BRITISH CEYLON CORPORATION LTD v. THE UNITED SHIPPING BOARD et al

048-NLR-NLR-V-36-BRITISH-CEYLON-CORPORATION-LTD-v.-THE-UNITED-SHIPPING-BOARD-et-al.pdf


<Pritikh Ceylon Corporation v. The■ 'bnitell Shipping Board. '. 225
*=1——
1934Present: Macdonell CJ. and Gaisin S.PJ.
BRITISH CEYLON CORPORATION" LTD. v. THEUNITED SHIPPING BOARD et. al.
45 (Inty.) /193 (Final)—D. C. Colombo, 33,424.
Contract—Agreement to ship cargo—Vessels owned by United States of Ame-rica and managed by the defendants—Breach of contract—Cause ofaction—Appeal—Appellants join in one petition—Treated as twopetitions—Stamps—Respondents1 objection to decree—Evidence oncommission—Civil Procedure Code, ss. 755, 756, and 772.
Where the plaintiffs entered into an agreement to ship cargo betweenColombo and New York with the agents of the second defendant-Steam-ship Company, which operated and managed vessels owned by theUnited States of America, under the direction and control of the firstdefendant-corporation,—
Held, that the second defendant was liable for the damage sustainedby the plaintiff for breach of contract and that the plaintiff had no causeof action against the first defendant.
Where the plaintiff obtained judgment against the second defendantand his action was dismissed as against the first defendant with costs, andwhere the defendants filed a joint petition of appeal in which theysever in their averments but join in their prayer, the first defendantadding a prayer of its own,—
Held, that the appeal of the defendants, though stated in one docu-ment, was severable and -should be treated as two petitions and that itoffended against the law as the stamp was only sufficient to cover one-petition. In the circumstances the petition of appeal should be rejected.
Held, further, that it was competent for the plaintiff to file an objectionunder section 772 of the Civil Procedure Code against the decree dis-missing his action as against the first defendant with costs, althoughthe latter’s appeal was limited to the reversal of the order depriving himof his costs.
Where an application is made by a defendant to issue a commissionto examine witnesses in a foreign country, the loss, inconvenience,and delay that may be caused to the plaintiff are factors that should be'considered before the application is granted.
N this action the plaintiff company averred that on March 17, 1928,a contract was entered into by Lionel Edwards Ltd. as agentsof the defendants and the American-India Steamers of which the defend-ants were owners, to carry from Colombo to New York, for the plaintiffcompany, 50 tons of general cargo monthly, from the month of May, 1928,to the month of December, 1928, and that on April 26, 1928, the contractwas repudiated and that by reason thereof the plaintiff had suffered lossand damage. Each defendant filed an answer.
The first defendant denied that it was the owner of the vessels andstated that the second defendant managed and operated under its direc-tion the said vessels, which were owned by the United States of America.
The second defendant also denied that it was the owner of the vesselswhich it operated under the direction of the first defendant. As a specialplea, this defendant pleaded that at all times material to the actionit acted to the knowledge of the plaintiff company as the agent of thefirst defendant, and that therefore the plaintiff company had no cause ofaction against the defendant. They denied that there was a breach of the
36/18
226
British Ceylon Corporation v. The United Shipping Board.
contract or that the plaintiff sustained any damages. They further pleadedthat if there was a valid agreement the' plaintiff committed a breachthereof, whereby they became entitled to claim from the plaintiffs damages.
The learned District Judge entered judgment for plaintiffs as againstsecond defendant, the latter’s claim in reconvention being dismissed andwith costs. Plaintiff’s action against the first defendant was dismissed andthe first defendant’s claim in reconvention was also dismissed.
H. V. Perera (with him Choksy and D. W. Fernando), for defendants,appellants.—The contract sued upon made through the medium of thefirm of brokers Keel & Waldock between the plaintiff and LionelEdwards Ltd. as agents for the second defendant, was marked ‘provisional’,and the plaintiff was under no obligation to ship the full 50 tons a month.It was at best only a continuing offer by the second defendant to carry50 tons a month which matured into a binding contract when the plaintiffoffered the 50 tons every month to be carried. (Burton v. The GreatNorthern Railway'.) There was no consideration to keep the offer con-tinuing and the second defendant was free at any time to revoke the offer.
(The Queen v. Demers*; Anson on Contracts (13th ed.), p. 39; Offord v.Davis & Lloyd *). Even if the contract is deemed to be a binding contractLionel Edwards Ltd. had no authority to reduce rates. They were thesecond defendant’s agents for engaging freight and loading vessls andwhen they purported to reduce rates they were acting clearly beyondtheir authority. Plaintiff’s action as against the first defendant has beendismissed without costs and the first defendant has appealed from thatorder as to costs. The plaintiff is now seeking under the provisions ofsection 772 of Civil Procedure Code to apply for relief from the decreedismissing his action against the first defendant. The provisions ofsection 772 are available to an opposite party only when a decree isunder appeal. The first defendant’s appeal is from the order as to costs,and an order as to costs is no part of the decree. (Ram Menika v. DingiriBand*.) Though the first and second defendants have joined in present-ing one petition of appeal the petitions are severable and may be treatedas two petitions of appeal.
[Garvin J.—If that is so, then there would be two petitions underone stamp which would offend against the provisions of the StampOrdinance.]
In that case this appeal may be treated as that of the second defendantrejecting the appeal of the first defendant.
Hay ley, K.C. (with him Garvin), for the plaintiff, respondent.—This isa contract which is based on the brokers’ note and parol evidence isadmissible to ascertain the terms of the contract. (Robson v. AitkenSpence & Co. ®; Durga Prasad v. Baggan Lai.e) The evidence clearly showsthat the plaintiff was bound to ship a minimum of 50 tons a month andthe second defendant’s ships were bound to carry the same. LionelEdwards Ltd. were the agents of the second defendant to engage freight.Engaging freight must include fixing the amount to be paid for freight.
1 (2854) 9 Ex. 507.
(2900) A. C. 203.
(1869) 6 L. T. R. 579.
95 N. L: R: 465.
13 N. L. R. 9.
«8 C. W. tJ. 489.
MACDONELL, CJ.—British Ceylon Cor. v. The United Shipping Board. 227
Every agent who is authorized to do any act in the course of his businessas agent has implied authority to do whatever is usually incidental, in theordinary course of such business, to the execution of his express authority.(Bowstead on Agency, 7th ed., p. 85).
The words of section 772 are quite clear. Where there is an appeal,whether against a decree or an order, objection may be taken to any-thing appealable in the decree out of which the appeal arises. If thispetition of appeal is treated as two petitions, then it offends against theprovisions of the Stamp Ordinance. There would be two petitionsunder one stamp which is only sufficient to cover one appeal. It issettled by the judgments of this Court that when it is found that apetition of appeal was not stamped or not duly stamped at the timeit was presented, the appeal is not duly presented according to law andmust be dismissed—such a petition may not be stamped after the expiryof the appealable time. . (Salgado v. PeirisSinnatcmiby v. Tangamma *;Hurst v. Attorney-GeneralSathcLsivam v. Cadiravel Chetty. *)
H. V. Perera, in reply.—In Salgado v. Peiris (supra) and Sinnatamby v.Tangamma (supra) it was held that the proper stamping of a petition ofappeal within time is a condition precedent to its acceptance, but section 37of the Stamp Ordinance provides that an instrument once admitted inevidence is not, save as provided in the section, to be called in questionlater in the suit or proceeding on the ground that it has not been properlystamped. “ A plaint is a document produced for the inspection of thecourt”—per Ennis J. in Jayawickrama v. Amarasooriya.0 If section 37applies to a plaint, then it must also apply to a petition of appeal.
Cur. adv. vult.
May 18, 1934. Macdonell C.J.—
In this case the plaintiff company sued the first and second defendantsfor Rs. 5,026.18 as damages for breach of contract. The material para-graphs of their plaint filed on June 28, 1929, are as follows : —
“ 2. The first and second defendants (or one of them) are the ownersof certain vessels trading between India and Ceylon and the United Statesof America. The said vessels are referred to by both the first and seconddefendants as the * American-India Line * and are known as such in thesaid trade. The second defendant company purports to operate andcarry on the said trade for the first defendant.
“ 3. The contract sued upon was made and the cause of action herein-after set out arose at Colombo within the jurisdiction of this Court.
“ 4. On or about March 17, 1928, Lionel Edwards Limited, a companycarrying on business at York street, Colombo, acting as agents for thedefendants and for and on behalf of the American-India Line agreed,inter alia, to carry from Colombo to New York for plaintiff company50 tons of general cargo monthly from the month of May, 1928, to themonth of December, 1928, in consideration of the plaintiff companypaying freight therefor at the rate of 25s. per ton of general cargo.
“ 5. On or about the 26th April, 1928, the said Lionel Edwards Limitedacting as agents as aforesaid repudiated the contract referred to in the
» U909) IS N. L. R. 379.3 4 C. W. R. 26$.
» (1912) 1 C. A. C. 151.* (1919) SI N. L. R. 93.
*17 N. L. R. 174.
228 MACDONELL C.J.—British Ceylon Cor. v. The United Shipping Board.
preceding paragraph hereof and refused to accept the plaintiff company'scargo for shipment at contract rates.
“ 6. By reason of the aforesaid breach of contract by the defendantsthe plaintiff company has suffered loss and damages which amount toRs. 5,026.18 made up as follows: —
“ Estimated difference between current and contract fates offreight in respect of July, August, September, October,November, and December shipments of 50 tons of generalcargo a month£375
at exchange 1/5 29/32=Rs. 5,026.18.”
The first and second defendants denied liability, filing on February 28,
1930, answers identical, save for a special plea by the second defendant
(to be set out later) and also filing identical counter-claims as follows —
“ 7. If there was any valid contract as is pleaded in the plaint and by
which this defendant was bound, this defendant states that the plaintiff
company committed a breach thereof in that it failed to duly tender for
shipment under the said alleged contract 50 tons of general cargo a month
during the months of May to December, 1928. This defendant states
that the failure of the plaintiff to tender the said cargo or in fact to ship
50 tons of cargo per month from month to month between May and
December, 1928—
' •
'‘ . . . . (d) entitled this defendant to claim from the plaintiffcompany the sum of £123. 10s. equivalent to Rs. 1,620.74 either by wayof set off or counter claim by way of damages for the above breaches.”
The action was tried by the District Judge of Colombo on May 8, 1933,and the following days, and on May 12, 1933, he gave judgment as follows: —“ Enter judgment for plaintiff ag&inst second defendant as prayed forwith costs and dismissing second defendant’s claim in reconvention.
“ Plaintiff’s action against first defendant is dismissed and first defend-ant’s claim in reconvention is dismissed. As between the plaintiff andfirst defendant each party will pay his own costs.”
It is from this judgment that the present appeal is brought.
The appeal raises a number of questions. First, what was the contract,if any, upon which the plaintiff sued? Next, whether the agent withwhom that contract was made had authority to bind in making it eitherthe first defendant or second defendant, and further, if both thesequestions be answered in plaintiff’s favour, was the first defendant or thesecond defendant the party liable on the contract or were they both liable ?
The first defendant and the second defendant have also appealed againsta decision of the same District Judge dated January 16, 1933, refusingtheir petition for a commission to take evidence in America. Thispetition and the decision thereon will be discussed later. There was yet afurther question under the Stamp Ordinance arising out of the caseitself which again will be stated ,and discussed later.
