136-NLR-NLR-V-22-MAJEED-v.-WEISS-et-al.pdf
( 449 )
Present: Bertram O.J. and De Sampayo J.MAJEED v. WEISS et cd.250—D. 0. Colombo, 49,328.
Seller dealing with broker abroad—No privity of contract between sellerand person buying from broker—Contract—Stipulation as totime—Stipulation waived—Breach of contract thereafter—Claimfor damages—Person holding out another as agent—Extent andnature of ostensible authority—Instructions to agent ambiguous—Interpretation put by agent different to what was intended by prin-cipal—Bights of agent and person dealing with the agent—Ratification of contract.
Where A deals with B, a broker abroad, the parties are in theposition of principals, and no privity is established as betweenB's buyers and A. The fact that B, to the knowledge of A himself,acted as broker, and was himself personally responsible to hisbuyers, is only material for the purpose of damages.
If there is a contract containing a time stipulation, which is ofthe essence of the contract, but that stipulation is waived, and on theexpiration of the time the contract is treated as being still open,the party liable on the stipulation is entitled, if the other partycommits a breach which is fundamental to the contract himself,to rescind the contract and to claim damages for the breach;while, on the other hand, the party who was originally entitled tonlairn enforcement of the time stipulation is no longer entitled onhis part to claim damages for the breach of that stipulation* .
In considering the nature of the authority of a person whom theprincipal was holding out as his agent, the question to be answered *is, Would a reasonable business man, dealing with an agent in thecircumstances of the case, think himself justified in accepting theassurance of the agent that in the transaction in questipn he wasacting with the authority of his principal ?
Where instructions to an agent are so worded as to be capableof two interpretations, and where the agent fairly and honestlyassumes it to bear one of those interpretations and acts on thatassumption, the principal oannot be released from his contracton the ground that he intended it to bear the other; and not onlyis the agent entitled to insist upon the authority so conveyed, butthe other principal is also entitled to insist upon the contract.
Where the principal telegraphed to his agent asking him to geta seller to renew his offer which had expired, and the agentthought that, if the offer was renewed, he was to accept the offer,and so accepted—
Held, that the princinal was bound by the acceptance of theagent.
34
19B1*
( 460 )
1921.
AfajeedV. WeUa
Where the principal repudiated a contract for the purchase ofgoods made on his behalf by his agent as made without authority,but th§ seller insisted on the contract, and the agent subsequentlytook delivery of a part of the goods and shipped it to his principal^and the principal dealt with the goods and accounted for them tothe seller at the contract price—
Held, that the principal imtst be taken to haye ratified thecontract.
HHHE facts appear from the judgment. [Large portions of the■**- judgment have been omitted from this report.]
Bairn, K.G. (with him#. J. C. Pereira, K.C., and Samarawickreme),for*appellant.
Drieberg, K.G. (with him Kmneman), for respondent.
July 29, 1921. Bertram C.J.—
This is a commercial case raising certain questions of importancewith regard to the position of merchants in this country dealing withthe agents of European firms. The plaintiff is Ahamado LebbeMarikar Alim Abdul Majeed, who carries on business under thestyle, of A. M. Ahamado Lebbe Marikar Alim & Co. His businessis entirely managed and transacted by his manager, Mr. D. N.Kekulawala, and whenever the plaintiff is referred to in thisjudgment, the reference is really to Mr. Kekulawala. The firstdefendant is Mr. Samuel Weiss, a London merchant, carrying onbusiness under the name of Samuel Weiss & Co. The seconddefendant did not appear in the action. Mr. Weiss was the onlyeffective defendant, and he is referred to as u the defendant ” inthis judgment.
* For the purpose of all the transactions referred to in theseproceedings defendant always acted as broker. He always spokeof himself as “ buying ” for clients, and, when differences arose,repeatedly referred to the possible action of his buyers; similarly,in notifying the conclusion of a contract to the plaintiff, he tele-graphed “ Sold ninety tons* bristle fibre ” (S. W. 50). Plaintiff inoffering goods for sale telegraphed to defendant’s Calcutta agent“ Sell London 300 tons ordinary mill coconut oil ” (P 26).
According to a well-recognized rule of law, however, the principalsin all these transactions are the plaintiff and the defendant, andno privity is to be considered as established as between defendant’sbuyers and plaintiff. (See the cases cited in the notes to tSmith’sLeading Cases on Thompson v. Davenport and in particular Armstrongv. Stokes.1) The fact that defendant, to the knowledge of plaintiffhimself, acted as a broker, and was himself personally responsible.
1 (1878) L. R. 7 Q. B. 598.
< 461 )
to his buyers, is only material for the purpose of damages. This 1981.
principle was accepted by both parties in the argument, though
at one point Mr. Bawa seemed disposed to question it. .C.J.
