The Bombay United Merchants’ … vs Doolubram Sakulchand And … on 23 August, 1887

Bombay High Court
The Bombay United Merchants’ … vs Doolubram Sakulchand And … on 23 August, 1887
Equivalent citations: (1888) ILR 12 Bom 50
Author: Farran
Bench: Farran


Farran, J.

1. The facts in this case, except in details which appear to me of but little importance, are not really in dispute. The plaintiffs are a company whose business is to receive indents in Bombay, order out goods from Europe to fulfil such indents, and deliver such goods to the indentors in Bombay. The defendants for some time prior to the transaction in question dealt with the plaintiffs’ company. On the 7th August, 1885, the defendant signed one of the plaintiffs’ usual indent forms, by which he commissioned the plaintiffs to order for their account from Europe, to be shipped as soon as possible by any steamer and subject to certain printed conditions, the following goods: 100 bundles, each weighing about 5 cwts.-equal to 500 cwts.-copper braziers, assorted in a certain manner set out in the indent, at £53-5 per ton, free on board, Bombay harbour. The first condition provided for the reference of any disputes as to quality or condition of the goods to arbitration. The next related to the payment, which was to be in cash for goods, free on board, Bombay harbour. The latter portion of it, which provides for the payment of shipping charges, &c, by the defendants, must be rejected as inconsistent with the rest of the order. The next is as follows: “The United Merchants’ Company, Limited, or their agents, can draw upon me at… days’ sight at the current rate of exchange for the full invoice amount, and I herewith bind myself to accept such draft on presentation and to pay it at maturity against delivery of the documents relating to such shipments, or, if required, by payment at current rate of exchange of the day by bank bill as usual.” The alternative mode of payment is in writing. This fact and the number of the days’ sight being left blank shows that it was intended that payment in this case was to be in cash. Then comes-” All risks of the voyage are for my account.” Then-“I hereby agree to accept the whole or any part of the order that may be practicable.” Then-“In case of the order being transmitted by wire, the United Merchants’ Company, Limited, do not hold themselves responsible for any mistake on the part of telegraph officials.” Then “Commission nil.” Lastly, “Shipment, September next.”

2. Before accepting such an indent as the above, it is usual for the plaintiffs’ company to telegraph to their agents in England to ascertain whether the order can be carried out at the rate proposed. This was not done in the present case, as the defendant did not wish the delay or expense of a telegram, but desired the company either to accept the order at once or refuse it. The company departed from their usual practice, because Carramchand Cullianji, one of the directors, expressed his willingness to take the risk upon himself. The order was, in fact, accepted by the company on his account and at his risk. This, however, did not affect the defendant, or alter his legal position in reference to the company. As far as the defendant was concerned, he commissioned the plaintiffs to order out for him 500 cwts. copper braziers, September shipment, and agreed to accept the whole 500 cwts and pay for them in cash at the rate of £53-5 per ton, free on ‘board, Bombay harbour, on their arrival.

3. On the same day the plaintiffs gave or sent to the defendant a reply, in their usual form, to his order, partly lithographed and partly written, as follows: “Bombay, 7th August, 1885. The United Merchants’ Company, Limited, to Doolubram Sakulchund, Esq. We have the pleasure to inform you that we have received a telegram from our Manchester friends, and so far as regards the cyphers therein used, we learn that they advise the following purchases, which will be invoiced to you at your limit, subject to confirmation by letter as usual: Order this’ day 100 bundles of copper braziers at £53-5 per ton, free on board, Bombay.” This reply, from the word “order” to the end, is written. That word and the portion preceding it are lithographed. As a fact,. however, no telegram had been received from the plaintiffs’ Manchester friends, and the plaintiffs had not learnt that they had advised the purchases referred to in their reply. This was probably known to the defendant as well as to the plaintiffs. It was, suggested that the telegram referred to in the reply might relate to a prior offer which the plaintiffs had received by telegram about a fortnight before, and which they had not accepted, but the suggestion appears to me to be without foundation. The acceptance of the defendant’s offer was really based on Carramchand’s view of the probabilities of the copper market.

4. As I have stated above, the usual course of the plaintiffs’ sending a telegram and waiting for a reply before accepting the defendant’s order was not adhered to, as Carramchand took the risk as well as the possible profit of the order upon himself. That circumstance, it seems to me, cannot alter the legal effect of the plaintiffs’ reply in the same way, as it did not affect the legal results flowing from the defendant’s order. The plaintiffs are in the same position exactly as if the usual course had been pursued. The defendant’s order, as summarised above, is accepted by the plaintiffs thus: The goods you have ordered will be invoiced to you at your limit, namely 100 bundles of copper braziers at £53-5 per ton, free on board, Bombay. The reasons which induced the plaintiffs to accept the order seem to me to be quite immaterial, whether it was the receipt of a telegram assuring them that the order could be carried out at the defendant’s limit, or the fact that Carramchand’s undertaking placed them in the same safe position as if such a telegram had been received. The plaintiffs, in consideration of the defendant’s order and the undertakings contained in it, promise the defendant that the goods ordered by him will be invoiced to him at the agreed rate. That acceptance or promise is in the same lithographed terms as the plaintiffs use in accepting and promising to fulfil all similar orders, and is, it seems to me, attended with the same legal consequences. I find nothing in the oral evidence which prevents me from giving effect to the contract between the plaintiffs and the defendant evidenced by the written agreement. The evidence of the plaintiffs’ agent is that Carramchand directed him to draw out the usual form.

