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M.S. Angulia and Co. Vs. E.D. Sassoon and Co. - Court Judgment

LegalCrystal Citation
CourtKolkata
Decided On
Judge
Reported in13Ind.Cas.705
AppellantM.S. Angulia and Co.
RespondentE.D. Sassoon and Co.
Cases ReferredMoll Schutte & Co. v. Luchmi Chand
Excerpt:
contract - bought-note signed by agent--authority of agent--power-of-attorney, construction of--power of re-sale--non-appropriation of goods to fulfilment of contract--measure of damages. - .....defendants refused to pay for and take delivery of the goods on the ground that they were not the goods contracted for.25. the goods were tendered to the defendants and were in accordance with the contract. now, to use the phraseology of the contract act, the goods had been appropriated bat possibly not ascertained. i say 'possibly not ascertained' because it seems to have been thought by the full bench that the property in the goods had not passed. (see section 83).26. the position then was that the vendors had done all in their power to make the specific goods the subject-matter of the contract.27. now in this case, it is otherwise; here there was neither ascertainment nor even appropriation. the sugar was in balk, and the vendors had not even appropriated the goods for the purposes.....
Judgment:

Lawrence Jenkins, C.J.

1. This litigation has been occasioned by the alleged breach of a contract for the sale of sugar. The terms of the contract are set forth in the bought-note, Exihibit A to the plaint.

2. This document is dated the 28th Febuary, 1910, and is signed by M.C. Misry on behalf of the defendants' firm.

3. By it the defendants' firm purports to buy from the plaintiffs 750 tons of white cane Java sugar, the shipments to be made during August, September, October, November, December equally. The price was Rs. 7-14-9 per bazar maund ex-jetty or docks. Delivery was to betaken by the buyer ex jetty or dock within 3 days and it was expressly provided as follows:

The goods to be at the buyer's risk and peril from the time of landing of the sugar until they be removed from jetty, dock, ghat or godown, and should the buyers fail to take delivery of the sugar, the sellers will have the option of re-selling the same in the open market by private sale or by public auction and hold the buyers responsible for all consequences.' On the 14th September, the plaintiffs wrote to the defendants' firm in reference to 150 tons of sugar on board the S.S. Okara, being the August shipment under the contract, and gave notice of the expected arrival of the steamer on or about that day. The steamer arrived on the 15th and on the 6th of October, delivery was taken of 25 tons under the contract, but beyond this no delivery was taken.

4. On the 8th of November, the plaintiffs sold the balance of 123 tons, and it is their case that this was done in exercise of the power of re-sale vested in them by the contract. On this footing, they demanded from the defendants firm a sum of Rs. 2,341-14-9 as representing the difference between the contract price and the amount realized on the re-sale; and further sums for interest and charges which brought the whole of their demand up to Rs. 2,745-12 6.

5. The claim was resisted by the defendants Sum and so this suit was brought.

6. The case came for trial before Harington, J., and the three following issues were raised; (1) whether the suit lies under Order XXX; (2) whether the Manager Misry had authority, and (3) whether there could be no re-sale of unascertained goods. The learned Judge decided the 1st and 2nd issues in the plaintiffs' favour, and on the 3rd against them. He, however, directed an inquiry as to damages.

7. From this decree, defendants' firm has appealed. The objection of want of jurisdiction embodied in the 1st issue has been abandoned, and the points made before us are these:

First it is said that the contract was unauthorised, and secondly, that as the Judge decided against the plaintiffs' contention that the price on the re-sale furnished the measure of damages, he should have dismissed the suit and not directed a reference.

8. For the plaintiffs, it has been contended that the Judge was in error in deciding adversely to his contention as to the re-sale, and though no cross-appeal or cross-objections have been filed, it is urged that Order XLI, Rule 33, empowers the Court to give effect to the defendants' contention as to the re sale.

9. First, I will deal with the defendants' contention that the contract was unauthorised.

10. I do not propose to deal with this at length for I am in complete agreement with Harington, J., on this point.

11. True it is, that the contract was signed not by the defendant but by Misry, his agent; but Misry was acting under a power-of attorney which authorised him to direct, superintend, manage, and control and carry on in Calcutta, in the name of M.S.E. Angulia & Co., the business of general merchants as then carried on by the defendant in Singapore and elsewhere. For that purpose, the widest powers were vested in Misry, followed no doubt by the qualification that nothing therein contained should be deemed to authorize the attorney to speculate in gunnies, opium, shares, or exchange.

12. It is urged that the transaction in suit was a speculation and so in contravention of the power-of-attorney.

13. But even if it wag a speculation,--and this is a view that has not been established--it is outside the terms of the express prohibition on speculation.

