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Scottish Court of Session Decisions |
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You are here: BAILII >> Databases >> Scottish Court of Session Decisions >> Warin & Craven v. Forrester [1876] ScotLR 14_132_1 (30 November 1876) URL: http://www.bailii.org/scot/cases/ScotCS/1876/14SLR0132_1.html Cite as: [1876] SLR 14_132_1, [1876] ScotLR 14_132_1 |
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Page: 132↓
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Date
A sale-note stipulated that sugar sold was to be “free on board,” and further, “to be delivered at the port of shipment in about equal quantities per month.” There was also this clause—“the sellers
Page: 133↓
will use every endeavour to engage freight-room and expedite shipments, but are not liable for delay caused by want of tonnage.”— Held that the obligation upon the sellers was not to have the goods shipped, but to have them ready for shipment at the time specified, and to use all reasonable efforts to have them despatched without delay. Where a buyer rejects goods, and distinctly intimates a repudiation of the contract, the seller must re-sell immediately to entitle him to claim against the buyer the difference between the contract price and the price obtained for the goods when re-sold.
This was an action of damages for breach of contract, at the instance of Warin & Craven, sugar merchants, London, against David Forrester, sugar merchant, Glasgow. The contract of sale-note was dated 17th September 1874; the subject sold was “about 2000 bags French or Belgian beetroot sugar, of the crop 1874/75, at 24s. 6d. per cwt., free on board at Dunkirk or Antwerp. The sugar to be taken at the official customs shipping weights, less usual tares, and to be delivered at the port of shipment in about equal quantities per month during October, November, December 1874, and January 1875. The sellers will use every endeavour to engage freight-room and expedite shipments, but are not liable for delay caused by want of tonnage. Payment by cash on London on delivery of bills of lading, less two months' interest at 5 per cent. per annum.”
On 16th November 1874, owing to the non-arrival of the sugar, which in fact did not leave Dunkirk till the 21st, the defender wrote to Mr James Dunn, sugar broker, Glasgow, the pursuers' agent, rescinding the contract, and he afterwards refused delivery of the sugar alleged to have been shipped, “on the ground,” as he averred, “that the contract had been broken by the pursuers' failure timeously to deliver or ship the first 500 bags, being one-fourth of the total contract quantity.” Dunn on 17th November wrote to the pursuers as follows:—“I regret exceedingly that in consequence of the delay in shipping Mr Forrester's beetroot sugar that gentleman now considers himself altogether free from the contract … Please instruct me in this unfortunate affair, and, in the meantime, if the sugars are not yet shipped to Greenock, I would advise you to divert them to another market, ours being exceedingly dull. Perhaps you will kindly telegraph me early to-morrow if I am to re-sell the sugars if shipped.” On 25th November Dunn again wrote to the pursuers “the market is exceedingly dull.”
The defender was called on to receive the November, December, and January deliveries, reserving all questions as to the October delivery, but he refused, and declined implement of his part of the contract.
The sugars, which arrived in two vessels about the 26th November, were not re-sold by the pursuers till the 20th January 1875, and this action was raised for damages against the defender, on the ground of loss sustained by the difference between the contract price of the goods and the price they brought when sold. Other items, for storage, &c., were claimed, which need not be noticed.
The defender answered that by the contract the pursuers were bound to have shipped in October 1874 the sugar contracted for; and that, assuming shipment was not obligatory, the pursuers had failed or neglected to “use every endeavour to engage freight-room and expedite shipments.”
A joint minute was put in for the parties, by which it was, inter alia, agreed— “(3) That, for the purpose of assessing the damages (if any) to be found due by the defender, but for that purpose only, the fair average prices for sugars of the quality in question was 23s. 6d. per cwt. in November 1874, and 22s. 6d. per cwt. in December 1874 and January 1875.”
The Lord Ordinary pronounced an interlocutor with certain findings of fact, and the following as matter of law: — “(1) That according to the sound construction of the said contract between the pursuers and the defender, No. 6 of process, the pursuers were not bound to ship, but were only bound to deliver at the port of shipment within the month of October 1874, the 500 bags of sugar intended for the October delivery, and consequently that the failure to ship the said quantity in October was not a breach of said contract; (2) That the agent or representative of th pursuers at Dunkirk having, immediately on th arrival of the said 500 bags at that port, applied for and been promised freight-room for that quantity on the first steamer that could take them, and the sugars having in implement of this engagement been taken, there was on the part of the pursuers no breach of their undertaking to use every endeavour to engage freight-room and expedite shipments; and (3) That, in the circumstances above set forth, the defender is liable to the pursuers in the consequences of their repudiation of the said contract with the pursuers: Therefore repels the defences, and decerns,” &c.