This case will be more readily intelligible if the events therein arestated in chronological order. In March, 1928, the. date of the contractsued on, there was a firm, Lionel Edwards & Co., Ltd., with its headoffice at Calcutta and a branch office at Colombo, of which firm thewitness Lionel Edwards was Managing Director (he gave evidence onJanuary 16, 1933, and following days in another case, D. C. Colombo,
MACDONELL C-J.—British Ceylon Cor. v. The United Shipping Board. 229
No. 42,969, but of consent this evidence is to be taken as part‘<ff this case).He stated:“‘In Calcutta in 1926 we were acting as agents in all capa-
cities for the Roosevelt Steamship Company. We did general agency forthe Roosevelt Line. I engaged freight and loaded vessels and attendedto all matters appertaining to engaging freight and loading vessels. ”(The shipping order (P 1) of March 17, 1928. headed “ The American-India Line ” and issued at Colombo is signed thus: “for Roosevelt Steam-ship Co., Inc.. New York. Lionel Edwards Ltd., H. Harger, Agent”.)Mr. Lionel Edwards also stated in his evidence “ The company is knownas the Roosevelt Steamship Co. Inc. The line of vessels that they formis for convenience sake known as The Roosevelt Line and therefore in anadvertisement or anything of that description it is called the RooseveltLine …. The American-India Line is one of the services operatedas the Roosevelt Line. The Roosevelt Steamship Co., Inc. ran theRoosevelt Steamship Line which included the American-India Line. … These vessels in this line belonged ~ to the -Government ”
(the United States of America). “ The United States Shipping BoardMerchant Fleet Corporation represents the Government. No, if I mayqualify that, the Shipping Board represents the Government. TheFleet Corporation represents the Shipping Board. The Merchant FleetCorporation appointed the Roosevelt Steamship Co. as their agents forthe purpose of operating and managing among others the American-India Line. I know now that the Roosevelt Steamship Co. Inc. wasappointed agents by the Merchant Fleet Corporation by writing ….
The final instructions were in December, 1927. On that occasion Idiscussed with the Directors of the Roosevelt Steamship Co. Inc., waysand means of increasing the volume of business done by the vessels.As a result of these discussions by the Board, and representations madeby thq Roosevelt Steamship Co. Inc., it was decided that unless thelines operating in the trade would permit the Shipping Board Lineknown as the Roosevelt Line to trade on certain adjusted terms, theRoosevelt Steamship Co. Inc., was to be given discretion to name therates which would affect the trade in such manner as would bring aboutto the Shipping Board in the guise or under the name of the RooseveltSteampship Co., that authority of the trade which they considered shouldbe carried on the American Flag tonnage between India and Ceylonand America; and then the Roosevelt Steamship Co. Inc. in New Yorkcut rates and I was instructed by the Roosevelt Steamship Co. Inc.,to advise my house in Calcutta that the rates had been cut and that theywere to quote equal rates and were authorized to enter into contractseven for long periods. My company accordingly cut the rates betweenCalcutta and New York. Those instructions were (given) for the firsttime in December, 1927.” He had said that these instructions weregiven by the Shipping Board, and went on:“ When I spoke of the resolu-
tions of the Board which I cabled to Calcutta, they were resolutionsempowering the cutting of rates and entering into contracts over longperiods for that service which included also Colombo; not only confinedto Calcutta and he said that those instructions were not cabled toColombo, but that he gave them in person to the Colombo office whenhe was here in March, 1928. On his arrival in Colombo on March 12,
230 MACDONELL C. J.—British Ceylon Cor. v. The United Shipping Board.
1928, he came to the conclusion that it would be a good thing to cut ratesto Halifax also, and cabled to the Roosevelt Steamship Co. inNew York for authority to do so, receiving that authority on March 13,1928. His evidence quoted shows that he had authority already to cutrates to New York and on March 14, 1928, he cabled to the RooseveltSteamship Co. Inc., New York, D 3 as follows: —
“ Many thanks message. From to-day to end of year, rates fromColombo for Boston, Philadelphia, New York are tea 30/-, generalcargo 25/-, Halifax 10/-. ” . . . .
He said further: “On hearing from the Director of the Roosevelt Co.
I instructed my Manager at Colombo to cut rates at Colombo to NewYork, Philadelphia, Boston, and Halifax. I think I instructed him onMarch 14, 1928.” The contract the subject of this case was made betweenMarch T9 and 19, 1928, therefore if Mr. Edwards’ evidence is correcthe had authority at that time to cut rates and to enter into freightcontracts for long periods between Colombo and New York and had givenhis local agent authority so to- do. He also says: “As agent mybusiness was to arrange freights for vessels, and in the course of trademerchants would accept the terms we offered without asking us to referto principals …. I should think so far as brokers are concernedthey accept the word of the shipping agent as to what the rate is to be.”The evidence of this witness that I have quoted is involved and nottoo well expressed, but it seems to say this. There is an entity represent-ing the United States Government called the Shipping Board. Thereis (or seems to have been) another entity representing the ShippingBoard called the Merchant Fleet Corporation. The Merchant FleetCorporation handed over to another entity, the Roosevelt SteamshipCo. Inc., certain vessels the property (it is said) of the UnitedStates Government called the “ American-India Line ” for the Roose-velt Co. Inc. to “ operate and manage ”. It would not perhaps beincorrect to .say that the Merchant Fleet Corporation had “ chartered ”those vessels to the Roosevelt Co. At the time material theRoosevelt Co. was operating and managing those vessels. What doesthis mean? Presumably, that the Roosevelt Co. would arrange for thevoyages, the provisioning, and the activities generally of those ships,including contracts as to cargo. The ships would be in their possessionfor one thing, and they were a “ Company Incorporated ” which wouldseem to be in American terminology the same as “ Company with limitedliability ”, in any event a legal entity or persona. If the Roosevelt Co.Inc. ordered certain food supplies for these ships, presumably the Roose-velt Co. Inc. would be the entity liable to pay for them and converselywould be the entity that would sue in the event of short weight or inferiorquality. That surely is the meaning to be put upon the words “ operateand manage”, and one would suppose that if a shipper did not pay hisfreight, it would be the Roosevelt Co. Inc. which would sue for the non-payment of same.
But it would seem that there was one thing on which the RooseveltCo. Inc. was notMts own master, but had to comply with the orders of anentity external to itself, the Shipping Board, and that was the fixing offreights. The reason seems to be stated in the evidence of Mr. Lionel
MACDONELL CJ.—British Ceylon Cor. v. The United Shipping Board. 281
Edwards. There were “ Lines operating 'in the trade ” which were not“Shipping Board Lines” and if the Shipping Board Line known as theRoosevelt Co. Inc. were at liberty to fix freights of its own volition,there might be difficulties with the non-Shipping Board Lines, conse-quently the Shipping Board kept the flying of freights in its own hands.The Roosevelt Co. Inc. had .to obtain leave, through its Calcutta andColombo agent, Lionel Edwards Ltd., to quote lower than currentrates, and according to the evidence it obtained that leave. Does thatfact make the Shipping Board the principal to sue and be sued on suchfreighting contracts as the ^Roosevelt Co. Inc. might thereafter make?One has heard of shipping pools. Supposing the Cunard Co., the''WhiteStar Co., and a number more shipping lines agree that no one ofthemwill alter freights without the leave of an entity called the Shipping Pool,does that fact make the Shipping. Pool the principal to sue and be sued onfreight and other contracts which the Cunard Co., or the White Star Co.,enters into? And does it make any difference that here the ships earningthat freight were the property not of the shipping line the Roosevelt Co.Inc. nor of the Shipping Board giving the orders, but of a third entity,the United States Government ?
The evidence shows that the Roosevelt Steamship Co. Inc. had authoritythrough its agent, Lionel Edwards Ltd. to cut rates and enter intofreight contracts for long periods, and that it was for and on behalf ofthat Roosevelt Steamship Co. the second defendants, that Lionel EdwardsLtd. now acted on that authority; they were his principals on whose. behalf he acted. This is the effect of Mr. Lionel Edwards’ own evidence,and the then Colombo Manager, Mr. Harger, was in Colombo whenMr. Lionel Edwards gave his evidence in January, 1933. He, Mr. Harger,was not called, so presumably was not in a position to deny whatMr. Lionel Edwards had said. •
The Colombo branch must have informed the local freight brokersthat they were willing to book freights at low rates and over a period of 'time. Mr. Bostock. of~ the firm of Keel & Waldock, Freight Brokers,says in evidence: “The offer to plaintiffs was made oh Lionel Edwards’instructions …. I was told to go round and book as much asI could. He said, do as much as you can. That is, to book for freightin advance, forward contracts ”. Mr. Young (plaintiff’s manager)said in evidence: “ This was rather unusual. To my knowledge it neverhappened before …. The American-India Line were not gettingany cargo. What they wanted to do was, they thought it was betterto have some cargo with half rates than no cargo at all. They got a lot offreight”. Later on Mr. Bostock was asked, did he make inquiries as towhether Lionel Edwards had authority to make this offer, and his answerwas: “ We are not accustomed to doubting good offers made by Europeanfirms in this Port. That is the only reason why I did not make inquiries.
I would not have dreamt of asking”. Mr. Young, the Manager of theplaintiff’s firm to whom Mr. Bostock made this offer, says also: “ Hetold me that Lionel Edwards Ltd. were offering freight to New York upto the end of the year at half the current rates. That was 25 shillings(The current rates, it is stated, were 50 shillings.) “He asked me if Iwould like to take advantage of it …. I instructed him to book
232 MACDONELL CJ.—British Ceylon Cor. v. The United Shipping Board.
on our account 50 tons a month from May to December. I said we woulddo. probably more. I was not prepared to commit the company at themoment to more than 50 tons. He promised to book it at 25 shillings….. We regarded ourselves bound to ship 50 tons a month. ThisWas impressed on me at the time by Mr. Bostock. 1 understood whetherwe shipped 50 tons or not we had to pay for it in consideration of theShipping Line’s obligation to take the goods at reduced rates. It was anovel procedure to have an agreement with regard to freight at a futuredate- …. The ordinary method is to book at the current rate atthe time of shipping ….. Possibly rates may go up or drop.By this agreement both parties agreed to take risks one way or the other,”and in cross-examination he added, “ I definitely accepted 50 tons amonth from May to December. I told Mr. JJostock that. I furthertold him, well, I will consider whether I will accept more.” The broker^notes issued by Mr. Bostock in evidence of this transaction have beenput in. They are in the ordinary form, and the first one D 4 of March 17,is marked “ Provisional ” and is as follows: —
“ Provisional. ’*
Messrs. Lionel Edwards & Co.
Dear • Sirs,—We beg to advise having –
cargo per ss. about for
tonnage scale.
Colombo, March 17, 1928.booked
the under-mentioned
applied for
Boston and N. Y. on Ceylon
Yours faithfully,
(Sgd.) Keel & Waldock.
Freight Brokers.
With whom.Cargo.Rate per ton. .
British Ceylon Corporation 50 tons of General Cargo—
Ltd.May/December
Boston/N. York@ 35s.
Halifax@ 35s.
On carrying rates as at present.
Subject to lower freight not being available. ”
As to this word ‘ Provisional * Mr. Young, the plaintiff’s Manager, says as
follows : —“ The contract note is for 50 tons general cargo from may to
December. It is not an accurate description. It is really 50 tons monthly.
To prevent any mistake on March 19, I asked Messrs. Keel & Waldock to
send me an amended note which was sent ”, D 5, and is as follows :—
“ Amended. ”
Colombo, March 19, 1928.
Messrs. Lionel Edwards & Co.
Dear Sirs,—We beg to advise having
cargo per ss. due about
tonnage scale.
booked
the
applied forfor Boston/N.
under-mentionedYork on Ceylon
Yours faithfully,(Sgd.) Keel & Waldock,
Freight Brokers.
