Alaris and Wijeysekere.
1943Present: Soertsz S.P.J. and Hearne J.
ALARIS, Appellant, and WIJEYSEKERE, Respondent.
380—D. C. Colombo, 9,158.
Broker—Purchaser of goods himself—Not an agent of seller to attach liabilityto the latter on a memorandum signed by the former—Contract con-tained in several documents—Proof of contract—Sale of goods for pay-ment against delivery—Delivery by instalments—Failure to pay Ondelivery—Breach of contract.
Where a broker purchased goods for himself he cannot sign a note ormemorandum even under an assumed name as agent of the seller inorder to make the latter liable to be charged on a contract evidenced bysuch note or memorandum within the meaning of section 5 of the Sale ofGoods Ordinance.
Where it is proposed to prove the existence of a contract by severaldocuments it must appear upon the face of the instrument" signed bythe party to be charged that reference is made to another document andthis omission cannot be supplied by verbal evidence. If, however itappears from the instrument itself, that another document is referred to,that document may be identified by verbal evidence.
Where a contract for the sale of goods provides for payment againstdelivery and the buyer accepts delivery by instalments but refuses topay on delivery, the other party is discharged from his obligations underthe contract.J‘
^ PPEAL from a Judgment of the District Judge of Colombo.
The facts appear from the argument and the judgment.
» (1931) 33 -V. L. R. 90.
Alaris and Wijeysekere.
H. V. Perera, K.C. (with him C. Thiagalingam and G. Thomas), for thedefendant, appellant.—Under contract No. 599, the defendant was tosupply to the plaintiff 2,000 ply-wood chests, 750 of which were to bedelivered during May, 1937, and the remainder in June. Payment wasto be made “ against delivery ”. Plaintiff, the purchaser, now claimsdamages resulting from the non-delivery of 1,200 out of the 2,000 chests.It is submitted that there was a repudiation of the contract at the momentwhen the plaintiff refused to make payment for the 800 chests alreadydelivered under the contract. It is true that the defendant had com-mitted breach of contract by not delivering the instalments withinthe time provided for in the contract. But what happened was that theplaintiff accepted the belated deliveries and gave time for the deliveryof the remaining chests. In the circumstances there was no breach ofcontract on the part of the defendant. See the cases cited in Leake onContracts (8th ed.) p. 635. It was the plaintiff who was in default innot paying for the chests which were actually delivered. It is clear,not only from the terms of the contract but also from the correspondenceproduced in evidence, that payment was to be made “ against delivery ”.In consequence of the failure of the plaintiff to make payment for thechests-which had already been delivered the defendant was entitled inlaw to be discharged from any obligation to supply the remainder of thechests. For the effect of the expression “Payment against delivery”see sections 31 and 28 of the Sale of Goods Ordinance (Cap. 70) andHalsbury’s Laws of England (2nd ed.), Vol. 29, para. 168.
in regard to contract No. 800, we refused to supply the 1,000 chestswhich we undertook to sell under it in view of the attitude of the plaintiffin contract No. 599. Further, it cannot be enforced because it doesnot comply with the requirements of section 5 of the Sale of Goods Ordi-nance. The bought note P 2 referred to in the evidence does not con-stitute the necessary note or memorandum required under section 5.One of the parties to a contract cannot sign the name of the other as hisagent so as to bind him ; the signature as agent must be by a thirdperson. See Sharman v. Brandt et al.
W. S. de Saram for the plaintiff, respondent.—There was no provisionin contract No. 599 for separate payments for each instalment. Whatwas purchased was 2,000 chests. The payment was to be against “ deli-very ” and not “deliveries ”. “ Delivery ” would mean the deliveryof the full 2,000 chests. Before defendant can plead repudiation theremust be clear intention intimated to the defendant that the plaintiff wouldnever pay. In cases of this sort, where the question is whether the oneparty is set free by the action of the other, the real matter for considera-tion is whether the acts or conduct of the one do or do not amount to anintimation of altogether refusing performance of the contract. Section31 of the Sale of Goods Ordinance can be cited in my favour. See alsoBenjamin on Sale (6th ed.) pp. 825i 828.
As regards contract No. 800, the evidence is clear that P 2 was in realitya broker’s bought note. Further, independently of the bought and soldnotes, the document P 7 which contains the signature of the defendant readwith P 2 and P 6 satisfies the requirements of a memorandum in writing.
