JIVRAJ Vs. CHAINKARAN

JUDGEMENT

(1.) THIS is an application for revision under Section 25, Provincial Small Cause Courts Act, by defendant 3 applicant against whom the lower Court has decreed the claim of the plaintiff non-applicant 1. The suit was for damages for breach of an agreement to sell 200 bags, that is 350 maunds of toli which according to the plaintiff, he agreed to buy at Rs. 2-8-0 per maund. There were two other defendants in the suit, namely defendant 1 non-applicant 2 and defendant 2 non-applicant 3, against both of whom the suit was dismissed. According to the plaintiff, he entered into the agreement in question with defendant 2 who represented defendant 1. It is not quite clear how defendant 3 was sought to be made liable but the plaintiff's allegation is that the goods, which were agreed to be sold to him, belonged to defendant 3 and the plaintiff appears to claim in the alternative on the footing that defendant 1 was the agent of defendant 3 for the sale of the goods. The due date according to the plaintiff was the first week of September 1940 and that was also stated to be the date of the cause of action. The lower Court held that defendants 1 and 2 were not liable as they had acted as agents of defendant 3 whom they disclosed as their principal and that defendant 3 was alone liable. When a broker expressly contracts as broker, he cannot sue or be sued on that contract personally and the question whether the principal was disclosed or not is immaterial. That is what was held in Nanda Lal v. Gurupada . That was also the view taken in Patiram Banerjee v. Kankinarrah Co. Ltd. A.I.R. 1916 Cal. 548. No liability can therefore possibly arise against defendant 2 and the question only is whether the agreement binds defendant 1 or defendant 3. On the materials oh record, there can be only one conclusion, namely that the plaintiff looked to defendant 1 as an adatia or commission agent. But that does not mean that defendant 1 figured in the contract as an agent. In Hope Prudhomme & Co. v. Hamel & Horley their Lordships of the Privy Council made the following observations: "There is great force in the observations which were made to their Lordships upon the extension which modern business has given to the terms "agent" and "agency". In many trades--particularly, for instance, in the motor ear trade--the so-called agent is merely a favoured and favouring buyer, one who under an overriding contract undertakes to do his best to find a market for the manufacturer's stock, who is given some special advantages, such as a special discount or preference in complying with his orders; but who in each particular contract acts as a buyer from the manufacturer and sells at whatever price he can get, unless--as is sometimes the case--he is by a special provision in the overriding contract forbidden to sell too cheaply or required not to spoil the market by asking too much." The learned Counsel for the plaintiff contended that in the absence of any evidence to show that defendant 1 was a pacca adatia it should be held that he was a kachcha adatia for defendant 3 and was therefore himself not the principal. It is not necessary to go into that distinction in this case as I find on the pleadings and on the evidence that the plaintiff was contracting with defendant 1 as a principal. What relations existed between defendant 1 and defendant 3, was in that case not the plaintiff's concern. Thus the plaintiff is entitled to enforce his agreement, if at all, against defendant 1 and not against defendant 3.

(2.) BUT even as against defendant 1 the suit must fail as it must also fail against defendant 3 on the ground that the plaintiff has not proved damages. This is not a case where, as the plaintiff's learned Counsel contended, time for performance was not fixed and that the agreement was to be performed within a reasonable time. The due date fixed here according to the plaintiff was first week of September 1940. That was also stated as the date of the cause of action. If the case was one in which reasonable time had to be determined, it had to be alleged what was according to the plaintiff the reasonable time. The evidence does not prove that there was rise in prices on 1st September 1940. The evidence of Anandi (3 D. W. 2) is to the following effect: "On 2nd September 1940 I had sold toli at rupees 2-8-0 per maund and also at Rs. 2-10-0, the former 264 1/2 maunds and the latter 40 maunds." This does not establish that the rate on that date was necessarily higher than the contract rate of Rs. 2-8-0 per maund. The lower Court has allowed damages on the basis of the rate prevailing on 28th September 1940, which was Rs. 2-13-0 per maund. This is what the learned Judge says: "It may be, as stated by him that they had not risen in the first week of September when the goods were to be supplied. However, plaintiff would have soon after made a gain by selling the goods at a higher price. This is then the damage that was suffered by him." This view is directly contrary to the decision in Errol Mackay v. Rameshwar where at page 605 their Lordships held that what is material is the value of spot goods at the date of the breach. So also in Mohanlal v. Gyaniram A.I.R. 1935 Nag. 111 it has been held that the measure of damages is the difference between the contract rate and the market rate at the expiry of the period agreed upon as the time for delivery in the contract. It is difficult to see why the learned Judge of the lower Court has stopped with 28th September 1940, because it may have been for aught we know that the prices went down after that date. The learned Judge has in awarding damages as of 28th September 1940, followed no known principle andliit must be held that the plaintiff has not proved the damages which he claims. This means that the plaintiff's claim to the extent of rupees 117-3-0 as decreed must be dismissed and the lower Court's decree for Rs. 24 against defendant 3 for price of bags can only stand. The application for revision is thus partly allowed and the lower Court's decree is varied accordingly. Each party has done its worst to confuse the case. I therefore order that the parties will throughout bear their costs in this Court as well as in the lower Court. The lower Court's order for costs against defendant 3 is set aside.