VENKATACHALLAM CHETTIAR (DEAD) Vs. PONNUSWAMI AIYANGAR

JUDGEMENT

(1.) The original suit was to recover a sum Rs. 1,691, principal and interest, due on account of dealings by the defendants with the plaintiff in silk goods. It is not denied that the plaintiff was a commission agent in Bombay for the defendants at Kumbakonam, for the purchase of silk thread. In his capacity as such the plaintiff had purchased two bundles of silk thread for the defendants and despatched them by rail to the defendants. One of thorn was lost on the way. The plaintiff in his present suit for the balance due in the matter of his agency account included the price of the lost bundle. The defendants repudiate liability for this and claim that it was lost through the plaintiff's negligence in not insuring the bundle, as required by railway rules to ensure safe transit of all parcels of such a nature whose value is over Rs. 100. The defendants also call in aid Section 91 of the Indian Contract Act.

(2.) The District Munsif held that Section 91 did not apply to a case of a commission agent and that no negligence had been proved. The lower Appellate Court held that Section 91 applied and that the plaintiff had not followed its provisions and was guilty of negligence, and the loss must fall on him.

(3.) The chief point argued in appeal by the plaintiff was whether Section 91 applies to the case of a commission agent. Section 91 comes under Chapter VII which is headed sale of goods and under the sub-heading Delivery" and no doubt is applied to the case of an ordinary vendor and vendee. The question then is whether a commission agent and his principal stand on the same footing of vendor and vendee, when goods have been purchased in the ordinary course of the agency by the commission agent for the principal and despatched to him. Defendants rely on the dictum of Lord Blackburn in Ireland V/s. Livingston 5 H.L.C. 395. It is true that the agent who in this executing an order ships goods to his principal, is in contemplation of law a vendor to him.... The legal effect of the transaction between the commission merchant and the consignee who has given him the order is a contract of sale passing the property from one to the o; her and consequently the commission merchants is the vendor and has the right of one as to stoppage in transitu.