P L D 1960 (W (PLP)
MICHAL ASSELY and others‑Plaintiffs Versus MESSRS ABDUL SATTAR & BROS.‑Defendants
| Citation | P L D 1960 (W (PLP) |
| Forum / Court | |
| Bench Members | Qadeeruddin Ahmad, J |
| Parties | MICHAL ASSELY and others‑Plaintiffs Versus MESSRS ABDUL SATTAR & BROS.‑Defendants |
Q1: What are the key laws and sections cited in P L D 1960 (W (PLP)?
This judgment primarily cites: statutory provisions as referenced in Pakistani case law index.
Q2: Which judicial bench decided the case P L D 1960 (W (PLP)?
The case was heard and decided by the bench comprising: Qadeeruddin Ahmad, J.
Q3: What is the official citation format for this judgment on Pakistan Law Portal?
Cite this legal precedent as: P L D 1960 (W (PLP) (MICHAL ASSELY and others‑Plaintiffs Versus MESSRS ABDUL SATTAR & BROS.‑Defendants). Read the full summary and cross-referenced laws free on Pakistan Law Portal.
Representation
- Dates of hearing : 13th and 14th May 1959 : 9th, 10th, 15th and 16th September 1959.
Headnotes / Summary
(a) Civil Procedure Code (V of 1908), O. II, r. 3‑Several causes of action arising out of, one contract‑May be united in one suit. (b) Contract Act (IX of 1872), ,Ss. 3 & 7‑Terms and con ditions printed on back of contract deed‑Contract containing clause that such terms and conditions would form part of contract‑Parties bound by terms and conditions. Neuchatek Asphalte Co. Ltd. v. Barnett (1957) 1 All. E R 362 ; Bishop & Baxter Limited v. Anglo Easter Trading Co. (1943) 2 All. E R 598 ; Scammell v. Custon (1941) 1 All. E R 14 and Haji Muhammad Haji Jiva v. E. Spinner I L R 24 Boma510 ref. (c) Sale of Goods Act (IX of 1930), S. 39‑Transhipment-- Meaning‑Transhipment allowable in C. I. F. contracts. Transhipment means transfer of the contents of a conveyance from one to another. Its implications are that the processes of transfer may cause delay in transit or damage to the contents or increase the carrier's charges or make the carriage of the contents after transhipment less satisfactory than at the outset. The significance of transhipment, therefore, varies according to the trade of the parties, the goods shipped and the nature of contract. In a contract of insurance its importance is obvious because of the likelihood of damage and the effect of the likelihood on the safety of the articles in transit. Between a carrier and his customer its significance rests on the undertaking of the carrier imposed by law, or practice of trade, or arising from the contract to carry the subject‑matter of the contract in the same vessel or conveyance. A carrier by sea is regarded as bound to carry the cargo in the same vessel, yet transhipment does not discharge the parties of their obligations merely ‑by reason of transhipment. The cargo may be carried to the destination in the interests of the owner of the cargo or of the ship‑owner, after the ship is disabled from continuing her voyage or the voyage is abandoned, in another ship or through the agency of a different ocean liner. Held, that transhipment is allowable in C. I. F. contracts. (d) Contract Act (IX of 1872), S. 1‑Differences arising in commercial matters‑Not capable of being solved with help of terms of contract and law‑Resort to common practice. Basically, reasonableness as determined by custom, common practice and current forms is the guiding principle in commercial matters for solving obscure questions and resolving those differences which cannot be satisfactorily solved and resolved with the help of the terms of contract and relevant provisions of the law. The same principle should also be applied to disputes of similar nature relating to the route by which goods are supposed to be carried and the permissibility of transhipment. Lecky v. Ogylvie (1897) 3 Com. Cas. 29 ; Acme Wood Co. v. Sutherland (1904) 9 Com. Cas. 170 ; Gordon Woodroffe & Co. v. Produce Brokers New Company Ltd. (1924) 31 Com. Cas. 54 and Perhaps Fischel & Co. v. Spencer (1922) 12 Lloyd's List L R 36 ref. (e) Contract Act (IX of 1872), S. 73‑Contract for sale of goods‑Quantum of damages‑Determination. The quantum of damages suffered is to be determined by comparing the market prices of the goods prevailing on the date on which the goods had to be supplied with the contract prices and not the contract prices with those prevailing on the date bf the renunciation of the contract. Re Jivanji Pirbhoy, ex parte David Sassoon & Co. (1912) 6 S L R 187 and Foby Bros. v. James A. Mellwee and others (from British Columbia) A I R 1927 P C 255 ref. K. A. Ghani for Plaintiffs. W. B. L. Vellani and Parmanand for Defendants.
