Dada v. The British Corporation, Ltd.
1937Present: Hearne J. and Fernando A_J.
DADA v. THE BRITISH CORPORATION, LTD.
270—D. C. Colombo, 4,772.
Contract—Sale of goods—C.I.F contract—Failure to tender bill of lading—Acceptance of delivery order by buyer—Waiver of obligatory documents_
Where on c.i-f contract lor the sale of goods the seller sent a delivery-order instead of a bill of lading and the buyer accepted the order,—
Held, that the buyer must be deemed to have waived his right to receivethe bill of lading under the contract.
Y a contract entered into on November 1, 1935, the plaintiff sold tothe defendant company 1,000 cwt. sun dried F. M. S. copra packed
in bags at Rs. 8.25 per cwt. nett c.i.f. Colombo ; payment was to bemade “ against delivery The correspondence produced in the caseshowed that the copra arrived on or about November 10, 1935. Theplaintiff wrote to the defendant company on November 12, enclosinga “Provisional Bill” on payment of which plaintiff offered to handdefendant “ the documents ”. Defendant company paid Rs. 7,425being 90 per cent, of the value of goods and requested plaintiff to senddefendant, the document, promising to pay the balance after deliveryThey also requested plaintiff to be present at the weighing at the defend-ant’s mills when taking delivery. Plaintiff sent the defendant onNovember 13 a delivery order and the insurance policy and statedthat his responsibility ended with the delivery of the documents as thecontract was on c.i.f. terms. The delivery order was a letter writtenby the local agents to the Principal Collector of Customs on November12 requesting the latter to “hold at the disposal of” the plaintiff 541bags of copra weighing nett 1,000 cwt. ; this letter bore an endorsementin the terms “ please deliver to Messrs. British Ceylon Corporation, Ltd."and was signed by the plaintiff ; underneath that “ endorsement ” wasthe signature of the defendant company’s manager upon which signa-ture the Customs released the copra to the defendant. After takingdelivery the defendant company paid only Rs. 476.28 instead of the fullbalance sum of Rs. 825. The plaintiff wrote and insisted upon paymentof Rs. 348.72 being the difference required to make up the Rs. 825 on theground that as the copra was sold on c.i.f. terms he was not responsiblefor any shortage. The defendant refused to do so as the copra was42 cwt. 30 lb. less than 1,000 cwt.
At the trial the defendant company’s position was that the contractwas not a c.Lf. contract but was a contract by which the plaintiff had todeliver the full quantity of 1,000 cwt, nett and that payment was to bemade against delivery of that quantity and not against delivery of thedocuments and that the letters c.Lf. in the contract merely meant thatthe plaintiff was to pay cost, the insurance, and the freight. Thedefendant also took up the position that if the contract was a c.Lf.contract in the fullest’sense, the plaintiff had failed to fulfil the terms
Dada v. The British Corporation, Ltd.
of such a contract in that he had failed to tender a bill of lading andhad tendered only the delivery order above referred to. Plaintiffaccordingly raised a further issue as to whether the defendant companywas precluded from relying on the failure to tender a bill of lading •by reason of its having accepted such documents as were tendered byplaintiff or by waiving the tender of any other documents.
The learned District Judge held that the contract was a c.i.f. contract,and that the plaintiff had failed to fulfil his obligation by the omissionto tender a bill of lading. If it was not a c.i.f. contract, but an “ arrivalcontract” the plaintiff’s action would equally fail as he had failed todeliver a 1,000 cwt. of copra. He accordingly dismissed the plaintiffs’action. The plaintiff appealed aganist this judgment.
N.K. Choksy (with him Stanley de Zoysa), for the plaintiff, appellant.—The contract is unquestionably a c.i.f. contract and the Judge has sofound. Defendant did not accept that position and put plaintiff to theproof that he had fulfilled the contract by shipping at Singapore exactly1,000 cwt. of copra, but relied firstly upon the position that it was “ aharrival contract ” and alternatively that if it was a c.i.f. contractplaintiff had not fulfilled it by tendering a bill of lading. But plaintiffmade it clear in his letters that it was a c.i.f. contract under which hisonly obligation was to tender documents and he accordingly tenderedan insurance Policy and a delivery order (having previously signed a“ Provisional Bill ” which was equivalent to an invoice as it gave theparticulars of the goods and the amount due at the contract rate). ■Defendant accepted these documents without protest and was able to•obtain delivery as fully and effectually as'if plaintiff had signed a billof lading. Had defendant refused to accept the delivery order theplaintiff had the right in law to make a fresh tender of the correctdocuments within the contract time (Borroviman v. Free ’).