The troubles that arose in connection with the transactions ' *77".between plaintiff and defendant are all attributable to the action v. Weieaof a local agent of the defendant, Mr. Gordon Bonas, the seconddefendant, who unfortunately was not called as a witness in thecase. Mr. Gordon Bonas was a young man of 24. He was an oldschoolfellow of defendant’s son, Mr. Harold Weiss, and Was onintimate terms with defendant, as shown by the fact that some ofhis business letters were simply signed with the name “ Gordon.”
He started business in the East in partnership with Mr. HaroldWeiss, with the assistance of capital from their respective familiesshortly before the war (see S. W. 1). Mr. Harold Weiss, as a memberof the Territorial Forces, was mobilized when the war began, andMr. Gordon Bonas continued in business alone. When connectionwas first established between plaintiff and defendant, defendantwrote to plaintiff (S. W. 3) on July 15, 1915: “ Our representative,
Mr. Gordon Bonas, who is at present staying at the Grand OrientalHotel in Colombo, would be pleased to discuss this matter with youfurther, and we shall be glad if you will call upon him ; but inany case you can write us fully about everything without delay.”
Mr. Bonas carried on business both at Calcutta and Madias. Inboth cases, to the knowledge of defendant, his notepaper wasconspicuously headed “ Samuel Weiss ft Co.”; it gave the Londonaddress of defendant “ 7, Mincing lane,” and purported to give thetelegraphic addresses of the firm both in London and in Madras.
In communications with the plaintiff at the very inception of theirrelations defendant described Mr. Bonas as “ our Madras house.”
For example, on October 21, 1915, he wrote (P 1): “ We havereceived from our Madras house samples of your bristle fibre ” ;and again on the same date (D 1): “ We have received direct fromyou samples of what we received earlier in the week from ourMadras house, and have reported on same under this date in anotherletter.” When differences about freight arose, Mr. Bonas came toColombo on defendant’s instructions. He paid a subsequent visiteither on defendant’s directions or, at any rate, with his subsequentapproval, and on both occasions there dealt with plaintiff onbehalf of defendant.' Mr. Bonas also appears to have had authorityto deal with defendant’s bankers, and to give them instructions ondefendant’s behalf (see'D 4). The real question We have todecide in all matters arising in this action is whether defendantis responsible for the negligences, indiscretions, and, it is to befeared, want of principle of Mr. Gordon Bonas, or whether, asdefendant contends, Mr. Bonas was simply a canvasser for orders,whose authority, both actual and ostensible, was strictly liinited,and who had no right to^ledge his principal's credit.
( .452 )
1921. Ip. the argument on appeal, Mr. Bawa, who appeared for theBertram Pkintiff, waived certain points made by the plaintiff in .the Courtdj. below. He explained that he did not mean to admit that theplaintiff was wrong in his contentions on these points, but only that.v. Weiaaas they were of minor importance he. did not desire to press them.
The conflict between the parties was thus reduced to three trans-actions :—
(а)Certain drawings made' by Mr. Bonas in respect of somemattress fibre consigned by plaintiff for sale by the defendant.
(б)A contract relating to 90 tons of bristle fibre. *
(c) A further contract relating to 150 tons of coconut oil.
I will proceed to consider these transactions seriatim.
The Bristle Fibre Contract.
We now come to the question of the bristle fibre contract. Thiswas concluded in December, 1918. On December 15 (S. W. 54)defendant cabled the price# at which he was prepared to buybristle fibre in three qualities, namely, £23 per ton for the first,£22 per ton for the second* and £19 per ton for the third. OnDecember 18, by telegram (S. W. 55), plaintiff accepted this offerfor January to March, adding “ draft sixty days.” On the samedate (S. W. 56) defendant cabled “ Sold 90 tons bristle fibre, draft' ninety days, confirm immediately,” defendant thus stipulatingfor a draft of ninety days’ sight, instead of sixty days’ sight asproposed by plaintiff. The following day (S. W. 57) plaintifftelegraphed “ Fibre confirmed.” The whole of this transactionwas thus arranged direct between plaintiff and defendant. Defend-ant lays emphasis on this circumstance as indicating the course ofbusiness between the parties.
