Where one party to an agreement repudiates it., the other is notbound to accept the repudiation. He may stand upon his contract,and hold the other party responsible and wait for the time of per-formance. If be does this, he is under no obligation to make anyattempt to minimize damages. It is only where he elects to treattbe repudiation as an immediate breach and to sue upon the contractat once, that it becomes his duty to do his best to minimize damages.
HE facts arc set out in the judgment of the Acting DistrictJudge (K. Balasingham, Esq.)t—
Plaiutiff is a limited liability company registered at Amsterdam, witha place of business in Colombo as well. On December 17, 1919, defendantrequested tbe plaintiff to import for himfiftycasesofBelgianplaying
cards at 34s. 7d. per gross. Subsequently, on January 5, 1920, the pricewas fixed at 41*. 6d. Tbe defendant took delivery of twenty cases inOctober, 1920, and paid forthe same.Hew'ouldnot takedelivery
of twenty cases in December, 1920. Plaintiff sold the lot at defendant'srisk, and claims the difference in price as damages from defendantIn the first place, defendantsays thatplaintiff wasonly anagent
and, therefore, cannot sue. He relics on 20 N. L, It. 268 in support ofthis contention. That' case does not apply to tbe facts of this case.The plaintiff, if he was anagent atall,wasanagentfor an
undisclosed foreign principal, and. as such, can sue and lie suedon the contract. In any case (here was no privity of contractbetween the defendant and any manufacturer. Plaintiff was to importthe goods on his own responsibility, and there is nothing to show thathe was not the only person liable to the manufacturers for non-paymentof price. The fact that it was agreed that plaintiff was to get a commis-sion for importing does not make any difference. I answer issues 2, 2a.3, and 7 in the affirmative. Defendant's next point is that it was agreedat the time whep the contract was entered into, that the goods were tobe paid for at the rate of exchange prevailing at the date of the indent—in December, 1919. Neither the indent, nor the order, nor any otherdocument embody this agreement. The plaintiff raises the objectionof law that oral evidence is not admissible to prove this alleged agree-ment. In my opinion, oral evidence is admissible to prove this. It isnot proposed to add to or vary the contract,* but merely to explain themeaning to be attached to £. s. d. at a time when exchange was unstable.The defendantsaysthat Mr.Ponnambalam was the canvasser ofthe
plaintiff, and that he made him understand that if he would place alarge order ofNfiftycases theexchange would be booked by the firm,
and defendant was to pay nothing for booking the exchange. Plaintiff'scounsel objected that this is not w’hat- defendant relied on in his' answer(paragraph 9) and in the issue (1). It is true' that in the answer and in theissue it is not alleged that plaintiff undertook to book the exchange,but it is clearthatthe booking of the exchange was only ameansby
which plaintiffwasto insurehimself against loss resultingfromthe
fluctuation ofexchange. Thereis, therefore,nochange of fronton the
part ofthedefendant whenhe spoke inthewitness box ofbooking
exchange.Mr. Ponnambalamdenies thathemade defendantunder-
stand that the exchange would be booked by the firm, or that defendantwas to be charged at the rate of exchange prevailing in December, 1919.
I cannot accept Mr. Ponnambalam’s evidence on this point. Theletters D1to D 5 supportdefendant’s casevery considerablyas to
this agreement, and I hold that plaintiff's canvasser did tell defendantthat exchange would be booked, or, what amounts to the same thing,that defendant would be charged the rate of exchange prevailing inDecember, 1919.
Defendant says that he did not refer to this agreement in the indentor orderatMr. Ponnambalam’s request.That is probablytrue.
Mr. Ponnambalam .was only a canvasser who- had no authority to enterinto an agreement with anyone as to booking exchange or as to chargingthe price at a particular rate of exchange. Mr. Ponnambalam clearlyexceeded his authority in making, defendant understand that hewould be charged the December exchange rate. I doubt whetherMr. Ponnambalam was an agent at all. He was merely a paid servantof the plaintiff to bring customers to the firm, and all the terms of thecontract had to be entered into with the plaintiff. Defendant himselfought to have known this, and if he thought otherwise he ought to paythe penalty. I -answer issue 4 in the negative.