With whom.Cargo. ,Rate per ton.
The British Ceylon Cor- 50 tons of General Cargo monthly
paration Ltd.May/December
Boston/N. YorkHalifax
(or lower if available).
“ Provisional."
@25s.
@ 35s.
MACDONELL CJ.—British Ceylon Cor. v. The United Shipping Board. 233
Mr. Young also said “ The word ‘ Provisional ’ at the top of P 3a(i.e., D 5). We expected to be in a position to place a larger quantitythan 50 tons …. I had accepted 50 tons definitely. Thecontract rate was 25 shillings. We booked 50 tons definitely at 25shillings a ton. The rate was fixed. There was no necessity to put theword ‘ Provisional ’ at all. 1 had communicated with Mr. Bostock ”.Later on in cross-examination he says, “ My instructions to Mr. Bostockwere to book 50 tons from May to December. These instruc-tions were final. There was ^ nothing provisional about it, quitedefinite.”
It will be noticed that even the amended brokers’ note, P 3a (D 5),has the word “ Provisional ” at the bottom of it,' and on being asked,Mr. Young said, “ It was a definite booking of 50 tons and indicates thatwe might be booking more As to this amended brokers’ note, Mr.Bostock says, “ That contract was made by me on the instructions ofLionel Edwards for freight for those amounts. They were preparedto accept it ”.
It is to be observed that the words “ booked, applied for ”, in thesebrokers’ notes are left as printed, neither word having been struckthrough, initialed, or touched in any way. I connot discover that anyquestion was asked of any witness in the case as to this fact. Presumablythen the defendants did not base any argument upon it.
Returning to March 17, the date of the first brokers' note: on thatdate Lionel Edwards Ltd. sent to the plaintiff the shipping order P 1already referred to. It is headed " The American-India Line,” and issigned “ For Roosevelt Steamship Co. Inc., New York, Lionel EdwardsLtd., H, Harger, Agent ”, and is addressed to the commanding *officer of a steamer left blank. The important portions of it are asfollows: —
“ Ready to load May/December, 1928.
Sir.—Please receive on board your steamer the under-mentioned goodsfrom Messrs. The British-Ceylon Corporation Ltd., and grant receipts forsame: for New York.
Shipping Tons.Description of Goods.Rate of Freight.
50General Cargo, monthly. .25s."
(The document P 2 headed “ American-India Line operated for UnitedStates Shipping Board Merchant Fleet Corporation, by RooseveltSteamship Company Inc., New York—India to United States of America,and/or intermediate Ports; Agents in Colombo, Lionel Edwards Ltd.”,and signed, weight, contents and value unknown. “ Owners, United StatesShipping Board Merchant Fleet Corporation, for Roosevelt SteamshipCo. Inc., N. Y., per pro Lionel Edwards Ltd.’1 put in at the trial by theplaintiff company as appears from the record and from its exhibit mark P 2but is nowhere, that I can discover, referred to in the evidence. There
234 MACDONELL CJ.—British Ceylon Cor. v. The United Shipping Board.
seems no evidence that it was seen by the plaintiffs firm, at any rate puntil after the contracts sued upon had been made.)
There seems then to have been a contract made through the mediumof this firm of brokers, Keel & Waldock, between the plaintiff companyand Lionel Edwards Ltd., as agent for the second defendant, wherebythe plaintiff company bound themselves to ship a minimum of 50 tnn«general cargo monthly from May to December, 1928, by the seconddefendants* ships to New York, and the agents of the second defendantbound themselves to receive and carry those 50 tons monthly from -Colombo to New York at 25 shillings a ton. There was also a clause inthe contract That the second defendants would carry that cargo forless than 25 Shillings a ton if the current rates fell below thatfigure.*
Was his contract a written contract to be found in the brokers* notesand not elsewhere, or was it a contract parol evidence of which wasadmissible outside those notes to ascertain j«the terms of the contract?Robson v. Aitken Spence & Cte.,1 decided, on the analagous question of abroker's bought and sold notes, that such notes do not constitute thecontract. Per Hutchinson C.J. at p. 14:“ What are these notes?
They are in form and substance information given by the broker to hisprincipal of what is done on his behalf, to the buyer what the broker hasbought for him, and to the seller what he has sold for him, so much atsuch a price. They are not a contract but a memorandum that acontract has been made ”, and Middleton J. at p. 17, summarizingthe decision of the Privy Council in Durga Prasad v. Baggan Lai/ says,
“ Bought and sold notes do not constitute the contract of sale but aremere evidence that may be looked to for the purpose of ascertainingthat there was a contract and what the terms of the contract- were.”Brokers’ freight notes seem analoguous to brokers’ bought and sold notes,and you conclude then that to discover what was the contract in this caseyou can take into account what the parties said at the time so as todiscover what they bound themselves to. I have summarized abovethe effect of the agreement of the parties. The only word leaving anydoubt is the word “ provisional ”. Mr. Young’s evidence for the plaintiffand the heading to P 1 sent him by the second defendant on March 17,seem to make it perfectly clear that both parties understood the contractas meaning that there was to be a definite shipping every month fromMay till December of 50 tons, but that the plaintiffs reserved to them-selves the right to ship at the rates given more than those 50 tons if theywere able to do so. The parties seem to have been ad idem and thereseems to have been mutuality, the plaintiffs binding themselves to shipnot less than a certain quantity each month and the second defendantsbinding themselves to receive that quantity or more if necessary, at anagreed on rate. No one of the witnesses suggested in their evidencethat there was any uncertainty as to the terms of the contract or thatthere was not consensus ad idem or that mutuality was absent—more,both sides acted on the contract. i
i 13 N. L. R. 9. .
* 8 C. W. N. 489.
MACDONELL CX—British Ceylon Cor. v. The United Shipping Board. 235
The next event was a letter from Lionel Edwards Ltd. of April 26,1928, to the plaintiffs, P 4:—
“April 26, 1028.
Messrs. The B ritish -Ceylon Corporation Ltd.,
Colombo.
American-India Like
Bear Sms,—We refer you to your forward bookings made by vessels of theabove Line, and we now wish to advise you that we have received cableinstructions to cancel all forward bookings with immediate effect.
We have advised brokers of this, and ss. * Oakparkwhich vessel is duehere on the 27th instant, -will now only accept cafrgo for Halifax and theUnited States, at 70s. tea and 60s. general cargo for the former place, and 60s.tea and 50s. general for America. _
Yours faithfully,per pro Lionel Edwards Ltd.,
H. Harger,
Acting Manager. ”
To this plaintiffs replied by P 5 of April 27, 1928 i— –
“April 27, 1928.
Messrs. Lionel Edwards Ltd.,
Colombo.
Dear Sms,—We are in receipt of your letter of the 26th instant and notecancellation of all forward bookings with the American-India Line withimmediate effect.
We can only express our surprise at the action taken by your Principals an#as we have acted in good faith on the bookings made with you, we mustreserve the right to claim on you for any loss sustained by our futurecommitments.
Yours faithfully,
British-Ceylon Corporation Ltd.,
Sgd. ,
Managing Director.”
Mr. Young, the plaintiff's Manager, put in a statement P 6 as to thetonnage shipped by his firm on the second defendant's ships, showing inJune 8.8 tons, in July 46.5, in August 145, in September 50, in October80, in November 42.5 and in December 32.5, total 405.3 tons for theseven months June to December, and says, “ In May, according to thisstatement, 251 tons were shipped"—but in the ships of other lines,be it noted. “ After the defendants had made the contract with us,the freights of other lines did not come down. In May we had a specialrate of 25 shillings. That was from June on. In May we shipped at 25shillings by other lines. We are not asking for damages in respectof May because we were able to ship by other lines at the same rate.In out plaint we start our claim as from July. We only shipped' a verysmall amount in June, 8 tons. From July onwards we were not ableto get that 25 shillings rate from other firms or from the defendants.We claim in respect of 300 tons for 6 months, July to December. Wehad to pay 50 shillings, which makes our loss £375 at the rate of 25shillings per ton, equivalent at the then rate of exchange to Rs. 5,026.18.In June we did ship a small quantity by the * Easterling ’ . . . .8 tons. I produce the bill of lading for that shipment in which freighthad been calculated at 25 shillings on the margin. That is done in ouroffice. That has been scratched out and the rate calculated at a higher
230 MACDONELL. C.J.—British Ceylon Cor. v. The United Shipping Board.
rate of 50 shillings. That was not done in our office. Probably done byLionel Edwards. ” The plaintiffs followed up this June shipment bysending on June 15, a debit note to Lionel Edwards for the differencebetween the rate of 25 shillings a ton and the rate of 50 shillings. To this,Lionel Edwards Ltd. replied on June 16, asking the plaintiffs to“ forward your claim in quadruplicate addressed to ourselves as Agentsfor the Roosevelt Steamship Co. Inc., Managing Operators for theUnited States Shipping Board, when this claim will be put before themfor their immediate attention.” On the same day the plaintiffs preferreda further claim arising as they said out of the cancellation of theirshipping order of March 17, as Lionel Edwards Ltd. for the second defend-ants had definitely repudiated the agreement of March 17. Theplaintiffs treated the repudiation of the shipping order of March 17as definite and on August 1, 1928, sent to “ Messrs. Lionel Edwards Ltd.,Colombov Agents of Roosevelt Steamship Co. Inc., Managing Operatorsfor the United States Shipping Board ” a debit note for Rs. 5,026.18,the amount claimed in their plaint. A letter of demand was sent onJune 24, 1929, and plaint was filed four days later.
