P L D 1955 Lahore 52 (PLP)

KAYANI, J.-‑On the 30th March, 1950, the Co‑operative, Multipurpose Society, Gojra, agreed to supply a thousand bags of cotton seed to Sayyed Mahmud Hussain Shah at the rate of Rs. 9‑12‑0 per bag, receiving Rs. 500 as advance. The bags were to be removed by the vendee up to the 31st May, 1950, against cash payment as and when they were removed. On the 10th April, 1950, when the vendee went to take delivery of some bags, the manager of the society, Muhammad Zaman, cancelled the contract on the ground, as stated in his report to the directors dated the 19th April, 1950, (Exhibit P/5), that the vendee had failed to make advance payment of a further sum of Rs. 500 which had to be paid by him within a week of the transaction. Sayyad Mahmud Hussain Shah brought a suit on the 10th of June, 1950, against the society claiming Rs. 4,500 as damages and Rs. 500 as refund of the advance. In the written state ment the defendant pleaded that the plaintiff had not only failed to pay the further amount of the advance as earnest money but had also committed a breach of the contract by his failure to take daily delivery, as required by the terms of the contract, up to the 10th of April 1950. The points in issue can be made clear only by an examina tion of the contract itself. The society keeps a register in The plaintiffs case is that the entry in column No. 6 requiring a further advance of Rs. 500 was made without his knowledge, apparently after the completion of the contract. The defendant's evidence is to the effect that this addition had been made immediately after the completion of the other entries, but in the presence of the plaintiff. This is one point in dispute. The second point is that according to the defendant the word "rozana" in column No. 7 signified daily deliveries. The following issues were struck :‑ (1) Did the plaintiff at the time of the contract agree to pay Rs. 500 more as advance within one week ? (2) Had not the plaintiff to take delivery of goods every day but any day till the 31st May 950, whenever he liked ? (3) Did the plaintiff commit a breach of the contract on account of which the defendant was entitled to cancel the contract ? (4) Did the plaintiff suffer any damage on account of the breach of the contract and to what amount of compensation is he entitled The Trial Court accepted the plaintiff's contention that an addition had been made in column No. 6 without his knowledge and that the word "rozana" in column No. 7 merely meant delivery from time to time, not necessarily daily. A decree for Rs. 4,000 as damages and Rs. 500 as refund of advance money with proportionate costs was granted to the plaintiff. The amount of damages was based on the difference between the price contracted for and the price on the last day of the transaction. The learned Additional District Judge of Lyallpur, Mr. M. A. Latif, reversed the findings of the Trial Court on the main points, maintaining the decree only in respect of the amount of Rs. 500 which lay deposited with the defendant as advance money. The plaintiff has come up in second appeal. The finding of the learned Additional District Judge in respect of the subsequent insertion in column No. 6 being one of fact, we have no choice but to accept it. We feel, however, that if we could have gone into the question, we would have readily preferred the reasoning of the learned Trial Court; because an addition which has to all appearances been made subsequently to the completion of the contract ought to have been signed by a party to the contract, namely the plaintiff. We notice that in the first column where the name of the vendee was altered from "Sayyad Mahbub Hussain Shah" to "Sayyad Mahmud Hussain Shah", although the alteration was effected by a clerk of the defendant, it was signed by the plaintiff. An important addition which according to the defendant's counsel was a condition precedent could not have been reasonably accepted as an honest insertion. However, we cannot circumvent the law and the law assumes that the Courts of appeal are presided over by officers who are competent to appreciate evidence. We cannot help observing that it is for that reason necessary that the High Court when conferring appellate powers should act with proper circum spection. Likewise we do not agree with the learned Additional District judge in his finding that the word "rozana" used in column No. 7 signifies daily deliveries, and fortunately, here, the question being one of interpreting a clause of a contract, we are not bound by the finding of fact. The words used in column No. 7 are to the effect that as goods are removed from day to day up to the 31st May, 1950, cash payment will be made against them after deducting a commission. The emphasis clearly is on payment against delivery and the word "rozana" has been loosely used to signify "from time to time". It would be absurd to imagine, as the learned trial Court has observed, that if some goods were not removed on one particular day between the 30th March and the 31st May, although they had been removed each day of the remaining 61 days, there would be a breach of the contract. If that were so, the plaintiff could harass the defendant by 'removing one seer of cotton seed daily and claiming the balance, on the 31st May. The question left for decision, therefore, is whether, assuming that the plaintiff failed to pay a further sum of Rs. 500 by way of advance within a week, the contract could be put to an end. It has been argued for the plaintiff that since the time of payment was not of the essence of the contract, section 11 of the Sale of Goods Act . saves the contract from a breach. Section 11 is to the following effect :‑ "Unless a different intention appears from the terms of the contract, stipulations as to time of payment are not deemed to be of the essence of a contract of sale. Whether any other stipulation as to time is of the essence of the contract or not depends on the terms of the contract." This section has been exemplified by the facts of Martindale v. Smith ((1841) 1 Q B 389) which were as follows:‑ The defendant sold the plaintiff stacks of oats, then on defendant's ground, under a written agreement, by which plaintiff was to have liberty to leave the stacks on the ground for four months, and was to pay for them in twelve weeks from the agreement. The defendant, at the end of the twelve weeks, called on the plaintiff to pay, which he did not do. After the expiration of the twelve weeks, plaintiff