Judgement

Appeal from a judgment and decree of the Chief Court of Lower Burma (July 24, 1913) affirming the judgment of Ormond J. of that Court.

By six contracts made between April and August, 1911, the respondents bought and the appellant sold, at various prices, 23,500 shares in the British Burma Petroleum Company, Limited, to be delivered and paid for on or before December 30, 1911. The con tracts contained a clause providing that in default of payment the seller should have the option to resell the shares. The shares were tendered on December 30, 1911, but the respondents declined to take delivery or pay for them. At the market price for sales upon that day, namely 4s. 3d. a share, the 23,500 shares would have realized Rs. 109,218 less than their price under the contracts. The appellant gave the respondents written notice of his intention to sell the shares against them. No sale, however, was made until February 28, 1912 ; all the shares were sold at various times between that date and August, 1912. By these sales the appellant realized more than if he had sold upon December 30, 1911, namely, a sum only Rs. 79,862 less than the price under the contracts.

Law. Rep. 43 Ind. App. 6 ( 1915- 1916)

A. K. A. S. Jamal V. Moolla Dawood 109

The facts are more fully stated in the judgment of their Lordships.

In March, 1912, the appellant sued the respondents in the Chief Court for damages for breach of contract, claiming Rs. 109,218. The respondents contended that the appellant was only entitled to recover Rs. 79,862.

The suit was tried by Ormond J., who gave judgment for the appellant for Rs. 79,862 only on the ground that the appellant having elected to exercise the right of resale given under the contracts was bound to give the respondents the benefit of the prices obtained. The Chief Court in its appellate jurisdiction (Hartnoll, acting Chief Judge, and Young J.), while differing from the above view of Ormond J., affirmed his decision upon the ground that the respondents were entitled to the benefit of the prices actually obtained in mitigation of damages.

1915. Oct. 22. Sir Erle Richards, K.C., and F. J. Coltman, for the appellant. The case is governed by

s. 73 of the Indian Contract Act (IX. of 1872), which, however, is merely declaratory of the English common law as to damages for breach of contract. The measure of damages is the difference in the market price of the shares at the date of the breach under the contract; the respondents are not entitled to the benefit of the higher prices obtained when the sales actually took place. Any increase or decrease in the price after the breach was a matter which only concerned the appellant. The decisions relied on by the Chief Court, such as Brace v. Colder ([ 1895] 2 Q. B. 253.), were cases with regard to contracts of a continuing character and are distinguishable. Pott v. Flather (( 1847) 16 L. J. (Q. B.) 366.), which was referred to, is in the appellants favour. The clause in the contracts giving the appellant an option to sell did not affect the appellants right to damages, but merely provided a summary method of ascertaining the loss at the date of the breach. The sales were not in fact made in accordance with the clause. [Williams Brothers v. Agius ([ 1914] A. C. 510, at p. 520.) was also referred to.]

F. Dodd, for the respondents. A decision against the respondents would infringe the cardinal rule as to damages for breach of contract, namely, that the plaintiff is entitled to the damages which he has suffered by reason of the breach Wertheim v. Chicoutimi Pulp Co. ([ 1911]

A. C. 301, at p. 307.) It was the duty of the appellant to mitigate the damages, and having by holding the shares obtained higher prices he cannot obtain damages on the basis of the price at the date of the breach. Further, the appellant had an option under the contracts to sell and elected to do so. The time at which the sales took place was suspended owing to negotiations, but they in fact were made under t