The answers of the first and second defendants were filed on February27, 1930; They define their position in paragraph 2 of that answer inwhich each defendant denies “ that it is the owner of vessels trading asalleged in paragraph 2 of the plaint ”. Each defendant then states “ thatthe second defendant manages and operates under the direction andcontrol of the first defendant the said vessels which are owned by theUnited States of America
I have endeavoured above to give some meaning to these words asinterpreted by the evidence of the witness Lionel Edwards. Prima facieand unexplained by that evidence, they might well have meant that theperson who “ directs and controls ” is the principal to sue and be sued andthat the one who “ manages and operates ” is the agent, but the plaintiff-respondents contended in the appeal that both defendants were liable asbeing in the position of co-principals. I am doubtful of this argumentfor a short and simple reason. The plaintiffs are suing on a freightcontract made between March 17 and 19, 1928, partly parol, namely, thewords used between Mr. Waldock the Broker and Mr. Young the plaintiffs’Manager, and partly in writing, namely, the brokers’ notes handed byMr. Waldock to the plaintiffs and to Lionel Edwards Ltd., and thedocument P 1 the shipping order of March 17, the material portions ofwhich have been quoted above. Now taking the contract so made—and I would emphasize that the parties immediately concerned seemto have been in no doubt whatever as to its terms or as to the partiesthereto—-it is clear that this was a contract made between the plaintiffcompany on one side and the Roosevelt Steamship Co. Inc., New York,on the other. Those were the parties to that contract which must beheld to have been concluded at latest on March 19, 1928, the date of theamended brokers’ note. At that time there is no evidence that theplaintiffs knew anything whatever about the first defendant or thatLionel Edwards Ltd., agents for the second defendant, had suggestedto the plaintiffs in any way that the first defendant was their principal.Can the plaintiffs now say that at a later date the real principal, namely,
MACDONELL. CJ.—British Ceylon Cor. v. The United Shipping Board. 237
the first defendant, was disclosed to them and that they sued it accord-ingly? If so, then, surely they should have brought their action againstthe first defendant, but they have not done so. They have very properlyincluded the second defendant as at least a party liable and it is againstthe second defendant, it seems to me, that their action lies. Do the words“ manage and operate under the direction and control ” imply a joint or co-responsibility ? I have suggested that prima facie and unexplainedthey would not, but that the entity which directs and controls would bethe superior, if the word may be used, and that the person managing andoperating would be the subordinate. If that be so then, as said above,the plaintiffs should have sued the first defendant solely. But theircontract was, it seems to me, with the second defendant and with thesecond defendant alone. If it be said that that second defendant nowdiscloses the fact that behind him is the real principal, namely, theShipping Board, my answer would be that the contract was made onMarch 17 to 19, 1928, with the second defendant and not with any otherparty, and that it is open to the plaintiffs to sue that second defendant asthey have done in this action. But for the reasons given above I do notthink that an action against the first defendant will lie because there is noevidence of any co-liability of these two defendants, the first and thesecond. Conversely, I do not think it would be open for the firstdefendant now to come forward and say that it was the real defendant andthat the action must be brought against it solely. The judgment appealedfrom dismissed plaintiffs’ claim as against the first defendant and I cannotsee that that judgment was wrong. But with the second defendant theplaintiffs do seem to have a binding agreement which it is not open to thefirst defendant to invalidate by coming forward now and claiming to be thereal principal. It is perfectly clear from the evidence in this case thatthere is no mention at all of the first defendant as party to the agreementof March 17 to 19, 1928, until sometime after that agreement had beenmade ; P 2 upon which much argument was based was not shown to theplaintiffs until after their contract was made. These considerations thenseem to dispose of paragraph 2 (b) in the second defendant’s answer to thiseffect: “ As a special and distinct plea the second defendant pleads that atall times material to this action and in all matters relevant thereto it actedto the knowledge of the plaintiff company as the agent of the first defend-ant and that the plaintiff company has therefore no cause of action againstthis defendant who was acting for a disclosed principal ”. That, it seemsto me, is exactly what the evidence does not prove. The whole evidenceis to the effect that if any contract was made it was made on March 17to 19, 1928, between the plaintiffs and the second defendant and that it wasonly after the conclusion of that agreement that the first defendant wasmentioned at all. The law on the point can be found in Firm of R. M-.
K.R. M, v. Firm of M. R. M. V. L.1—per Lord Atkinson at p. 770a case cited td us in argument.
The normal meaning of the evidence led was that Lionel Edwards Ltd.had express authority to bind his principal the second defendant by theagreement made with plaintiffs. But the argument before us was in themain that Lionel Edwards Ltd. had no implied authority to make this
» (1.926) .4. C. 761.
238 MACDONELL. C J.—British Ceylon Cot. v. The United Shipping Board.
particular contract on behalf of the second defendant. That argumentrelies on the admissions of Mr. Young, the plaintiffs' Manager, that theoffer from Lionel Edwards Ltd. to book freights over a considerableperiod was “ surprising ” and “ unusual ”. It relies also on the evidencethat “ the ordinary method is to book at the current rate at the time ofshipping". Mr. Young qualifies this somewhat, by saying "It is not .the invariable rule for a broker to book freight in a particular ship. It isusual but not invariable ”. The evidence in this case was certainlynot strong enough to prove anything that could be called a custombinding at the Port of Colombo. Admittedly the offer was an unusualone and it was therefore argued that there could be no implied authorityon the part of Lionel Edwards Ltd. to make it; the plaintiffs would beput upon inquiry and would have themselves to thank if it turned outthat Lionel Edwards Ltd. had no authority in fact. The answer to thisseems to be furnished not merely by Mr. Bostock's words that he as abroker would never dream of questioning an offer made by .a firm of goodstanding, but more especially by the words of Mr. Lionel Edwardshimself “ We did general agency for the Roosevelt Steamship Line.
I engaged freight and loaded vessels and attended to all matters apper-taining to engaging freight and loading vessels ”. Engaging freightmust include fixing the amount to be paid for freight. If the current ratein March, 1928, was 50 shillings a ton for this particular voyage, couldit be contended that Lionel Edwards Ltd. had not the implied authorityto alter the rate (say) to 60 shillings on one side or 40 shillings on theother? We were referred to Bowstead on Agency and to the cases onimplied authority collected therein. That work (7th ed., p. 85) laysdown the rule as follows:—“Every Agent who is authorized to do anyact in the course of his trade, profession or business as agent has impliedauthority to do whatever is usually incidental in the ordinary course ofsuch trade, profession or business to the execution of his express author-ity, but not to do anything which is unusual in such trade, profession orbusiness or which is neither necessary for or incidental to the executionof his express authority ”. Clearly the fixing of the amount of freightwas “ necessary and incidental " to the express authority of LionelEdwards Ltd. Could the sudden dropping of the amount of freight byhalf be said to be something “ unusual ”? No case was cited to usto show that it would, and the cases collected in Bowstead (ut supra)to which we were referred certainly do not go this length. They are caseswhere an agent takes some specific step outside the ordinary course of hisexpress authority. For instance, if a broker is authorized to effect apolicy he is not held to have implied authority to cancel the same after hav-ing made it. If a solicitor is authorized to receive payment of interest,he has not implied authority to receive payment of the principal. Thesethings would be specific acts outside the course of his express authorityand it is in that sense that the passage referred to in Bowstead seemsto use the word “unusual”. These things could not be put under anyof the divisions or headings that together comprise that express authority,and would be “unusual" in the sense that the agent by doing themwould thereby be adding on his own responsibility, something to thecategories that make up the express authority given to him. That
MACDONELL C.J.—British Ceylon Cor. v. The United Shipping Board. 239
express authority, reasonably analysed, will comprise authority to docertain things, and things falling outside that analysis will be outside theexpress authority. Here, Lionel Edwards Ltd. had express authorityto quote freights and to demand and receive the same, and it was certainlynot argued to us that quoting freights and demanding and receiving themwere outside the express authority of that firm. But it was argued to us,and the argument had to go that length, that if Lionel Edwards Ltd. quotedfreights varying in any respect from the normal or current freights of themoment, this put the shippers on inquiry as to what his express authoritywas and that they could not be heard to say that alteration of freights waswithin the implied authority of his firm. Yet if an agent, held out toobtain cargo, to quote, demand Nand receive freight therefor-—and therewas no suggestion but that this was what he was held out to do—couldnot alter from time to time the freights he was quoting, it is difficultto see how he could carry out the agency that confessedly he wasundertaking.
If however one has interpreted correctly the evidence of Mr. LionelEdwards as set out above, it is difficult to draw from it any other conclusionthan that he had in March, 1928, an express authority to cut rates betweenColombo and New York, and also to book freight contracts over a period.
On these considerations, if then one has correctly apprehended theterms of this contract and the authority under which it was made, it isdifficult to see that the decision appealed from in giving the plaintiffsjudgment as against the second defendant is wrong.
The plaint was filed on June 28, 1929, and on September 2 evidencewas taken from a Mr. Brown who had been Manager of Messrs. LionelEdwards Ltd. since April that year. That evidence does not carrymatters further than the evidence quoted from of Mr. Lionel Edwardshimself, but Mr. Brown also says that his firm is agent for the RooseveltSteamship Co., and has authority from them to book freights. Followingon this evidence there was an argument as to whether the defendantshad been properly served, and the learned District Judge in an order ofSeptember 9, 1929, decided that the service in this case was good. Anappeal against this order was dismissed on December 12, 1929. Thedefendants filed their answer on February 28, 1930, the material portionsof which have been set out above. On November 7, 1930, it was agreedby both parties that the present case should be postponed sine die untilsuch time as a final decree had been given in case No. 30,616 of theDistrict Court of Colombo, since the main issues in the two cases werethe same. On January 22, 1931, the plaintiff company’s Proctors movedthat as judgment had by then been entered for the plaintiff in thiscase for the. amount claimed, decree be entered as prayed for with costs ;alternatively, in the event of the defendants failing to settle, that thecase should be fixed for trial. Nothing seems to have been done forexactly a year, when on January 28, 1932, the plaintiff’s Proctors movedto issue notice on the defendants, presumably of their application ofexactly a year before. On February 29, 1932, the case was fixed fortrial for May 8, 1933, and the following days, until concluded. It givessome idea of the congestion of work in the District Court of Colombo,that to be perfectly certain of getting a clear date for the hearing of this
240 MACDONELL C.J.—British C&glon Cor. v. The United Shipping tfoard.
—7—
case, one had to be taken fifteen ift&nths ahead. On December 21, 1932,the defendants moved to amend their plea. Their amendment affectedparagraph 5 of their answer and was. a denial that Lionel Edwards Ltd.
“ had any authority to enter into any contract or agreement as is referredto in the plaint or otherwise howsoever to bind either first or seconddefendant whether expressly or impliedly, to any such contract as ispleaded in the plaint The defendants further stated “ that the saidLionel Edwards Ltd. had no authority of whatsoever nature or kind,whether express or implied, to enter into contracts or agreements tocarry cargo at any rates less than those current at the dates materialto this action and more particularly at rates less than those current at orabout the date of the alleged contract …. called and known as.. … current rates ”. If this amended answer is compared with
paragraph 5 of their original answer of February 28, 1930, nearly threeyears before, it will be seen that there is a marked difference. Theoriginal paragraph 5 of the answer simply denied that “ there was anyagreement or contract entered into as is pleaded in the plaint of whichthe defendants were parties or whereunder they could in any way berendered liable to the plaintiff company ”. The defendants had also“ denied that they had committed a breach of any such contract or ofany contract to which they were parties or whereunder they could in anyway be rendered liable It may be argued that the earlier paragraph 5is implicitly a denial of authority on the part of Lionel Edwards Ltd.to bind them or either of them, but it certainly does not say so explcitly.There might be other ways by which it would be impossible for themto be bound under the contract pleaded in the plaint. It is not the leastremarkable feature in the' case as presented for the defendants thatit was only at the last moment, ten months after the day for hearinghad been fixed, that they for the first time pleaded definitely that LionelEdwards Ltd. had no authority to bind them—the point more thanany other upon which the case and this appeal were argued. If LionelEdwards Ltd. had no authority, express or implied, to enter into thecontract of March 17 to 19, 1928, then the defendants would have knownthat fact in ample time to insert it in their original answer of February 28.1930. These considerations are material in vew of the next step takenby the defendants. The day following their motion to amend answer,on December 22, 1932, the first and second defendants filed jointly apetition and affidavit asking for a Commission to take evidence inAmerica. The affidavit and petition are in identical terms and statethat to enable them to establish their case they will have to proveinter alia.—
“10.(a) That the vessels of the American-India Line are owned
by the United States of America and are operated and managed by thesecond defendant as the agent of the first defendant and under the firstdefendant’s management and control.
“ (b) That the said Lionel Edwards Ltd. had no authority to enterinto any such contract as is pleaded in the plaint or otherwise howsoeverto bind the defendants expressly or impliedly to any such contract or toenter into any contracts or agreements to carry cargo at any rate'otherthan the current rate.
MACDCfNE^-L. C.J.—British Ceylon Con: v./the United .Shipping Board. 241
“ (c) That the^plain tiffs have not shipped from Colombo to New Yorkbetween May and December, 1928, 50 tons of general cargo from month tomon’.h and that for this it will be necessary for the defendants to producedocuments and lead evidence of witnesses who are resident in America,”—and for this purpose clause II of the affidavit gives the names of a number ofwitnesses in America whose evidence they ask should be taken oncommission.