Judgment & Decree
(14) Is plaintiff No: 2 entitled to any commission from the defendant ? If so, to what amount ? (Covers para. 18 of the written statement). (15) Are plaintiffs No. I and plaintiff No. 2 or any of the two registered under the Partnership Act, 1932 ? If not, what is the consequence? (16) (a) Can plaintiff No. 2 sue for the sum of Rs. 66,863‑5‑10 or a part thereof ? (Para. 17‑A of the plaint). (b) Is plaintiff No. 2's claim for this barred by limitation ?(Covers para. 19‑A of W. S.) (17) General. Issues No. 4, 5, 7, 8 and 15 were dropped by . counsel for the defendant and counsel for the plaintiffs dropped issues No. 7, 11 and
12. My finding on the remaining issues is as under
4. Issue No. 1.‑Plaintiff No. I, and in the alternative plaintiff No. 2 has claimed Rs. 66,863‑5‑10 as damages for breach of contract alleged to have been committed by the defendant and plaintiff No. 2 has also claimed Rs. 3,872‑8‑0 as damages for the loss of its commission. Counsel for the defendant contended that these two causes of action could not be joined in one suit. These causes of action have arisen out of one contract, Exh.
7. If two suits bad been instituted for the two claims, common questions of law and fact would have arisen in terms of Order I, rule 1, C. P. C. There is nothing in Order II, rule 3, C. P. C. against joining such causes of action. The issue is decided against the defendant.
5. Issue No. 2.‑Mr. Vellani argued this issue at length and stated that it was the most important issue in the suit. His contention was that the contract was not enforceable because‑ (a) Clause 2 of the terms and conditions printed at the back of the contract, Exh. 7, was `a trap', for any new condition could be introduced under it without the consent of defendant. The word `remarks' used in the clause was indefinite and was meant to bind the defendant by any new term or condition that might be introduced by the plaintiffs under the clause. The contract was thus invalid under section 7 of the Contract Act. Moreover, the contract was not binding on the defendant because attention of the defendant was not drawn to the terms and conditions that were printed at its back. (b) The contract was not concluded and never passed the stage of negotiations because the condition of transhipment was introduced by Exh. 9 as a counter offer. When the con dition was passed by plaintiff No. 2 through the letter Exh. 14 the defendant positively declined by its letter Exh. 15 to accept it, and finally broke off further negotiations by its letter Exh. 19. (c) Correctness of the excuse of the plaintiffs, for insisting on transhipment, on the ground that direct steamers from Beyrouth to Karachi were "very infrequent and irregular" and that con sequently the condition of transhipment was "absolutely necessary" was not borne out by facts. (d) The 200 bales that were shipped under the contract were accepted by the defendant without the knowledge that they were transhipped on the way and therefore their acceptance did not amount to the acceptance of the condition of transhipment. On the contrary the Bill of Lading, Exh. 54, read with the letter from the Legation of Lebanon, Exh. 25, indicated that the plaintiffs had sold those goods fraudulently by concealing the fact that, to their knowledge (1) those goods had been shipped after the agreed period of shipment, and (2) had been transhipped on the way. A good many of the above contentions are not substantial. The argument that there was a `trap' in clause 2 was not founded on tin a plea of fraud, for no plea of fraud was raised in the written statement. It had the value of being picturesque and for that reason was borrowed by counsel from Neuchatek Asphalte Co. Ltd. v. Barnett ((1957) 1 All. E R 362). In that case, a cheque was sent `on account' and on its back the sender had typed the words "In full and final settlement of account". After it was accepted, a plea was raised that the account had been fully settled. The Court rejected the plea, described the devise as "a trap for the unwary" and held that "those words were inconsistent with the main object." They were apt observations for that occasion but do not apply to clause