1 L. R. (1871) 6 Q. B. 720.
HEARNE J.—Alaris and Wijeysekere.
H. V. Perera, K.C., in reply.—In order to make a valid note or memo-randum of a contract, the names of the parties to the contract mustappear upon the document as such parties—Vandenbergh v. Spooner
A memorandum has to set out all the terms of the contract. P 7was a letter written in reply to P 6. The purchase price can in no way beascertained for those two documents. P 7 merely refers to P 2 and doesnot incorporate it. It is not a case of incorporation by reference. Thecorrespondence produced at the trial, although they speak of a pre-existing contract, do not contain the elements necessary to constitute amemorandum.
Cur. adv. vult..
March 4, 1943. Hearne J.—
Alton Wijesekere, the sole proprietor of “Wijesekere & Co.” whichcarried on “ an export and import ” business sued the defendant on threecauses of action. On the 3rd cause of action he failed and it has noconcern with this appeal.
On the 1st cause of action he alleged that on May 5, 1937, the defendantsold to him and he purchased from the defendant 2,000 ply-wood chests750 of which were to be delivered during May and the balance in June.
“ Payment ” was to be made “ against delivery ”. In regard to thiscontract P 1 is the broker’s bought note addressed to Wijesekere & Co.,and D 3 the sold note addressed to the defendant. The person whopurported to be the broker was in fact the plaintiff, who also conductedthe business of “ Produce, Exchange, Share and Freight Brokers ” underthe style and title of “ Alton Wijesekere & Co.”. P 1 and D 3 were, how-ever, not signed “Alton Wijesekere & Co.” but “Wijesekere & Co.”.In consequence of this lapse the broker’s so-called bought and sold notes-were signed, not by the broker, but by the purchaser. The subsequenthistory of this contract, called contract 599; I shall deal with presently.The damages claimed were based on the non-delivery of 1,200 out of the2,000 chests the subject-matter of the contract.”
On the 2nd cause of action the plaintiff alleged that on June 17, J937,the defendant sold to him and he bought from the defendant 1,000 casesin regard to which there was a complete default by the latter. Deliverywas to be made during July., Once again Alton Wijesekere & Co. werethe “ brokers ” but P 2, the bought note, addressed to Wijesekere & Co.in which there was a “ payment against delivery ” clause, was not signedAlton Wijesekere & Co., nor by any person on behalf of Alton Wijesekere& Co. but by “ Alton Wijesekere ” personally. Counsel for the plaintiffsaid this was a mistake for “ Alton Wijesekere & Co.”
Judgment was entered in favour of the plaintiff awarding him Rs. 914damages on the 1st and Rs. 550 damages on the 2nd cause of action.The defendant has appealed. In regard tc the extent of the damages .no argument was addressed to us. The claim of the appellant is that therespondent was not entitled to any . damages at all.
1 now turn to the contracts themselves—the first No. 599 and the secondwhich was numbered 800. In breach of the former no delivery was madein May. In June 500 cases were delivered in three instalments of 200,
L. It. (1S6S- G) Exch. 316.
HE ARNE J.—Alaris and Wijeysekere.
200, and 100 on 18th, 19th and 21st respectively. There was thus inregard to No. 599 complete default of 750 cases in May and 750 cases inJune. It will be noted that on June 17, at a time when the defendanthad made no delivery at all against contract 599, contract 800 was made.In July 300 cases were delivered, 200 on the 2nd and 100 on the 28th oncontract 599. No deliveries at all were made on contract 800.
It was stated by the appellant’s Counsel that as his client had deliveredand the respondent, as purchaser, had accepted part of the goods soldunder contract 599, the enforceability of that contract was not questionedby reason of the provisions of section 5 of the Sale of Goods Ordinance.It was argued, however, that contract 800 was unenforceable, at theinstance of the respondent, as there had been no delivery under thatcontract and as there was no note or memorandum in writing madeand signed by the appellant “ or his agent in that behalf It wasalternatively argued that the respondent was precluded from claimingdamages as he had committed breaches of both contracts which entitledthe appellant to treat them as having come to an end.
