of shellac loaded for Philadelphia, and the actual value must be taken to be that which but for the negligence of the defendants the goods would have possessed on their arrival in due course at Philadelphia. I am unable to accede to this contention. If the defendants before undertaking to carry out the repairs to the 'City of Agra' had known that the plaintiffs bad contracted to sell the goods on arrival at Philadelphia, and would lose the market value of 'the goods there if they were lost or damaged by the defendants' negligence, it may be that the defendants would be liable for such damages: Borries v. Hutchinson (1865) 18 C.B. (n. s.) 445 : 34 L.J.C.P. 169: 11 L.T. 771 : 11 Jur. (n. s.) 267 : 13 W.R. 386 : 144 E.R. 518 : 144 R.R. 563; Grebert Borgnis v. Nugent (1885) 15 Q.B.D. 85 : 54 L.J.Q.B. 511; Dunn v. Bucknall (1902) 15 K.B. 614 : 71 L.J.K.B. 963 : 51 W.R. 100 : 87 L.T. 497 : 18 T.L.R. 807 : 9 Asp. M.C 330 : 8 Com. Cas. 33, But there is no evidence of the user to which the plaintiffs proposed to put the 602 bags of shellac in suit. The goods were consigned by the plaintiffs to their own office in Philadelphia, but did the plaintiffs intend to sell the shellac in transit or on arrival, or to hold it in the expectation or belief that the market would rise, or to retain it for their own use? Who can tell? Again, if it be urged that the actual value was the price for which goods loaded in Calcutta for Philadelphia could have been sold in the market in August 1921 the answer is two fold; (1) that there is no evidence of the price at which such goods could have been sold, and (II) that the price which an intending purchaser would be prepared to pay for such goods in August 1921 would depend upon circumstances so various and so recondite that an estimate of the amount must needs be the result of speculation and guess work. In this connection I would refer to the reasoning upon which the judgment of Mellish, L. J. in The Parana (1877) 2 P.D. 118 : 39 L.T. 388 : 25 W.R. 596 : 3 Asp, M.C. 399, was based. In considering whether the loss of market at the port of discharge due to delay in the transit of goods at sea could be recovered, his Lordship observed that.

12. 'In order that damages may be recovered, we must come to two conclusions (1) that it was reasonably certain that the goods would not be sold until they did arrive, and : AIR1924Cal240 . that it was reasonably certain that they would be sold immediately after they arrived, and that that was known to the carrier at the time when the Bills of Lading were signed. It appears to me that nothing could be more uncertain than either of those two assumptions in this case. Goods imported' by sea may be, and are every day, sold whilst they are at sea. If the man who is importing the goods finds the market high and is afraid that the price may fall, he is not usually prevented from selling the goods because they are at sea. The sale of goods to arrive, the sale of goods on transfer of Bills of Lading, with cost, bills and insurances is a common mercantile contract made every day. It may be that from not having samples of goods, or from not knowing what is the particular quality of his goods, the consignee may have a difficulty in selling them until they arrive, but that would not affect the question. Nor would it signify that the goods no longer belonged to the original consignee, but to a man who acquired them by the assignment of the Bill of Landing whilst the goods were at sea. We were told that in this case the plaintiff was a person who had advanced money on the security of the Bills of Lading. That possibly may be the case; but whether he has done that or is the purchaser, would make no difference. It was said that the goods were sold, and that if the person who sells them does not suffer the damage then the purchaser would suffer the damage. But that is pure speculation. If a man purchases goods while they are at sea, no person can say far what purpose he purchases them. He may purchase them because he thinks that if he keeps them for six months, they will sell for a better sum, or he may want to use them in his trade. It is pure speculation to en terinto the question for what purpose he purchases them. In this particular case the plaintiff did not sell the goods when they arrived, for he sold them some months afterwards, when a further fall bad taken place in the market. Of course, he does not seek to recover from the defendant that additional loss, but this serves to illustrate how uncertain it is whether he would have sold them. If he did not sell them when they did arrive, but kept them because he thought the market would rise, how can we tell that he would not have done exactly the same thing if the goods had arrived in time? Therefore, it seems to me, that to give these damages would be to give speculative damages, to give damages when we cannot be certain that the plaintiff would not have suffered just as much if the goods had arrived in time. According to the principles on which the Courts have acted in all such speculative and uncertain cases damages ought not to be recovered.'

