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Madras High Court
M. S. Doraiswami Mudaliar vs P. K. M. Subbanna Chettiar And Anr. on 25 February, 1927
Equivalent citations: AIR 1927 Mad 880
Author: Ramesam


Ramesam, J.

1. The facts of this second appeal may be stated as follows. The plaintiff is a commission agent of Vellore and the defendants are merchants at Tiruppur. On 21st January 1920 (Ex. D) the defendants sent an order to the plaintiff asking him to send 150 bags of rice at Rs. 3-2-0 per bag. They repeated the same order by Ex. 3 on 23rd January 1920. Ex. D was replied to by Ex. F and F-1, on 23rd January 1920. On 24th January 1920 the defendants addressed Ex E to the plaintiff acknowledging receipt of Ex. F-1 and asking him to send one waggon of 150 to 160 bags of white kar rice and semba rice. This was followed by Exs. G dated 25th January and G-1 dated 26th January. Ex, H on the 26th January definitely stated that the bags to be sent should be 160. Meanwhile the plaintiff wrote Ex. 4 on the 26th January and on the 31st January he wrote Ex. J in which he mentioned that 100 bags have been sent. The defendants wrote Ex. 5 on the 1st February and on the 2nd February they wrote Ex. K admitting receipt of Ex. J and also of another letter containing the railway receipt for the 100 bags and asking that further 50 bags of white kar rice should be sent. The plaintiff meanwhile wrote Ex. M (registered letter) on the 2nd February in which he enclosed a railway receipt for another 100 bags and an invoice for the total 200. The invoice is Ex. T. It is for 70 bags of white kar rice at Rs. 2-15-0, 34 bags of the same at Rs. 3-1-0 and 96 bags of semba at Rs. 2-14-0. The defendants wrote Ex. L on the 3rd February acknowledging receipt of Ex. M and say further “we shall check invoice and intimate to you. We shall also send money.” The defendants do not object in this letter that, whereas they ordered only 150 or 160 bags, 200 bags have been sent. Ex. 6 by the defendants dated 9-2-20 says that the first 100 bags are in a damaged condition and then says:

We do not know what the nature of the 100 bags which we expect would be. If they be also of this kind we cannot accept and if any delay be made the goods would be much damaged. You should at once come and take charge.

2. In this letter also there is no complaint that an additional hundred was sent instead of an additional 50 or 60 only. On the other hand, the defendants signify their intention to accept those goods subject to their being of the proper kind. The same idea is repeated in Ex. 7 dated the 10th February. Exs. 8 and 9 dated the 11th and 12th February also raise no objection to the number of bags sent. Both the lower Courts have found against the defendants and in favour of the plaintiff that
the goods were of the description and quality ordered by the defendants: (para, 10 of the lower appellate Court’s judgment.)

3. In para. 4, the Subordinate Judge also says:

the defendant did not refuse to accept the goods on the ground that more bags than that the defendants wanted were sent by the plaintiff

4. In para. 5, he says:

the question is simply whether the goods were not of the description and quality which the defendants wanted.

5. In spite of these remarks in paras. 4 and 5, in para. 41 he says:

From the correspondence it appears that the order was only to send 150 to 160 bags and not 200.

6. The Subordinate Judge has already found that there is no objection to the larger number and the correspondence shows that the larger number of bags was accepted subject to their being of the proper kind. I therefore think that it is not open to the Subordinate Judge to reduce the claim from one on 200 bags to 150 bags or 160 bags.

7. This disposes of the question strenuously argued by Mt. T. M. Krishnaswami Iyer for the respondent that where more goods were sent than were ordered the defendant is entitled not to accept the goods on this ground and though this ground was not.given at the time of the refusal the defendants can now justify their refusal in the suit by relying on that ground. He relied on Cunliffe v. Harrison 6 Ex. 903 and Levy v. Green [1857] 8 El.&Bl. 575 which was affirmed by the Exchequer Chamber in Levy and Green [1859] 1 El.&El. 969 In the appellate judgment while confirming the judgment of the Queens Bench, Byles J., said:

I do not say that, in all oases where the goods ordered are sent together with others not ordered, the vendee would have a right to refuse to accept any; but, if there is any danger or trouble attending the severance of the two or any risk that the vendee might be held to have accepted the whole if he accepted his own, he is at liberty, as this defendant was, to refuse to accept at all.