In the trial Court it was apparently argued that the bought note, P 2constituted a sufficient compliance with the requirements of section 5of the Sale of Goods Ordinance. Dealing with the matter the Judgeremarked that “ the defendant did not deny that such a contract wasentered into ”, But this is irrelevant. The object of section 5 is toprevent the enforcement of a parol contract unless the defendant hadexecuted it by partial performance or unless it can be shown that he orhis agent had signed some note or memorandum of the bargain, thoughthis need not necessarily be the- bargain itself. The Judge held that“ the bought note was a sufficient note or memorandum ” and addedthat “ as the defendant knew Alton Wijesekere was functioning in a dualcapacity the absence of the sold note was not material”. He appearsnot to have addressed his mind to the real issue that was involved.Assuming, as was admitted at the hearing of the appeal, that a sold notewas sent to.the appellant which was in the same terms as P 2, did that makethe contract enforceable notwithstanding section 5 ? Was that a note ormemorandum signed by Alton Wijesekere or, as has been argued, reallyby Alton Wijesekere & Co.,, as the, appellant’s agent ? These questionsrequire to be answered. It is clear, as the Judge has found, that Wije-sekere & Co. and Alton Wijesekere & Co. are in reality a “ one man show ”belonging to Alton Wijesekere. In the absence of authority I am quiteunable to subscribe to the view that Alton Wijesekere, the real purchaser,'whether he adopted an alias to suit the occasion or whether, as was the •case in P 2, he signed his own name unadorned by “ & Co.”, could signa note or memorandum as the agent of the appellant, so as to . make thelatter liable to be charged on a contract evidenced by such note ormemorandum within the meaning of section 5.
'The facts in Sharman v. Brandt'-were somewhat different, butone of the grounds of the decision is instructive. The broker sent a con-tract note to the defendants mentioning B and H as his principals when,in fact he had no principals as sellers. It was held, inter alia, that “ the
» (1870-71) L. E. S'Q. B. 720.
HEARNE J.—Alaris and Wijeysekere.249
plaintiff, if a party to the contract, could not sign as agent for thedefendants so as to bind them within the meaning of section 17 of the
Statute of Frauds
It was argued by the respondent's Counsel that, independently of the“bought and sold notes” considered by themselves, the Judge shouldhave held that P 7 satisfied section 5 of the Sale of Goods Ordinance.The document, a letter, is signed by the appellant. It refers to contracts599 and 800 and states “ We beg to admit that 2,300 plywood cases aredue to be delivered against the above contracts ”. It was pointed outby Counsel for the appellant that P 7 was in answer to P 6, that in thelatter the respondent purported to set out the terms of 599 and 800 butomitted to mention the purchase price and that, therefore, P 7 cannotby reference to P 6 be said to contain all the terms of the contracts. But. I do not regard P 7 as referring to P 6 which clearly did not set out thecontracts in their entirety. In it reference was clearly made to anotherdocument (I confine myself to 800) which contained all the terms ofcontract 800 ; in other words to the contract note corresponding withP 2 which, although not produced by the appellant, was admittedly inthe same terms as P 2. In my view the contents of P 7 are unambiguouslyconnected by reference with the contents of P 2 and the sold note in thepossession of the appellant. In Long v. Miller1 Thesiger L.J. said “ whenit is proposed to prove the existence of a contract by several documents,it must appear upon the face of the instrument, signed by the party tobe charged, that reference is made to another document, and this omissioncannot be supplied by verbal evidence. If, however, it appears fromthe instrument itself that another document is referred to, that documentmay be identified by verbal evidence ”. In this case reference was made,as I hold, to a document containing the terms of contract 800 and itsidentification with the sold note in the appellant’s possession, identicalwith P 2, is established by the admissions in the case and the fact that P 2is marked “ Contract 800 ” the terms of which are then set out.
In Taylor v. Smith' “ the sellers ” (I am quoting from Benjamin on Sale)“ sent to the buyer an invoice in the following form : ‘ Mr. John Smith.Bought from Messrs. Charles Taylor, Sons, and Co., 1060 spruce deals.Free, to flat, £100 11s. 4d.’; and an advice note was also sent, mentioning1060 spruce deals, and the plaintiffs, the sellers, as consignor but statingno price, nor referring to any other document. The defendant, thebuyer, wrote across the advice note and signed a memorandum : “ Rejec-ted ; not according to representation ”. He also wrote a letter referringto " the spruce deals ” rejected. Held, by the Court of Appeal, that thememorandum on the advice note, and the defendant’s letter, were not asufficient memorandum, as they did not set out the terms of the contract,and, not referring to any other document, could not be connected with theinvoice ”.
In his judgment Lord Herschell said, “ It is obvious that the advice note,the indorsed memorandum, and the letter do not by themselves consti-tute such a memorandum (that is a memorandum within the Statute),.
