TMI Blog1966 (3) TMI 79X X X X Extracts X X X X X X X X Extracts X X X X ..... t to it for shipment in the nature of advances and he used to set off these advances when payment was made to the respondent after the goods were shipped. The respondent will hereinafter be referred to as the plaintiff and the appellant as the defendants. The plaintiff tentatively claimed a sum of ₹ 56,564/and odd as due to him as balance of the price of the goods and a further sum of ₹ 40,275/- as representing the loss sustained by him by reason of the defendants' conduct in not shipping his goods under the Shaik mark . The plaintiff accordingly prayed that an account should be taken of the dealings between the parties for the period in question. The defendants contested the suit on the ground that it was not an agent of the plaintiff but it purchased hides from the plaintiff for export and for resale in the United Kingdom. The case of the defendants was that there was an outright purchase of the goods from the plaintiff for the purpose of resale in the United Kingdom. The defendants also contended that a sum of ₹ 4,351 /- and odd was due to it from the plaintiff and it prayed for a decree against the plaintiff for that amount by way of counter-claim. The tr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... arties in the present case has, therefore, to be inferred from the nature of the contract, its terms and conditions and the nature of respective obligations undertaken by the parties. It is necessary, at this stage, to set out briefly the course of the dealings between the parties which has been summarised by the High Court as follows: The plaintiff used to purchase tanned hides of all sorts in Periamet (Madras), and in his godown assort them according to quality, pack them into bales and mark them with his mark, viz., Shaik or S. M. A. Mark. Then the bales would be delivered into the defendants' godown where the bales would be opened and re- assorted so as to conform to London specification and standard. In the process of putting the goods into that shape, there used to be necessity for the defendants to cut and trim the pieces and sometimes call on the plaintiff for replacement of the pieces which fell below the standard. Thereafter, the defendants used to re-pack them into bales each weighing 600 pounds and then ship the goods themselves as shippers and obtain the necessary shipping documents on the basis of c.i.f. contracts. The goods would be shipped to the defendants& ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... quality of the goods at destination where inspection and acceptance thereof will be made by our agents or the ultimate buyers. In the event of any dispute or claim in respect of goods covered by this contract, failing amicable settlement with buyers, such claim is to be submitted to arbitration according to the custom of the trade in the United Kingdom and the result of such settlement or arbitration is binding on you. We have a charge or lien on all goods covered by this contract for all moneys advanced by us including expenses incurred and interest thereon. Insurance through Gordon Woodroffe Company, Madras, Limited. Time is an essence of the contract. In the first place, it is important to notice that the contract in the opening portion specifically makes a mention of the fact that the defendants were buying the goods for resale, and in the paragraph containing the terms of the contract it is reiterated that the goods were intended for resale in the United Kingdom. On the face of it, therefore, the contract is clearly not one of agency for sale but it reads as an agreement of sale. If the defendants were intended to be constituted as the agents for sale the terms of the con ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... received by the plaintiff without any objection. Statements of account were Prepared in terms of these contracts and the plaintiff was receiving moneys from the defendants on the basis of these contracts and according to the price fixed therein. He did not, at any time, raise the slightest protest against the terms of the contract or against the price fixed therein. On the other hand, he received all the contract forms and statements of account as well as the moneys sent to him by cheque. The plaintiff cannot, therefore, be heard to say that he was not a consenting party to the contracts. There is also the circumstance that before the goods were shipped to London they were subjected to a process of trimming and reassortment in the godowns of the defendants with a view to make them conform to London standard and selection. In that process the defendants often called upon the plaintiff to replace the pieces found defective. If the defendants were merely acting as agents the process of trimming and reassorting in the godowns to make the goods conform to London standards and specifications will be unnecessary, for in that case the defendants were merely bound to ship the goods as th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oods was found particularly good the premium was obtained from the London purchaser, that is to say, the premium was obtained not as in terms of the contract but as a special payment if the goods happened to be of good quality. It is a payment therefore, L/S5SCI-3 made outside the terms of the contract and there is nothing significant if the defendants considered it fair and just to pay the whole of the premium to the plaintiff or to share it with him in some cases. It was also contended by the plaintiff that According to the terms of the contract the landed weight was to be accepted and the plaintiff was to be responsible for the selection and quality of goods at the destination where inspection would be made by the defendants' agents or the ultimate London buyers. In some statements of account sent by the 'defendants the plaintiff has been debited various amounts for shortage in weight at London. The plaintiff was also informed about the claims made by the London purchasers on the ground of low standard and selection, that is to say, the plaintiff was made answerable for weight as well as quality. It is true that the liability of the, plaintiff is an additional burden