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Present: Mr. Justice Wendt and Mr. Justice Middleton.
A* -UNACHALAM CHETTY et al. v. SERVICE REEVE & CO.D. C., Colombo, 25,820.
Jurisdiction—C.I.F. contract sale of goods—Non-delivery of goods—Actionfor damages—Breach whether within jurisdiction of District Court.By a c.i.f. contract the defendants, who are merchants domiciledand resident and carrying on business in England, sold certaingoods to the plaintiffs, merchants resident and carrying on businessin Ceylon. The goods not having been received by the plaintiffs,they sued the defendants in the District Court of Colombo fordamages for non-delivery of the goods.
Held, that the District Court of Colombo had ho jurisdiction toentertain the action.
Crozier, Stephens & Co. v. Auerbach 1 followed.
HE plaintiffs earned on business at Colombo, and the defend-ants were resident and carried on business in London. The
. plaintiffs and defendants entered into several contracts for the saleby the defendants to the plaintiffs of certain goods. The terms ofthe contract were contained in the following indent and contractnote:—
‘ ‘ Sirs, — Prepare and ship on our account in part or whole the goodsas specified in the indent. For the amount of invoice draw upon
me atdays’ sight, bill of lading and policy of insurance
attached. Such drafts we hereby undertake to accept on presen-tation and pay on or before maturity. In case any default on ourpart the shipment or sliipments are to be sold for our account, andshort proceeds, if any, are to be collected from us. Goods to beinsured against all risks from Manchester to Colombo for 15 per cent,over invoice amount.
‘ ‘ Sterling drafts to carry usual bank interest from time of drawingtill amount again reaches London. In cases of any claims or disputesarising on the sliipments against this indent, such claims or disputesare to be submitted to the survey of two European merchants inthe usual way as provided in such cases, the losing side to pay costsof survey. One arbitrator to be appointed by each side. Nodispute or claims to be entertained unless made within fifteen daysfrom the landing of the goods. Goods shut out of one steamermay be shipped by the first subsequent steamer available, suchsubsequent shipment to be ‘ good shipment,’ as if shipped by firststeamer from which the goods were shut out.
“ Description of goods.. Sarongs.
“ Quantity …. Ten cases, each containing 20
corges; size 23 in. by 150 in.
1 (1908) 77 L. J. K. B. 873.
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“ Price and quality and finish
“ Assortment
“ Headings and folding”Borders
‘ Make up and packing
“ Shipments
” Remarks
“ Folding to measure“ Code for the indent
.. As per our sample No. 124, 28o.i.f. and o.,. less 3 per cent,commission.
.. In 10 check designs as on ourdesign sheet, guaranteed fastcolour.
.. As per our sample No. 128.
.. Border must be a little thickerthan the quality sample No. 124.
.. In tin-lined cases 10 pieces as-sorted to be put in white oard-board boxes and tied with twotapes, eaoh pieoe to be tiedwith imitation silk thread oneach end as on our sampleNo. 128.
.. In two shipments. First ship-ment to be here in Colombo inJanuary, 1905, and other inFebruary, 1905.
.. All instructions as given in ourdesign sheet.
• • 8* by 3f
.. Sturmzeit.
June 8.
“ Contract Note No. 58.
“ Service Reeve & Co. to Messrs. K. R. M. T. T. ArunachalamChetty & Bros., Colombo.
“ London, November 18, 1904.
“ Reference Indent No. 5. Confd. Telegram, November 15, 1904.
“ We have this day sold to you—
“Description and quality of goods Sarongs; quality and finish as
your sample No. 124.
“ Quantity -.. Ten cases, each containing 20
“ Length….150 inches.
“ Price.. Thirty shillings per corge c.i.f.o.,
less 1$ per cent.
“ Payment….By.draft as usual.
-“Shipment ….In two lots; first, January-
Februarv, 1905; second, onemonth later. Delivery subjectto’alteration on receipt of yourconfirmation of oable.
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.. In ten oheck designs as on yourdesign sheet; colours as fast asyourj^ sample. Heading andfolding as sample 128. Bordera little thicker than qualitysample 124. Folding 8£ by 3J.Packing in tin-lined cases. Ten. pieces assorted to he put in awhite cardboard box and tiedwith two tapes, each piece tiedwith imitation silk thread oueach end as sample 128.
“ Conditions of saleDeliveries may be suspended
pending any contingencies be- ond our control (such as fire,accidents, war, strikes, lock-outs, or the like) causing ashort supply of labour, fuel,raw material, or manufacturedproduce, or otherwise prevent-ing or hindering the manufac-ture or delivery of the article.”
The defendants pleaded that the cause of action did not arise inCeylon, and that the District Court of Colombo had no jurisdictionto entertain the action. The District Judge (J. R. Weinman, Esq.),over-ruled the plea to the jurisdiction, oh the ground that the causeof action, to wit, the non-delivery of the goods, arose in Colombo.
The defendants appealed.
Batca (with him F. J. de Saram), for the defendants, appellants.
Sampayo, K.C. (with him F. M. de Saram, H. A. Jayewardene,and Retnam), for the plaintiffs, respondents. .
1909.“ Remarks
Cur. adv. vult.
