Noorbhai V. Karuppen Chetty

[PRIVY COUNCIL.]

Present : Viscount Haldane, Lord Wrenbury, and Lord Blaneshurgh.

NOORBHAI et al. v. KARUPPAN CHETTY.

D. C. Colombo, 8,290.

    Contract-Sale of goods-Repudiation of contract-Consensus ad idem.

Plaintiff entered into a contract with defendant to buy sugar at Rs. 37-50 per bag. A few days later, in the course of a letter to the defendant, the plaintiff gave the price as Rs. 34, which the defendant promptly corrected. The defendant declined to deliver the sugar on the ground that the contract wag no longer binding. In an action for damages for breach of contract brought by the plaintiff-

Held, that there had been no repudiation of the contract, as the defendant did not accept plaintiff's attempt to revoke the contract.

APPEAL from a judgment of the Supreme Court.1 The facts are set out in judgment of the Judicial Committee of the Privy Council.

July 13, 1925. Delivered by LORD WRENBURY :-

For brevity the plaintiffs are in the following judgment referred to as the buyer and the defendant as the seller.

This is the buyer's action for damages for breach of a contract for the sale of sugar. He claims repayment of Rs. 7,500, which he paid as an advance on the price of the goods, and damages for non-delivery of the goods sold. The question in the case, and the only question, is contract or no contract. The trial Judge held that there was no contract. Two of the Judges in the Supreme Court were for affirming his decision, but were not agreed on the grounds which they assigned for that conclusion. One held that there was a contract, but that the buyer was estopped from relying upon it; the other that there was no contract and that no question of estoppel arose. The Chief Justice, on the contrary, held that there was a concluded contract, and was unable to see how there could be any doubt in the case. Their Lordships are of the same opinion as the Chief Justice.

For the decision of the case there is no need to travel beyond the very elementary proposition of law that a contract is concluded when in the mind of each contracting party there is a consensus ad idem, and that a modification or revocation of the contract requires a like consensus.

The facts lie in a very small compass. On February 16, 1923, Kandappa Pillai, a broker, was instructed by the buyer to arrange

for him a purchase of sugar. The authority of the broker is not in dispute. He went on that day to the seller, arranged with him for the purchase of 1,500 bags at Rs. 37*50 per bag, and gave him a cheque for Rs. 7,500 as an advance, at the rate of Rs. 5 per bag. The seller cashed the cheque the same day. He signed and gave the broker the document D 1, which was the seller's memorandum of the contract and acknowledgment of the receipt of the Rs. 7,500. That document is as follows :-

16. 2. 1923.

The receipt rewritten and granted to T. A. J. Noorbhai by S. P. L. K. R. Karuppan Chetty. I acknowledge receipt of a sum of Rs. 7,500 by Chartered Bank cheque as advance for the sale to you of 150 tons of Java sagar at Rs. 37 o 50 per bag c. i. f. to be delivered to you as follows :-

Fifty tons as February shipment, 50 tons as March shipment, 50 tons as April shipment in terms of the conditions of the Indent entered into by me -With Messrs. Carson & Co.

On the arrival of each shipment the entire value should be paid and delivery taken.

(Signed) S. P. L. K. R. KARUPPAN CHETTY.

There was, therefore, a contract signed by the defendant, the seller, and part payment made by the plaintiffs, the buyer. There was a concluded contract between the parties. The broker gave D 1 to the buyer on the same February 16, and it seems to have remained in his possession for three days, until February 19. On February 19 the broker took D 1 back to the seller to have some words added as to delivery by " weighing without slackage and moisture, as usual " (upon which nothing turns). The words were ad

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