2. The word "remarks" used in clause 2 was described by counsel as vague because any new term could be stealthily introduced owing to its existence as a remark. But it is not so ; for the word does not mean or include terms, conditions or warranties. Counsel cited Bishop & Baxter Ltd. v. Anglo Easter Trading Co. ((1943) 2 All. E R 598) and Scammell v. Custom ((1941) 1 All. E R 14), in support of his contention. Those authorities do not support counsel because the word "remarks" is not vague in the sense in which the words "war clause" can be vague when used as a substitute for actual terms and conditions of a war clause or the words "hire purchase terms" can be vague when used as a substitute for actual terms of hire purchase. Counsel would have been convincing if he contended that tranship ment was an arrangement of much too serious a character to fall within the meaning of the word "remarks" and that, therefore, transhipment was outside the scope of that clause.
6. Moreover, counsel questioned the validity and enforce ability of the entire contract on account of clause 2 by citing Haji Muhammad Haji Jiva v. E. Spinner (I L R 24 Bom. 510) in which the following proposition of law was laid down "In order to convert a proposal into a promise the acceptance must be absolute and unqualified. That is to say, until there is such an acceptance the stage of negotiation has not been passed, and no legal obligation is imposed." Further " I take it to be clear that a person making a proposal cannot impose on the party to whom it is addressed the obliga tion to refuse it under the penalty of imputed assent, or attach to his silence the legal result that he must be deemed to have accepted it." Counsel contended that, in view of the above proposition of law, the provision contained in clause 2 that "any objection by us to any remarks in the . . . letter (of acceptance) shall be notified to you in writing within 24 hours from receipt of the same failing which we shall have accepted the same", was illegal. The pro position of law was not disputable and was not disputed by counsel for the plaintiffs, but he contended that arrangements of minor nature could be proposed and impliedly accepted under clause 2, without affecting the unconditional acceptance of the offer, because, as pointed out by Sanjiva Rao in his book on Indian Contract Act, at page 174 (5th Edition) on the authority of Williston "Frequently an offence, while making a positive acceptance of the offer, also makes a request or suggestion that some addition or modification be made. So long as it is clear that the meaning of the acceptance is positively and unequivocally to accept the offer whether such request is granted or not, a contract is formed." If in the present case the plaintiffs erroneously regarded tranship ment to be of no importance and as such introduced a term as to transhipment in pursuance of clause 2 their interpretation might be said to be at fault and their proposal could be disregarded as outside the scope of clause
2. The defendant actually disregarded tt and opened two letters of credit without allowing transhipment. The plaintiffs utilised those letters of credit but in their letter, Exh. 14, protested against the omission and demanded that more letters of credit should be opened in which transhipment should br allowed. It is noteworthy that their letter, Exh. 14, makes no mention of clause 2 and merely contains a statement that at the time of the signing of the contract the defendant had been informed that direct steamers for Beyrouth to Karachi were very infrequent and irregular and that therefore a provision for transhipment was necessary. That demand and its effect could be considered separately. To contend that clause 2 and that owing to it the entire contract was void and unenforceable was pushing the agree ment too far. In Haji Muhammad Haji Jivo cited by counsel for the defendant, the Division Bench of the Bombay High Court did not hold the contract in suit to be invalid or unenforceable. On the contrary, the learned Judges dismissed the suit for damages on the ground that the plaintiffs were not ready and willing to deliver the goods according to the "Contract subsisting between them and the defendant."