This petition and affidavit call for several remarks. These documentsaver definitely that the Roosevelt Co., second defendants, were agentsof the Shipping Board Corporation, first defendants. No such avermenthad been made<-in the answer filed on February 28, 1930. Again, if thefact was that the second defendant was the agent acting for firstdefendant the principal, then that fact was perfectly well known longbefore the. date of the original answer of February 28, 1930, and one is ata loss to see why that averment was omitted from the answer of Febru-ary 28, 1930. Further, one would suppose that the question whether theplaintiffs had or had not shipped 50 tons monthly from May to December,1928, by the defendants’ ships could be very much better answered inColombo, confessedly the port shipped from, than in New York. Further,it is nowhere stated in the petition or affidavit that it is impossible forthe witnesses named* or for one or . more of them to come to Colomboand give evidence. The question of authority was one to be gatheredfrom the evidence of witnesses in Colombo supported by documents,the originals of which no doubt are in America, but which, so far as onesees, could without much difficulty or expense have been produced, here,and there is- nothing in the case that I can discover showing that theplaintiffs were asked to admit those documents. It is another remarkablefact that the affidavit is not sworn to by anybody who is or claims to bea member of either of the defendant corporations. It is sworn to simplyby their Proctors in Colombo. When petitions are lodged asking forpermission to take evidence outside the jurisdiction, it is usual, I appre-hend. that they should be authenticated in some manner by the partiesthemselves. There is absolutely nothing in the present petition andaffidavit to prevent the defendants hereafter repudiating what has beensaid and sworn to on their behalf by their Proctors. It has been pointedout that the petition and affidavit were filed at a very late stage in thecase. Petitions for a commission to take evidence must be bona fideand reasonable, and filed in proper time. The learned Judge in an orderof January 16, 1933, refused this application for a commission andagainst this refusal appeal is now brought. No sufficient reason has beenshown to us that the learned District Judge was wrong in his refusaland the appeal against it must be dismissed.
On the same day, and following days, on which order was maderefusing this commission, the evidence was taken of Mr. Lionel Edwardshimself. The material portions of that evidence have been set out andcommented on above. The evidence, as I have, said, was taken in anothercase, namely, D. C. Colombo, No. 42,969, but is by consent incorporatedin the present case. Finally, on May 8, 1933, and following days, thecase was heard and on May 12, 1933, judgment was given for the plaintiffsfor the amount claimed against the second defendants, against whichjudgment the present appeal was brought.
36/19
242 MACDONELL C.J.—British Ceylon Cor. v. The United Shipping Board.
The petition of appeal against that judgment states, paragraph 5 (n),
“ that the plaintiff company is not entitled to recover any damagesbecause they made no effort to minimize the damages”, and, paragraph5 (o), “ that the plaintiff company failed to place before the Court evidenceon which the Court could have assessed the damages But the argumentaddressed to us was directed to prove that the first defendant and seconddefendant were not, either of them, bound at all by any contract with theplaintiff company and did not as I understood it, deal with these para-graphs in the petition of appeal as to damages. There was evidencebefore the learned trial Judge from which he could conclude that thedamages to the plaintiff company were as alleged by them.
The judgment appealed from dismissed the second defendant's claimin reconvention with costs and no argument as far as I could gather,was addressed to us that this portion of the judgment was wrong.
The judgment also dismissed the plaintiff company’s action as against• the first defendant and likewise the claim of the first defendant inreconvention but ordered that as between the plaintiff company and firstdefendant each party should pay its own costs. The first defendanthas appealed against this last, asking to be given its costs below. Onthis portion of the appeal a point arises which require separate con-sideration.
The first defendant appealed in time against this order depriving itof costs below. After the time for appeal had elapsed the plaintiffcompany filed a cross-objection under section 772 of the Civil ProcedureCode, which section reads as follows : —
“ Any respondent, though he may not have appealed against anypart of the decree, may, upon the hearing, not only support the decreeon any of the grounds decided against him in the Court below, but- take any objection to the decree which he could have taken by way ofappeal, provided he has given to the appellant or his Proctor sevendays’ notice in writing of such objection.
“Such objection shall be in the form prescribed under head (e) ofsection 758 ”, that is—
“ (e) a plain and concise statement of the grounds of objection to thejudgment, decree or order appealed against—such statementsto be set forth in duly numbered paragraphs.”
The ground of objection here assigned was that the judgment waswrong in dismissing the plaintiff company’s action as against first defend-ant, and that judgment ought to be given against the first defendant,as well as against the second defendant, and it was argued for the firstdefendant that it was not competent for this Court to entertain thatobjection:“ having failed to get judgment against first defendant,
below, plaintiffs cannot try to get it on a cross-objection under section772. We are entitled to our costs, but the plaintiffs are not entitled toobject to the decree itself. This that we appeal against is an orderas to costs, and an order as to costs is no part of the decreeRam
Menika v. Dingiri Banda which was cited to us, decides that an orderfor costs is not a decree save in certain excepted cases of which the
*25 N. ^ R. 465.
MACDONELL C.J.—British Ceylon Cor. v. The United Shipping Board. 243
present objection is not one. But I am doubtful if that case was directedto rule the point now raised to us. The order as to costs appealed fromwas connected with the decree dismissing the action as against firstdefendant. That order could not be separated from the decree in favourof first defendant—this was very candidly conceded in argument—ortreated as something self-subsisting apart from that decree and if soI cannot see how the respondent can be debarred from objecting undersection 772 that the decree from which that order as to costs cannot beseparated, was itself wrong. No case was cited to us to show that therespondent could not and the words of the section seem to allow it. Thesection contemplates an appeal, and an appeal may be brought (section 754)against “ any judgment, decree or order of any original Court the termappeal is wide enough to cover appeal against any one of these things,and the present appeal is one against an “ order ” of an original Court.But then section 772 goes on to say that the respondent, though he maynot have appealed against any part of the decree, may yet on givingseven days’ notice “ take any objection to the decree which he couldhave taken by way of appeal ”. The objection now taken is an objectionto the decree in so far as it dismissed the action as against first defendant,and that dismissal of first defendant was beyond question part of thedecree and not a mere “ order ”. Then the section seems in terms togive to a respondent the right to take such an objection as the plaintiffcompany now seeks to take. To hold the contrary, it would be necessaryit seems to me, to interpret the section as follows. Its opening words: —" any respondent, though he may not have appealed against any portionof the decree ”, would have to be read with the addition “ provided theappellant has appealed against some portion of the decree ”, in otherwords the rights secured to the respondent by the section would onlyenure where the appeal itself was against the decree itself or a . portionthereof and not where; as here, the appeal is, strictly, not against thedecree but against an order appurtenant thereto. But this would bereading into the section words which are not there and which are notrequired for the understanding of the section; it makes perfectly goodsense without them. The section seems to say that where there is anappeal, whether against a decree or an order, objection may be taken toanything appealable in the decree out of which the appeal rises.
Apart however from this, an order for costs is something so connectedwith, so appurtenant to, the decree to which that order is annexed thatit seems to me it would be giving an unnecessarily narrow scope to.thissection 772 if, on appeal as to costs, the respondent were to be debarredfrom objecting to the decree ^itself. I am of opinion then that it waspermissible to the plaintiff company to bring this objection, namely,that the decree was wrong in dismissing its claim as against the firstdefendant, and to have it determined. For reasons given earlier thedecree dismissing the action against the first defendant seems correct,and the plaintiff company’s objection fails and must be dismissed.
The question arose in argument whether the petitions of appeal in thiscase were sufficiently stamped and the facts answering that question arethese. There was a joint petition of appeal dated January 26, 1933, filedby both defendants, first and second, against the order of January 16,
244 MACDONELL C.J.—British Ceylon Cor. v. The United Shipping Board.
1933, dismissing their petition for a commission to take evidence inAmerica. In this petition the two defendants, first and second, makeaverments and prayer, textually identical. This petition of January26, 1933, bears a 12-rupee stamp which is by Part II. of Schedule B of theStamp Ordinance, No. 22 of 1909 (Ordinances, vol. II., p. 943) theprescribed stamp for a single petition of appeal involving as here overRs. 5,000 but less than Rs. 10,000. There was also a joint petition ofappeal dated May 13, 1933, filed by both defendants, first and second,against the judgment and decree of May 12, 1933, dismissing the actionas against first defendant without costs and allowing the action as againstsecond defendant with costs. At paragraph 5 of the petition +hedefendants sever in their averments, the second defendant solely avert. ,g"he matters contained in paragraph 5, (a) to (o), and the first defendantthereafter also solely averring certain matters. They join in theirprayer but the second defendant adds solely a prayer of its own. Thispetition of May 13, 1933, also bears a 12-rupee stamp which again is theprescribed stamp for a single petition of appeal involving over Rs. 5,000but less than Rs. 10,000. Each of these appeals is furnished with aCertificate in Appeal of the respective date, January 26, 1933, May 13,1933, as required -by section 756 of the Civil Procedure Code, each suchcertificate bearing a 12-rupees stamp, again the prescribed stamp for asingle certificate in appeal involving the above amount. The properstamp on the blank form of Supreme Court judgment required to besent with the petition of appeal is one of 21 rupees and this was dulydeposited as appears from a journal entry of January 26, 1933; seeOrdinances, vol. V„ pp. 942 and 946.
Now the petition of appeal of January 26, 1933, relating to the com-mission to take evidence in America would seem to be two petitions ofappeal, for it is possible that a Court of Appeal might have refused thecommission to one of these two defendants but have allowed it to theother. The petition of appeal of May 13, 1933, that against the judgmentand decree in the action generally is by its content, and ex conjesso. twoappeals. No attempt was made in argument to maintain that it was oneappeal only. It would seem to follow then that these petitions of appeal,of January 26, 1933, and of May 13, 1933, were insufficiently stampedin that they and the respective certificates in appeal accompanying thembore each a stamp of 12 rupees where each such petition and certificateshould have borne two stamps of that amount or stamps of 24 rupeesin all. If these be the facts and if this be the correct conclusion of lawfrom these facts, namely, that the present appeals were insufficientlystamped, what is the duty of this Court?
The answer seems to be given by the case of Sathasivam v. CadiravelChetty1—a two Judge decision—and by the authorities therein cited.In that case Schneider J. says as follows : —
“ The petition of appeal was filed in the lower Court, according to thejournal entry in the case on January 17, 1919, and there is an entryon the record that no stamps were tendered for judgment of theSupreme Court and for the certificate in appeal. On the record there isa certificate in appeal stamped and dated February 18, 1919. There is
1 {1910) 21 N. L. n. n:t.
MACDONELL CJ-.—British Ceylon Cor. v. The United Shipping Board. 245
nothing to show that stamps for the copy of the Supreme Court Judg-ment have been supplied up to date. A preliminary objection wastaken that the appeal should not be heard, because of the omission tosupply the stamps for the certificate and for the copy of the SupremeCourt judgment, together with the petition of appeal. This objectionwas raised upon the provisions in the Stamp Ordinance, schedule B inPart II., head * Miscellaneous ’ :‘ Provided also, that in appeals
to the Supreme Court the appellant shall deliver to the Secretary of theDistrict Court or Clerk of the Court of Requests, together with hispetition of appeal, the proper stamp for the decree or order of theSupreme Court and certificate in appeal which may be required forsuch appeal.'
