MAARTENSZ A.J.—Muller v. Fernando.
Present: Maartensz A.J.
MULLER et al. v. FERNANDO.
52—C. R. Colombo, 54,900
Sale of goods—Action by brokers for breach of contract—Bought note—Note ormemorandum in writing—Ordinance No. 11 of 1896, s. 4.
Plaintiffs, who are pro'duce brokers sent their clerk with samples ofrubber they had for sale with a bidding sheet to prospective buyers.The clerk entered in the sheet the prices offered by the buyers, includingthose of the defendant's attorney.
On the same day the plaintiffs posted the bought note to the defendant.
Held (in an action brought by the plaintiffs for breach of contract), thatthey could not rely on the bidding sheet or the bought note to constitutea note or memorandum within .the meaning of section 4 of the Sale ofGoods Ordinance.
^^PPEAL from a judgment of the Commissioner of Requests, Colombo.
N. Nadarajah, for defendant, appellant.
Gratiaen (with him Amarasekera), for plaintiffs, respondents.
September 30, 1931. Maartensz A.J.—
This was an action for the recovery of a sum of Rs. 223.70, the damagessustained by plaintiffs by reason of the defendant’s failure to take deliveryof and pay for certain lots of rubber which the plaintiffs alleged thedefendant had contracted to buy from them.
The action was tried on several issues of law and fact. The defendantappeals from the learned Commissioner’s finding in favour of the plaintiffs.
The learned Commissioner held on the issues of fact that the defendanton or about May 27, 1929, contracted to buy the lots of rubber in questionfrom the plaintiffs unconditionally, and that the plaintiffs had suffereddamages to the extent claimed.
I see no reason to dissent from the findings on the facts.
The appeal was strongly pressed on the issues of law. The issues areas follows: —
Was there a memorandum of the alleged sale?
If not, can plaintiffs maintain this action?
Did the plaintiffs act as brokers or agents in this matter?
If so, can they maintain this action?
In any event can the plaintiffs maintain this action as they wereagents for the sellers?
It was contended by the appellant that the bidding sheet P 1 and theletter P 11 from he defendant to the President of the Rubber Buyers’Association, which the learned Commissioner said,may well be regardedas furnishing a memorandum of the contract to satisfy section 4 of theSale of Goods Ordinance ”, did not constitute a memorandum in writingof the contract as P 11 did not set out the terms of the contract on whichthe plaintiffs were suing.
MAARTENSZ A.J.—Muller v. Fernando.
It was also contended that the Commissioner was wrong in holdingthat the sale was a sale by auction and that the plaintiffs were in theposition of auctioneers and therefore entitled to maintain the action.
These contentions necessitate an examination of the circumstancesin which the contract was made. They are as follows:—On May 27,1929, the plaintiffs, who are produce brokers, sent their clerk Mirandawith samples of the lots of rubber they had for sale with the bidding sheetP 1 to prospective buyers. Miranda entered in this sheet the pricesoffered by the buyers, including those of the defendant’s attorney, S. B.Fernando ; his .bids are shown in P 1 under the head “ M. A. ” Theywere made at 2 or 2.30 p.m.
At 4.10 p.m. Miranda informed S. B. Fernando that his bids wereaccepted.
Miranda’s evidence is that S. B. Fernando’s bids were madeunconditionally and that he did not repudiate the contract but said in ahalf-hearted hesitating manner that he would take the rubber. On thesame day, he posted to Fernando the bought note P 3 which isas follows.: —
“ Dear Sir,
We beg to inform purchase made by us this day on your account ofthe following lots of rubber at the price named for each lot as under ”(next follow details of the lots of rubbber purchased) “ as per sampleshanded buyers and delivered in good merchantable condition at ourstores; Payment as per Chamber of Commerce Conditions of Sale ofRubber.
Muller & Cooray, Brokers. ”
Below this note P 3 is a confirmation form to be signed by the buyer-as follows:—“Received contract No. R 29/777 to 783 dated May 27,1929, for 9,451 lb. of rubber which I/we hereby confirm.”
S. B. Fernando by document P 4 dated May 28, 1929, refused to confirmthe contract.
S. B. Fernando’s evidence is that he told Miranda that “ it must beclosed before the Singapore telegram came in ” that is, that his offersmust be accepted before the cablegram from Singapore arrived with theprice ruling there, and that immediately after the Singapore telegramarrived he rang up the plaintiffs and cancelled the contract, which hadnot been confirmed before the cablegram arrived. He admitted writingletter P 11 to the President of the Rubber Buyers’ Association. Inthis letter he stated the terms on which he agreed to buy the rubber.
The learned Commissioner has rejected the evidence of S. B. Fernandoand held that the offer was an unconditional one. But the rejection ofhis evidence is not based upon the letter P 11 which clearly sets out thatthe offers were made subject to the condition that they were acceptedbefore the arrival of the cablegram from Singapore.
P 11 is therefore not a note or memoradum in writing signed by thedefendant or his agent of the contract as sued on by the plaintiffs.
MAARTENSZ A.J.—Muller v. Fernando.
It was held in the case of Mohamed Ezak v. Marikar1 that a letterwritten subsequent to the conclusion of the contract by the proctorsof the purchaser which refers to the terms of the contract would be asufficient note or memorandum in writing of the contract to satisfythe provisions of section 4 of the Sale of Goods Ordinance, No. 11 of 1896.Bertram C.J. observed in his judgment that a letter to a third partyhas been held to be enough (Gibson v. Holland*).
The letter P 11 would be sufficient as a note or memorandum if itembodied the terms of the contract. The letter P 11 “ must therefore,either expressly or by necessary implication, contain : —
the names of or description sufficient to identify the parties in their
respective characters ;
the goods sold ;
the price, if a price was agreed upon ;
all other substantial terms of the contract not being such as are
merely implied by law or usage ”—Halsbury’s Laws of England,
Vol. 25, s. 248, pp. 135 and 136.
