AN INVOLVED CASE

Dominion, Volume 16, Issue 178, 16 April 1923, Page 5

AN INVOLVED CASE

WAS A PRICE-LIST SUPPLIED I. • ■ DEFENDANT AWARDED DAMAGES A peculiarly involved series •f transactions between a manufacturer and the firm he supplied with piston rings was disclosed in the Supreme Court on Saturday, the Judge, basing his decision on the whole of the circumstances, holding that . the defendant was entitled to damages.

The reserved) judgment of .His Honour Mr. Justice Chapman in a civil action between Cycle and Motor Sup* plies Ltd. (plaintiffs) and David Percival Fisher (defendant), entered at the Supreme Court on Saturday, awarded the defendant £B5O damages. “A debt being admittedly owing by the defendant to the plaintiff company, the main question is the price at which the plaintiff ought, against this debt, to credit the defendant for piston rings delivered by defendant under contract.” There was no question, continued His Honour, of the quantity of rings delivered, but only of the price. There had been dealings between the parties for several years, and in July, 1916, the plaintiff company undertook for five years to purchase the entire output of the defldndant’s works, provided that the output did not exceed 60 gross _per month. The agreement contained clauses that the price might vary, from time to time, as the cost of production or materials might vary. There was a proviso attached to this latter clause that the company should not be obliged to take the specified quantities should the prices’at which the defendant is willing to sell at any time prove non-competitive. In April, 1921, after discussions, a letter was written by the plaintiff to the defendant, embodying the result, which reviewed the matters of sizes and prices agreed upon, and further stated: u We undertake to supply in the course of the next few days a list showing the standard sizes we will adopt, and also, oversizes. Tinder these circumstances, it will not be necessary to obtain special quotations, as the new list, plus 25 per cent., will operate. ' “The defendant’s case, says His Honour, “is that no list was ever supplied to him. He, therefore, makes up nis charges as nearly as mav .be as he had been in the habit of making them up before the date of the letter. Plaintiff replies on his own published price list, and asserts that that was delivered as a list of sizes in compliance with the letter.” The plaintiff does not allege. the supplying of a list literally and strictly in the course of the next few days, or even in such time that the defendant saw it before going abroad, but says that a list was supplied, accepted, and acted on in such a way as tc bind the defendant. It is desirable first to endeavour to dispose of this question. There was an intimate connection between the premises occupied by defendant and plaintiff’s premises. In the latter de-’ feiidant occupied a small office. As plaintiff took defendant’s whole output and virtually ran the concern, the intimate connection was not confined to the physical premises, but extended to the personnel of the two concerns. It was common ground that when the letter of April 6 was arranged for and written defendant was, to the knowledge of. plaintiff, about to leave for the United States, and that this involved a long absence, during which the manufacturing of rings would go on. He. in fact, left on April 27 and returned in November, 1921. The Difficulties of Common Agent. “Before leaving he placed, a power of attorney, dated April 27, in the hands of Mr. Charles Harcourt Turner, secretary to the plaintiff company, by which extensive powers were conferred on that gentleman, who thus became in a sense the servant. or agent of parties whose interests might conflict. I see no reason to doubt that Mr. Turner discharged his duties honestly, but it does not follow that he discharged them, or was able to discharge them, adequately. That he gave his evidence honestly I see no reason to doubt. He says: “After the letter was written I knew a list had to be prepared. I always invoiced the rings from Fisher, and it was necessary to have a list to do so. When Fisher went away I continued doing as I had been doing before. The list was handed to me after Fisher left. I required the list in order to make up the first lot of invoices after the reduction. 1 knew the-reduction had been made and knew Fisher was leaving for America. I asked Fisher to give me instructions as to where this list was coming from in order to make the reduct:on?.. It was very difficult just . before he left to get him down to any business course. I asked him several times, but got no satisfaction until a day or so before he left. I said it was necessary for me nto have the list, and he said to me in our office, ‘You’ll get the list from Mr. Edwards.’ I ultimately got the-list and used it.” Mr. Edwards was the plaintiff’s managing director.