Defendant must be deemed to have waived his right to insist upon thedelivery of a bill of lading; such a waiver is possible—see OrientCompany, Ltd. v. Brekke and Howlid In these circumstances judgmentmust be entered for plaintiff.
C. W. van Geyzel, for defendant, respondent.—A contract forthe sale of goods c.i.f. is not performed by the delivery of goods butby the tender of the necessary documents, viz., invoice, insurancepolicy and bill of lading. ^ (Biddell Bros. v. Clemens Horst ’;Kpxberg & Co. v. Blythe *.) No bill of lading was tendered to thedefendant company and it is clear from the evidence that the plaintiffcould not even at the trial produce it. His claim on a c.i.f. contractmust, therefore,'fail.
The defendant company cannot be said to have waived the right to•insist on the customary documents, because the company’s view hadalways been that the contract was an “ arrival ” contract and not c.i.f. ;in .these circumstances there could be no appreciation of the relevancyof the documents and, therefore, no waiver.
Cur. adv. vult.
1'Q.B.D.500.* (1912) A. C. 18.
1 (1913) 1 K. B. 530.* (1916) 1 K. B. 495.
HE ARNE J.—Dada v. The British Corporation, Ltd.
September 14, 1937. Heabne J.—
The plaintiff sued the defendant company for Rs. 348.72 being thevalue of the difference between 1,000 cwt. and 957 cwt. 82 lb. of copra.The copra was coming from overseas. It is unnecessary to deal with allthe facts of the case. The determination of the suit depended upon threeconsiderations. If the contract was an arrival contract the defendantcompany was not liable. If it was a c.i.f. contract the question waswhether the plaintiff had delivered what are known as the “ obligatorydocuments ” under a c.i.f. contract. Finally if he had not deliveredthe obligatory documents, did the defendant company by express agree-ment waive any of the obligatory documents and in lieu thereof acceptanother document.
The learned trial Judge found, and his. finding is unexceptionable,that the contract was a c.i.f. contract. He then considered thecontention of the defendant company that “ the plaintiff had not fulfilledhis obligations under such a contract to tender a bill of lading ”. Thisissue (it is issue 2) he decided against the plaintiff when he held that“ there was no constructive delivery by tender of a bill of ladingHaving so found he dismissed the plaintiff’s suit. But he failed toconsider the further issue of whether the defendant company havingaccepted a delivery order in lieu of a bill of lading was not liable on thecontract as a c.i.f. contract.
The law on the subject is settled. If a seller tenders in place of oneof the obligatory documents—for instance, a warehouse order or a ship’srelease in place of a bill of lading—the buyer need not accept it and theseller may subsequently retender proper and valid documents providedthe time for tendering has not gone by. But a buyer may by expressagreement accept another document, for instance a warehouse order,in place of a bill of lading.
The facts of this case indicate either that the defendant companydid not appreciate the significance of a c.i.f. contract, or if they didthat they sought to convert what the Judge found to have been a c.i.f.contract into an arrival contract. In their letter of November 12, 1935(D3) they ask the plaintiff to forward the necessary documents and toarrange for a representative of his to be present at the weighing of thecopra. In his letter (P3) dated the following day (November 13) theplaintiff pointed out that his terms being c.i.f.- terms his responsibilityended with the delivery of the documents. There was a clear indicationto the defendant, company that such documents as the plaintiff wastendering were being tendered “ on c.i.f. terms ”. The plaintiffenclosed a delivery order in place of a bill of lading and thereafter thedefendant company took delivery. In view of the clearest intimationto the defendant company that the documents were tendered under ac.i.f. contract it must be held that they had expressly agreed to acceptthe delivery order in place of the bill of lading. Any misconception onthe part of the defendant company as to the nature of the contractcannot affect its character , or the legal implications of their conduct.
I would allow the appeal and enter judgment as prayed for by theplaintiff with costs in this Court and the Court below.
Fernando A.J.—I agree.Anneal allowed.
DADA v. THE BRITISH CORPORATION, LTD