Dada V. British Corporation, Ltd.

1937   Present : Hearne J. and Fernando A.J.

DADA v. THE BRITISH CORPORATION, LTD.

270-D. C. Colombo, 4,772.

Contract-Sale of goods-C. I. F contract-Failure to tender bill of lading- Acceptance of delivery order by buyer-Waiver of obligatory documents.

Where on c.i.f contract for the sale of goods the seller sent a delivery-order instead of a bill of lading and the buyer accepted the order,-

Held, that the buyer must be deemed to have waived his right to receive the bill of lading under the contract.

BY a contract entered into on November 1, 1935, the plaintiff sold to the defendant company 1,000 cwt. sun dried F. M. S. copra packed in bags at Rs. 8.25 per cwt. nett c.i.f. Colombo ; payment was to be made " against delivery". The correspondence produced in the case showed that the copra arrived on or about November 10, 1935. The plaintiff wrote to the defendant company on November 12, enclosing a " Provisional Bill" on payment of which plaintiff offered to hand defendant " the documents". Defendant company paid Rs. 7,425 being 90 per cent, of the value of goods and requested plaintiff to send defendant the document, promising to pay the balance " after delivery ". They also requested plaintiff to be present at the weighing at the defend-ant's' mills when taking delivery. Plaintiff sent the defendant on November 13 a delivery order and the insurance policy and stated that his responsibility ended with the delivery of the documents as the contract was on c.i.f. terms. The delivery order was a letter written by the local agents to the Principal Collector of Customs on November 12 requesting the latter to "hold at the disposal of" the plaintiff 541 bags of copra weighing nett 1,000 cwt.; this letter bore an endorsement in the terms " please deliver to Messrs. British Ceylon Corporation, Ltd." and was signed by the plaintiff; underneath that " endorsement" was the signature of the defendant company's manager upon which signature the Customs released the copra to the defendant. After taking delivery the defendant company paid only Rs. 476.28 instead of the full balance sum of Rs. 825. The plaintiff wrote and insisted upon payment of Rs. 348.72 being the difference required to make up the Rs. 825 on the ground that as the copra was sold on c.i.f. terms he was not responsible for any shortage. The defendant refused to do so as the copra was 42 cwt. 301b. less than 1,000 cwt.

At the trial the defendant company's position was that the contract was not a c.i.f. contract but was a contract by which the plaintiff had to deliver the full quantity of 1,000 cwt, nett and that payment was to be made against delivery of that quantity and not against delivery of the documents and that the letters c.i.f. in the contract merely meant that the plaintiff was to pay cost, the insurance, and the freight. The defendant also took up the position that if the contract was a c.i.f. contract in the fullest sense, the plaintiff had failed to fulfil the terms

of such a contract in that, he had failed to tender a bill of lading and had tendered only the delivery order above referred to. Plaintiff accordingly raised a further issue as to whether the defendant company was precluded from relying on the failure to tender a bill of lading by reason of its having accepted such documents as were tendered by plaintiff or by waiving the tender of any other documents.

The learned District Judge held that the contract was a c.i.f. contract, and that the plaintiff had failed to fulfil his obligation by the omission to tender a bill of lading. If it was not a c.i.f. contract, but an " arrival contract" the plaintiff's action would equally fail as he had failed to deliver a 1,000 cwt. of copra. He accordingly dismissed the plaintiffs' action. The plaintiff appealed against this judgment.

N. K. Choksy (with him Stanley de Zoysa), for the plaintiff, appellant.- The contract is unqu

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