In pursuance of this purchase, defendant on December 20 madea corresponding contract (S. W. 84) with his own buyers, Messrs.Landauer' & Co. On December 23 (see S. W. 58 and S. W. 59)he cabled to plaintiff that his buyers required half the quantitiesof each grade shipped to Havre, and that they would pay anyextra freight over the London rate. Mr. Kekulawala swears inhis evidence that, before receipt of this telegram, he had bookedfreight to London for the whole consignment. This is confirmedby his letter of December 23 (S. W. 59), and though this fact mighthave been proved with more particularity, it must be accepted asestablished; but he promised in his letter to cancel half thefreight bought and to ship to Havre. In his telegraphic replyof December 24 (S. W. 28), apparently in a spirit of sanguineoptimism, he said “ Shipping half fibre Havre.” Thus inspiredby the belief that freight to Havre Was available, defendant
( 453 )
on December 24 (see J3.*W. 62) cabled “Ship remainder fibreHavre”; but on December 30 (S. W. 61) plaintiff had to cable“ Freight Havre unavailable.” Defendant then cabled to plaintiff(see S. W. 62) asking-him to do hie utmost to arrange the shipmentas desired. On January 21 plaintiff had to cable defendant(S. W. 68) “ Freight absolutely unobtainable. till May.” OnJanuary 24 defendant cabled (S. W. 69) “Arranged fibre,”explaining in a confirming letter of January 27. (S. W. 70) that he hadbeen able to induce his buyers, being personal good friend's of his,to acoep’t the fibre in May ; and in a subsequent letter of February17 (S. W. 42) observed: “ With our fibre buyer we are glad to haveno difficulty, and would count on your positively getting the 90 tonsshipped during April-May.” %n extension of time until the Mayshipment was thus arranged.
On February 28,1916 (S. W. 71), plaintiff wrote suggesting thatthis fibre should be sent through Mr. Bonas at Calcutta, as therewas no possibility of securing freight from Colombo to Havre,though he might possibly do so in May. On March 11 (S. W. 72)defendant inquired by cable “ Will you ship fibre.” Plaintiff on thefollowing day telegraphed (S. W. 73) “ Shipping fibre as arranged.”Plaintiff repeatedly gave assurances of this nature in histransactions with the defendant, but they appear in almost allcases to be merely expressions of his anticipations, and not tocorrspond to any arrangements actually made. It will readilybe understood that this had an exasperating effect on defendant, *and no doubt contributed to the subsequent friction.
On April 26, 1916, the promised time for the shipments drawingnear, defendant telegraphed (S. W. 76) “ Cable particular fibreshipment,” and in a confirming letter of the following day explainedthat prices had risen by £10 or £12, and that his buyers werepressing him to name the ship. On April 28 (S. W. 78), in thesame spirit of optimism which has already been commented on,plaintiff replied “ Shipping fibre direct Havre about twelfth, wirecredits.” Plaintiff’s only justification for this telegram was thathe had secured a provisional booking (see S. W. 81).. Credit wasaccordingly arranged, but no shipment followed, and on May: 2defendant cabled (see S. W. 120) “ Have you arranged freight bristlefibre ? Please reply immediately.” We have no record of thereply.
At this point, in the relations between plaintiff and defendant,there arose a misunderstanding about another contract, namely,a contract for the sale of .150 tons of coconut oil, which will be fullydiscussed later. The defendant, Mr. Weiss, early in May went toAmerica, and remained there till the end of June. In spite of therise in price, no further communication with regard to the shipmentof the bristle fibre appear to have been interchange*?.. If anysuch communications were interchanged, they have not been
1921.
Bbbtbah
O. J. .
Majeedv. Weiss
( 454 )
1921,
Bebtbam
O.J.
Majeedv. Weite
disclosed to ns. It seems likely some communication had passedbetween defendant and Mr. Bonas, for in June 14, in reply to amessage from Mr. Bonas relating to an instalment of the oil contractjust referred to, defendant wired to Mr. Bonas (S. W. 83) “ Oilforty-eight, arrange fibre first.” The meaning of this message wasthat before Mr. Bonas dealt with the oil he was to arrange forthe shipment of the fibre, and on June 21, in pursuance eitherof this or of some subsequent direction, Mr. Bonas appeared inColombo, where he proceeded to deal with plaintiff, entering at thesame time into telegraphic correspondence with his principal inLondon.
Having ascertained the local conditions^ Mr. Bonas, on June 26(P 6), telegraphed to defendant “ Havre impossible before August,can ship Marseilles July.” * This was probably not the onlytelegram sent, for in a long letter (S. W. 81) subsequently recapitu-lating his version of the story plaintiff writes to defendant: “ ThenMr. Bonas tried to book freight, and as he also was unsuccessful, heoabled to you and got your permission to ship the fibre to London.”On June 28 (P 8) Mr. Bonas, in fact, cabled to defendant “Shippingto-day /London, immediate transhipment Madras.” A way ofgetting the fibre to London had, in fact, presented itself, namely,vi& Galle and Madras. But this was an expedient which involvedconsiderable extra cost in freight, and plaintiff pressed upon Mr.Bonas that he ought to pay this extra freight.
It is not necessary for us to decide whether plaintiff was rightin this contention. He fully explains his case in the matter insubsequent letters to both defendant and Mr. Bonas (see S. W.104 and S. W. 105). His case was that he had already bookedfreight to London at the then ruling rate, which was 545. per ton,but that at the request of defendant he had cancelled thosebookings in order to ship the fibre to Havre on an assurance thatthe buyers would pay the extra freight. Although it was nowimpossible to obtain freight to Havre, yet he considered that he wasentitled to any freight which he had to pay over and above the54$. per ton above referred to, any such extra expenses being reallyoccasioned by the cancellation of his previous bookings. Hecalculated the extra freight so claimed at £378. This includedrailway transport to Galle.
