151-NLR-NLR-V-23-FERNANDO-et-al-v.-MENDIS.pdf
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Present: Ennis and Porter JJ.FERNANDO et at. v. MENDIS.44—D. C. Colombo, 1,282.
Sale of goods-i-Refueal to pay by purchaser—Is it a ground for refusal to
de&eer balance due under die contract f
Where the purchaser claimed damages from the vendor for notdelivering a portion of the quantity he agreed to sell, the vendorpleaded non-payment for goods previously delivered under thecontract.
Held, that the real question was not whether there was a refusalto pay, but whether the circumstances of the case showed anintention to repudiate the contract.
“ The refusal on the part of the defendant (purchaser) was nota mere failure to pay for some of the goods delivered, but a definiterefusal on the part of the defendant to pay except upon terms,namely, that the plaintiffs should give a guarantee against anyloss sustained on the consignment. Clearly such a stipulation isnot within the terms of the contract, and a refusal to pay on thatground was a refusal to be bound by the contract, and would bea good ground for refusal to make further dehveiies.”
' (1892)2 C.L.R.tt.
16*
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1922.
Fernando v.Mendie
T3LAINTJFFS entered into oontraots to supply defendant companyon the first contract one hundred cases of medium desiccated
coconuts at 29 cents per lb,, and on the second contract fifty oasesof fine and fifty cases of medium at 24J cents per lb. The first con-tract was entered into on February 8, and the second on March 14,1921. The time for delivery on the two oontraots was extendedtill April 39, and defendant took delivery of the one hundred caseson contract A, and only paid for fiftyof them. The plaintiffs allegethat on March 23 they delivered fifty oases on account of contractA,and fifty-five cases on account of contract B, viz., twenty-onemedium and thirty-four fine, and on April 14 delivered sixteen fine,thus completing one-half of the contract B.'
According to these deliveries defendant company had to pay thema sum of Rs. 4,024*96, and, giving defendant credit for a sum ofRfe. 2,750 paid by him in respect of such deliveries, plaintiffs claimedthe sum of Rs. 1,274*96.
The defendant joined issue with plaintiffs with regard to thedeliveries of Maroh 23 and April 1. His case was that on March 23plaintiffs delivered sixty-nine cases medium and thirty-six casesfine, which were appropriated as follows, viz., fifty cases mediumtowards completion of contract A and nineteen cases medium andthirty-six fine in respect of contract B. On April 1 thesixteen casesfine, according to defendant, were appropriated as follows, viz.,fourteen oases to contract B and two cases to another contract Dentered between the parties on March 18.
Defendant further stated that the deliveries of March 23 wereaccepted only on the condition that plaintiffs would give them aletter of indemnity against loss defendant might sustain if the goodswere found to be not of good merchantable quality,and thatas plain-tiff failed to give this letter, defendant withheld payment till he hadascertained his loss, if any.
One hundred cases delivered on March 23 were shipped bydefendant to London, and the losscame to Rs. 167*25 on five of thesecases. He further claimed Rs. 95*71 damages from plaintiffs fornon-delivery of thirty-one cases on contract B. He admitted hisliability to plaintiffs on contracts A and B for Rs. 899*52, but hecounter-claimed Rs. 977*60 for non-delivery on contract D, and,giving plaintiffs credit for Rs. 899*52 as above, claimed in reconven-tion Rs. 78*0& The plaintiffs denied that they ever entered intocontract D with the defendant.
The parties went to trial on the following issues:—
Did plaintiffs on or about April l, 1921, deliver sixteen cases
of fine on contract B ?
Did plaintiffs fail and neglect to deliver thirty-one orany cases
medium against contract B, or were plaintiffs justified innot delivering the same, as prerous deliveries had not beenpaid for ?
( «1 )
If issue 2 is answered in favour of defendant, what damages,
if any, is defendant entitled to ?
Did plaintiffs agree to indemnify defendant against any loss
he might sustain by the deliveries of March 23, 1921, asset out in paragraph 4 of the answer ?
