( 417 )
Present: Fisher C.J. and Garvin J.1086
GORDON & GOTCH, LTD. v. RODRIGO et al.
258—"D. C. Colombo, 23,595.
Principal and agent—Indent for goods—Disclosed firm—Request topurchase goods on stated terms—Breach of contract—Action onbills by agent.
Where the defendants requested the plaintiff company topurchase for them on their account and at their risk certain goodsand to draw upon them for the amount of the invoice whichincluded the value of the goods and commission,<—
. Held (in an action by the plaintiff company on the billsdrawn by them upon the defendants and accepted by the latter),that the relationship between the plaintiff oompany and thedefendants was that of agent and principal, and that it was notopen to the defendants to plead as a defence that the goods werenot in accordance with the terms of the indent.
HIS was an action by the plaintiffs to recover the amount dueon certain bills drawn by them and accepted by the defend- '
ants. They were drawn in pursuance of an indent for goods suppliedby the plaintiff company at the request of the defendants. It waspleaded in defence that the bills were accepted in the belief thatthey wer^rawn in respect of goods shipped in accordance with theterms of tne contract, and that the plaintiffs having failed to do so,the defendants were, not liable to pay any sum on the said bills tothe plaintiffs. The learned District Judge gave judgment for theplaintiffs.
H. V. Perera, for defendants appellant.—In the present case theappellants had nothing whatever to do with the foreign supplier.
The plaintiffs stated that they would supply the appellants withgrapes from Mr. Cordero, and that in the event of any disputebetween the plaintiffs and the appellants the plaintiffs would submitto arbitration. So that the plaintiffs undertook the obligations ofa vendor.
The plaintiffs having agreed to buy and deliver goods at a futuredate at a fixed price, the mention of the name of the person fromwhom they are to be bought is immaterial.
Another test would be: Are the plaintiffs affected or not bythe fluctuations of the price. If they are not, then they are notagents, although the document refers to their remunerations as a“ commission ” ; it is really their, profit.
The preliminary clause where the defendants request the plaintiffsto purchase on their behalf is not conclusive of the legal positionof the parties because it says “ on the terms mentioned below.”
A reference to the terms makes it clear that plaintiffs are principals.
28—J. N. A 9487 (11/48)
Gordon dsQolch, Lid.v. Rodrigo
( 418 )
H. H. Bariholomeusz (with N. K. Choksy), for the plaintiffs,respondent.—The true construction of the whole document is thatthe plaintiffs were to place the order in those terms with thesupplier indicated in the contract (Francisco Perez Cordero). If theappellants prove that the plaintiffs have failed to do so they mayhave a claim for damages for breach of that duty as agents. Thegoods were grapes in Spain, the plaintiffs are in England, andneither party contemplated that the plaintiffs were to ship.
The bills of lading were made out in the name of the plaintiffs,but that was to give them control of the goods so that theymay exercise their rights as, e.g., the right of stoppage intransitu.
Even if it be held that the plaintiffs agreed not only to purchasebut themselves to ship the goods, the defendants were not entitledto repudiate the contracts, because the plaintiffs were only agents,and the defendants would only have been entitled to claim damagesas for the breach of duty as agents. The plaintiffs were not calledupon to prove that the goods were shipped fortnightly, because thebasis of the defence was that defendants were entitled to repudiatethe whole contract as plaintiffs were vendors and had failed to shipaccording to time, and not that the plaintiffs, as agents, had failedto perform a duty..
The arrival of the goods quicker than fortnightly is not proofthat they were not shipped fortnightly, as provided for.
The fact that the price was fixed does not alter the position. Thecommission agent, in the case of a contract on C.I.F.C.I. terms,gets a C.I.F. quotation from the foreign supplier, adds on hiscommission and the interest, and quotes that to the local indentor,who accepts it. In such a case the fact that the price is fixed doesnot alter the character of the relationship between the parties.Furthermore, in such a case there can be no risk of a fluctuation ofthe market price, as the contract price is already ascertained andfixed beforehand.
Counsel cited Ireland v. Livingstone,1 Cassaboglou v. Gibbs,2fSbrahim Parikhan v. Scheller Dosogne dk Co.,3 Meredith v. AbdullaSahib dk Co.* This case is exactly in point.
H. V. Perera (in reply).—Our defence of a set-off is on the basisof a breach of duty as well, in that the plaintiffs had failed to shipthe goods in accordance with the terms of their agency. There wasalso another breach of duty alleged, namely, that the plaintiffs hadshipped rotten grapes instead of “ golden ” grapes.
1 27 L. T. R. 79.
1 48 L. T. R. 850.
3 13 Bom. 470.
‘ 41 Mad. 1060.