There is no question that Mr. Bonas, in view of the high pricesruling in London, and that the fact that his principal’s credit wasinvolved, was most anxious to get the fibre shipped, and pressedplaintiff to use every possible means for getting this done. Butplaintiff further says that Mr. Bonas, on behalf of his principal,definitely promised to pay this extra freight, and points to acircumstance which seems to clinch the matter. Mr. Bonas inplaintiff’s office drew up shipping documents for the greater partof the intended consignment by the ss. Clan MacIntyre. The
( 455 )
terms of the material part of the invoice which form part of thesedocuments are:—
£
292 bales = 43 tons bristle fibre at £28 per ton..1,204
Part extra freight….160
1,354
1921.
Bbshtbau
C.J.
Majeedv. Weiee
and the accompanying bill of exchange was for this amount.
[The Chief Justice then gave the effect of certain correspondenceon what Mr. Bonas subsquently disclaimed responsibility for extrafreight, and demanded that the shipping documents should besent to Madras, and the plaintiff thereupon repudiated the contract.]
We have now to discuss the legal effect of the above correspond-ence. Plaintiff on his side claims as damages for breach of thecontract the contract value of the fibre shipped, together with theextra freight less the amount realized by Messrs. Volkart Brothers’sale, and in respect of the unshipped fibre damages at the rate ofRs. 5 per cwt. Defendant on his side claims as damages the £900which he has paid to his buyers.
We must first consider what it was that put the parties at arm’slength and caused the repudiation of the contract. This appearsto be due to two circumstances: First, the refusal of Mr. Bonasto pay the extra freight; secondly, his refusal to provide creditat Colombo, and his insisting on the documents being sent to MadrasiBy his telegram of July 11 (P 15) plaintiff had, indeed^*repudiatedthe contract on the first ground alone. It was assumed in argumentthat if Mr. Bonas had. in fact, promised the extra freight, and ifthis was within the scope of his authority, his subsequent refusalwould have justified plaintiff in terminating the contract. I willnot discuss, therefore, whether plaintiff would have been so entitled,or whether he ought not to have fulfilled the contract, and claimedthe freight in a separate action. I think, however, it. is, morereasonable to regard plaintiff’s repudiation on July 11, not as anabsolute but as a conditional repudiation, and to consider that thecause of the breach between the parties was partly this ciroumstance,and partly, in combination with it, the refusal of Mr. Bonas toprovide credit at Colombo, though it is on the latter ciroumstancealone that plaintiff’s claim for damages is based to the plaint. ThatMr. Bonas did, in fact, promise to pay the extra freight I have nodoubt. His story that he included an item for extra freight in theinvoice, subject to his principal’s approval, is incredible; somememorandum would certainly have been made of any such arrange-ment. His statement in his telegram of July 1 (P 13) that he hadcabled asking for extra freight I believe to be false. If such atelegram had been contemplated, it would have been sent beforeha left Colombo. I. believe that he either made the promise
( 456 )
1921.
Bertram
O.J.
Majeedv, Weiee
intending afterwards to shuffle out of it, or else that he made itthinking that it would be approved, but afterwards on the journeyto Madras felt qualms about the responsibility he had assumed,and so determined to go back on his action. No such telegramand no answer have been produced. I do not believe that hecabled to defendant about extra freight until August 9. Further,in my opinion, having been instructed by defendant’s cable of June14 (S. W. 83) to arrange about the shipment of the fibre, I thinkthat he had authority to make any reasonable arrangement, andthat, at any rate, the plaintiff was justified in thinking, from all theoiroumstances of the case, that he had an ostensible authority forthe purpose.
With regard to the connected cause of the breach, the refusalto place credit at plaintiff’s disposal in Colombo and his offer oforedit at Madras, I think that plaintiff, in the circumstances, wasjustified in regarding this as a trick, and as an attempt to get hold ofthe documents. Up to this point defendant had taken no stepsto declare the contract at an end ; he had treated the contract asstill being open. He was under an obligation, therefore, by theterms of his general agreement with plaintiff, to provide credit atColombo, and his failure to do so entitled plaintiff to treat thecontract at^an end and to dispose of the goods.