1 (1893) 2 Q. B. 65.
1 iC.P. D. 450, C. A. at 456.
HE ARNE J.—Alaris and Wijeys ekere.
for the terms of the bargain are not to be found in them. If any of themhad referred to or incorporated the invoice I think there would have been asufficient memorandum
In the case before us P 7 mentioned contract 800, that is to say- thedocument in which it was set out, and its terms were by reference incor-porated in P 7. It was signed by the appellant. I therefore hold againstthe appellant in regard to his ground of appeal based on seetion 5 of theSale of Goods Ordinance.
The second ground of appeal requires a consideration of the correspond-ence which passed between the parties.
In P 4 dated July 14, 1937, the plaintiff stated that 2,300 cases remainedto be delivered under the two contracts—this is correct as, at that time,only 700 cases in all had been delivered—and offered to send a chequein settlement of all deliveries to date on receipt of particulars.
In P 5 dated July 15, 1937, the defendant stated that he had notreceived “ any advice of shipments ” and, enclosing a statement, re-quested payment. The statement is P 5a and includes one item ofKs. 675 referrable to the chests delivered in June and another of Rs. 270referrable to the chests delivered on 2nd July.
In P 6 dated July 27, 1937, the plaintiff wrote “ unless you are ableto complete all the deliveries before the 31st instant we shall be compelledto purchase same against you at the current market (? rates), and debityou the difference in value ”. No reference, it is to be noted, was madeby the plaintiff to payment although he had asked for an account whichhas been sent.
In P 7 the defendant wrote apologetically “ We beg to admit that2,300 plywood cases are due to be delivered . . . .” He explainedthat he was not defaulting by reason of the fluctuation of the marketbut because he had no stock of cases at all. He did not press for paymentof his account. This letter was in fact addressed to Alton Wijesekere &Co. and not to Wijesekere & Co.
On August 13 Wijesekere & Co. replied in P 8 requiring deliveryon or before the 15th instant. “ Should you fail to deliver by this datewe shall be compelled to buy against you in the market at the bestpossible price ”.
P 9 dated August 16 is the reply to P 8 and merely pleads for time.
'The plaintiff does not appear to have replied to that letter and in P 10,dated September 15, the defendant wrote again stating he was in a positionto deliver 300 cases on 22nd instant. He requested payment for the 800cases already delivered.
In P 11 dated September 29 the plaintiff informed the defendant thathe had purchased 200 cases from E. B. Creasy & Co. at Rs. 2.67 andhad debited the difference against the defendant’s credit balance. Healso informed him that he would purchase the balance “ against yourcontracts as we require them ”. No cheque for the difference was sent.
In P 12 dated September 30 the defendant stated that he would deliver300 cases on hand if the plaintiff settled his account for the 800 caseswhich had been delivered. If this was not done he (the defendant)would treat the contracts as being at an end and he would sue the plaintifffor what was due to him.
HEARNE J.—Alaris and Wijeysekere.
He did subsequently sue the plaintiff and obtained judgment for thecontract price of the 800 cases.
The plaintiff replied through his proctor in P 13 dated October 2.In this letter the plaintiff clearly intimated that he would only pay for thechests delivered less the loss he had suffered by the purchase of 200 caseson the delivery of the remaining chests which the defendant had contractedto deliver.
In P 16 dated October 12 the defendant’s proctor wrote “My clienthas in stock with him a sufficient number of chests to meet your client’sdemands and requirements and my client will deliver same to your clienton your client’s paying the amounts already due and the value of thechests now required.
In P 17 of October 16 the plaintiff stated his willingness to acceptdelivery of the balance of chests under the contracts but declined to payanything till delivery in full had been completed.
The .legal position that arises from the correspondence appears to bethis. In the first place the appellant had committed breaches of contracts599 and 800, and there was no new binding agreement with the respondentwhich entitled him to discharge his obligations by delivering chests afterthe time provided for in the contracts. The respondent, assuming he hadnot committed breaches of the contracts himself, was well within hisrights in buying chests in the open market and holding the appellantliable for the difference in price. In point of fact it would appear that hewould have had difficulty in purchasing chests locally. This seems to bewhat the Judge finds. So the respondent threatened to purchase chestsagainst the contracts if the remaining chests were not delivered bycertain dates. Vide P 6, P 8, P 11. In effect he had progressively extendedthe stipulated time for delivery, and if the appellant had delivered theremaining chests within the extended time, this would have been equiva-lent to punctual performance in discharging the contracts. Ogle v. Vane 'Hickman v. Haynes", Levey v. Goldberg referred to in Leake on Contracts,8th Ed. at page 635. He did not do so and was clearly in default. Somuch for the appellant’s position.