tendered payment, which defendant refused to accept. Afterwards the defendant sold the stacks, which had remained on his ground. In an action of trover, the plaintiff was held entitled to recover, "for the sale of a specific chattel on credit ", observed Lord Denman, Chief justice, "though that credit may be limited to a definite period, transfers the property in the goods to the vendee, giving the vendor a right of action for the price, and a lien upon the goods, if they remain in his possession, till that price be paid. But that default of payment does not rescind the contract . . . . In a sale of chattels time is not of the essence of the contract unless it is made so by express agreement, than which nothing can be more easy, by introducing conditional words into the bargain." The vendor's lien referred to in this observation has received recognition in our law in section 46 of the Sale of Goods Act, under which, "notwithstanding that the property in the goods may have passed to the buyer, the unpaid seller of goods, as such, has by implication of law a lien on the goods for the price while he is in possession of them", and under section 47 he is entitled to retain possession of them until payment or tender of the price. In The Mersey Steel and Iron Co. v. Naylor, Benzon Co. (9 App. Cas. 434.) Lord Chancellor Selborne observed :‑ "I am content to take the rule as stated by Lord Coleridge in Freeth v. Burr which is in substance, as I understand it, that you must look at the actual circumstances of the case in order to see whether the one party to the contract is relieved from its future performance by the conduct of the other ; you must examine what that conduct is, so as to see whether it amounts to a renunciation, to an absolute refusal to perform the contract, such as would amount to a rescission if he had the power to rescind, and whether the other party may accept it as a reason for not performing his part." These observations were relied upon by McCardie J. in Payzu Limited v. Saunders ((1919) 2 K. B. 581.). We have no doubt that in the present case if the intention was to remove the' goods from time to time up to the 31st May 1950 and the contract came into force on the 30th March, the plaintiff had a right of removal from the 30th March onwards, .and since he could have removed the entire goods within a week, we do not see how the payment of a further sum of Rs. 500 as advance money within a week could have operated as a condition precedent. A condition, according to section 12 of the Sale of Good Act, is a stipulation essential to the main purpose of the contract, the breach of which gives rise to a right to treat the contract as repudiated. A stipulation which is collateral t to the main purpose is merely a warranty the breach of which gives rise to a claim for damages but not to a right to treat the contract as repudiated. If after paying the advance of Rs. 500 on the 30th March the plaintiff was required to take delivery against payment as and when he chose, the fact that he was required to make another payment of Rs. 500 within a week could not be treated as a circumstance that went to the root of the contract, for a matter that went to the root after seven days could not have been treated as harmless during the first seven days of the contract, and as we have pointed out already, the goods could have been removed entirely within the first seven days. Learned counsel for the defendant relied on section 6 of the Contract Act according to which a proposal is revoked by the failure of the acceptor to fulfil a condition precedent to the acceptance, and argued that the contract had not been completed on the 30th March but that it would have been completed only on or before the 7th of April if the further advance had been paid. And since there was no contract of sale, section 11 of the Sales of Goods Act did not apply. This argument, however, over looks the express provisions of the Sale of Goods' Act. Under section 4 (1) of that Act "a contract for sale of goods is a contract whereby the seller transfers or agrees to transfer the property in goods to the buyer for a price." Therefore the respondent having agreed to transfer the goods in question to the appellant for a price, the tran saction in question was a contract within the meaning of section 4 (1), to which section 11 will apply. Under section 5 a contract of sale is made by an offer to buy or sell goods for a price and the acceptance of such offer. The contract may provide for the immediate delivery of the goods or immediate payment of the price or both or for the delivery or payment by instalments, or that the delivery or payment or both shall be postponed. But as we understand the present contract, there was no term that the plaintiff would be prevented from taking delivery before the lapse of a week. If, theref6re, he could take delivery, earlier, the payment of Rs.500 within a week could not be treated as a condition precedent. At best it was a stipulation that amounted to a warranty. We hold that the time of payment was not of the essence of the contract in this case and that consequently the plaintiffs failure to pay the further advance did not constitute a repudiation of the contract. The amount of damages to which the plaintiff would be entitled is not questioned if it is assumed that it is the price prevailing on the 31st May, 1950, that has to be accepted for the determination of damages and not the price prevailing on the 11th of April, the day succeeding the cancellation of the contract. Learned counsel for the defendant argued that it would be unreasonable to assume that the plaintiff could take delivery of the entire chattel on the 31st of May. He was expected to take delivery from time to time and, therefore, the relevant date would be the 11th of April after the contract had been cancelled. Ors this point, however, we receive proper guidance from Leigh v. Paterson ((1818) 8 Taunt 540) where it was held that if a vendor has time until a given day to. deliver goods, and on a prior day, when the prices are low, he refuses to proceed with the contract, after which the price rises, the pur chaser not rescinding, is entitled to recover the difference between the contract price .and the higher price which the goods bear on the last day appointed for the fulfilment of the contract. We, therefore, accept the appeal with costs throughout, set aside the order of the lower Appellate Court and restore the decree of the Trial Court. A. H. Appeal accepted.