Page 10 Advertisements Column 5

Otago Witness, Issue 2104, 21 June 1894, Page 10

ters wara no t communicated to the plaintiff*, d so ciiiot be referred to in order to cer tain the intention of tho plaintiffs. They show, however, that the arrangement between the company and the defendants was really incomplete, until the plaintiffs had been communicated with. The most important part of the correspondence consists of the letters of the 17th and 19th October from the defendants and the company respectively to the plaintiffs, and the plaintiffs' letter to the company of the 23rd December in reply. In the letter of 17th October 1892, from the defendants to the plaintiffs, the defendants say 'we have sold half our purchase of 1000 bales eorneacks to the Invercargill branch of the New Zealand Loan and Mercantile Agency Company (Limited).' In the letter of the 19th October from the company to the plaintiff s, the manager says :— • Referring to your sale note No. 1390 for 1000 bales cornsacks sold by you to Messrs Tothill, Watson, and Co. I now have pleasure in informing you that we have tasen half this order.' The letters then go on to suggest that the plaintiffs shall consign the company's half of the sacks direct to the company, and shall draw upon the company for the payment of that half. The inference which would naturally be drawn by the recipients of these letters would be that the original arrangement between the defendants and the company was not that the defendants £?"* contracted m an y event to sell the company 500 bales of cornsacks, but that the defendants had contracted with the company that the company should stand in halves with them in the purchase from the plaintiffs. That is, as between the defendants and the company, the defendants had undertaken, as to half their interest under the contract of gale with the plaintiffs, to hold it on behalf of the company, and m the event of a breach by the plaintiffs to exercise their remedies under the contract as to one-half for the benefit of the company. Tha proposals contained in these letters are obviously made with tHe express intention of placing the company and the plaintiffs in direct relations, of giving each reciprocal rights, and of getting rid of the defendants as intervening parties. 1 Send these goods to us direct instead of to the defendants and we will pay you for them' is in effect the proposal of the company. In this proposal the defendants concurred, and to this proposal the plaintiffs in their letter of December 23 and by their acts undoubtedly as seuted . There was no further communication whatever between the plaintiffs and the defendants on the subject of the goods. Ihe plaintiffs forwarded the bills of lading direct to the company, they invoiced the goods to the company as being shipped on their account, debiting them with the price, and crediting them with the amount of the bill which they had drawn upon the company. If there had been a short delivery, or if the sacks had been of inferior quality, could the plaintiffs after this have successfully defended an action by the company on the ground that they had made no contract with them P If they did make a contract what other kind of contract can reasonably be suggested but a contract of sale and purchase, and if there is such a contract then, as before pointed out, it is in respect of its subject matter inconsistent with the coexistence of the original contract. No valid reason can be suggested why the plaintiffs should have been unwilling to enter into such a contract with the company, and to rely on the company for payment. We do not accede to the contention that the acceptance of the bills by the Bank of New Zealand for the defendants' half of the sacks was equivalent to payment, and that the defendants would not have been liable for the price if the bank had not met the bills. No doubt, therefore, the plaintiffs in contracting with the company took the company's liability only where before they had that of the bank in the first instance, and on the bank's default that of the defendants. It is quite clear, however, from the case, that it was not the defendants' credit but the bank's that the plaintiffs relied upon. Not a bale was to be shipped until the letter of credit was to hand. The company was at that time in good credit, and the plaintiffs placed the same reliance on the company as on the bank. The contingency of the failure of either certainly was not in the plaintiffs 1 contemplation, and so long as these institutions took the responsibility the defendants' credit was a neglectable and neglected quantity. We think, therefore, the defendants are entitled to judg« ment. Judgment for defendants with coßts on the highest scale."

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