8. The view of Byles J has been acted upon in Section 119 of the Contract Act which says that the buyer may refuse to accept any of the goods so sent; if there is risk or trouble in separating the goods ordered from the goods not ordered. But apart from this where the goods have been expressly accepted subject to their being of the proper kind no question arises that the defendant is entitled to refuse them or justify the refusal on the ground that more goods were sent than were ordered. That there may be an acceptance by the buyer subject to a condition and on the condition being complied with the acceptance becomes complete appears also from Benjamin on Sales, 6th Edition pp. 105, 131 and 138. The defendants having accepted all the 200 bags subject to the only condition that they should be of the proper quality are now estopped from refusing the goods or from justifying the refusal on the ground that they were more in quantity than ordered, the goods being now found to be of the kind ordered. This makes it unnecessary for me to discuss at great length the other point argued by Mr. Krishnaswami Iyer, namely that though the ground of refusal now relied on was not originally stated, the action can be defended on that ground and the original refusal can be justified. That such a principle applies in the case of dismissal of a servant is clear from The Boston Deep Sea Fishing and Ice Co. v. Ansell [1889] 39 Ch. D. 339 and Ridgeway v. Hungorford Market Co. 3 A. & R. 171 But the question is, how far such a principle applies to breach of contracts? Mr. Krishnaswami Iyer referred to the case of Cowan v. Milbourn [1867] 2 Ex. 230 but that is a case where the contract was illegal. It is not very convincing to me that the same principle applies to breaches of contracts relating to sale of goods. It is true that in Taylor v. Oakes Ram Coroni & Co. [1922] 127 L. T. 267 Greer, J. referred to the above two cases of master and servant and expressed the opinion that the principle applies equally to a contract for the sale of goods (pp. 269 and 270). But the Court of Appeal made no reference to this principle and disposed of the case without resorting to it, and it seems to me doubtful how far the case is applicable to contracts for sale of goods. At any rate, it is clear it must be applied subject to limitations and it is certainly displaced where there is an express acceptance of the goods subject to condition or conditions which were afterwards fulfilled. I am, therefore, of opinion that in this case there is a completed sale for 200 bags and the defendant is liable to the plaintiff for the claim with reference to all the 200 bags.

9. The next question is whether the plaintiff is entitled to damages estimated on a difference of prices, that is the difference between the contract price and the market price on the date of breach, or whether the plaintiff is entitled to the price of the goods minus the price realised on a resale. This question depends upon whether the title in the goods has passed to the defendants. The District Munsif adopted the latter method, whereas the Subordinate Judge held that the plaintiff is entitled only to a difference of prices. He said:

Further the sale took place in this case without any notice to the defendants. There was no proclamation. I think that Section 107, Indian Contract Act is, not applicable to this case. Plaintiff is not entitled to claim the loss on account of resale under Section 107.

10. Every part of these sentences seems to me to be erroneous. It is now conceded before me that the plaintiff gave notice to the defendants of resale. It is Ex. W. dated the 10th March 1920. Section 107 does not require that the notice should mention the date of the resale. Secondly, I do not understand what the Subordinate Judge means by saying “there is no proclamation”. This is not a Courtsale under the Civil Procedure Code and the Contract Act does not require any proclamation. As a matter of fact the price realised was really the market price prevailing at the time of the resale and there is no ground for attacking the resale, The plaintiff is, therefore, entitled to the contract price of the goods minus the price realised on resale.

11. The only other question is, whether any deduction should be made for the shortage in the bags when finally measured. At the end there was a shortage of 18 bags. Both the lower Courts have found that so far as 13 bags were concerned it is due to negligence of defendants in keeping them on a wet floor. As to the other 5 bags the Munsiff found that it is due to the shortage in measurement, but even as to this the Munsif found that there is no evidence to show that the shortage of 5 bags was due to the plaintiff’s neglect. B.t the Subordinate Judge says:

The burden is on the plaintiff to prove that there was not this shortage when he sent the goods by rail. There is no satisfactory evidence on this point.

12. It may be that in a case where there is no conduct on the part of the defendant amounting to accepting the goods without any question as to the measurement, the burden is on the plaintiff to show that he sent the goods of the proper measurement and there was no shortage. But where the defendant has said as in this case in Ex. L “we shall check the invoice and intimate to you, we shall also send money” and never afterwards even suggested that there was shortage in the goods sent and on the other hand accepted the bags subject to the only condition that they should be of the proper quality (vide Exs. L and 6) to throw the burden now on the plaintiff of showing that there was no shortage at the time of despatch seems to me improper. The goods were sent by rail and it is well known that there will always be petty pilfering in the course of transit. The plaintiff being a commission agent is not liable for such loss. Venkatachalam Chettiar v. Ponnuswami Aiyangar A. I. R. 1925 Mad. 46 Immediately the goods were placed in the train to the address of the defendants the title has passed. After the goods were received by the defendants they were thrown in two different godowns and there was a total shortage of quantity amounting to 18 bags. It is impossible to split up this into two parts, 13 bags due to defendant’s negligence and 5 bags due to shortage, If there was negligence on the part of the defendants the shortage also might be due to the negligence; the damage to some of the goods as well as loss of others might both be well due to the negligence. On this ground, I think. the plaintiff is entitled to the total price of the 200 bags minus the amount realised on resale.

13. The result is the second appeal is allowed and the Munsif’s decree restored with costs here and in the lower appellate Court. The memorandum of objections is dismissed with costs.

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