Volkart Brothers vs Rutnavelu Chetti

The first, question referred for our opinion is what is the proper construction of the agreement, Exhibit A. By that document the defendant

agreed to purchase from the plaintiffs 120 cases of condensed milk which were to be shipped in London and delivered in Madras. The part of the

agreement as to which there is a conflict is in these terms, ""shipment in six lots of twenty cases each at monthly intervals.

On behalf of the plaintiff''s it was contended that the expression ""shipment at monthly intervals"" means shipment in consecutive months or, as the

learned Chief Judge puts it, shipment month by month, whereas the defendant contended that the expression meant that the shipment should be

made at intervals of a month from each other.

It is not suggested on either side that the expression is used among merchants in any technical sense. Now the term ""monthly"" can only mean

once a month or every month and the term ""intervals"" the time between two shipments. In the ordinary sense of the words therefore the expression

shipment at monthly intervals"" means that there was to be an interval of one month between each shipment. As the learned Chief Judge observes,

the importer wishing to arrange that his supplies should arrive at fixed periods would naturally stipulate that the date of shipment from the export

country should be certain. He also refers to Exhibit E, the letter written by the plaintiffs'' firm on the 26th August, as showing that the plaintiff''s

understood that the term ""monthly intervals"" meant at intervals of a month as nearly as possible. It is urged by plaintiffs'' Counsel that it would be

unreasonable to hold that the plaintiffs contracted to ship the twenty cases at exact intervals of one month as they would have to wait till a steamer

was available or charter a special steamer for the conveyance of the twenty cases. There can be no doubt that in determining what is the

construction to be put upon the term ""shipment at monthly intervals,"" regard should be had to the possibility of finding a steamer available for

shipment on or about the monthly interval as well as to the necessity for defendant getting his supplies at regular intervals.

The reasonable construction, therefore, is that the interval contemplated by the parties to the document was not precisely thirty days or one

month, but one month more or less, regard being had to the time which it may be reasonable to allow to the plaintiffs for finding a steamer available

for the required shipment.

This is in accordance with the rule mentioned by Cresswell, J. in Wilson v. Bevan 7 C.B. 673 which he stated in these words: ""When the

intention of the parties to a contract is sufficiently apparent, effect must be given to it in that sense, though some violence be thereby done to the

words. Where the intention is doubtful the safest course is to take the words in their ordinary-sense."" In applying the rule it must also be observed

that the hardship to either party is not an element to be considered unless it amounts to a degree of inconvenience and absurdity so great as to

afford judicial proof that such could not be the meaning of the parties, Prebble v. Boghurst I Swanston 329

With reference to the second question referred to us whether the defendant was entitled to rescind the contract, we observe that its decision

depends upon a further question which contract was it which defendant claimed to be entitled to rescind. It appears that the first shipment was

made on the 18th June and arrived at Madras on 22nd July. Defendant complained that the consignment had arrived late, and at an interview,

plaintiffs'' agent consented to accept delivery only on the assurance that future shipments or deliveries were regular. In their letter of the 11th

September plaintiffs refer to his agreement as an agreement for ""shipment in due course"". The second shipment was made on the 27th July and

arrived in Madras on the 6th September. Meanwhile on the 18th August defendant had written to plaintiffs (Exhibit D) in these terms: ""The first

twenty cases should have been delivered in the month of June, instead of which you delivered them in July, when you promised that future

deliveries would be made every month."" It will be observed that the defendant treated the original agreement (A) as one for ""deliveries at monthly

intervals"" and that he regarded the agreement of July as an agreement for ""deliveries regularly every month."" The original contract was one for

shipment at monthly intervals"" and the learned Chief Judge appears to hold that as the second shipment was not within one month from the date of

the first shipment, defendant was entitled to repudiate the contract. That would depend upon the question whether the interval between the 18th

June and 27th July was under the circumstances reasonable, regard being had to the time ordinarily necessary for finding a steamer available for the

shipment.

If it was the agreement of July which defendant claimed to repudiate, there must be a finding what the terms of that agreement were, and

whether with reference to the construction we put upon the term ""monthly intervals"" defendant was entitled to repudiate it.

We will ask the learned Chief Judge to return a finding upon these questions.

In compliance with the above order, Mr. N. Subrahmanyam, the Acting Chief Judge of the Court of Small Causes, submitted his finding as

follows:

Finding:

My finding on the first question is that defendant claims to repudiate the original contract of 14th May 1890 under Exhibit A. It will be seen by

the statements filed by the Attorneys of both the parties that it is not the case of either party that there was any new agreement on 21st July 1891.

Exhibits F, H, J and III also confirm their view; what really took place on that date was that plaintiff having made a default in the first shipment,

defendant complained on this score and at the interview on 21st July 1890 all that happened was that defendant agreed to waive his right to

rescind the whole contract and accept the delivery of the first shipment on plaintiffs'' promising that future shipment should be regular as stipulated

in the original contract A of 14th May. What happened, therefore, was an agreement to stand by the original contract. The defendant makes

plaintiffs understand more clearly, if possible, than before that time was of the essence of the contract.

It becomes unnecessary to give a finding on the second question.

Taking the third question to be whether the defendant was entitled to repudiate such new contract, it becomes unnecessary to give a finding on

it. If the question is whether, with reference to the construction put by the High Court on the term monthly intervals, the defendant was entitled to

repudiate, I agree with Mr. Shaw for the reasons given by him that defendant was entitled to repudiate the contract as the plaintiffs might have had

the second shipment made by the steamer which left London on 19th July and he failed to do so.

JUDGMENT

The first question was already answered in the affirmative.

As to the second question also the answer must be in the affirmative on the findings now submitted.