The legal position I take to be as follows. If there is a contractcontaining a time stipulation which is of the essence of the contract,but that stipulation is waived, and on the expiration of the timethe contract is treated as being still open, the party liable on thestipulation is entitled, if the other party commits a breach which. is fundamental to the contract,- himself to rescind the contract andto claim damages for the breach; while, on the other hand, theparty who was originally entitled to claim enforcement of thetime stipulation is no longer entitled on his part to claim damages‘ for the breach of that stipulation. No doubt, under the originalcontract, subject to the extension of time arranged, plaintiff wasbound to' ship at the latest in May, but in view of the difficultiescaused by the state of war this had not been insisted upon. Theoontract was treated- as still open ; defendant had never notifiedplaintiff that he was liable for damages; he never sought to makeany arrangement with his buyers until plaintiff had himself rescindedthe contract, and I do not think it is now open to defendant toolaim damages on the basis of that contract.
The Oil Contract.
We now come to the question of the 150 tons oil contract, whichis one of the most difficult parts of the case. It was the fourthand last transaction between plaintiff and the defendant (apartfrom the mattress fibre transaction). The other transactions were
( 457 )
1921.
a sale of plumbago on consignment, the 100 tons oil contract, andthe 90 tons bristle fibre contract. All these previous contractshad been made direot between plaintiff and defendant, but it willbe remembered that owing to the difficulty of obtaining freight,Mr. Bonas had been sent by defendant to Colombo, and as a resultof that visit a change in the course of business had been arranged.Plaintiff by his letter of March 15 (S. W. 17a) had intimated that,in view of the soaroity of freight in Colombo, he would in futureoffer -goods through Mr. Bonas in Calcutta, as he would be “ in abetter position to ascertain definitely regarding freight.” A copyof this letter had been forwarded to defendant on Maroh 22, andwould be in his hands by the middle of April. The shipping of thefirst consignment of coconut oil by this route was notified'by Mr.Bonas to defendant on April 7. On March 23, in pursuance of thecourse of business proposed by his letter of March 15, plaintiffcabled to Mr. Bonas (P 26) an offer of 300 tons of cooonut oil:“ Sell London three hundred tons ordinary mill coconut oil £57. . . . insurance from Calcutta …. your acoount.”On April 5 he wrote a letter to defendant (S. W. 18) confirming theoffer thus transmitted through Mr. Bonas. He heard there wasa possibility- of direct freight also being available, and in that casehe would cable other offers direct. Mr. Bonas replied to thetelegram of March 30 (P 26) by a counter offer (not produced, seeMr. Kekulawala’s evidence). This counter offer was apparentlylimited to 150 tons. Plaintiff replied on March 30 P 27): “ £57,insurance our account, cannot do better.” Mr. Bonas thentelegraphed (see S. W. 105) requesting plaintiff to hold open hisoffer for a week as he was cabling London.' Plaintiff on this arrangedto keep open the offer until 5 p.m. on April 7 (see S. W. 105). Mr.Bonas, however, with the negligence which seems to have beencharacteristic of him, did not cable the plaintiff’s offer until April 6(S. W. 90). On April 8, after the expiration of the week’s limitwhich had been arranged, plaintiff received a cable direct fromdefendant (see S. W. 105) accepting the 150 tons. Plaintiff there-upon informed Mr. Bonas that the acceptance had arrived too late(see S. W. 105). Mr. Bonas requested him to inform London, andthereupon on April 10 (S. W. 91) plaintiff cabled defendant: “ Accept-ance received late, goods now unprocurable.’,’ On April 13defendant wrote to plaintiff (see S. W. 105): “We received on the11th your following cable: ‘Acceptance received late,goods nowunprocurable.’ Contents of which we note with regret. Luckilyno harm iB done beyond the needless incurring of cable expenses,as we made this sale subject to your confirmation.” This letteris quoted in plaintiff’s letter to Mr. Bonas of September 7, 1916(S. W. 105), but was apparently overlooked in argument.
Mr. Bonas appears to have taken upon himself to be muchconcerned at the failure to complete this transaction. He went
15*
Bbbsrak
C.J.
Majeed■ v. Weiss
L 458 )
. 1921.
llmtTltAiur
cu.
MajeedV* W€%98
to Mr. Mather, plaintiff’s agent in Calcutta, complained of theloss whioh he alleged his principal had sustained, and asked himto write the plaintiff to “ try the market again andranyhow placethe order” (see S. W. 81). He appears to have written andtelegraphed in similar terms to plaintiff (see S. W. 105) last para-graph hut one. On April 17 both Mr. Mather and Mr. Bonaswroto to plaintiff .urging him to book the order (see S. W. 105 and8* W. 121). In the latter letter, Mr. Bonas observed that Mr.Mather informed him that he might be able to procure the 150tons for him in Calcutta. He concluded:* “I hope you are stilltrying to procure 150 tons of oil, and that you will let Londonknow as soon as you are able to get s^me.” One would naturallyconclude that in bringing this pressure to bear Mr. Bonas wasacting under the express instructions of his London principal, butdefendant seems to imply that this was not the case. No suchinstructions have been produced, and it must, I think, be takenthat Mr. Bonas was acting in supposed interpretation of hisprincipal's wishes.