14. But then it is said the transaction is not in accord with the manner in which business was carried on by the defendant at Singapore, and in this connection, the defendant complains that a commission for his examination should have been issued, as this would have enabled him to prove this point. In my opinion, there is no force in this contention, and I am confirmed in this view by the fact that at the hearing the request for a commission was not advanced.

15. And I think there was very good reason for this. The words 'as now carried on by me in Singapore and elsewhere,' are merely descriptive of the general character of the business and were not intended to limit the articles in which business was to be done or to define the terms on which it was to be conducted. It is not suggested that the agent could not purchase sugar, or that a forward contract could not be made; the objection when analysed is as to the prudence of the transaction, and its mere imprudence would not render it unauthorized.

16. Then it is contended that as the plaintiffs claim to damages, as formulated in the plaint and the issues, rests on the re-sale, the Court should not have directed a reference as to damages on a totally different basis. I think this contention is entitled to great weight, and all the more in view of the fact that the plaintiffs, when challenged by the defendants, refused to amend their plaint 30 as to make a case of damages on the difference between the contract price and the market price at due date and were supported in this refusal by the Court. And there is yet another circumstance which lends strength to the defendants' contention.

17. The due date under the contract is the 21st September, and there is no evidence of damages on that date: on the contrary, the evidence, such as it is, points the other way.

18. To evade this difficulty, it is suggested that the due date was postponed, and in fact that the learned Judge treats the 20th October as the day of breach.

19. But postponement was not pleaded, nor was it made the subject of an issue.

20. Nor does the matter rest there, for Mr. Sinha, when challenged, could not point to any agreement, or clear inclination, that the due date should be postponed, all he could contend was that it might be inferred from the fact that late delivery was taken of 26 tons.

21. In my opinion, it would be wrong, in view of the case made by pleadings and issues, and of the mode in which the plaintiffs' case Was conducted, to hold that there was a postponement of the due date or to direct a reference as to damages.

22. But then the plaintiffs claim that they were entitled to have the damages estimated on the footing of the re-sale. Harington, J., decided this against the plaintiffs, holding there was nothing to which the power of re-sale under the contract could attach. For the plaintiffs, it was contended that the learned Judge in so deciding failed to follow the decision of the Foil Bench in Moll Schutte & Co. v. Luchmi Chand 25 C. 505 : 2 C.W.N. 283.

23. But when the essential facts of that case and the present are contrasted, they present a significant difference. In Moll Schutte & Co.'s case 25 C. 505 : 2 C.W.N. 283, the plaintiffs sold to the defendants under an indent contract 10 cases of tobacco to be shipped by steamer to Calcutta, The plaintiffs ordered ten cases only of tobacco and caused them to be shipped and consigned to themselves for the purpose of fulfilling this contract.

24. The goods duly arrived, but the defendants refused to pay for and take delivery of the goods on the ground that they were not the goods contracted for.

25. The goods were tendered to the defendants and were in accordance with the contract. Now, to use the phraseology of the Contract Act, the goods had been appropriated bat possibly not ascertained. I say 'possibly not ascertained' because it seems to have been thought by the Full Bench that the property in the goods had not passed. (See Section 83).

26. The position then was that the vendors had done all in their power to make the specific goods the subject-matter of the contract.

27. Now in this case, it is otherwise; here there was neither ascertainment nor even appropriation. The sugar was in balk, and the vendors had not even appropriated the goods for the purposes of the agreement. That condition of affairs continued until after the re-sale.

28. Can it be then said that there even were goods to which the power of re-sale applied so as to make the result of that re-sale the measure of damage? Now the answer to this depends on the construction of the agreement between the parties as did the decision in Moll Schutte & Co.'s case 25 C. 505 : 2 C.W.N. 283 turn on the construction of the agreement there under consideration.

29. Neither in that case, nor in this was any general principle or rate of law involved.

30. What then is the scope of this power of re-sale the words of which I have already read? The goods would have come within its operation if they had been ascertained or even if they had been appropriated for the purpose of the agreement. But, in my opinion, it would be going beyond the true meaning of the words to extend the operation o the Clause to goods which had not even been appropriated and thus had in no sense become the subject-matter of the contract.

31. I do not say that a Clause could not have been so framed as to have this extended operation; there would be nothing illegal in it. But I do hold that the Clause as it has actually been framed cannot have this operation.

32. This is the view taken by Harington, J., and lie too arrived at this conclusion by the same process of reasoning. I think he used the word 'ascertained' not in the technical sense in which it is employed in the Contract Act but in the sence of appropriated, for I feel very sure the learned Judge had no intention of disregarding the Full Bench decision.

33. The result, then, is that while I agree with the view of the learned Judge as to the scope of Misry's authority and the interpretation of the power of re-sale, I think, for reasons I have already stated, that a reference as to damages should not have been granted, as this was opposed to the plaintiffs' own case. The appeal must, therefore, be allowed and the suit dismissed with caste throughout.

Woodrofee, J.

34. I agree.


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