7. Similarly, the contention of counsel for the defendant that the terms and conditions ‑printed at the back of the contract were not binding is untenable because reference to them was unmistakably made on the face of the document.
8. The defendant did refuse to accede to the demand of the plaintiffs to allow transhipment. Moreover, it declined by its letter, Exh. 19, to reconsider its refusal, but it is not correct to say that the stage of negotiations had not been passed. The true situation was that disputes had arisen regarding the permissibility of transhipment under the contract and the defendant held on To its stand that there was not, nor could there be, any such term in the contract.
9. One of the justifications for the demand for transhipment made by the plaintiff in Exh. 14 was that direct steamers from Beyrouth to Karachi‑ were irregular and infrequent. Its object was to make the allegation convincing that transhipment was a known necessity and that, therefore, must (sic) been orally dis cussed at the time of the signing of the contract. The defendant has succeeded in proving that the ships of at least one American concern of ship‑owners namely Isthman Lines, came directly from Beyrouth to Karachi ; that eleven steamers of that concern came from Beyrouth to Karachi in 1952 and that two of them, namely Steel Architect and Steel Executive had brought 346 bales for plaintiffs No.
2. D. W. 4,
1. B. Fernaridex, has stated that the service from New York via Beyronth to Karachi was mostly dependant on the availability of adequate amount of cargo but one could depend on that service as a regular service if one reserved a space in advance, for otherwise, "no space might be available when a ship called at a port". D. W. 3, Syed Mansur Ali, has also stated that some vessels came regularly and directly from Beyrouth to Karachi. Both witnesses are employees of Mackinnon & Meckenzie Ltd., who are Agents of Isthman Lines. How unimportant and unknown this direct service is can never theless be judged from the statement of D. W. 2 Abdul Hamid, of United Liner Agencies (Pakistan) Ltd., who are Agents of "four or five Ocean Liners" that he did not know of any direct service for shipping cargo between Beyrouth and Karachi. Moreover, D. W. 4 has pointed out that Isthman Lines is not a member of Karman Conference Lines though "almost all big shipping com panies are its members". The last mentioned witness has also stated that "some shippers are members or supporters of Karman Conference" and that "in return they get a rebate of 10% in their frieght" which they lose if they use the service of those lines which are not members of Karman Conference. In these circumstances good many shippers would not care to think of Isthman Lines. In the presence'of these facts I am not inclined to believe that the stand of the plaintiffs that direct service between Beyrouth and Karachi was ‑ irregular and infrequent was a mere pretence. The evidence of the parties is conflicting on whether transhipment was discussed by them at the time of making the contract. Granting for the sake of argument that it was discussed, I am unable to conclude that the defendant agreed to transhipment. The inconclusive oral discussion, if any, could have no effect on the written agreement.
10. Mr. Vellani painted the plaintiffs as unreliable and as ready to be unprincipled, and contended that they had succeeded more than once in trapping the defendant. Exh. 25 has been proved which is a letter from the Legation of Lebanon, to establish that the 200 bales that were shipped under the contract were loaded on board the ship between the 5th and 7th of February 1952, and not on the 31st of January 1952, as suggested by the date of the bills of lading Exh. 11 and Exh.
54. Moreover, they were ostensibly sent direct from Beyrouth to Karachi, but were secretly transhipped on the way. The true position, however is that the allegation of secret transhipment made on behalf of the defendant was without foundation, and obviously originated from inattention to the contents of the bills of lading and the letter Exh. 56, a copy of which was. sent to the defendant. The first paragraph of the bills of lading makes it obvious but they were through bills of lading. This was further pointed out in Exh.