thr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... esale in the United Kingdom and in keeping with this object the buyer stipulated with the seller for delivery of the goods abroad and for that purpose adopted a c.i.f. form of de. It is also contended on behalf of the plaintiff that the term with regard to arbitration according to the custom obtaining in United Kingdom was not compatible with the theory of a sale between the parties. It is not possible to accept this argument as correct. It is open to the plaintiff to agree that even after the sale had taken place any dispute with regard to the quality of the goods and selection may be submitted to arbitration in the United Kingdom. It is true that a clause of this description is unusual but it is not inconsistent with the theory that there was a sale of goods between the parties at Madras. We have already observed that the contracts in this case were not c.i.f. contracts but the price alone was fixed on a c.i.f. basis. It is well-established that even an agent can become a pur- chaser when an agent pays the price to the principal on his own responsibility. In Ex parts White, In re Nevil(1) T Co. were in the habit of sending goods for sale to N who was a partner in the, firm o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e manufacturers to the sole selling agents was the ruling market price and the sole selling agents were allowed a deduction of 10 per cent by way of commission on that price. The manufacturers had no concern at what rate the sole selling agents sold the goods to customers. It was clear from these facts that the sale by the selling agents to customers was a transaction in which the manufacturers were not interested and there was no privity of contract between the manufacturers and the ultimate purchasers. Reference may be made, in this connection to the following passage from Blackwood Wright, 'Principal and Agent'. Second Edn. page 5: In commercial matters, where the real relationship is that of vendor and purchaser. persons are sometimes called agents when, as a matter of fact, their relations are not those of principal and agent at all, but those of vendor and purchaser. If the person called an 'agent' is entitled to alter the goods, manipulate them, to sell them at any price that he thinks fit after they have been so manipulated, and is still only liable to pay for them at a price fixed beforehand, without any reference to the price at which he sold them, it ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... atements. On June 22, 1949 the defendants again wrote a letter-Ex. D-5, en- closing a statement of account Ex. P-17 showing the said balance of ₹ 1,26,379/7/2 and asking the plaintiff for confirmation. On receipt of this statement the plaintiff signed the memorandum, Ex. D-4 on June 22, 1949 and sent it to the defendants confirming the correctness of the balance as due by him and also confirming the stock of his goods remaining with the defendants. The plaintiff conceded in his evidence having signed Ex. D-4 after the receipt of the statement of account, Ex. P-17. The plaintiff explained that he did not look into the correctness of the figures but believed Ex. P-1 7 to be correct ' as it was sent by an English firm . The plaintiff also said that he was told by the defendants' broker that if he did not sign it, it would be harmful to him. The trial Judge refused to accept the explanation of the plaintiff and held that the plaintiff had accepted all statements of account as correct and, therefore, it must be held in law that the accounts were settled and the plaintiff could be allowed to reopen it only by proof of fraud or mistake or any other sufficient equitable groun ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be inferred by conduct of parties. The contention on behalf of the defendants is that there has been a stated or settled account in this case and in the ab. sence of fraud, mistake or any other sufficient equitable ground it is not liable to be reopened at the instance of the plaintiff. In connection it is necessary to state that the expression account stated has more than one meaning. It sometimes means a claim to payment made by one party and admitted by the other to be correct An account stated in this sense is no more than an admission of a debt out of court, while it is no doubt cogent evidence against the admitting party, and throws upon him the burden of proving that the debt is not due, it may, like any other admission, be shown to have been made in error. Where the transaction is of this character, it makes no difference whether the account is- said lo be 'stated or to be stated and agreed ;, the so-called agreements is,without consideration and amounts to no more than an admission. There is however a second. kind of account stated where-the, account contains items both of credit and debit, and the figures on both sides are adjusted between the parties and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ain figure and then agreeing that it has been discharged to such and such an extent, so that there win be complete satisfaction on payment of the agreed balance. Hence, there is mutual consideration to support the pro- mises on either side and to constitute the new cause of action. The account stated is accordingly binding. save that it may be re- opened on any ground for instance. fraud or mistake which would justify setting aside any other agreement. In the present case, the 'correctness of the statements of account furnished by the defendants has been challenged by the plaintiff under 13 heads. In view of our finding that the transactions between the parties were not on the basis of an agency but on the basis of an outright sale the accounts cannot be reopened under any of these heads of challenges. The trial court has already gone into the evidence and has reached the finding that there was no fraud, mistake or any other sufficient equitable ground for reopening the finality of the accounts. As regards one item, viz., rebate in marine insurance, the trial court has ordered that the plaintiff should be given credit for a small sum of ₹ 157/- though there was no ev ..... X X X X Extracts X X X X X X X X Extracts X X X X
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