Whatever defendant's attitude was at first, it is clear .that in September,1920, when the first consignment of twenty cases arrived, he waived allobjections, and took delivery of the goods and paid for the same. Heonly stipulated that no interest, or other charges, in respect of the twentycases should be charged, and that plaintiff was to do his best to cancelthe order for the remaining thirty cases. Plaintiff's evidence' on thispoint is supported by his .letters P 4—P 7. Plaintiff in terms of thisnew agreement endeavoured to get the order for the thirty cases cancelled,but succeeded only in getting ten cases cancelled. In view of the new
The Holland-er ey Ion Commercial Cov.
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a tat.
The Holland(%km Com -mmol Co.v.
agreement arrived in September or October, 1920,- it is not now open tothe defendant to maintain his original position. I answer the 0th issuein plaintiff's favour. There is dear evidence as to damages I enterjudgment for plaintiff as prayed for, with costs.
The defendant’s indent and letter were as follows: —
Colombo, December 17, 1919.
M. M. Mohuthoom Pillai, General Merchant, Nos. 12, 13, and 14,Dam street, Fettah.
Messrs. Holland Ceylon Commercial Co., Colombo.
Dkab Sms,—Pleasb order through your agents for fifty cases playingcards No. 2, Belgian make, “ Eagle Brand," at 34/7 per gross c.i.f.,Colombo.
Colours: red, .blue, and green. Packing as usual, 10 gross per case.Shipment in three equal lots at the interyal of 60/75 days.
Please wire for immediate shipment and oblige.
Yours faithfully,
(Signed) B. S. Shoo Mohahado Saibo,for M. M. M. PiLiiAi,
No. S. 156.Colombo, December 17, 1919.
We, the undersigned. M. M. Mahuthoom Pillai, hereby request Messrs.Holland Ceylon Commercial Co. to order -and import on our accountthrough their correspondents the under-mentioned goods, at the pricesand on the terms specified below—the whole or any part of which goodsI/We agree to receive on arrival-—payment for the same to be made onthe day on which the goods are tendered for delivery, or within ten daysafterwards, as follows: —
Cash or promissory note by agreement.
The goods to be received from Messrs. Holland Ceylon Commercial Co.either at their godowna or at the Customs-house as tendered, anddelivery to be taken on the day on which the goods are tendered orwithin ten days afterwards—the removal being ■ at the expense and riskof the purchaser.
If the arbitrators or umpire should find that the goods are not of thequality ordered, or are not in good condition, they shall decide whatallowance or deduction in price (if ■ any) should be made by the saidMessrs. Holland – Ceylon Commercial Co., for and on account thereoffor on no account can the indebtor refuse to take and accept the saidgoods.
The arbitrator shall also decide who should pay the costs of thereference.
50 (fifty) cases playing cards No. 2 celebrated;
" Eagle Brand " at 84s. 7d. per gross c.i.f., Colombo.
Colours: red, blue, and green.
( 155 )
Packing.—One dozen io « small packet, snch 8 dozens in a Urgepacket, J gross and 10 gross per case as usually supplied to Colombomarket. Send shipment samples in duplicate. Shipment as soon aspossible. Commission 8' per cent.
The HollandCeylon Com-mercial Co.
£T. IF. Jayawardene (with him H. V. Per era and Ranawaka), for Mojuakoomappellant.Pitted
Bartholomeusz (with him Canakaratne and R. C. Fonseka), forrespondent.
September 14, 1022. Bertram C.J.—
1 have every sympathy with the appellant in the case. There arevery definite indications that he believed in good faith on theassurance of the canvasser Ponnambalam that an arrangementwas made by which the exchange was booked as at the date of thecontract. Nevertheless, his legal position is faulty on every side,and none of the strenuous efforts which Mr. Jayawardene .hasmade on his behalf can avail to save him.
I confess that 1 do not understand how a person of his. experiencewho had had numerous transactions with other European firms canhave accepted the assurance which he says Ponnambalamgave him, that where it was arranged that the exchange should bebooked as at the date of the contract this would not be mentionedin the contract. However, 1 will take it to be so, and deal withthe legal points raised by Mr. Jayawardene.
