« EelmineJätka »
HE facts are set out in the judgment.
Drieberg, K.C. (with him Hayley), for plaintiffs, appellants.
Samarawickreme (with him F. H. B. Koch and Canakeratne), for defendant, respondent.
Cur, adv. vult.
December 21, 1922. DE SAMPAYO J.
This case involves a question as to the rights and obligations arising out of a contract entered into by the defendant with the plaintiffs, Messrs. Hayley & Kenny, on April 19, 1920. The plaintiffs are a firm of merchants, and part of their business is to indent for goods from England and elsewhere in Europe on the orders of local traders. The defendant is a hardware merchant, carrying on business in the Pettah of Colombo. The contract is contained in the document marked A, which is in the printed indent form of the plaintiffs, with the description of the goods and certain other particulars written at the bottom. As much of the argument on the appeal related to the construction of this document, it is convenient to quote it in full. It is as follows:—
INDENT FOR C.1.F. IMPORT BUSINESS.
(1) I/we, the undersigned, I. L. Abdul Kudhoos, hereby request Messrs. Hayley & Kenny to order and import for my/our account and risk the whole or any part of the goods mentioned hereinafter at the prices and on the terms noted below.
(2) Price to include cost, freight, and insurance, but duty and all landing and Customs charges to be paid by the indentor. Payment cash in Colombo in Ceylon currency on presentation of shipping documents, or should such documents be delayed, payment to be made on the day goods arrive in Colombo. Messrs. Hayley & Kenny are not responsible for loss sustained through the late arrival of documents.
(3) For goods sold in sterling currency the current rate of exchange on the day of payment will be taken.
(4) Should I/we fail to pay for the goods as arranged above, Messrs. Hayley & Kenny may land, clear, and store the goods at my/our expense and risk, and may at any time thereafter and without any special notice to me/us sell the goods on my/our account and risk, either by auction or by private sale, and I/we agree to make good to them immediately any loss and expense incurred thereby, and also to pay them in addition 3 per cent. re sale commission and per cent. re sale brokerage.
(5) Messrs. Hayley & Kenny are not responsible for late or nonshipment of goods in consequence of war, accidents, or loss during sea and/or land transport, ice blockades, quarantines, strikes, bankruptcy, fire at manufacturer's works, breakdown of machinery, or other causes of force majeure.
I/we agree that we will not make any claim for late shipment if same be only two weeks after the specified time. The date of the bill of lading will be accepted by me/us as conclusive DE SAMPAYO evidence of the date of shipment without further proof being required. If goods were ready for shipment within contract time, and were shut out or have to wait for the steamer, such goods to be shipped by the first available steamer, and I/we agree to accept them without making a claim. Should the goods be shipped before the time stipulated, I/we agree to pay for them as arranged above, but with an allowance for interest at the rate of 6 per cent. per annum for the time shipped too early.
(6) The weight of the goods as specified in the shipper's invoice shall be accepted by me/us as the correct weight thereof, and the goods shall be paid for on that basis, any loss in weight being borne by me/us.
(7) Messrs. Hayley & Kenny or their agents are to effect marine insurance F. P. A. on the said goods with some good Insurance Co., the solvency of which they shall, however, not be deemed to guarantee for the full invoice value of the said goods (unless otherwise agreed in writing), otherwise all goods shall be at my/our sole risk from the time when same shall be put on board ship at the port from which shipment is first made, and Messrs. Hayley & Kenny shall be in no way responsible therefor.
(8) All complaints regarding the goods to be made in writing within seven days from arrival of the goods.
(9) Each shipment and/or separate item under this order to be
(10) Messrs. Hayley & Kenny are not responsible for any errors
Arbitrator's fees are to be borne by the party against whom the
The acceptance of this order shall be made known to me/us by
Messrs. Hayley & Kenny shall be entitled to receive from me/us
1922. DE SAMPAYO
We hereby bind ourselves jointly and severally to perform the several conditions and covenants hereinbefore contained. Anything written in the vernacular, except a plain signature, shall be null and void.
I/we undertake to give Messrs. Hayley & Kenny full instructions as to get-up, stamping, marking, packing, &c., of the goods. immediately after acceptance of the order, but should I/we fail to do so, Messrs. Hayley & Kenny are at liberty to use their own discretion in these matters.