56. A "through bill of lading" in the language of Scrutton, "is one made for the carriage of goods from one place to another by several ship‑owners or railway companies". No exception could be taken to tranship ment under such an arrangement. The suggestion of 'secrecy is in. contradiction to the tenor of the documents. Through bills of lading were arranged by the plaintiffs No. 1 in consonance with their stand that direct steamers from Beyrouth to Karachi were infrequent and irregular, and that a provision for transhipment was "absolutely necessary", because, as pointed out by Kennedy in his book on C.
1. F. Contracts (2nd Ed.) at page 30, in such circumstances it is a commercial practice to sign through bills of lading. The date which appears at the foot of the two bills of lading is 31‑1‑
52. It could be the date of actual shipment or of receipt of goods for shipment. It is not conclusive evidence of shipment. Shipped bills of lading are sometimes issued, as pointed out in Shipping Practice (7th Ed.) by E. F. Stevens, at page 25, by the Master of a ship on his own responsibility before actually taking the goods on board. Exh. 25 shows that the goods relating to the bills of lading in question were loaded on the 6th of February 1952, whatever may be the liability of the Master of the ship for doing so, the difference in the dates is immaterial in this case, because both 31‑1‑52 and 6‑2‑52, fall within the contract period. Moreover, there is no dispute in this suit regarding the 200 bales. The plaintiffs had not led evidence to prove that the bales had come without transhipment, Muhammad Hussain, P. W. 4, said that he was not aware that they had been transhipped, but, the evidence led by the defendant opened the chance for an argument on behalf of the plaintiffs that by accept ing transhipped goods the defendant had waived all objections to transhipment. Mr. Vellani tried to forestall this argument by contending mistakenly and against the contents of Exhs. 11, Exh. 54, Exh. 56 and Exh. 28 that the defendant discovered after accepting the goods that they had been transhipped. The net gain of this aspect of the defendant's case to the plaintiffs is that the defendant appears to have waived its objection to the tranship ment of 200 bales though the plaintiffs are blamed by the defendant for being unscrupulous traders. Counsel for the plaintiffs con tended that Exh. 25 which is the keystone on which this aspect of the defendant's case is built has no evidentiary value because it contains heresay statements. Moreover, it cannot be accepted as trustworthy evidence because the correctness of the route stated in it namely, Beirut‑Aden‑Jeddah‑Jibbute‑Mombasa Karachi has been denied by the defendant's own witnesses D. W. 2 and D. W.
3. I have noted the contentions of the parties because of the emphasis that was placed on them, and would pass on with the remark that the attempt of the defendant to this the plaintiff below the belt was to no purpose.
11. If I have understood the address of learned counsel for the defendant correctly, my conclusion must be, and it is, that there is no reason for holding the entire contract as invalid or unenforceable. The significance of the proposal to tranship the goods contained in Exh. 9, its validity and effect on the contract will be considered later. The issue is decided against the defendant.
12. Issues Nos. 3 and 16.‑Plaintiff No. 1 originally claimed damages for breach of contract and the defendant questioned under section 230 of the Contract Act, their right to do so. The plaint was, therefore, amended and plaintiff No. 2 claimed those damages in the alternative. The defendant objected to the claim of plaintiff No. 2 on the ground that it was barred by time owing to late amendment, as well as on the ground that plaintiff No. 2 had no right to claim damages under that section. It is obviously incorrect to contend, under section 230 of the Contract Act that neither of them had the locus standi to make the claim. Plaintiff No. 1 had the right to claim damages _ because, as Exh. 7 would show, they were disclosed foreign principals. Moreover, the contract was made by them and not by their agent because the agent conveyed their acceptance by Exh.