The first of these points is that the plaintiff cannot sue at*all, but only his correspondents in Holland. This proposition isentirely untenable. The plaintiff was doing what is done bymerchants in Fort every day. He was ordering goods for acustomer from abroad, and it was arranged that the price of thegoods should be that at which they were invoiced to him, plus hiscommission. Under such circumstances the parties to the contractare the merchant and the purchaser. It would be preposterousif in respect of every such order the supplier abroad had to sue thecustomer of the commission merchant. The case cited by Mr.Jayawardena, Miller, Gibb & Co. v. Smyth & Tyler, Ltd.1 doesnot support his proposition. The main point of that case is thatwhere a contract is made on behalf of a principal abroad, a questionof fact to be determined on all the circumstances of the case iswhether the person liable upon that contract is the agent at home,or the principal abroad. Nor do the cases from our own LawReports make the position any better. Rahim v. Davoodbhoy,*Boyeen v. Zameldeen,9 Silva & Nayendra v. Haniffa.* In all theseeases the broker here was acting expressly on behalf of theprincipal abroad. In this case the plaintiff was not.
Mr. Jayawardene’s second point is that on the defendant,repudiating the contract and calling upon him to cancel it, plaintiff
1 {1917) 2 King's Bench, P- 141.* (1912) 17. N. L. R. 346.
* {1917) 20 N. L. B. 226.* {1920} 21 N. L. B. 468.
( 1*« )
<922. was bound to cancel it and to do his best to minimise the damage by3kbtbam telegraphing to his suppliers in Europe. It would certainly haveCJ. shown much better feeling if the plaintiff had done so. If he hadThr ffo/ffTnrf done so» I have little doubt that the damages would have been veryCeylonCom- much minimized. Defendant would, no doubt, have had to pay®°‘ plaintiff’s commission he also would have to pay the 20 per cent.Makuihoom deposited with the suppliers. Nevertheless, it is quite clear thatplaintiff- was not bound to take this course. It is settled law, laiddown in all the text books, ''that where one party tov an agreementrepudiates it, the other is not bound to accept the repudiation. Memay attend upon his contract, and hold the other party responsibleand wait for the time of performance. If he does this, he is underno obligation to make any attempt to minimize damages, it is onlywhere he elects to treat the repudiation as an immediate breachand to sue upon the contract at once that it becomes his duty to dohis best to minimize damages. See Mayne on Damages, 8th ed.tp. 205 ; Benjamin on Sale, 6th ed.y p. 935 ; Deane on Contracts, 5thed., p. 619. The recent case relied upon by Mr. Jayawardene, Payzu,Ltd., v. Saunders,* was a case of that description. That is to say, acase where the plaintiff elected to treat repudiation as an immediatebreach.
The next point was that the canvasser Ponnambalam had osten-sible authority to give assurances to the defendant that the exchangewould be booked as at the date of the contract. The facts areagainst this suggestion. Mr. Jayawardene then says that evenif, Ponnambalam gave these assurances fraudulently, his principal isricyertbeless liable. The principles laid down in the well-knowncriBerwick v. English Joint Stock Bank? if properly understood,are ratal to this proposition also. Ponnambalam neither actually norostensibly bad authority to give any such assurance, and such assu-rances were not of the class of assurances which a person in hisposition as canvasser was entitled to give, nor is a canvassing agentin the same position as a confidential clerk of a firm of solicitors,left in charge of an important pari of the work of the firm as inLloyd & Grace Smith & Co.3 All these points are fatal. Oneis that even if Ponnambalam hud been impliedly authorized to givethese assurances, it would not be possible in this way to annex anew and important term to a written contract, and, further, it seemsclear on the correspondence in the evidence that this matter wascompromised by agreement, that terms were arranged under whichdefendant waived his grievance ; the plaintiff relinquished his claimto commission, and the supplier abroad cancelled the order withregard to ten of the cases.
Under the circumstances I think that we have no alternative butto dismiss the appeal, with costs.
Schneider J.—1 agree.
Appeal dismissed
1 (7919) 2 Ring'* Bench, p. 581.* (1267) L. B.. 2 Exch. 259.
*11912) A. C. 716.