Lord Phillimore :-

The appellants who are the plaintiffs constitute a French firm of merchants carrying on business at Madras as exporters of ground nuts, castor seeds and other country produce.

The respondents, the defendant Com pany, are merchants in London who, from August, 1913, down to the date of the present suit, were intermediaries for the placing of the appellants' merchandise at European Continental ports, especially Marseilles.

The suit was brought for the price of a cargo of castor seeds sold by the appellants to the respondents. The respondents set up certain defence to some of the items in the appellants' claim, but there was no answer to the bulk of it, and their real ground for refusing to pay was that they had a counter-claim against the appel lants for a larger amount in respect of the non-delivery of a cargo of ground nuts, which should have been despatched in December, 1916, or January, 1917, to Marseilles.

It was this counter-claim that formed and forms the real matter in dispute. The trial Judge decided against the counter claim, but the High Court at Madras in its appellate jurisdiction reversed this decision and gave judgment for the coun ter-claim - hence the present appeal.

The particular transaction over which the dispute arose began by a telegram of the 12th October, 1916, despatched by the respondents to the following effect :-

"Immediate reply bid ordinary three hundred December, January 59.

Hamel."

The expansion of this telegram is to be found in a paragraph of a letter of the same date, which reads as follows :-

"We are much obliged for your offer of 100 tons of ordinary at F. 59.50 for December/January shipment, c.i.f. Mar seilles, which offer we put before our friends, but regret to say that we have not been able to place at your price. On the other hand, we have succeeded in getting a counter-offer (but for 300 tons, instead of 100) at F. 59, which we are cabling you to-night and hope you will be able to accept. If you can do so and can offer us further quantities at the same price we think we could place them or machine-decorticated kernels at Fs. 2 more."

The telegram in response was not pro duced at the trial, but there is no doubt that it was an acceptance dated the 14th, and on the same day the appellants wrote to the respondents as follows :-

"In accordance with the cables exchan ged between us, we beg to confirm the following sale :-

Quantity. - 300 tons (three hundred tons only).

Quality. - Groundnut kernels ordinary usual quality.

Brand. - H.P.

Price at Frs. 59 per 100 kilos, (francs fifty-nine only).

C.F.I. per steamer from Kernels Port to Marseilles.

Shipment. - December and/or January, 1916, and 1917.

Buyer.-

Payment. - As usual

Terms. - As usual

Commission. - As arranged."

This letter was upon a printed form with such words as "quantity, quality, etc.," printed with spaces to be filled up in writing. What is especially to be noticed is that as against the word "buyer" there is a blank and against the word "Commission", the words "as arranged." The respondents on the 18th despatched the following note :-

"Contract (Purchase) Note No. 028.

Article. - Coromandel kernels new crop.

Quantity. - 300 (three hundred) tons, packed in bags.

Quality. - As stipulated in Ref. 031.

Price. - Fcs. 59 (francs fifty-nine), less 1 per cent. per 100 kilos., cost, freight and insurance, including war risk, Marseilles.

Shipment. - From Corornandel Coast during December, 1916 and or January, 1917.

Payment. - As arranged.

Terms. - Marseilles C. Contract, 1909.

Your telegram of 14th October 1916.

Our telegram of 12th October 1916."

In compliance with this arrangement, the appellants took up space on the ss. "Seapool": and if they could have kept this they would have been able to ship to Marseilles in accordance with the contract. But, it being in the middle of the war, the Government requisitioned the "Seapool," and the appellants did not succeed in procuring any other ship and failed to send the cargo forward.

The goods were the subject