9. Issue No. 3 is accordingly decided in favour of plaintiff No.
1. Issues Nos. 16 (a) and 16 (b) do not arise.
13. Issues No. 6 and 14.‑The contract, Exh. 7, proves that plaintiff No. 2 was to be paid commission immediately after shipment was notified at the rate of 1% on the C. I. F.. value of the goods. It was not a part of the price of goods. Plaintiff No. 2, is, therefore, entitled to get the commission on C. I. F. value of 200 bales that were shipped. It has, however, claimed commission on the price of 500 bales that were to be supplied under the contract. The defendant's counsel contended that plaintiff No. 2 was not entitled to commission on 300 bales because notification of their shipment was never given. In view of the language of the term, the contention is correct irrespective of whether the seller or the buyer committed the breach of the contract. It is, therefore, entitled to Rs. 2,748‑13‑3 only.
14. Issues No. 9 No. 10 and No. 13.‑ Counsel for the defendant contended that plaintiff' No. 1 committed a breach of the contract by introducing the term of transhipment at the time of accepting the offer of the defendant and subse quently by insisting on that term. Taking for granted that the request for allowing transhipment made in Exh. 9 at the time of the acceptance of the offer' did not fall within the scope of the word ` remarks ' contained in clause 2 of the " terms and conditions " of the contract, and conceding the transhipment was not discussed at the time of making the contract, was transhipment expressly or impliedly prohibited by the provisions of the contract ? Arguments were advanced that transhipment was prohibited and that it was sought to tie introduced by a `resentful ' of ` detrimental ' device. Tran shipment means transfer of the contents of a conveyance from one to another. Its implications are that the processes of transfer may cause delay in transit or damage to the contents or increase the carrier's charges or make the carriage of the contents after transhipment less satisfactory than at the outset. The significance of transhipment, therefore, varies according to the trade of the parties, the goods shipped and the nature of contract. In a contract of insurance its importance is obvious because of the likelihood of damage and the effect of the likelihood on the safety of the articles in transit. Between a carrier and his customer its significance rests on the undertaking of the carrier imposed by law, or practice of trade, or arising from the contract to carry the subject‑matter of the contract in the same vessel or conveyance. A carrier by sea is regarded as bound to carry the cargo in the same vessel, yet transhipment does not discharge the parties of their obligations merely by reason of transhipment. The cargo may be carried to the destination in the interests of the owner of the cargo or of the ship‑owner, after the ship is disabled from continuing her voyage or the voyage is abandoned, in another ship or through the agency of a different ocean liner. Counsel for the defendant attempted to argue that transhipment was not allowed in a C. I. F. contract. None of the books cited at the Bar supported this contention of counsel. I reproduce the legal incidents of C. I. F. contract as given in Halsbury's Laws of England in Volume 29 at page 214 "
285. A seller under a contract of sale upon ` c. i. f. ' terms has first to ship at the port of shipment goods of the description contained in the contract ; secondly, to procure a contract of affreightment, under which the goods will be delivered at the destination contemplated by the contract ; thirdly, to arrange for an insurance upon the terms current in the trade, which will be available for the benefit of the buyer ; fourthly, to make out an invoice debitting the buyer with the agreed price, or the actual cost and commission with premiums of insurance and Line freight, as the case may be, and giving him credit for the amount of the freight which he will have to pay to the ship‑owner oil actual delivery, or in some similar form : and finally, to tender these documents to the buyer as soon as is reasonably possible after shipment. Against tender of these documents, the bill of lading, invoice, and policy of insurance, which completes delivery in accordance with that agreement, the buyer must be ready and willing to pay the price. Counsel relied on the words, " on board a ship bound to the contractual destination " that occur in the following passage under the main headings " Intention to transfer the whole property by indorsement of the bill of lading " in Scrutton on Charter‑parties & Bills of Lading (16th Ed.) at page 197 " In a contract for the sale of goods upon ` c. i. f. ' terms, the contract, unless otherwise expressed, is for the sale of goods to be carried by sea, and the seller performs his part by shipping goods of the contractual description on board a ship bound to the contractual destination, or pur chasing afloat goods so shipped, and tendering within a reasonable time after shipment, the shipping documents, to the purchaser the goods during the voyage being at the risk of the purchaser ". The last words of the quotation are significant and likely to create a misunderstanding in this case. I may point out they are of general not of universal application. In the present case the goods were at the risk of the seller owing to clause '5 of the " Terms & Conditions " of the contract, Exh. 7, because they formed the security for the price. For a discussion on this subject reference is invited to Chapter IV in , Kennedy's book on. C. I. F. Contracts. In explanation of the last word of the above quoted passage, on which counsel relied, Scrutton has given the following footnote " (k) Lecky v. Ogylvie (1897) 3 Com. Cas. 29 (the two Tripolis). The seller must pay any expenses necessary to secure delivery at the contractual destination, e.g., lighterage to a wharf at the port of discharge in addition to the ocean freight when that wharf is the destination named in the c. i. f. contracts Acme Wood Co. v. Sutherland (1904) 9 Com. Cas.