June 8,1909. Wendt J.—
I agree that the appeal should be allowed. In order to foundjurisdiction the plaintiffs had to show a breach in Colombo of thecontracts sued upon. In English cases, therefore, decided underRule 1 (e) of Order XI. of the Rules of the Supreme Court are inpoint. According to the Sale of Goods Ordinance the place ofdelivery was presumably at the seller’s place of-business, and thereis nothing in the contracts stipulating the contrary. Therefore, thebreach being non-delivery, the cause of action arose in London,where the seller was to ship the goods. Moreover, this was a c.i.f.contract, and the Court of Appeal in Crozier, iStephens & Co. v.
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Auerbach1 appear to have regarded the decided cases as establish-ing that to make the port of destination the place of delivery wasinconsistent with the nature of such a contract.
Middleton J.—
This was an action by a firm of Chetties carrying on business inColombo against a firm of merchants carrying oh business in Londonon several causes of action for breach of contract by non-delivery ofgoods. The defendants pleaded to the jurisdiction of the DistrictCourt of Colombo, on the ground that the contract on their part wasnot to be performed by delivery in Colombo. A preliminary issuewas settled thereupon. Has this Court jurisdiction to try this actionin Colombo ? Upon that issue the District Judge found that theparties intended and contracted that the delivery of the goodsshould be in Colombo, and that this Court had jurisdiction.
The defendants appealed, and for them it was contended that thecause of action being for non-delivery, the breach did not arisewithin the jurisdiction under section 9 of the Civil Procedure Code.The contract was to be gathered from the documents D 1 and D 2,being respectively what are called an indent and a contract note.It was admitted on both sides that the contract was what is knownin English Mercantile Law as a c.i.f. contract, the terms beingthat the price paid by the plaintiffs, the buyers, should includecommission, insurance, and freight, the sellers to draw on the
“ buyers atdays’ sight, and the insurance to include all
risks from Manchester to Colombo, and to be for 15 per cent, overinvoice amount. Goods shut out- of one steamer to be shipped bythe first subsequent steamer available. Two shipments to be made,first shipment to be here in Colombo in January, 1905, and theother in February, 1905.” The contract note further stated“ delivery subject to alteration on receipt of your confirmation ofcable. Conditions of sale: delivery may be suspended pending anycontingencies beyond our control (such as fire, accidents, war,strikes, lockouts, or the like), causing a short supply of labour, fuel,raw material, or manufactured produce, or otherwise preventingor hindering the manufacture or delivery of the articles.”
For the appellants counsel relied on sections 18, 28 (1), and (31)of the Sale of Goods Ordinance, No. 11 of 1896, the terms of theindent as to shipment, and contract note as to conditions of sale asshowing that delivery meant shipment at the English port, whileBrandi v. Laurence* and Bowes v. Shand,s Wancke v. Wingren,4 andespecially in reply Crazier, Stephens <fe Co. v. Auerbach,1 over-rulingBarrow v. Myers,6 were relied on as showing that shipment at theport of departure was equivalent to delivery of the goods. Counsel
1 {1908) 77 L. J K. B. 873.3 46 L. J. Q. B. 561.
* 46 L. J. Q. B- 337. .4 58 L. J. Q. B. 519.
‘ (1888) Timet Law Beports 441,
June 8.
Wendt j.
June 8.
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also referred to the Annual Practice, 1909, page 81, and Order XI,of 1896, seotion 28, Rule I.
On the other hand, oounsel for the respondents sought to construethe contract as indicating from its terms that delivery was boundto be in Colombo, especially on the ground that the buyer stipulatedto pay the freight, and strove to distinguish the cases relied on byoounsel for the appellants.
In the present case it was the defendants’ duty to ship the goodsin England c.i.f., and the plaintiffs’, duty to accept the defendants’drafts on presentation and pay them on or before maturity. Thealleged breach is non-delivery in Colombo. As to the contract ascomprised in D 1 and D 2, after the defendants had insured, paidthe freight for and shipped the goods, and posted the invoice, billof lading and insurance policy attached, to the plaintiffs, their partof the oontraot would have been performed. The insurance policybeing attached to the invoice and sent to the buyer with the bill oflading assuredly contemplated that all risks of transit were thebuyer’s, and that he was covered by the policy of insurance. Underseotion 31 (1) of our Sale of Goods Ordinance, vbi supra, “ where inpursuance of a contract of sale the seller is authorized or requiredto send the goods to the buyer, delivery of the goods to a carrierwhether named by the buyer or not for the purpose of transmissionto the buyer is primd facie deemed to be a delivery of the goods tothe buyer.” Here the goods were to be shipped by no named lineof ships, but by some ship as a carrier, and there is nothing to begathered from the contract, which shows that the statutory positionof the parties was modified by agreement in favour of respondents*contention.
I hold therefore that the breach of the contract took place inEngland, and did not arise within the jurisdiction of the DistrictCourt of Colombo. The case, in my opinion, is covered by thedecision of the Appeal Court in Crazier, Stephens & Co. v. Auerbach,1which, as our law is practically the same, seems to conclude the case,and should be followed by this Court. I hold therefore that thedecision of the Additional District Judge of Colombo must bereversed, and the aotion dismissed on the ground of want ofjurisdiction with costs in the District Court and of this appeal.
Appeal allowed. ,
1 (1908) 77 It. J. K. B. 873,