Mr. Bonas, however, appears to have taken a further step, whichit is quite impossible to explain. During the Easter holidays of1916 (Easter Sunday in that year was on April 23) he took uponhimself to offer defendant on account of plaintiff 150 tons ofcoconut oil. There is no doubt about this, though the circumstancewas entirely overlooked in the argument (see sJ W. 51). “ Coconutoil: Mr. Bonas kindly offers us on your account 150 tons, immediateshipment, at £57 10s. This offer reached us during the holidays,and the market has not yet recovered from its holiday feeling,buyers have quite withdrawn for the present. The price isright, and we therefore cabled Mr. Bonas to obtain your renewalof the offer, when we hope to put the business through.” Thispassage in the argument was treated as referring to the previousoffer telegraphed defendant on April 6 (S. W. 90), but, as I haveshown above, defendant had previously acknowledged and dealtwith that offer. It occurs to me as a possibility that the^oil thusoffered may possibly have been procured by Mr. Mather locally.It seems more likely that Mr. Bonas took upon himself to makethe offer in the expectation that the pressure he had already put uponplaintiff to procure, the oil would have had the desired effect. Inreply to Mr. -Bonas’ telegram, defendant cabled to him to Calcuttaon April 25 (S. W. 92) “ Oil holidays. You cable Alim renew.”
Meanwhile, the pressure exerted by Mr. Bonas upon plaintiffhad in fact the desired effect. On April 29 (P 18) plaintiffcabled “ Vide letter seventeenth, bought, with great difficulty 150tons coconut oil, pounds fifty-seven, May-June, shipmentCalcutta …. inform London confirm.” Before hereplied to this telegram, Mr. Bonas had received on- May 1 hisprincipal’s telegram of April 25 (S. W. 92) “ You cable Alim renew.”
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The delay in this reaching him must be due to the fact that 1921.he was away at Madras, Whereas the cable was sent to Caloutta.
He did not know what to make of the cable, and forwardedc.j.
it to plaintiff (P 19) “Received cable to-day as follows: ‘Oil
holidays. Ton cable Alim renew. Weiss/ Telegraph me what thisWei$*
means/’ Plaintiff at once correctly interpreted the telegram,and replied (P 20) “ Cannot understand. Bid not cable anythingWeiss. Presume requires renewal oil offer/1 At the same timehe asked Mr. Bonas to reply to his telegram of April 29 (P 18), whichhad, in fact, contained the very offer that defendant seemed to desire.Immediately on receiving this answer, or possibly before he receivedit (the time at which the telegram was handed in at the Madras officeis somewhat obscurely indicated), he replied (P 21): “ Accept 150tons, May-June, fifty-seven half. Have cabled London. Arrangingfreight. Writing.” The following day he confirmed this by aletter (S. W. 120): “ Please note that Samuel Weiss & Co., London,have bought 150 tons coconut oil, May-June shipment at £57 105.per ton c.i.f. London, less 3 per cent. . . . . Please prepareand pack at your earliest convenience and send to Calcutta as soonas possible.” At the same time he cabled to London (S. W; 83):
“ Have accepted 150 tons oil from Alim, May-June, fifty-seven half.
Confirm.”
To all appearances, therefore, the transaction was concluded.Defendant, however, telegraphed to Mr. Bonas on May 2 in code(S. W. 94): “ We do not confirm the purchase. There are no buyersat present for oilif matters improve, we will telegraph.”
On May 4, in a telegram not produced, Mr. Bonas telegraphed toplaintiff requesting a cancellation of the contract; plaintiff repliedon the same day (P 28): “ Goods bought already, impossible cancelcontract, arranged part shipment for sixth.” Mr. Bonas entirelyaccepted this position, and on May 8 (S. W. 97) cabled: “ Alimrefuses, cancel contract. Shipping. 75 tons immediately. Writtenfull explanation. Going Calcutta Thursday.” These 75 tons woreMr. Bonas5 imaginative interpretation of plaintiff’s telegram ofMay 4 (P 28): ‘ ‘Arranging part shipment for sixth. ” He accordinglyproceeded to arrange for a' credit at Colombo for these 75 tons,and on May 11 the National Bank of India at Colombo informed,plaintiff that they had received the following wire from theirCalcutta office (B 4): “ You may advance up toBs. 45,000 to Alimagainst full shipping documents 75 tons coconut oil to Calcutta/1The oil referred to was accordingly .shipped from Colombo in thecourse of the month of May by the ss. Dupleix. Its subsequenthistory will be discussed later.
It will be convenient to pause at this point and to discuss thequestion whether defendant is bound by the contract which Mr.
Bonas purported to make on his behalf. There can be no questionthat when Mr. Bonas received the instruction “ You cable Alim
( 460 )
1921.
Bbbtbam
O.J.