It was found by the Judge, and I am in agreement with his finding,that the respondent was in default in not paying for the chests delivered.Payment was to be made against delivery. The respondent, at his risk,may have refused to accept delivery by instalments if he felt justifiedin so doing under section 31 (1) Sale of Goods Ordinance. But havingaccepted instalments he was bound to pay on the receipt thereof. Thecontracts provided for payment against delivery and that is clearlywhat the respondent understood when he wrote P 4 although subsequently,as is evidenced by the correspondence, he took up a position completelyinconsistent with what he then wrote.
What was the effect of the respondent’s default ? Did it dischargethe appellant from his obligations under the contracts ? They must bedifferentiated. I shall deal first with 599.
The Judge said “ For the breach committed by the buyer he has been,ordered to pay the defendant his damages ” (this -has reference to the case
L. R. 10 C. P. 598.
(1922) 1 K. B. 688.
1 L. R. 3 Q. B. 272.
HEARNE J.—Alaris and Wijeysekere.
in which the appellant was successful against the respondent when hesued him for the contract price of 800 cases). “For the breach com-mitted by the defendant he is equally entitled to pay the buyer”. I donot follow that the one depends upon the other but it occurs to me, asa point of law, that what was decided in the case referred to and the•defences available to the respondent in that case may well be regardedas res judicata in this case, in regard to 599.
In another passage the Judge said “ Both parties had acquiesced in•each other’s breaches This, I find, the utmost difficulty in accepting.The appellant asked for payment in P 5, again inP 10 and in P 12 he madeprepayment a condition of delivery of 300 cases which he had on hand.
In still another passage the Judge said, “ I do not think that the factthat the buyer failed to make payment excused the defendant fromdelivering the rest of the chests under the contract ”. In other wordshe found that the respondent’s breach of the contract did not amountto a repudiation of the whole contract: vide section 31 (2) of the Saleof Goods Ordinance. There is no doubt that this is a question of factto be decided according to the circumstances of each case. In (1919)
K: B. 581 failure to pay for the first instalment was held not to showan intention to repudiate the whole contract. But in the present casethe respondent’s intention to violate an important term going to the rootof the contract, viz., payment on delivery, was not only indicated by hisfailure to send a cheque in settlement on demand being made, but inP,13 and P 17 he expressly stated that he would not.pay for what hadalready been delivered. This was an undoubted refusal to be bound bythe teims of the contract.
In my opinion the appellant was entitled thereafter to regard therespondent as having repudiated the contract. In regard to the 200cases purchased by the respondent to which he refers in P 11 datedSeptember. 29, it is true that he had not then told the appellant in somany words that he would not pay for the instalments till deliveryhad been made in full, but it is obvious that that was what he had intended-to convey. P 10 by the appellant stated he could deliver 300 cases andrequested payment for the 800 cases. P 11 intimated that the appellanthad been debited the difference oil 200 cases purchased from E. B.•Creasy & Co,, also, that, further purchases would be made, and it ignoredthe request for payment. The appellant,,wrote P 12, and in P 13 theposition the respondent had taken up antecedently (from July 27 whenP 6 was written in reply to P 5 requesting payment) was made abundantly•clean.
The respondent was in a strong position but he threw away his chances• when he would not pay for the cases delivered to him. The appellant,initially at any rate, was unable to keep his- contract out of necessity.Unless the respondent was not in. funds he appears to have refused to bebound by the terms of the contract out of perversity.
For the reasons I have given the respondent is, in my opinion, not entitledto any'damages in respect of contract 599.
– The position is different in regard to contract 800. There had been' no partial execution of that contract, no delivery of any instalment forwhich the respondent had declined to pay, and in consequence no breach
HEARNE J.—Municipal Council, Kandy, and Silva.
by him of any term of it. After the extended time given to the appellanthad come to an end, he alone was in default. I have already said that thequantum of damages awarded was not challenged.
I would order that judgment be entered in favour of the respondentfor Rs. 550 with costs based on this amount and I would allow the appealwith costs based on Rs. 914 the extent to which the appellant hassucceeded.
Soertsz J.—I agree.