170. But of course the buyer, as indorsee of the bill of lading, must .pay any demurrage at the port of discharge which the ship‑owner can claim under it and cannot seek to recover this back from the seller ". The footnote discloses that he was thinking of reasonableness of expenses. His care in emphasizing this aspect is understandable. The same idea has been expressed by Kennedy more clearly in his aforesaid book (2nd Ed.) at page 40 " The contract of affreightment which the seller bas to obtain must be a reasonable contract ". Basically, reasonableness as‑ determined by custom, common practice and current forms is the guiding principle in commercial matters for solving obscure questions and resolving those differences which cannot be satisfactorily solved and resolved with the help of the terms of contract and relevant provisions of the law. The same principle should also be applied to disputes of similar nature relating to the route by which goods are supposed to be carried and the permissibility of transhipment. The last mentioned author has stated at page 39 "In the absence of express terms in the contract the customary or usual route must be following" Counsel cited Gordon Woodrofe & Co. v. Produce Brokers New Company Ltd. ((1924) 31 Com. Cas. 54) to emphasize the importance of route. Perhaps Fischel & Co. v. Spencer ((1922) 12 Lloyd's List L R 36) quoted by Kennedy at page 43, could be cited with advantage to support the proposition that " where a seller desires to have power to tranship it is usual and customary for him to insert in the contract a clause authorising transhipment ". But neither of the two judgments proceeded on any principle of law or recognised conception of C. I. F. contracts. One of them was based on the terms of the contract and the other on the local practice found in that case.
15. The emphasis laid by counsel for the defendant on his objection to the route that is alleged in Exh. 25 to have been adopted by the ship‑owners and to transhipment was misplaced in the present circumstances. There was no express condition in the contract against transhipment and as pointed out by Benjamin in his book on Sale (8th Ed.) at page 597 " If the conditions of time, etc. of shipment are satisfied, no further condition will ordinarily be implied that the goods shall come by any particular route, or without transhipment ". Counsel's only ground for contending that transhipment was prohibited was that transhipment was foreign to the conception of all C. I. F. contracts. I have discussed above various l aspects of the question in order to explain the weakness of this contention.
16. Let me recall a few facts. The plaintiffs made a request in Exh. 9 simultaneously with the acceptance of the defendant's offer, for permission to tranship the goods. That request was neither accepted nor rejected on receipt of Exh.
9. They sent goods under through bills of lading and those goods were accepted by the defendant. They insisted on transhipment in their letter, Exh. 14, and then never mentioned it, though they have written several letters after Exh.