[Garvin J. observed that that was not the basis of the defence,which was that the plaintiffs were vendors—not agents. In viewof this difference, the plaintiffs were not called upon to meet it.As they alleged, themselves to be agents, such a claim theycontend, could only be made against the principal, Cordero.]
Our position is that on this question the plaintiffs’ liability isthe same as that of the vendor.
[Garvin J. pointed out that the measure of damages would bedifferent in the two cases. If appellants had pleaded a breach ofduty qua agents they would have had to meet an entirely differentcase.]
Whatever label is given, we are entitled to prove, upon thepleadings and the document plaintiffs are relying upon, that plain-tiffs had failed to carry out their obligations to ship according tothe terms of the document. It would make no difference in whatlight they were regarded.
February 27, 1929. Fisher C.J.—
In this case the defendants sent the plaintiffs an indent in thefollowing terms :—
Indent No. 075.
Colombo, September 15, 1925.
From Rodrigo and Fernando, 13, Hill street, Colombo.
To Messrs. Gordon & Gotch, Ltd., London.
Gentlemen,—I/We hereby request you to purchase for me/us(if possible) the under-mentioned goods on my/our account and riskupon the terms stated below.
It shall be optional with you to execute the whole or any part of this,order.
If any dispute arise with regard to this order, two European merchantsresident in Colombo, to be nominated to survey the goods, whosedecision shall be final, and JL/We hereby agree to abide by such decision.Expenses of such survey to be borne by the losing party.
Terms of Payment: I/We authorize you to draw upon me/us forthe total amount of invoice at the sight mentioned below, at currentrate of exchange, and such bill or bills, I/We hereby bind myself/ourselves to accept on presentation and pay at maturity.
In the event of the goods arriving before the bills become due, I/Weagree to retire the same.
Should I/We fail to accept or to pay at maturity such bill or billsI/We hereby authorize you or whomsoever you may appoint to disposeof the documents or goods either by private sale or public auction onmy/our account and risk, and hereby bind myself/ourselves to makegood any loss or deficiency that may arise from such sale and expenses,together with usual brokerage and interest, and your further commissionof five per cent, waiving all claims to any advantage thereon. Andfurther I/We agree to accept your invoices as correct and that the samemay be used in any Court or Courts without further proof. Deliveries
Gordon <kGotch, Ltd.y. Rodrigo
( 420 )
Gordon <fcQotch, Ltd.v. Rodrigo
may be suspended pending any contingencies beyond the oonttol orsellers nr agents (snob as strikes, look-outs, fire, accidents, war, stoppageof navigation, or the like). The failure of one delivery not to vitiate
the contract as to others. The terms and conditions of this indenthave been fully interpreted and explained to me.
.Limits of Time „Usance of Bills and
"*ark8,and Route. Commission. Name of Bank.
075.. Per steamier .. Per cent. .. Three days sight
Messrs. Francisco Perez Cordero, Almeria.
100 barrels, every two weeks, golden grapes, during the* season asusually shipped to Colombo.
Each barrel to weigh 21 kilos nett.
Price at 23/8d. per barrel C.I.F.C.I. Colombo (as per your cable).Shiptnent: 100 barrels every two weeks during the season.
In accordance with the indent four bills of exchange were drawnby the plaintiffs and accepted by the defendants, and the plaintiffssue to recover the amount due on the said bills. The defendantsplead (paragraph 5 of the answer) “ that they accepted the saidbills when presented, believing that the said bills were drawn inrespect of goods shipped in accordance with the terms of thecontract, and as the plaintiff company failed and neglected to shipthe goods in accordance with the said contract the defendants didnot become liable to pay any sum on the said bills to the plaintiffcompany. ”
The short point for decision on this appeal is whether on the trueconstruction of the indent the relationship between the defendantfirm and the plaintiff company is that of vendor and purchaser oragent and principal. In my opinion it is quite clear that therelationship was that of agent and principal. The words of theopening paragraph are very specific, and there is nothing in theremainder of the indent to indicate any intention of the partiesto alter .or modify the relationship which those words so clearlyestablished. Brett M.R. in his judgment in Cassaboglou v. Oibb,1.said “ It is obvious to my mind that the contract of principal andagent is never turned into a contract- of vendor and purchaser forthe purpose of settling the damages for the breach of duty of the -agent.” Those words seem to be in point.in this case.
In my opinion the judgment of the learned judge must beaffirmed and the appeal dismissed with costs. In view, however,of the consent given at the trial and repeated in this Court byCounsel for the respondent, the appellant firm, if so advised, willbe at liberty to bring an action for damages against the respondentbased on any default of which they may allege that the respondent!company was guilty in its duty as an agent.
Garvin J.—I agree.
1 11 Q. B. D. 797.
GORDON & GOTCH, LTD v. RODRIGO et al