P 11 contains the names of the parties and,, read with the biddingsheet, may be said to contain the goods sold and the price agreed on.It does not in my opinion contain all other substantial terms of thecontract as sued on. The contract as sued on is an unconditional contractof sale, whereas the letter P 11 is a memorandum or writing of a conditionalsale.
In the case of Mohamed Ezak v. Marikar (supra) there was a disputeas to the place of delivery. According to the seller delivery was to bemade at the seller’s stores, according to the buyer at the buyer’s stores.
In the proctors’ letters relied on as a memorandum or note in writingof the contract it was asserted that delivery was to be made at the buyer’sstores. Bertram C.J. said : —“ If these letters are to be admitted asconstituting the memorandum, that term would also have to be accepted.It is not open to the respondent (the seller) to pray in aid the letters asshowing the memorandum, and to repudiate one of the terms which thememorandum so constituted contains.”
It was accordingly held that the letters did not constitute a note ormemorandum in writing of the contract. The ratio decidendi is clearlyapplicable to the letter P 11 and I hold that it does not constitute a noteor memorandum in writing of the contract as required by section 4 of theOrdinance.
On behalf of the respondent it was contended that P 11 was not essentialto his case, as the note P 3 was in law a note or memorandum in writingsigned by the defendant’s agent.
I am unable to accept this contention. . Where there is no entry ofthe terms of the contract in a broker’s book—there is no evidence of suchan entry in this case—bought and sold notes, if they correspond withone another are sufficient to constitute a contract' in writing, or are a goodmemorandum of a verbal contract (Halsbury, Vol. 25, s. 259, pp. 140,141).'
. i (1919) 21 N. L. R 289.2 (18S5) L.' R. 1 C. P. I.
16MAARTENSZ A.J.—Muller v. Fernando.
Messrs. Muller & Cooray cannot, however, I think, plead P 3 as a noteor memorandum in writing as they are suing the defendant themselves.
In my opinion it is only the principal, that is the buyer or seller, who canrely on a bought or sold note as a note or memorandum in writing of thecontract. I was not referred to any authority on the point as regardsbrokers. I was referred to two cases in which the plaintiffs wereauctioneers.
In the case of Farebrother v. Simmons1 it was held, (I read the headnote)
“ that the agent contemplated by the 17th section of the Statute of Frauds,who is to bind a defendant by his signature, must be a third person, andnot the other contracting party ; and therefore, where an auctioneerwrote down the defendant’s name by his authority opposite to the lotpurchased : Held, that in an action brought in the name of the auctioneer,the entry in such book was not sufficient to take the case out of the statute ”.
Section 17 of the Statute of Frauds has been repealed and re-enacted assection 4 of the Sale of Goods Act, 1893, with certain verbal alterations.
It corresponds to section .4 of the Sale of Goods Ordinance, No. 11 of1896.
In the other case of Bird v. Boulter – it was held, that “ in assumpsit byan auctioneer against a purchaser, for goods sold, an entry in the sale…book by the auctioneer’s clerk, who attehded the sale, and, as each lotwas knocked down, named the purchaser aloud, and on a sign of assentfrom him, made a note accordingly in the book, is a memorandum inwriting by an agent lawfully authorized, within section 17 of the Statuteof Frauds. For the clerk is not identified with the auctioneer (whosues), and. in the business which he performs, of entering the names, &c.,he is impliedly authorized by the persons attending the sale, to be theiragent. ”
The latter case is distinguishable from the present case and the caseof Farebrother v. Simmons (supra), as on the facts the purchaser constitutedthe clerk his agent and the entry made by him was relied on as a note ormemorandum in writing of the contract by a person “ not identified ”with the auctioneer who sued.
The note P 3 is signed “ Muller & Cooray, ” who are the other contractingparties, and on the principle laid down in Farebrother v. Simmons (supra)it cannot be relied on as a note , or memorandum in writing of the contractthey seek to enforce.
It seems to me that no authority can be found on the question whetherthe brokers themselves can rely on a bought or sold note as a note ormemorandum in writing of the contract because they have no right to sue.
In the case of Sharman v. Brandt3 a broker signed a contract note,professedly as agent for an undisclosed principal. He was in fact actingon his own behalf, but the other contracting party was not aware of that.Held, that he could not sue on the contract, because there was no memo-randum thereof to-satisfy the 17th section of the Statute of Frauds(I quote from Bowstead on Agency p. 434 as I am on circuit and the reports
are not available).
> (1822) 5 B. ,C Aid.-333.
3 (1871) L. R. 6 Q. B. 720.
2 (1833) 4 B. ,0 Ad. 443.
In that case some of the judges laid down that the broker had no rightto sue because no contract had been made with him ; a fortiori a brokerwould have no right to sue who was in fact only acting as agent.
It was argued that the plaintiffs were acting as auctioneers, as bidswere received from prospective buyers by the clerk going round to them.I cannot accept this argument. The second plaintiff in his evidencedescribed himself and his partner as brokers and the note P 3 is in the formof a sold note usually sent by brokers. It was not proved, as in thecase of John & Co. v. De Mel that the plaintiffs carry on business asauctioneers as well as brokers. The fact that plaintiffs’ clerk went* roundto prospective buyers privately asking them to make offers cannot possiblyrender the sale a sale by auction.
I am accordingly of opinion that the plaintiffs had no right of actionand that there was no note or memorandum in writing of the contractthey sought to enforce.
I allow the appeal and dismiss plaintiffs’ action with costs in bothCourts.
MULLER et al. v. FERNANDO