14. The defendant did not open letters of credit, though time was extended again and again by the plaintiffs for this purpose, on the ground that transhipment could not be permitted by it. Against this back‑ground of facts the defendant questioned the integrity of the plaintiffs in its letter Exh.. 28 and alleged that the quality of goods sent by the plaintiffs, before this contract as well as under this contract, was not satisfactory. The letter reads as under " So far your certainty of quality is concerned, your previous consignment against contract for 20/1 has given us ample proof of your morality and that was the reason why we refrained from opening credit for 32/1 and 40/1 till we receive the 200 bales against credit No. 2 and 5, but as predicted you have repeated that old practice of shipping the inferior quality ". It is noteworthy that, as proved by the schedule of prices pro duced by Kemal Javre P. W. 3 and the statements of Muhammad Hussain, P. W. 4 and Mirza Muhammad Alam, P. W. 5, the market was falling and the defendant was likely to suffer loss by performing the contract. Granting for the sake of argument that the request for transhipment was wholly unreasonable ; amounted to the introduction of an important new condition which the defendant effectively rejected, I am still unable to see why the defendant did not open letters of credit in terms of the original contract. It had the control of the situation because it could refuse to accept the bills and to honour them for payment if the terms of the contract were violated. As against this the defendant honoured the bills for 200 bales which to its knowledge had been transhipped and yet omitted to open more letters of credit. Transhipment was made an excuse for not performing the contract which the defendant did not intend to perform, after 200 bales had been received, because of the declining market. The breach of contract has been committed by the defendant.
17. The quantum of damages suffered by plaintiff No. 1 is to be determined by comparing the market prices of the goods prevailing on the date on which the goods had to be supplied with the contract prices and ,pot the contract prices with those prevailing f on the date of the renunciation of the contract. Counsel for the plaintiffs cited Re Jivanji Pirhhoy ex‑parte David Sassoon & Co. ((1912) 6 S L R 187) and Foby Bros. v. James A. Mellwee and others (from British Columbia) (A I R 1927 P C 255), in support of the proposition that the election to rescind a contract affects only the question of the breach of the contract and not the measure of damages which much be assessed with reference to the date of delivery of the goods. There is no doubt that the proposition is correct, both in principle and with reference to the language of section 73 of the Contract Act, that compensation which the seller is entitled to receive is " for any loss or damage caused to him " by the breach of the contract; and " which naturally arose in the usual course of things from such breach, or which the parties knew " to be likely to result. In this case, the goods were to be shipped in terms of the contract upto the end of February 1952 and, therefore, the 'difference between prices prevailing on the 28th of February 1952, and the contract prices are the loss sustained by plaintiffs No.
1. The rates of the two brands of the commodity prevailing on that date at Beyrouth have nevertheless not been proved. The defendant's counsel has calculated the difference of the contract prices and the prices prevailing on the 2nd of February 1952. The. amount of the damages by that calculation comes to Rs. 38,585‑14‑
6. Counsel for the plaintiffs accepted this figure (see his writing on that sheet) with a view to avoid disputes as to the date of the breach of the contract and the proof of loss suffered by plaintiffs No.
1. Counsel for the defendant had contended that the breach should be taken to have been committed on the 26th of November 1951 because the defendant had failed to open the remaining letters of credit immediately after the contract, or on the 2nd of February 1952 because it had repudiated the contract on that date, vide Exh. 15, or on the 22nd of February 1952 because the contract was finally repudiated on that date vide Exh.
19. The first date cannot be the date of the breach because a letter of credit had been opened by the defendant on the 3rd of December 1951, (Exh. 35). The second date accepted by counsel for the plaintiffs is more favourable to the defendant than the third date because the evidence shows that the prices were falling steadily. I, therefore, hold that plaintiffs No. 1 have suffered a loss of Rs. 38,585‑14‑6 owing to the breach of the contract committed by the defendant and are entitled to recover this amount from the defendant.
18. General.‑Plaintiffs No. 1 are granted a decree for Rs. 38,585‑14‑6 (Thirty eight thousand five hundred and eighty -five rupees, fourteen annas and six pies) with proportionate costs and plaintiff No. 2 is granted a decree for Rs. 2,748‑13‑3 (Two thousand seven hundred and forty eight rupees, thirteen annas and three pies) with proportionate costs. Both plaintiffs are entitled to recover interest at six per cent. per annum on these amounts from the date of the suit until payment by the defendant. K. M. A. Suit decreed.