Gordon & Gotch, Ltd. V. Rodrigo Et Al.,

Present: Fisher C.J. and Garvin J.

GORDON & GOTCH, LTD. v. RODRIGO et al.

258-D. C. Colombo, 23,595.

    Principal and agent--Indent for goods-Disclosed firm-Request to purchase goods on stated terms-Breach of contract-Action on bills by agent.

Where the defendants requested the plaintiff company to purchase for them on their account and at their risk certain goods and to draw upon them for the amount of the invoice which included the value of the goods and commission,-

 Held (in an action by the plaintiff company on the bills drawn by them upon the defendants and accepted by the latter), that the relationship between the plaintiff company and the defendants was that of agent and principal, and that it was not open to the defendants to plead as a defence that the goods were not in accordance with the terms of the indent.

THIS was an action by the plaintiffs to recover the amount due on certain bills drawn by them and accepted by the defend- ' ants. They were drawn in pursuance of an indent for goods supplied by the plaintiff company at the request of the defendants. It was pleaded in defence that the bills were accepted in the belief that they were drawn in respect of goods shipped in accordance with the terms of the contract, and that the plaintiffs having failed to do so, the defendants were, not liable to pay any sum on the said bills to the plaintiffs. The learned District Judge gave judgment for the plaintiffs.

H. V. Perera, for defendants appellant.-In the present case the appellants had nothing whatever to do with the foreign supplier. The plaintiffs stated that they would supply the appellants with grapes from Mr. Cordero, and that in the event of any dispute between the plaintiffs and the appellants the plaintiffs would submit to arbitration. So that the plaintiffs undertook the obligations of a vendor.
The plaintiffs having agreed to buy and deliver goods at a future date at a fixed price, the mention of the name of the person from whom they are to be bought is immaterial.

Another test would be: Are the plaintiffs affected or not by the fluctuations of the price. If they are not, then they are not agents, although the document refers to their remunerations as a " commission "; it is really their, profit.

The preliminary clause where the defendants request the plaintiffs to purchase on their behalf is not conclusive of the legal position of the parties because it says " on the terms mentioned below." A reference to the terms makes it clear that plaintiffs are principals.

H. H. Bartholomeusz (with N. K. Choksy), for the plaintiffs, Gordon. & respondent.-The true construction of the whole document is that the plaintiffs were to place the order in those terms with the v. Rodrigo supplier indicated in the contract (Francisco Perez Cordero). If the appellants prove that the plaintiffs have failed to do so they may have a claim for damages for breach of that duty as agents. The goods were grapes in Spain, the plaintiffs are in England, and neither party contemplated that the plaintiffs were to ship.

The bills of lading were made out in the name of the plaintiffs, but that was to give them control of the goods so that they may exercise their rights as, e.g., the right of stoppage in transitu.

Even if it be held that the plaintiffs agreed not only to purchase but themselves to ship the goods, the defendants were not entitled
to repudiate the contracts, because the plaintiffs were only agents, and the defendants would only have been entitled to claim damages as for the breach of duty as agents. The plaintiffs were not called upon to prove that the goods were shipped fortnightly, because the basis of the defence was that defendants were entitled to repudiate the whole contract as plaintiffs were vendors and had failed to ship according to time, and not that the plaintiffs, as agents, had failed to perform a duty.

The arri

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