(Sgd.) I. L. ABDUL KUDHOOS.
FROM WILLIAM TELL BRAND.
12 Twelve and a half tons galvanized plain sheets, sizes as below at seventy-three pounds four shillings.
Terms: Payment in cash before delivery, or at seller's option by approved pro-notes at 90 days' sight at ruling rate of bank interest.
(Sgd.) T. MURUGESU.
Accepted 20/4/20. Per pro HAYLEY & KENNY, (Sgd.)
The plaintiffs allege that the goods arrived at Colombo on or about October 13, 1920, and were duly tendered to the defendant, and that the defendant in breach of his contract failed to take delivery of and pay for the same, and they claim Rs. 7,332.57 being the difference between the contract price and the amount realized when they were sold by auction at the defendant's risk, together with a certain sum as interest. The defendant pleaded, inter alia, that the plaintiffs could not and did not tender an effective policy of insurance covering the galvanized sheets ordered by him, and he was, therefore, not bound to accept the goods. The District Judge upheld this ground of defence, and dismissed the action with costs, and the plaintiffs have appealed.
It is admitted that no policy of insurance was tendered to the defendant, and that the insurance which the plaintiffs effected covered not alone the goods in question, but also other goods
ordered by others on separate indents. The law is clear that in the case of c.i.f. contracts a policy of insurance must be delivered by the vendor together with the ordinary shipping documents. Mambre Saccharine Co., Ltd., v. Corn Products Co., Ltd.,1 and Wilson Holgate & Co. v. Belgian Grain & Produce Company. The first of these cases shows that the purchaser is entitled to have delivered to him a policy of insurance which covers only the goods mentioned in the bills of lading and invoices. But it is contended on behalf of the plaintiffs that the indent constituted a contract of agency, and not a contract of purchase and sale, and that the defendant could not refuse to accept the goods, but would have only a claim for damages if the plaintiffs had violated any part of their duty, and the judgment of Lord Blackburn in the leading case of Ireland v. Livingstone 3 is cited in this connection. The indent in this case no doubt is in form a contract of agency, but it is noticeable that the order is to supply the goods at a settled price, which is to cover cost, insurance and freight, and commission. Thus, if the plaintiffs were able to procure the goods at a less price, they would be under no obligation to reduce their claim, nor, if they had to pay a larger price, would they be able to claim anything more than the price agreed upon. The gain or loss, as the case may be, would be the plaintiffs' own, and this is inconsistent with the essence of a contract of agency, as explained in Ireland v. Livingstone (supra). In this, as in that case, there is no relation between the defendant and the consignor in England, who was wholly unknown to the defendant, and unless the plaintiffs were considered the vendors to the defendant, there would be no one from whom the title to the goods could pass to the defendant. I think that the plaintiffs, to all intents and purposes, are in the position of vendors to the defendant, and are bound to observe the obligations of a contract on c.i.f. terms. Even if the contract were really one of agency, there is, I think, no difficulty in attaching to the plaintiffs the same obligations. Any controversy on this head, however, is concluded by the position which the plaintiffs themselves took up in bringing the action, for their plaint stated that by the indent in question "the plaintiffs sold and the defendant bought 12 tons of galvanized plain sheets at £73. 4s. per ton c.i.f. and c." I think that in accordance with the ordinary incidents of a c.i.f. contract, they were bound to effect a separate insurance over the goods ordered by the defendant, and tender to him the policy of insurance before they sought to enforce the contract against him.
The plaintiffs, however, pressed two points which they contended relieved them from that obligation. They sought to establish a custom among merchants in Colombo, according to which the merchant who executes an indent may effect one policy of insurance over the goods of several parties and likewise retain the policy and 2 (1920) 2 K. B. 1.
(1919) 1 K. B. 198.
341 L. J. Q. B. 205.
recover on it in case of necessity on behalf of the indentors and not
As far as my knowledge is concerned, I should say that it is not the
It seems to me that these witnesses practically speak of the practice of their respective firms, and not of a general local custom. and there does not appear to be any uniformity in the practice.