The defender reclaimed.
Authorities quoted— Turnbull v. M'Lean & Company, March 5, 1874, 1 Ret. 730; Jonessohn v. Young, June 24, 1863, 32 L.J., Q.B. 385; Simpson v. Crippin, Nov. 26, 1872, Law Rep., 8 Q.B. 14; Hoare v. Rennie, Nov. 14, 1859, 29 L.J., Excheq. 73; Coddington v. Paleologo, Law Rep., 2 Excheq. 193; Brown v. Müller, June 8, 1872, Law Rep., 7 Excheq. 319.
At advising—
There is this further clause in the contract:—“The sellers will use every endeavour to engage freight-room and expedite shipments, but are not liable for delay caused by want of tonnage.”
I rather agree with the observation made by Mr Darling in opening the case for the pursuers, that in endeavouring to engage freight the sellers were acting as agents for the buyer. But at the same time, I am not sure that this has any great bearing on the case. I do not see that a failure of that obligation would constitute a breach of contract.
The answer to the action made is, that if the defender has broken the contract, there was a previous breach on the part of the pursuers in two respects —(1) That they did not deliver at the port of shipment the requisite quantity of goods in
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I think, on the evidence, there can be no doubt the pursuers have proved that the goods were at the port of shipment in October, and I do not think the defender has proved his other point either.
The consequence of the non-arrival of the sugar was that on 16th November 1874 the defender wrote to Mr Dunn, the broker, in terms amounting to a positive repudiation of contract, and this repudiation of the contract was intimated to the pursuers by Dunn. They were not left in doubt, and got good advice from Dunn, who pointed out their remedy as having suffered a breach of contract. Re-sale is the only proper remedy for parties in the position of the pursuers to adopt, and there was nothing to prevent the sale of the sugar before it arrived in this country. It could have been sold when in transition. But the pursuers did nothing even after the two vessels arrived. Dunn wrote to them again on the 25th that the market was dull. In fact the pursuers were fully certiorated, even if they were not themselves bound to know, that the contract having been broken their proper remedy was to re-sell the goods and claim the difference as damages against the defender. If they had sold immediately, it is admitted the sugars would have brought 23s. 6d. No doubt the market fell in December, and if they had sold then I cannot help thinking they would have had more to say, as the case ultimately turned out. But they did not sell until the 20th January.
A seller's right to recharge against a buyer a loss upon a re-sale of goods cannot be properly exercised by a re-sale occurring three months after the breach of contract. That would be a very loose and inexpedient proceeding to sanction, and I am not aware that any such privilege of delay has been admitted. A seller is certainly not entitled to speculate either for himself or for any other party. He is not entitled to consider his own interest. He must re-sell whatever the state of the market, and it is only if he immediately does that that he can charge the difference between the contract and the market price against the buyer. What was done here in January should have been done in November, and I therefore cannot agree with the Lord Ordinary on this point. The true estimate must therefore be the difference between the contract price and what the goods would have brought if sold in November. Whatever loss has arisen by the postponement of the sale till January must be deducted from the sum of damages found due to the pursuers.
The following interlocutor was pronounced:— “The Lords having heard counsel on the reclaiming note for the defender David Forrester against Lord Craighill's interlocutor, dated 5th June 1876, Adhere to the said interlocutor except in so far as it decerns the defender to make payment to the pursuers of the sum of £436, 7s. 4d., with interest thereon at the rate of five per centum per annum from 26th February 1875, the date of the summons in the present action, until payment, in terms of the conclusions of the summons: Recal the decerniture, and in place thereof decern the defender to make payment, to the pursuers of the sum of Two hundred and ninety pounds and eightpence sterling, with interest thereon at the rate of five pounds per centum per annum from the date of citation until payment: Find the pursuers entitled to additional expenses, modified to two-thirds of the taxed amount thereof: Allow an account thereof to be given in, and remit the same when lodged to the Auditor to tax and report.”
Counsel for Pursuers — Balfour — Darling. Agents— J. & D. Ross, W.S.
Counsel for Defender — Trayner — Alison. Agents— Webster & Will, S.S.C.