Majeed•v. Weiss
renew,” lie interpreted it as meaning that, if the offer was in'factrenewed, he had authority to accept .it. It is equally cleat fromdefendant’s letter of April 27 (S. W. 51) that all that defendantintended was that on an offer being made he would try to find abuyer in London. As far as plaintiff is concerned, there can be noquestion whatever that, in view of the insistent pressure put uponhim by Mr. Bonas, purporting to speak on behalf of defendant,to obtain the oil, and from defendant’s cable asking for a renewalof the offer which Mr. Bonas purported to communicate to him,he had every reason to suppose that Mr. Bonas, in urging himto procure the oil and in accepting the offer, was acting with thefull authority of his principal. But in view of the fact that Mr.Bonas was not, in fact, so expressly authorized, what we have toconsider is, not what were the representations made by Mr. Bonas,but what were the express or implied representations made by thedefendant as to the authority, of Mr. Bonas. If Mr. Bonas weresued on a warranty of authority, he would have had to answerto the action. But the question for us is, What was the nature of theauthority which Mr. Bonas was held out by defendant as possessingon his behalf ?
Mr. Bawa experienced some difficulty in presenting any expressauthority which seemed to bear on his case, and, indeed, it isvery difficult in such a case to find an authority in point, as eachcase is really a question of fact. The ostensible authority of sucha commercial agent as Mr. Bona*s must depend partly upon thestatus which he is represented as possessing, and partly on theprevious course of business between the parties. Defendantinsists that all previous transactions had taken place direct betweenhimself and plaintiff, and that no bargain was deemed completeuntil it was confirmed by both principals. This is no doubt true,but it must be borne in mind that previous transactions of thischaracter had only been two in number, and that since they wereconcluded, a change had taken place in the course of business.'Plaintiff had intimated that in future transactions he would makeproposals to defendant through his representative, Mr. Bonas,in Calcutta. This intimation was acquiesced in, and such a proposalwas made, when this proposal came to nothing, and he wasthereupon approached again with a request that it should berepeated, first by Mr. Bonas, and then by a cable from defendanthimself sent through Mr. Bonas. It seems to me that plaintiff, in allthe circumstances of the case, might justly treat Mr. Bonas as anintermediary having the full authority of his principal to acceptthe offer. The fact that these communications had taken placethrough Mr. Bonas must be considered in connection with thefurther fact that Mr. Bonas had been held out to him as “ ourrepresentative” and as “our Madras house.” The use of note-paper headed “.Samuel Weiss & Co.,” and purporting to give
( *G1 )the telegraphic addresses, both in England and in India, and thethree visits of Mr. Bonas to Colombo on defendant’s behalf, werecalculated to enhance the impression thus produced that Mr.Bonas was a trusted agent of the firm with considerable authorityto speak on its behalf. The question in every case must be, Woulda reasonable business man dealing with an agent in the circumstancesof the case think himself justified in accepting the assurance of theagent that in the transaction in question he was acting with theauthority of his principal ? If that question is put in the presentcase, 1 think it must be answered in the affirmative.
I may here remark incidentally that both the plaintiff in hisevidence and the learned District Judge in his judgment seem tothink that the only material question is, whether Mr. Bonas washeld out as an actual partner of the defendant. The learned Judgethus treats the question from too restricted a point of view. Partner-ship is after all only a form of agency. The question is not so muchwas Mr. Bonas a partner, but what was the extent of his ostensibleagency.
But there is another way in which the question may be regarded.As I have said above when Mr. Bonas received his principal’stelegram “ You cable Alim renew,” there is no question that hesupposed that it was intended that, if Alim did renew the offer, hewas to accept it. That this was a reasonable interpretation of thismessage it is very difficult to deny. We know, in fact, that this wasnot the intention, and if the cable is strictly interpreted accordingto its exact words, it cannot be said to contain a direction to acceptthe offer. But cables are necessarily curt and leave something tobe supplied. It may well be said at least that the intention of thesender of the telegram might seem to be dubious. Now, there isa well-known chain of authorities which lay down the principlethat where instructions to an agent are so worded as to be capableof two interpretations, and where the agent fairly and honestly, assumes it to bear one of those interpretations and acts on thatassumption, the principal cannot be released from his contract onthe ground that he intended it to bear the other; and not only is theagent entitled to insist upon* the authority so conveyed, but theother principal is also entitled to insist upon the contract. (SeeIreland v. Livingstone,1 Loring v. Davis,2 Weigall v. Runciman.®) Itcannot be said in this case that the telegram was ambiguous, butit can be said in the circumstances of the case that the directioncontained in the telegram was one from which a-further directionmight reasonably be thought to be implied. The case, therefore,seems to come within the principles of those cases, though notwithin the precise formula in which that principle has been stated..It carries the principle a step further, but it appears to me that it
1 (1872) L. R. 5 H. L. 395,1 (1886) 32 Ch. D. 625
* (1916) 85 L. J. K. B. 1187.