'* The question, therefore, is whether the omission to supply thestamps was so fatal as to wreck the whole appeal. There is no directauthority either in the Stamp Ordinance or in the provisions of theCivil Procedure Code for the proposition that the omission to supplythe stamps would entail as a consequence the dismissal of the appeal;but our attention was invited to two cases—Comclis v. Ukku (1867, Ram.(1863-1868), 278), decided in 1867, where it was held that the omission tosupply stamps for the decree or order of the Supreme Court within thetime limited by the rules for perfecting an appeal was fatal to the appeal.The reason given for that decision was that otherwise injustice would becaused to the respondent by his being kept out of his judgment. The othercase was that of Don Mathes Bandara v. Babun Appu (1892, 1 Mataracases, 203) which we ascertain by a reference to the Minutes of this Courthad been decided by the Full Court in 1892. where it was held that thestamps for the decree of the Supreme Court and certificate in appeal pothaving been furnished till the day after the petition of appeal was filedwas fatal to the appeal, and the appeal was on that account rejected, withcosts. We are bound by the decision of the latter case, and for the reasonsgiven in that case we reject the appeal in this case, with costs.”
It is to be noted that in that case the stamps required on the petitionof appeal itself seem to have been furnished in due time, and the same inthe Don Mathes Bandara case (supra) relied on by Schneider J., and itwould seem to follow then that the facts here are stronger in that thestamps required on the petitions themselves have not been furnished in duetime. These authorities are binding upon us and have been followed inSinnatamby v. Tangamma * and in Hurst v. Attorney-General1 and requireus to say that these appeals not having been properly stamped must berejected.
As to the course of practice on this point it would appear that thewords of Grenier J. in Salgado v. Peiris", are as applicable now as whenthey were uttered. He was dealing with an insolvency appeal, butmentions interlocutory appeals also—such as the joint one of Janu-ary 26, 1933—and I understand that his statements are equally correct offinal appeals such as the joint one of May 13, 1933. He said as follows: —“ I may say that in my experience, both at the Bar and on the Bench
of the District Court, appeals in insolvency cases have been treated
i j c i i~_ j~tj.–i C. if. R. ffer,.
' tiun't) jQ v. T.
R. 3^9 at 383.■
246 MACDONELL C.J.—British Ceylon Cor. v. The United Shipping Board.
on the same footing as those in interlocutory matters. The Secretaryof the District Court of Colombo has never yet to my knowledgeaccepted a petition of appeal in an insolvency case unless it was properlystamped at the time of presentation, according to the provisionscontained in Chapter LVIEI. of the Civil Procedure Code.
“I have never known of any case where such a petition of appealhas been allowed to be stamped at any time subsequent to the date ofpresentation. There has been an uninterrupted practice for nearlytwenty years at least, from the time the Civil Procedure Code cameinto operation, of stamping petitions of appeal in insolvency cases,and then presenting them to the Court through the Secretary. Itwould lead to much confusion and delay if this practice was nowaltered, and the appellant given liberty to stamp his petition of appealwhenever he liked.”
Reverting to Sathasivam*s case {supra) it may be as well to discuss thewords in it of Schneider J., “ There is no direct authority either in the StampOrdinance or in the …. Civil Procedure Code for the propositionthat the omission to supply the stamps would entail as a .consequencethe dismissal of the appeal.”
Section 4 of the Stamp Ordinance, No. 22 of 1909, is as follows : *' Sub-ject to the provisions of this Ordinance and the exemptions contained inschedule B ”—these exemptions do not affect the present matter—“the following instruments and documents shall be chargeable withduty of the amount indicated in that schedule as the proper duty thereforrespectively, that is to say: (a) Every instrument mentioned in thatschedule which, not having been previously executed by any person, isexecuted in Ceylon; and every document mentioned in parts II., III.,IV., and V. of that schedule which, not having been previously executed,issued, presented, made, or filed, is executed, issued, presented, made,or filed in Ceylon ”.“ Document ” is not defined in the Ordinance but
** instrument ” is defined by section 3; it “ includes every documentby which any right or liability is, or purports to be created, transferred,limited, extended, extinguished, or recorded ”. As the word “ include ”implies that there may be other instances of the subject defined thanthose mentioned—cf. the definition in the same section of the Ordinanceof “ person ” as including “ any company, corporation or society ”,it must certainly include any individual human being as well—thisdefinition of “ instrument ” will be wide enough to include the documentsunder discussion, petition of appeal and certificate in appeal. Section 33is as follows: “ Every person having by law or consent of partiesauthority to receive evidence, and every person in charge of a publicoffice, except an officer of police, before whom any instrument chargeablein his opinion with duty is produced or comes in the performance of hisfunctions, shall, if it appears to him that such instrument is not dulystamped, impound the same ”, but impounding a document decidesnothing as to its ultimate validity or the reverse. The duty to examineinstruments to see if they are sufficiently stamped is imposed by section34 (1): “ For that purpose every such person shall examine everyinstrument so chargeable and so produced or coming before hl§h, in order
MACDONELL C-J.—British Ceylon Cor. v. The United Shipping Board. 247
to ascertain whether it is stamped with a stamp of the value and descrip-tion required by the law in force in Ceylon when such instrument wasexecuted or first executed Section 36 enacts that “ No instrumentchargeable with duty shall be admitted in evidence …. unlesssuch instrument „ is duly stamped ”, but goes on to make provision forstamping such instruments (with a penalty) even after their productionunstamped, and section 37 provides that an instrument once admitted inevidence is not, save as provided in the section, to be called in questionlater in the suit or proceeding on the ground that it has not been properlystamped, but 1 am inclined to agree with Pereira J. in Jayawickrama v.Amarasooriya1 that section 37 of the Ordinance—and semble section 36also—do not apply to pleadings, and if so, then not to petitions of appeal.
“ It (i.e., section 37) refers ” says Pereira J. “ to instruments tendered inevidence and clearly a plaint does not answer to that description ofdocument”. A petition of appeal and its accompanying documents arethe foundation of the appeal, things without which that appeal is notand I think it would be a straining of words to describe the documentsnow in question as documents in evidence or tendered in evidence. If,however, I am wrong and the opinion of Ennis J. in the same case is to bepreferred where he says : “ The plaint is, to use the words of the EvidenceOrdinance (see section 62); a document produced for the inspection of theCourt. It contains admissions, and is a means by which a matter offact may be proved as against the party making the admission ”,still I am doubtful of the applicability of sections 36 and 37 of the StampOrdinance to this matter (I have cited all the sections of the Ordinancethat can refer to it) in the face of section 755 of the Civil Procedure Codewhich is as follows :“ All petitions of appeal shall be drawn and signed
by some Advocate or Proctor, or else the same shall not be received.Provided always that any party desirous to appeal may within the timelimited for presenting a petition of appeal, and upon his producing theproper stamp required for a petition of appeal, be allowed to state vivavoce his wish to appeal together with the particular grounds of suchappeal, and the same shall (so far as they are material) be concisely takendown in writing from the mouth of the party by the Secretary or ChiefClerk of the Court in the form of a petition of appeal, when it shall besigned by such party and attested by the Secretary or Chief Clerk, andbe received as the petition of appeal of such party without the signatureof any Advocate or Proctor The meaning of this section 755 is perfectlyclear. Normally all petitions of appeal are to be drawn and signed by anAdvocate or Proctor or they are not to be received. But as there may bepeople unable or unwilling to engage an Advocate or Proctor, suchpeople are to be allowed to state their wish to appeal and their grounds ofappeal viva voce to the Secretary of the Court who is to take these downin writing, the writing when signed and attested to be received as apetition of appeal even without the signature of any Advocate orProctor, subject however to this, that the party, before the Secretarycan be required to take down his appeal and its grounds, must produceto him the proper stamp; without he does this, he is not allowed to statehis wish to appeal or the grounds of the appeal, and the Secretary has no
1 17 N. L. R. 274-
248 MACDONEL.L C.J.—British Ceylon Cor. v. The United Shipping Board.
power to write them down at All and without such writing there will be noappeal in existence. As Grenier J. says of this section in Salgado v.Pieris (supra), “ The Secretary cannot receive a petition of appeal with-out stamps ”, their production is, as Hutchinson C.J. impliedly says in thesame case, “ a condition precedent to the petition being received ”, and inSinnetamby’s case (supra), Lascelies C.J. says the same explicitly, properstamping of a petition of appeal within time is a condition precedent to itsacceptance. Can it be contended that this requirement applies to theparty who cannot afford Advocate or Proctor and that it does not applyto the party who can, that though the former must produce the rightstamp before his petition of appeal can be received, yet the latter thoughfurnished with Advocate and Proctor, is exempt from this requirement?It does not seem so. The section seems 10 say, explicitly with regardto the appellant who has no Advocate or Proctor, implicitly with regardto the appellant who has them, that the production of the proper stampis condition precedent to a petition of appeal being received. If theabove conclusions are correct, then possibly there is more authorityin the Civil Procedure Code, read with those portions as above of theStamp Ordinance affecting these documents, that an appeal not properlystamped cannot be received than the remark of Schneider J. at 21 N. L. R.93 suggests. One would point out that while the Supreme Court haspower since 1921 to grant relief for failure to comply with the provisions ofsection 756, the power by section 765 to .admit a petition of appeal thoughthe provisions of sections 754 and 756 have not been observed, there doesnot seem anywhere to be power to relieve from the non-observance of theprovisions of section 755, which seem to be peremptory.
The result then of these appeals is that the decisions in the Courtbelow must be affirmed. The appeals against the order of January 16,1933, refusing a commission to take evidence, must be dismissed withcosts. The appeal of second defendant against the judgment of May 12,1933, on claim and counter-claim, must also be dismissed with costs.The cross-objection by the plaintiff company to the dismissal on May 12,1933, of their action against the first defendant, must also be dismissed.
There only remains the question of the costs of the first defendant.It obtained judgment below but with order to pay its own costs. Itappeals against that order as to costs, and on the cross-objection it keepsthe judgment in its favour below. Now in the action below it madecommon cause with the second defendant in advancing and pressingnumerous obiections to the plaintiff company's claim as against seconddefendant as well as against itself and those objections, save on onematter—a matter, certainly, affecting the first defendant only—havefailed. Also the two defendants, first and second, were jointly representedboth below and on appeal, and the arguments for them were jointlyurged. These things furnished grounds for the exercise by the learnedtrial Judge of a discretion as to the costs of first defendant. In theexercise of that discretion the Judge refused first defendant its costs,and I do not feel disposed to interfere with the way he has exercisedthat discretion even if I have the power to do so.
By parity of reasoning the plaintiff company seems entitled to thecosts of this appeal. It has succeeded on all points save one and again,
GARVIN S.P.J.—British Ceylon Cor. v. The United Shipping Board. 249
here as below, the two defendants have made common cause in theirobjections to the plaintiff company’s claim. Decree affirmed and appealsdismissed with costs.
As to the separate question of the appeal in this matter not havingbeen properly stamped, authority which is binding upon us declaresthat appeals not properly stamped cannot be received. These appealshave not been properly stamped and therefore cannot be received,then they must be struck out with costs.
Garvin S.P.J.—
The defendants in this case have together filed two petitions of appeal.The first relates to an order made in the course of the case refusing anapplication for a commission to examine witnesses in America. Thesecond relates to the decree entered after trial, whereby the Court awardedthe plaintiffs a sum of Rs. 5,026.18 as damages for breach of contract tobe paid by the second defendant, while dismissing the action as againstthe first defendant but without costs. There is also a petition by theplaintiffs-respondents purporting to be made in pursuance of the pro-visions of section 772 of the Code praying that the decree in so far as itdismisses their action as against the first defendant be set aside and thatjudgment be entered against the first defendant as well.
By agreement the appeals entered in this case were listed on the sameday and heard together.
