HARILAL CHIMANLAL Vs. PEHLADRAI AND CO

JUDGEMENT

(1.) This is a contest between an Ahmedabad commission agent as plaintiffs and their Delhi principal as defendants, and the point is, whether the plaintiff's had any power to sell the goods they purchased on behalf of the defendants, when the defendants failed to retire certain drafts in payment of the goods. I say commission agents because we accept the finding of the learned Judge that that was the true relationship between the parties at the outset of the transaction.

(2.) On the other hand, we have it here that the agents bought these goods personally and paid for them, and that as between themselves and their own vendors they were acting, in effect, for an undisclosed principal, and were accordingly personally liable to them. We further think that on the facts of this case when the goods were forwarded to Delhi, they were merely sent, in effect, to the plaintiffs own agents, viz., their bankers, and that the property did not pass to the defendants. What the plaintiffs did was to send the railway receipt forward to their bankers with the drafts, and the railway receipt was only to be handed over by the bank, when the draft was retired by the defendants. This is borne out by the letter of the defendants of September 13, 1926 in which they requested the plaintiffs to instruct the bank to get the goods of the above draft cleared and stored in the bank's own godown, and that they would pay as early as possible. It was really, therefore, an ordinary case of payment against documents.

(3.) The defendants, however, failed to carry out their duty, viz., to indemnify their agent under Section 222 of the Indian Contract Act. They, therefore, broke the terms of what was a purely business arrangement, viz., to pay for the goods and pay also the railway freight. Thereupon, after notice by telegram, the plaintiffs sold the goods. The exact date of the re- sale does not appear and no complaint was made as to that, The suit is brought to recover the difference between what the plaintiffs have paid for the goods (including expenses incurred) and the proceeds of the sale.