1921,
BSB£R4BT
C. J.
Majeedv. Weiss,
( 462 )
1921.
BsbtbaM
CUT.
Majeedt>. Weiss
is a logical step, and that on this ground also the plaintiff is entitledt<fjudgment on the issue under consideration.
But there is a further question to be considered, the questionof ratification, and with regard to that the facts are as follows.When defendant telegraphed to Mr. Bonas declining to confirmthe purchase, he also wrote a letter to plaintiff regarding this and 'other matters, and referring to this transaction in the followingterms (see S. W. 79): “ We regret that the business Mr. Bonasproposed us this week at £57 10s. could not go through. The oiland similar trades are in a stagnant condition, and no businesswhatever is taking place …. We have cabled Mr. Bonasto that effect, and that we will let him know when there is animprovement.” This was the only communication which defend-ant sent plaintiff on the subject. When on May 8 Mr. Bonascabled to him (S. W. 97) “ Alim refuses cancel contract,” he appearsto have sent no reply to Mr. Bonas and to have addressed noremonstrance to plaintiff. We have a certain difficulty in decidingthis question of ratification, because it is quite clear that defendanthas not produced all his documents bearing on the question. Hesays that some of Mr. Bonas’ cables were lost, and that he has hadto obtain duplicates from the cable company; but there is noquestion that in an office whose correspondence was so carefullymanaged as that of defendant many more documents could havebeen produced which would throw light upon the subject. Never-theless, if defendant had addressed any peremptory remonstrance toMr. Bonas, it seems difficult to believe that Mr. Bonas would nothave further communicated with plaintiff. So late as May 10 Mr.Bonas appears to have written to Mr. Mather (spe S. W. 103) “ Isimply asked Alim whether he would cancel the contract ….However, I am willing to keep to the contract, and have tele-graphed to the National Bank to arrange about the advance.”Defendant is thus informed that plaintiff declined to cancel thecontract, and that a part of the goods are being shipped, and takesno steps to prevent this; and -in the course of the month of Maysome 48 tons of coconut oil under this contract were shipped toCalcutta, and remained in Calcutta under Mr. Bonas' control tillJuly 20.
In a letter of June 7 (see S. W. 105) Mr. Bonas appears to havewritten to plaintiff that he was shipping the first shipment of the150 tons of oil, and that he was trying to sell the balance 12 tonsof oil in Calcutta, and that as soon as the 48 tons of oil and the 5 toniVof fibre were shipped, he would remit plaintiff the balance. It isclear, therefore, that up to this point defendant had taken no stepsto instruct his agent to disclaim responsibility for the 48 tons of oil.
A few days later Mr.' Bonas appears to have sent a cable todefendant with reference to these 48 tons of oil. The terms of itare unfortunately not disclosed to us. We have only the reply
( 463 )
(S. W.83): “ Oil 48, arrange fibre first.'* All we can gather fromthis is that defendant kneV4jiat the 48 tons of oil delivered underthe contract was at Calcutta in^M^ Bonas' hands. A week later,June 21, Mr. Bonas arrived at ColomboTan^ proceeded to negotiatewith plaintiff and his suppliers with regard to the disposal of theoil. Plaintiff gives an account of these negotiations in his corre-spondence, and as Mr. Bonas is not called to contradict it, it must betaken as representing at least the main lines of what took place.
On June^dMr. Bonas cabled^to his principal: <cOil declining,can still probablyselTsix hundred loss. Cannot induce Alim sellerswait any longer." Plaintiff subsequently threatened to sell theoil by auction, and on July 10 (P 14) Mr. Bonas telegraphed toplaintiff: “ Cabling London about oil. You must stop proceedingsuntil answer received." Whereupon the proceedings in questionwere stopped for three days.
In this state of affairs, about July 20, the 48 tons of oil wereshipped by Mr. Bonas from Calcutta by the ss. City of Poona(see S. W. 24), and the defendant took delivery of these in London.How can such a proceeding be considered otherwise than as aratification of the contract ? Defendant affects to believe, thoughhe accounis for the oil at the contract prices, that this oil wasshipped to him under no contract at all, but the transaction cannotbe legally regained in that light. It appears to me that the factscome within the principles of the old case of Cornwall v. Wilson,1the headnote of which is as follows : “ Plaintiff, a faotor abroad,having exceeded the price limited for a purchase of hemp, thedefendant, who objected to the contract, but afterwards re-shippedand disposed of some of it on a new risk, was ordered to accountfor the whole at the cost price."^~~
It seems to me, therefore, that, quite apart from the question ofMr. Bonas' authority, defendant must be taken to have ratifiedthis contract.
De Sampayo J.—Agreed.
Sent back.
1921.
Bebtbam
C.J.
Majeedv. Weies
1 (1870) 1 Veaey Sr. 610.