This action was instituted on June 28, 1929. The plaintiff companypleaded that on March 17, 1928, a contract was entered into by LionelEdwards Ltd., acting as agents of the defendants, and the “ American-India Line ” of steamers of which the defendants were owners, to carryfrom Colombo to New York for the plaintiff company 50 tons of generalcargo monthly from the month of May, 1928, to the month of December,1928, in consideration of the plaintiff company paying freight thereforat the rate of 25s. per ton: that on April 26, 1928. the contract wasrepudiated and that by reason thereof the plaintiff company had sufferedloss and damages in the sum of Rs. 5,026.18.
Each defendant filed an answer and both answers are dated February28, 1930. The first paragraph and the rest of the answer commencingwith paragraph 3 are identical in terms, and the pleas are as follows: —
A denial that there was any agreement or contract entered into to
which the defendant was a party and a denial of a breach ofcontract:
A denial that the plaintiffs sustained damages as alleged in the plaint
and a denial that the plaintiffs did in fact ship 50 tons of generalcargo a month from May to December, 1928;
A plea that if there was a valid contract as averred in the plaint,
the plaintiffs committed a breach thereof in that they failed totender 50 tons of cargo monthly from May to December, wherebythe defendants became entitled to claim from the plaintiffsdamages in the sum of Rs. 1,620.74.
The second paragraph of the first defendant’s answer is as follows: —
*' This defendant denies that it is the owner of vessels trading as allegedin paragraph 2 of the plaint. This defendant states that the
250 GARVIN S.P.J.—British Ceylon Cor. v. The United Shipping Board.
second defendant manages and operates, under the directionand control of this defendant, the said vessels which are ownedby the United States of America
The second paragraph of the second defendant's answer is in thefollowing terms: —
(a) “ This defendant denies that it is the owner of vessels trading asalleged in paragraph 2 of the plaint. This defendant statesthat this defendant manages and operates, under the directionand control of the first defendant, the said vessels which areowned by the United States of America.
<b) “As a special and distinct plea this defendant pleads that at alltimes material to this action and in all matters relevant theretoit acted to the knowledge of the plaintiff company as the agentof the first defendant and that the plaintiff company has there-fore no cause of action against this defendant who was actingfor a disclosed principal ”.
The answer of the second defendant read with these special pleas showsthat the principal ground upon which that defendant denies liability isthat “ at all times material to this action and in all matters relatingthereto ” it acted to the knowledge of the plaintiff company as agent fora disclosed principal the first defendant. The position of the first defend-ant corporation is not as clearly defined inasmuch as it is not specificallyadmitted that the second defendant was its agent or that “ at all timesmaterial to this action and in all matters relating thereto ” the seconddefendant company was acting as its agent. It merely states that thesecond defendant company manages and operates under the control of thefirst defendant corporation the vessels referred to and indicates theUnited States of America as the owners of the vessels.
The pleadings were closed in February, 1930, and the trial fixed forNovember 7, of that year. But the trial so fixed was postponed sine dieof consent until decree was entered in another similar case bearingNo. 30,616 then pending in the same Court. After the decision of thatcase the Court on February 29, 1932, fixed this action for trial on May 8,1933. On December 21, 1932, nearly three years after the filing of theiranswers and ten months after the order fixing the trial for May 8, 1933, thedefendants moved the Court for permission to amend the answer. Uponnotice the plaintiff company consented to the amendment but withoutprejudice to their right to object to the issue of a commission to Americafor which the defendants also proposed to move the Court. The defend-ants were allowed to amend the answer but their application for theissue of a commission to take evidence in America was refused. Theamendment for the first time set up the defence that Lionel Edwards Ltd.had no authority to make the contract pleaded in the plaint as far back asJune 28, 1929.
The learned District Judge refused the application for a commission totake evidence in America and the first appeal is from that order. OnJanuary 16, 1933, the learned District Judge after hearing Counsel madethe order under appeal. The issue of a commission is in the discretion ofthe Judge and for my part I see no reason for saying that in this cnse bis
GARVIN S.F.J.—British Ceylon Cor. v. The United Shipping Board. 251
discretion was not properly exercised. The main points on which it wasproposed to lead the evidence which it was said could only be obtained byissue of a commission to America are summarized in the application madelby the defendants as follows:—
For the purpose of establishing—
that the vessels of the American-India Line are owned by the
United States of America and are operated and managed by thesecond defendant as the agent of the first defendant and underthe first defendant’s management and control;
that the said Lionel Edwards Ltd. had no authority to enter into
any such contract as is pleaded in the plaint or otherwise howso-ever to bind the defendants expressly or impliedly to any suchcontract or to enter into any contracts or agreements to carrycargo at any rate other than the current rate;
that the plaintiffs have not shipped from Colombo to New York
between May and December, 1928, 50 tons of general cargo frommonth to month.
As to the matters set out in paragraph (a) they relate to pleas taken bythe defendants as far back as February 28, 1930. The defendants weremade aware by the plaint filed on June 28, 1929, that it was alleged thatthese contracts were made by Lionel Edwards Ltd. as their agents.The authority of Lionel Edwards Ltd. to make such a contract was notspecially denied until the middle of December, 1932, when we find anamendment filed in which it is specifically and categorically denied.The allegations in paragraph (c) might quite easily, if they were in accord-ance with fact, have been established by the evidence of the local agentsand the production of the usual records and documents.
The inordinately long delay in applying for a commission to recordevidence which the defendants must be taken to have known over two yearspreviously was required to establish the defences taken by them is amatter to which a Court should give due weight especially where, as here,a very real risk of a further postponement of the trial and determination ofthis long pending action is involved.
Judging from the large number of witnesses whom the defendants desiredto examine on commission and the lengthy references to documents, itwould seem that what the defendants were seeking was an opportunity tohave all their evidence recorded in America on commission. This isconfirmed by their failure to call a single witness at the trial—not even thelocal manager of Lionel Edwards ’Ltd., even then the local agents forthis line of steamers, who was at the time in Colombo. It would be mani-festly unsatisfactory that an action of this nature should be determinedupon oral evidence taken abroad on commission. The learned DistrictJudge has recorded an admission by Counsel with reference to a numberof documents, production of which he desired, that they “ will not bear onthe question of authority ”. The point to which it was intended to directthe oral evidence of the six witnesses mentioned was that oral instructionswere given to Lionel Edwards Ltd., which would show that in respect ofthese contracts he had no authority. I am not satisfied that all thesewitnesses are necessary to prove the instructions given to Lionel Edwards
252 GARVIN SJP.J,—British Ceylon Cor. v. The United Shipping Board.
Ltd., and that they could not have been proved by the evidence of one orsome of these gentlemen or that it would be unreasonable to expect oneor some of them even at some inconvenience to attend here to giveevidence. Besides, business is being done here by the local agents of theline of steamers in which these defendants are interested and the plaintiffis one of numerous persons here with whom business was done. In thesecircumstances the loss, inconvenience, and delay to the plaintiffs are alsofactors to be considered before such an application is granted.
The learned District Judge refused this belated application and I thinkhe was right.
In due course the action was tried. Judgment was entered for theplaintiffs against the second defendant as prayed for and the seconddefendant’s claim in reconvention was dismissed.
Plaintiffs action against the first defendant was dismissed and so alsowas the first defendant’s claim in reconvention.
The only respect in which the first defendant complains of this judgmentis that no award of costs in its favour has been made. This is a matterwhich will be noticed later in connection with the cross-objection filed bythe plaintiffs.
The principal appeal is that of the second defendant who impeaches thewhole decree and contends generally that the judgment is wrong. Thefacts of this case must be gathered from the evidence given by Mr. Young,the Manager of the plaintiff company, Mr. Bostock a partner of Messrs.Keel & Waldock, Brokers, who put through this contract, and Mr. LionelEdwards, Managing Director of Lionel Edwards Ltd. Mr. Young’sevidence as to the contract and the circumstances under which it wasmade is as follows: —
" Mr. Bostock told me that Lionel Edwards Ltd. were offeringfreight to New York up to the end of the year at half the current rates.That was 25 shillings. He asked me if I would like to take advantageof it. The offer interested me. I instructed him to book on ouraccount 50 tons a month from May to December. I said we will doprobably more but I was not prepared to commit the company at themoment to more than 50 tons. He promised to book it at 25 shillings.I said I would see if I could make it more. He sent me the broker’snote on the same date ”.
Later he says,—
" We regarded ourselves bound to ship 50 tons a month. That wasimpressed on me at the time by Mr. Bostock. I understood whetherwe shipped 50 tons or not I had to gay for it in consideration of theshipping line’s obligation to take the goods at the reduced rates ”.
Mr. Bostock was instructed by Lionel Edwards Ltd. to make forwardcontracts for freight at half rates. His offer was accepted by Mr. Youngand the resulting contract according to the evidence was the one spokento by Mr. Young. That this was the contract is further established bythe document P 1 which relates to the shipment of 50 tons of general cargomonthly at 25 shillings per ton to New York and is signed by LionelEdwards Ltd. as agents for the Roosevelt Steamship Company.
GARVIN S.P.J.—British Ceylon Cor. v. The United Shipping Board. 253
Not a single witness has been called to deny that this was the contract,or that its terms were in any respect different or even to support thesuggestion that there was any misunderstanding as to the contract or itsterms. But our attention was drawn to certain features of the broker’snotes sent to the parties by Mr. Bostock and it was argued that thearrangement was only provisional and did not amount to a bindingcontract, that the contract was bad for uncertainty, that there was anabsence of consensus ad idem.
On March 17, Mr. Bostock sent Mr. Young a note in the form D 4.On the top of the note the word “ provisional ” appears. On receipt ofthis note Mr. Young noticed that the cargo to be shipped was describedas follows: —
50 tons of general cargoMay/December.
Inasmuch as the contract was to ship 50 tons monthly he returned itfor amendment. On March 19, he received a note in the form D 5 whichwas headed, “ Amended.”. The word “ provisional ” appeared at thebottom of this note.
Mr. Young was cross-examined at great length in regard to the circum-stance that the word “ provisional ” appeared on these notes. He wasstrongly pressed in the endeavour to elicit an answer to support the con-tention, that no contract had been concluded. But his evidence clearlyand unmistakeably shows that so far as he was concerned the contractwas final and binding and that his instructions to Mr. Bostock were final.In explanation of the word “ provisional ”, there is a suggestion in theevidence that “ the word ” was possibly used in view of his observationto Mr. Bostock that, while the contract was to be for 50 tons monthlywhich, for the time being, was the amount for which he was prepared tocontract, he hoped to be able to make a contract for a larger amountlater.
In cross-examination Mr. Young was asked—
Q.—What was your object in reserving the right to accept morefreight later ? ”
The answer was—
“ I did not reserve the right to accept freight later.” After lengthycross-examination Mr. Young in answer to the question what interpreta-tion he placed on the word “ Provisional ”, answered “ You must askMr. Bostock why he put in that word ‘ provisional ’ ”.
When Mr. Bostock followed Mr. Young in the witness-box he was notasked why he placed the word “ provisional ” on the note nor was heasked any question on the various points connected with these notes uponwhich arguments were addressed to us. There is therefore no explanationother than the one suggested by Mr. Young as to why the word “ provi-sional ” appeared on the note. There is specific evidence that it was notintended by Mr. Young to indicate a tentative arrangement and not abinding contract. There is no witness called by the defendants, not eventhe Manager of Lionel Edwards Ltd., who signed the document P 1, totell us that it was not understood that their offer had been accepted and adefinite contract made. But on the other hand, there is the document P 1
254 GARVIN S.P.J.—British Ceylon Cor. v. The United Shipping Board.
which is a clear indication that Lionel Edwards Ltd. were satisfied thattheir offer had been accepted, and the letter P 4 dated April 26, 1928,addressed to the plaintiff company with reference to their “forwardbookings ” in which they intimate that they have received instructionsto cancel all forward bookings. There is nothing in this letter whichsuggests any doubt or uncertainty as to the contract or its terms; indeed,the letter refers without ambiguity to the “ forward bookings ” made.