(6) Did the defendant sustain a loss of Ra. 167*26 on the saiddeliveries, and are plaintiffs liable to pay the same ?
Did plaintiffs enter into oontract D ?
Did plaintiffs deliver two oases on the said contract ?
If issues 6 and 7, or either of them, be answered in favour of
defendant, what damages, if any, is defendant entitled toby reason of plaintiffs’ failure to fulfil contract D T
Was oontract D pleaded in the answer a valid binding oontract
between plaintiffs and defendant f
The District Judge (A. Beven, Esq.) held as follows:—
I hold that plaintiffs were justified in not delivering the balancecases on contract B, as defendant had not paid them for previousdeliveries.
In my opinion plaintiffs are not liable to pay defendant Rs. 167*25on the deliveries of March 23,1921, as defendant took delivery andshipped the goods, thus acknowledging they were merchantableand of good quality before he asked for a letter of indemnity.
I answer the issues as follows:—
Yes.
Plaintiffs were justified in not making delivery of twenty-
nine oases medium on contract B.
No.
Defendant has sustained a loss, but plaintiffs are not liable.
No.
No.
(9) No.
Pereira, K.O. (with him Garvin), for the appellant.
Jayawardme, K.O. (with him L. H. de Alans), for respondents.
June 29,1922. Emus J.—
In this oase the plaintiffs Bued for a sum of money in respect ofdesiccated coconuts sold on certain contracts. The learned Judgefound in favour of the plaintiffs, and the defendant appeals. Inanswer the defendant claimed a sum of Rs. 95*71 for thirty-onecases medium desiccated coconut which he said the plaintiffs hadnot delivered under one of the contracts. The appeal is pressed
1982.
Fernando v.Mendis
1922.
Stems J.
Fernando t>.Mendte
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only on the question of the claim for damages in the defendant’scounter-olaim, all the findings of the learned Judge on facts beingaccepted. It appears that the short deliveries were twenty-ninecases and not thirty-one. The learned Judge held that the plaintiffswere justified in not delivering the balance, as the defendant had notpaid them for previous deliveries. It was urged that the learnedJudge was wrong in law on this finding, and in support of thiscontention, Mr. Pereira, for the appellant, cited the case of TheMersey Steel db Iron Go. v. Naylor Benzon db Co.1 It was held inthat case that “ upon the true construction of the contract, paymentfor a previous delivery was not a condition precedent to the right toolaim the next delivery ; that the respondents had not, by post-poning payment under erroneous advice, acted so as to show anintention to repudiate the contract, or so as to release the companyfrom further performance.” This argument was met by a number ofcases being cited, all of which go to show that the real question inthe case is not whether there has been a refusal to pay, but whetherthe circumstances of the case show an intention to repudiate thecontract. The first of these cases cited to us was Withers v.Reynolds,® in which case there was an undertaking to deliver strawfrom time to time, and there was a refusal to pay on one instalment,the defendant insisting on keeping one payment always in arrear.Those facts were held to justify the plaintiff in refusing to deliverany more straw under the contract. The case of Freeth v. Burr 8was the next case. In re an Arbitration between Rubd Bronze dbMetal Co., Ltd., and Pos,4 the rules which would apply in case of'breach of contract justifying a repudiation of the contract weresummed up, and the rule laid down in Withers v. Reynolds(supra) wasemphasized. In the present case it would seem that the refusal onthe part of the defendant was not a mere failure to pay for some ofthe goods delivered, but a definite refusal to pay, except upon terms,
, namely, that the plaintiffs should give a guarantee against any losssustained on the consignment, dearly, such a stipulation is notwithin the terms of the contract, and a refusal to pay on that groundwas a refusal to be bound by the contract, and would be a goodground for refusal to make further deliveries. In my opinion thepresent case comes within the principle of Withers v. Reynolds(supra).
I would accordingly dismiss the appeal, with costs.
Pouter J.—I agree.
19 A. 0. 434.9 {1873-74) 9 0. P. 208.
9 2 B. A A. 882. '4 {1918) 1 K. B. atp. 322.