13 See also Brown v. Mutter (1872) 7 Ex 319 at p. 320 : 41 L.J. Ex. 214 : 27 L.T. 272 : 21 W.R. 18. The Netting Hill (1872) 7 Ex 319 at p. 320 : 41 L.J. Ex. 214 : 27 L.T. 272 : 21 W.R. 18; Celia v. Volturno (1921) 2 A.C. 544 at p. 549 : 90 L.J.P. 385 : 27 Com. Cas. 46 : 37 T.L.R. 969. Although, the subject-matter of the appeal in which Mellish, L.J. delivered the above judgment was different from that in the present suit, in my opinion, the reasoning upon which that judgment was based is applicable to the circumstances of the present case. The contention founded upon the allegation that the value of the shellac on the 18th August 1921 was enhanced by reason of the fact that it was loaded in the 'City of Agra' bound for Philadelphia, in my opinion, fails, for it is not proved that any suck enhanced value was lost to the plaintiffs by reason of the defendants' negligence. As it is conceded that there was a free market for shellac in Calcutta on or about 18th August 1921, in my opinion, the loss which the plaintiffs have sustained is to be measured by the price which they would have had to pay at the material date in order to purchase similar goods in the market at Calcutta, leas the amount realised by the sale of the damaged shellac and in addition to this sum, the plaintiffs are entitled to the advance freight which they have paid to the shipowners and any other, incidental expenditure which they have lost. There will be, therefore, a decree in that sense in favour of the plaintiffs.

14. I cannot permit this case to pass out of my hands without referring to a contention which was pressed upon me by Counsel for defendants. He urged that as the plaintiffs were able to purchase shellac, in Calcutta to replace that which was damaged, and the goods so purchased could have been loaded in the 'City of Agra' before she sailed on the 26th August, the plaintiffs who were under an obligation to minimise the damage that might result from the defendants' negligence, were entitled to recover only the market value of the goods in Calcutta on the 2lst August 1921, less the sum realised from the sale of the damaged shellac. Now, upon the evidence I find that it was feasible for the plaintiffs to purchase shellac in Calcutta, and to load the shellac bought to replace the damaged bags in the 'City of Agra' before she sailed on the 26th August; but I find also that from the 18th August up till the 26th August the plaintiffs could have ship-pod the shellac only if the shipowners had consented to shut out other goods which they had contracted to carry in the 'City of Agra'. It is true, of course, that

even those who have been wronged must act reasonably, however wide the latitude and discretion that is allowed to them within the bounds of reason..

15. per Lord Loreburn (Lord Chancellor) in Lodge Holes Colliery Co. v. Wednesbury Corporation (1908) A.C. 323 : 71 L.J.K.B. 847 : 99 L.T. 210 : 72 J.P. 417 : 6 L.G.R. 924 : 24 T.L. Rs. 771; Smith v. McGuire (1858) 3 H. & N. 551 : 27 L.J. Ex. 465 : 6 W.R. 726 : 157 E.R. 589 : 31 L.T. (n. s.) 248 : 1 F. & W. 199 : 117 R.R. 853. I am of opinion, however, that in the circumstances of this case the plaintiffs were under no obligation either to purchase shellac to replace that which was damaged or to load the same in the 'City of Agra'. How can a wrong-doer be heard to complain that the person injured has not laid out money for the wrong-doer's benefit, and in order to minimise the damages which he is liable to pay by reason of the tort which he has committed? I can conceive of no ground in reason or in equity why the injured party should incur expenditure, or invest money which otherwise he might employ for his own benefit, in order that a possible advantage thereby may accrue to the wrong-doer. In support of the view which I entertain on this matter I pray in aid, and make my own, the observations in another connection that Kelly, C. B. passed in Brown v. Muller (1872) 7 Ex 319 at p. 320 : 41 L.J. Ex. 214 : 27 L.T. 272 : 21 W.R. 18:

He is not bound to enter into such a contract, which may be either to his advantage or to detriment, according as the market may rise or fall. If it fell, the defendants might fairly say that the plaintiff had no right to enter into a speculative contract, and insist that he was not called upon to pay a greater difference than would have existed had the plaintiff held his hand SS Or again, by such a course, the plaintiff might be seriously injured and yet have no remedy. Suppose, for example, his new contract was with a person who proved insolvent. He would, in that case, be without redress; he would have lost his former contract, and his new one would turn out worthless. In either event, therefore, I do not think the plaintiff could be called upon to enter into a fresh contract. If he did; and thus obtained an advantage, he, no doubt, might save the defendant from some damages. Bat if he should suffer a loss, as by the insolvency of the new contractor, he could not make the defendant answer for it. And if it should happen that he might have done better for the defendant by waiting and making no speculative contract, the defendant would in his turn have a fair right to complain that his loss had not been mitigated as far as possible.

16. See The Mediana (1800) A.G. 113 at p. 116 : 69 L.J. Q.B. 35 : 48 W.R. 398 : 82 L.T. 95 : 16 T.L.R. 194 : 9 Asp. M.C. 41., Jamal v. Moolla Dawood Sons & Co. 31 Ind. Cas. 949 : 43 C. 493 : 20 C.W.N. 105 : 30 M.L.J. 73 : 14 A.L.T. 89 : 19 M.L.T. 80 : 3 L.W. 181 : 23 C.L.J. 137 : (1916) 1 M.W.N. 70 : 18 Bom. L.E. 313 : 9 Bur. L.T. 8 (P. C).

17. For these reasons, I am pf opinion that this contention on behalf of thy defendants fails. In the result there will be a decree for the plaintiffs for Rs. 88,503,8-8 and the generaly costs of the suit on scale No. 2 less the costs of one day's hearing.


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