The opening sentence in the broker’s note commences with the words“ We beg to advise having booked/applied for the under-mentionedcargo …. It so happened that in this case the writer of the
letter addressed to the Shipping Company omitted to score off the inappro-priate words. This was doubtless due to inadvertence which might evenbe characterized, as the Judge has done, as carelessness on the part of thebroker. Nor do I think the words “ subject to lower freight not beingavailable ” altered to “ or lower if available ” gave rise to any misappre-hension in regard to the freight which the shipper was to pay. Mr. Youngsays he was bound to ship 50 tons monthly and to pay 25 shillings per tonas freight, and the document P 1 shows" that Lionel Edwards Ltd. clearlyapprehended the terms of the contract.
The parol evidence as to the contract and its terms is clear and un-iambiguous. That the parties were agreed is further evidenced by thedocuments P 1, the letter of Lionel Edwards Ltd., P 4 and their letter P 9of January 16, requesting the plaintiffs to send in their claim for breachof contract in quadruplicate addressed to them as agents for the RooseveltSteamship Co., managing operators for the United States Shipping Boardwhen the claim “ will be put through for their immediate attention ”.
As between the plaintiff company and Lionel Edwards Ltd. who wereacting as agents a definite contract had been made. It is also establishedthat the contract was made by Lionel Edwards Ltd. as agents for theRoosevelt Steamship Company Incorporated of New York, the seconddefendant company. They did not purport to act for the first defendantcompany nor is there any evidence to support the second defendant com-pany’s plea that “ in all matters relevant to this action it acted to the.knowledge of the plaintiff company as agent of the first defendant
If then Lionel Edwards Ltd. were the agents of the second defendantand it was within the scope of their authority actual or apparent to makethis contract the second defendant would clearly be liable for the damagessustained by the plaintiffs by the breach of the contract.
Mr. Lionel Edwards gave evidence in a connected case and the evidenceso given has been admitted as evidence in this case. He tells us that in1926, his company was appointed agents in Calcutta for this line ofsteamers. In 1927, after a visit to America, where he met the Directorsof the Roosevelt Steamship Co., he was requested to take over theiragency in Colombo from Messrs. Volkart Bros, and he did so.
Lionel Edwards Ltd. were thus agents in Colombo of the second defendantcompany at all dates material to this action. As to the nature and scopeof the agency, the witness tells us that his instructions were “ the generalinstructions given by a steamship company to agents to carry on thesematters which appertain to the engaging of freight and loading of vessels ”.He also said “ As agent my business was to arrange freights for vessels
GARVIN S.P.J.—British Ceylon Cor. v. The United Shipping Board. 255
and in the course of trade merchants would accept the terms we offeredwithout asking us to refer to principals but 1 know nothing of this. I amnot well versed in Colombo matters. In Calcutta I am well versed.Contracts would ordinarily be made by brokers in Calcutta. I shouldthink so far as brokers are concerned they accept the word of the shippingagent as to what the rate is to be ”.
The evidence of Mr. Bostock would seem to show that the practice inCeylon is much the same as in Calcutta—freight is booked by brokers—andto quote his own words he “ would not have dreamt of asking ” whetherLionel Edwards Ltd. had authority to make the offer as to freight whichresulted in this contract. “ We ” said Mr. Bostock “ are not accustomedto doubting good offers made by European firms in this port ”.
That Lionel Edwards Ltd. had been appointed the local agents of thesecond defendant company is beyond question, and it is equally clear thatas such they had the same general authority as the agents of other steam-ship companies in all matters appertaining to the booking of freight. Assuch they had authority to make contracts for freight and they mustbe presumed to have had power to fix the rate to be paid by the shipper.
It was urged, however, that Lionel Edwards Ltd. as local agents had nopower to make forward contracts and no power to make any contractsexcept at what has been referred to as the current rate. There is no evi-dence of any such limitation of the authority of local agents of steamshipcompanies. While it may be presumed that local agents would be in closecontact with their principals and would in their own interests obtainspecific instructions on all such matters, the effect of the evidence both ofMr. Lionel Edwards and of Mr. Bostock would seem to be that it is assumedthat local agents of steamship companies have general power to makecontracts for freight without any such limitation as is here suggested.Nor does the evidence tell us anything about “ current rates ”, how theyare to be ascertained or by whom and how they are fixed.
Forward contracts such as the one under consideration are evidentlyunusual but there is a passage in Mr. Bostock’s evidence which suggeststhat such contracts were not unusual during the period of the war. How-ever that may be, the evidence does not in my opinion establish thatthe general authority of local agents of steamship lines does not extendto the making of such contracts or that the offer to make a contract suchas the one under consideration would raise a doubt in the mind of shippersas to the authority of a local agent to make such a contract.
But in the case before us there is evidence that Lionel Edwards Ltd.had express authority to make such contracts. When speaking of hisinterview with the representative of the second defendant company atNew York, Mr. Lionel Edwards said “ I was instructed by the RooseveltSteamship Company Incorporated to advise my house in Calcutta thatthe rates had been cut and that they were to quote equal rates and wereauthorized to enter into contracts even for long periods. My companyaccordingly cut the rates between Calcutta and New York. Theseinstructions were for the first time in December, 1927 ”, and later in hisevidence, “ When I spoke of the resolutions of the Board which were cabledto Calcutta, they were resolutions empowering the cutting of rates and
256 GARVIN S.P.J.—British Cepfon &r>r. v. The United Shipping Board.
entering into contracts over long^ericas for that service which includedalso Colombo, not only confined to Calcutta
Mr. Lionel Edwards spoke in greater detail of his interview in NewYork and referred to telegraphic communications between him and hisprincipals the second defendant company touching this matter of reducedrates and forward bookings. It is hardly necessary to deal more fullywith his evidence since it is quite clear that if his testimony is to beaccepted he had the fullest authority to make this contract. There isnothing to contradict his testimony nor is there any reason apparentwhy it should not be accepted and acted upon.
The contentions advanced in support of the second defendant’s appealtherefore fail.
The appeal of the first defendant Corporation relates solely to thequestion of costs. It is evident from their answer and the proceedingshad in the case that they joined in traversing and raising issues uponevery argument material to the plaintiff’s claim. The plaintiffs succeededupon every point save that they failed to establish that the relationsbetween Lionel Edwards Ltd. and the first defendant were those of agentand principal. The position of the second defendant company was thatthe first defendant Corporation was their principal. The first defendantCorporation, however, was evidently not prepared to take up that position.Their exact legal .relationship was peculiarly within their knowledge butno previous information on the point was vouchsafed to the Court by thefirst defendant. – Moreover, the first defendant Corporation made analternative claim in reconvention based upon an alleged breach of contractby the plaintiffs which they wholly failed to establish.
Under such circumstances I am not prepared to interfere with thediscretion exercised by the District Judge in this matter of costs.
The cross-appeal of the plaintiffs from the decree in so far as the actionagainst the first defendant was dismissed fails for the reason that theevidence does not sufficiently establish such a relationship between LionelEdwards Ltd. and the first defendant Corporation as would render thatCorporation liable on this contract.
An objection was taken to the plaintiff’s application for relief from thedecree so far as his action against the first defendant was dismissed. Thisapplication for relief was entered under the provisions of section 772 ofthe Civil Procedure Code; no regular appeal had been filed. Counselurged that the first defendant Corporation’s appeal was not from the decreebut from the refusal or failure of the District Judge to make an order forcosts in their favour, and objected that the provisions of section 772 wereDnly available to the opposite party when a decree was under appeal.
The evidence which 'it became necessary to consider in connection withthe second defendant’s appeal made it apparent that no objection by theplaintiffs against the dismissal of the action as against the first defendantcould be upheld and that their appeal therefore failed. It is not necessaryto consider the objection which was only taken after the merits of thecase had been fully explored.
But it is necessary to refer briefly to'a matter which emerged in thecourse of the argument in support of the objection. The second defendanthad clearly asked for a reversal of the decree and both defendants had
GARVIN S.P.J.—British Ceyfoiq Co//v. The United Shipping Board. 257
:f.—
joined in presenting one petition of^ appeal. Counsel, however, urgedthat the petitions of the two defendants though written on the same paperwere severable and invited us to treat them as two petitions. Assumingsuch a course to be practicable, Counsel was constrained to admit thatthere would then be two petitions under one stamp.
What is contemplated and provided for in sections 754 and 755 of theCivil Procedure Code is that a person aggrieved by a decree or order mayappeal therefrom by presenting a written petition of appeal within thetime specified or within such time on production of the proper stamp stateviva voce to the Secretary of the Court his wish to appeal and the grounds■of such appeal.
As an inference from these sections and section 760 of the Code it followsthat every person desirous of appealing must file a separate petition saveonly that “ Where there are more plaintiffs or more defendants than onein an action, and the decree appealed against proceeds on any groundcommon to all the plaintiffs or to all the defendants, any one of the plain-tiffs or of the defendants may appeal against the whole decree, and there-upon the Appellate Court may reverse or modify the decree in favourof all the plaintiffs or defendants, as the case may be ". This is not sucha case.
The petition of appeal entered in this case offends against the provisionof the Code in this respect. If the document be treated as containingtwo separate petitions it offends against the law in another respect inthat the stamp is only sufficient to cover one appeal. It is well settledby the judgments of this Court that when it is found that a petition ofappeal was not stamped or not duly stamped at the time when it waspresented, the appeal is not duly presented according to law and must bedismissed—such a petition may not be stamped after the expiry of theappealable time ’(Salgado v. Petris1). That judgment which proceeded onthe Stamp Ordinance, No. 3 of 1890, since repealed and replaced byOrdinance No. 22 of 1890, has however been consistently followed. Thejudgments in the later cases so far as it was necessary to have recourseto the new Stamp Ordinance are based on section 36 which is as follows :■—
“ No instrument chargeable with duty shall be admitted in evidence forany purpose by any person having by law or consent of partiesauthority to receive evidence, or shall be acted upon, registered,or authenticated by any such person or by any public officer,unless such instrument is duly stamped. ”
The proper stamping of a petition of appeal is a condition precedentto its acceptance under the Civil Procedure Code—vide Lascelles C.J. inSinnathamby v. Tangamma
These cases were followed in Hurst v. Attorney-General3 by Ennis andde Sampayo JJ. and the appeal dismissed on the ground that the petitionof appeal was insufficiently stamped—Ennis J. who delivered the judg-ment of the Court remarking “ I would add that section 36 of the Stamp
1 (1909) 12 N. L. B. 379.* (1912) 1 C. A. C. 151
(291?) 4 C. W. R. 265.
36/20
258
Rajapakse v. Commissioner of Income Tax.
Ordinance (9 of 1909) prohibits the Court from acting upon the instru-ment . . .Sections 754 and 755 of the Code read together
require a petition of appeal to bear the proper stamp at the time ofpresentation.
The law as stated in these judgments has been consistently followed.
Counsel then invited us to treat the appeal as that of the second defend-ant and reject the appeal of the first defendant. I cannot well see howwe. can adopt such a course. There is nothing which enables one to saythat this is the second defendant’s petition of appeal and not that of thefirst defendant. It purports to be the petition of appeal of both of them.Had this been a case which came within the exception created by section760 of the Civil Procedure Code it might reasonably have been contendedthat there could be no objection to their joining in one petition. Thishowever is not such a case.
Then inasmuch as the petition offends against the law in more than onerespect it should, I think, be rejected. The appeals are dismissed withcosts.
Appeals dismissed.