5. On the 11th August, 1885, the plaintiffs wrote to their ManChester agents to send them the goods, which the plaintiffs had ordered at £53-5 per ton. This indent the plaintiffs cancelled by telegram early in September, reducing their limit by 5s. per ton. The agents were unable to carry out the order at the reduced limit, and it remained unexecuted. On the 26th October, the plaintiffs through Carramchand had negotiated with one Naga Ducha to take over from him a September shipment of copper by the Merton Hall, answering to the defendant’s order and for the purpose of fulfilling it; so they wrote on that day to the defendant as follows: “We beg to inform you of the arrival of the S.S. Merton Hall with 100 packages of goods sold to you as per agreement No. 213, and have, therefore, to request payment of the cash for those goods, according to the terms of the agreement.” The negotiation with Naga Ducha fell through, and the defendant, therefore, could not get the goods from the Merton Hall. He, on the 30th October, wrote through his solicitors to the plaintiffs, stating that he believed the goods never came to Bombay, and he considered the contract to be at an end. The plaintiffs on the 29th October had succeeded in purchasing, through Carramchand, a September shipment of goods from Beg Mahomed, corresponding to those ordered by the defendant. They then on the 31st October wrote to the defendant, informing him that it was a mistake of their clerk to advise the arrival of the defendant’s goods per Merton Hall, and handing the defendant invoice of 100 bundles arrived ex Tuban Head. The defendant found out that the plaintiffs had not ordered out those goods, but purchased them in Bombay, and he repudiated them on that ground. The price of copper had then fallen. The plaintiffs sold the goods by auction, and now sue for the difference in price between that realised and that which the defendant had contracted to pay.

6. The question is, whether, under the circumstances, they are entitled to recover it. That question is one of general importance. It amounts to this. When a firm, like the plaintiffs, accept a commission to order out goods from Europe at a specified rate, and undertake that the goods will be invoiced to the indentor at that rate, do they fulfil their contract by offering to their indentor goods which they have procured in Bombay from another house answering the description of the goods ordered through them? It appears to me that the custom of the trade, if there be one, ought properly to be invited to solve that question (see Johnson v. Raylton L.R., 7Q.B. Div., 438.) No evidence of any custom has, however, been adduced, and I must, therefore, decide it upon principle. It is admitted by the plaintiffs’ witnesses that it was intended, at the time when the defendant gave his order, that the goods should be ordered out from England by the plaintiffs, and that this was the invariable course of business of the plaintiffs’ firm, the present case forming the only instance to the contrary. The plaintiffs usually have the goods they order out invoiced to themselves, and when they receive such invoice, they re-invoice them to the persons for whom they order out the goods. In the case of copper braziers the goods do not bear any distinctive marks, showing that they have been imported through the plaintiffs. The Only mark on them is the shipping mark on the outer sheet of each bundle, which varies according to the pleasure of the agent who ships the goods. There does not appear to be any particular advantage in having the copper selected by the plaintiffs’ agents. In fact, in the case of copper braziers, it does not appear to make any difference to the indentor whether they are imported by the firm from or through whom he obtains the goods or not. In the case of goods of other descriptions, there may be, and no doubt is, an advantage, real or supposed, in ordering them out by a particular firm.

7. The construction of the contract cannot, however, vary according to the goods to which it is applied. The importance of the stipulation is really immaterial. The sole question is, is it a term of the contract that the plaintiffs shall order out the goods? Can this be really doubted? The proposal is that the plaintiffs shall order out the goods to be paid for at a certain rate. The acceptance is an undertaking that the goods shall be invoiced to the defendant at that rate. That, in my opinion, means that the goods shall be ordered out and invoiced to the defendant at that rate; otherwise it would be an acceptance of it, with a modification which, until the modification was itself assented to, would not constitute a contract. The case of Johnson v. Raylton L.R.. 7 Q. B, Div., 438, at p. 454 is important as showing that, if it can be gathered expressly or impliedly from an order for goods and its acceptance that the goods are to be of the manufacture of the person accepting the order, the latter will not fulfil his contract by supplying goods in all respects answering to the description contained in the order if they are not of his own manufacture. Upon that point there was no difference of opinion between Lord Bramwell and his colleagues. Their difference of opinion consisted in this. Was a stipulation that the goods were to be manufactured by the plaintiff to be implied into the contract without evidence of custom? Lords Justices Cotton and Brett thought that it was. Lord Bramwell thought not. To use the words of Brett, L.J., in that case-” It seems to me to be more consonant with the ordinary simplicity of fair mercantile business, and more in accordance with legal principles, to say” that an importing firm which accepts a commission to order out goods at a fixed rate, and undertakes that they shall be invoiced to the person giving the order at that rate, does not fulfil his contract by obtaining goods answering to the terms of the order from another firm in Bombay and tendering them to the person giving the order than (in the absence of evidence of usage) to say the contrary that this is so through the practical effect of an order like the present, when accepted, is to constitute the relation of vendor and purchaser between the parties As to the legal relation which such a contract creates, see Ireland v. Livingston 5 H.L,395.. I have already pointed out that it was the admitted intention of the parties that the defendant’s order should be carried out in England in the usual manner. The terms of the plaintiffs’ letter (written under the instructions of Carramchand) offering the defendant goods ex Merton Hall and ex Tuban Head in fulfillment of his order, indicate, I think, an intention on the plaintiffs’ part to conceal from the defendant the fact that they had not themselves ordered out the goods. Their present contention is for the first time set up in their letter of the 3rd November, 1885.

8. It is to be regretted that the law in this case does not allow of an appeal from my decision, as it involves a question of importance. I dismiss the suit with costs, including costs of application for new hearing.

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