Defendant Expected a List. Defendant says that when preparing to leave for America he received the letter of April 6, and expected to have a list submitted to him. He says: “The list I expected to get was a list of a range of sizes somewhere about the same as'that which thev forwarded to me at the end of 1920 —somewhere about 35 popular sizes. That list I knew to indicate popular sizes to the public.” He speaks with regret of having left no one capable of checking the list in his interest, arid instructed to do so. He says he trusted to Edwards to adhere approximately to the 35 sizes referred to. What is now relied on as the list ■to bo supplied pursuant to the terms of the letter was handed to Mr. Turner, and this delivery to Mr. Turner is relied on as a compliance with the contract. Mr. Turner’s acquiescence in its terms is also relied on as an adoption by defendant of the terms of the document as part of the contractThough I say this was relied on, Mr. Edwards insists that neither agreement nor acquiescence was necessary. The view of the agreement on which he insists is that the plaintiff was to deliver a list according to its own requirement, and that this was final and not open to discussion. When considering how far Turner’ o acquiescence can b; relied on the actual position hrs to be borne in mind. He was tho plaintiff’s servant and lli» attorney of the defendant. Without minutely examining the terms of the power of attorney. I assume that its general provisions as to management of defendant’s business are wide enough to enable Turner to receive a list, and he understood that he was called upon to do so, to critic se it. and then decide whether it wa • presumably in accord with his prim ipal’s views and ir terasts. After reviewing Turner’s evidence, His Honour says: —If Turner’s evidence ... Is to bo accepted—and I see no rtdson for nob accepting it —then Tucker know that he waa powerless to

check, and consequently not capable of independently examining and assenting to a list, and this disability was fully known to the plaintiff company. On this footing defendant was relying on plaintiff to furnish him in the course of a few days with a list which he never received. He then relied on plaintiff to furnish Turner with the list that he had contemplated iccei" ing. Plaintiff, a good deal more than a “few days after’’ the agreement was made, handed a list to its own servant who was incapable of rejecting it or of determining whether, he ought to accept it. In these circumstances Turner tacitly accepted what the plaintiff chose to hand to him. Was thin List Contemplated? Now, was this the list which defendant contemplated receiving? Was it a. list in compliance with the terms of the letter, or was it something quite different? His Honour reviews the plaintiff’s stock list, and quotes evidence to show that “it has nothing to do with Fisher’s manufacture. It was got out for the trade to show what was. in stock.” The matter of constant increase in the number of sizes demanded by the plaintiff, was referred to in defendant’s evidence.. Specific List not Delivered. As a result o fthe examination of this and a good deal of other evidence, I have come to the conclusion that a specific list of sizes, such as was in contemplation by the parties, was not delivered either to defendant or his attorney. Assuming that lam wrong in this, it is tiecause defendant could spell out a list from the printed ;card separating the relevant from the irrelevant matter. It was, however, beyond the power or knowledge of Turner to do this His position seems to me ’•o .'have been simply this: H« had to get the invo : ce out. otherwise his arnnunts would be blocked. rO he took his instructions from his actual employer, the company, and got thm* out.

Difficulties Resetting any' Conclusion.

. . . For these reasons, notwithstanding many difficulties which seem to beset this’ or indeed any conclusion. • arrive at tho result that the two t-if recments afford the only standard upon which th" invoices can be based and the account, adjusted. I think, the;e > fore, that tho proper course i« to al low the credits on the footing qf defendant’s account, that being supported by his and other evidence, while I have no deta’Ted evidence to controvert it oi io show the computation to unreasonablu. Defendant’s Counter-claim. Then as to the defendant’s counterclaim, which is reallv equivalent to a cross ’ action for an alleged breach of the same contract, this is based .cn the loss of profit on goods which the plaintiff had promised to order, but which it failed to order. This no loubt arises, as has »•> much litigation in this Court, out of the sudden collapse <f mercantile business in 1921 • Rings were not ordered to the extent anticipated bv defendant and for this he charges plaintiff with a breach of contract. A forther question arises as to the measure of damages in the event of defendant s ease being proved. As to this the defendant says that during the period from August 1, 1919. to Julv 31, 1921, the plaintiff fai.ed to order the stipulated quantity, where by the defendant lost the profits ho would have made on the rings, had the> been taken by the plaintiff in accord anee with the agreement. This results in a very large money claim Sixty gross per month amounts to 1330 gross, while the quantity ar tually taken is said to amount to 911 Defendant avers that this shortage ought to be assessed at Is. 3d. each for 239 gross, and 9d. each for 200 gross, amounting to £3231. Defendant m sesses the cost of manufacturing at half this, and claims £1615 10s This claim is, I presume, made on the same tooting as to prices as the claim ti» e.redi’* in connection with deliveries.

Plaintiff’s Breach of Contract. After reviewing the subsequent transactions, His Honour says; • “When the great trade depression affected New Zealand plaintiff’s business fell olf. That did not. exonerate it from .this obligation any more than if it had issued a promissory noie It ir true that defendant did not refer to this ernsq ot action when lie complain ed of the error in the credits. A matured cause of action, however, is not lost by inactivity on the part of the creditor. It seems to me that by July 31, 1922, there was a substantial cause of action arising from plaintiff’s breach ot contract and that for this damages have to be assessed- In the circumstances I think that the defendant is entitled to recover substantial damages. . . . This is a case in which, though not supplied with exact figures, I am not bound by defendant’s calculations,' but may take mitigating circumstances into consideration, as a jury would. Looking at the matter in this way 1 assess the damages at £850.”