C.V. George and Company VS. Marshall Sons

The Appellant humbly submits this memorandum for one appeal filed before this Honorable Court.. It sets forth the facts and the laws on which the claims are based. Statement of Jurisdiction of the Respondent The Respondent humbly submits this memorandum in response to the appeal filed before this Honorable Court.. It sets forth the facts and the laws on which the claims are based. Statement of Facts On 6th May, 1971, C.V George and Company, a contractor in Cochin, requested a quotation for the supply of one hot mix plant from Marshall Sons, a dealer in Hot Mix plants and Mini Crushers. The requested quotation was sent by Marshall Sons on 1 lath May, 1971. After a few days, on 21st June 1971, C. V. George and Company requested for a revised quotation which was sent by Marshall Sons on 29th July, 1971. C. V George and Company finally placed the order for one hot mix plant on 31st July, 1971. In their second quotation, Marshall Sons said that they would supply the hot mix plant within 3 -4 months, subject to conditions beyond its control.To this quotation, the contractor sent a letter saying that according to their previous discussions, the hot mix plant should be ready by the last week of September. No reply affirming this condition was sent by the dealer. Nearly a month after the time within which C. V. George and company wanted to have the delivery of the plant, they received a letter from Marshall Sons stating that he plant would be ready for delivery in the middle of next month or even earlier and that they had requested their associate company to expedite delivery of the machine. On 22nd November, 1971 Marshall Sons informed C.V George and Company that due to the go slow policy adopted by the workers in the factory it would be impossible for its associate company to deliver the plan by the end of November and they would try to deliver it by 10th December, 1971. There was no further correspondence between the two parties and the plant was eventually supplied b y Marshall Sons on 30th January,1972. Marshall Sons (plaintiff filed a case against C. V George and Company (defendant) in the trial court due to discrepancies between them. The objective of filing the case was to claim the amount for the supply of the hot mix plant from C. V George and Company whereas C.V. George and Company made a claim for damages under four counts, namely: (1) RSI. 2,000 being the cost of 12 volt electrical starter equipment with battery complete;(2) RSI. 321. 97 being the expenditure incurred towards the cost of materials and labor charges for welding and rectification of defects before the commission of the plant: (3) RSI. 2,000 being the value of 0. 75 ton of steel and (4) RSI. 8,175 being the hire charges for hiring plant from the Cochin Corporation. The trial court held that: (1) there was no consensus among the parties regarding the mime within which the hot mix plant was to be supplied, (2) C. V.George would receive an amount of RSI. 500 for the 12 volt e lectrical supply starter equipment and the other three claims would be set off, (3) even if for any reason, it is held that the amounts claimed under the other three clauses, do not amount to a plea of set off or counterclaim, the evidence adduced, has not established the claim made by the defendant. A decree was given in the favor of the plaintiff for a sum of 12,096 and at an interest rate of 6% annum from 27th' January, 1971, till the date of plaint and proportionate costs. C. V George and Company appealed against this decree and judgment of the trial court in the high court.Questions Presented by the Appellant The following questions are presented before the court in the instant matter: 1) Whether time is to be considered an essence of the contract 2) Whether the contract was carried out by the respondent within a reasonable span of time 3) Whether the appellant is entitled to claim full amount for damages 4) Whether there was a breach of warranty Questions Presented by the Resp ondent Whether time is to be considered an essence of the contract 2) Whether the appellant is entitled to claim full amount for damages 3) Whether there was a breach Summary of Pleadings of the Appellant 1 .Whether time is to be considered an essence of the contract: Ordinarily, time is to be treated as an essence of commercial contracts, as stated by the Counsel for the appellant. Furthermore, when the appellant requested for the machinery to be supplied latest by the middle of September, 1971 , the subsequent replies of the respondent showed clear indication of acknowledgment of the time span, as well as the stipulated deadline. Therefore, the respondent has committed reach of condition of warranty under Section 59 of the Sale of Goods Act, by not supplying the hot mix plant by the middle of September, 1971. . Whether the contract was carried out by the respondent within a reasonable span of time: The appellant's case states that the hot mix plant should have been supplied by the middle of September, 1971 and the respondent failed to fulfill his part of the contract as the plant was supplied on 30th January, 1972. The appellant further states that this delay was without any reasonable or probable cause and hence the contract wasn't fulfilled within reasonable time. 3.Whether the appellant is entitled to claim full amount for damages: The appellant's case is that as the hot mix plant was not delivered within the time stipulated, it is entitled to claim damages amounting to 12,496. Due to the delay in the supply of the plant, the appellant had to incur losses. 4. Whether there was a breach of warranty: The appellant claims that there was a breach of warranty and tries to recover the amount he can. He is of the view that part (3) in section 12 of the Sale of Goods Act entitles him to raise a claim.Part (3) in section 12: ‘A warranty is a stipulation collateral to the main purpose of the contract, the breach f which gives rise to a claim for damages but n ot to a right to reject the goods and treat the contract as repudiated. ‘ Summary of Pleadings of the Respondent 1 . Whether time is to be considered an essence of the contract: The respondent had stated that the hot mix plant would be supplied within 3-4 months, subject to conditions beyond its control. Though the appellant wanted delivery of the hot mix plant in the middle of September, 1971, the respondent did not send any reply agreeing to the appellant's stipulation.Marshall Sons sent out another correspondence on 22nd November, stating that in view of the go slow policy adopted by the workers in the factory for the past one month, it would not be possible for its associate company to deliver the plant by the end of November. No objection or protest was raised by the appellant in response to this. There was no consensus regarding the period within which the plant had to be supplied and thus, time was not to be considered as essence. 2.Whether the appellant is entitled to claim full amount for damages: The appellant aimed to collect its desired sum as compensation, of RSI. 12,496, by using Section 59 of the Sale of Goods Act. An important portion of this act states that if the appellant ants to claim compensation for any loss occasioned by the non-performance of the contract within the stipulated time and if the appellant accepts performance of the contract, he must issue notice to the respondent of his intention to claim damages.In this situation, the appellant issued the notice to the respondent on 8th December, 1971, which was long prior to the date when the goods were supplied to it and the performance of the contract was accepted by the appellant. Therefore, since the claim was not issued at the time when the appellant accepted the performance of he contract, the appellant is unable to resort to Section 55 of the Contract Act to sustain a claim for damages against the respondent. 3.Whether there was a breach of warranty: Granting for argument sa ke that time was essence of the contract and there was breach of contract by the respondent, even then Section 59 of the Sales of Goods Act cannot be attracted as the definition of â€Å"Condition and Warranty' in Section 12 of the Sales of Goods Act is limited to stipulations in a contract of sale with reference to goods and stipulations with regard to time and other matters is outside the definition f Section 12 of Sales of Goods Act.Pleadings and Authorities 1 . Time is to be considered an essence of the contract: The Counsel for the appellant made its case by stating that time was of essence to this particular situation, and is treated as such for commercial contracts, in reference to two such decisions of the Supreme Court in Inhabit Parkas v. Durra Data and C. C. Exporters v. B. &C. Mills.The appellant wrote to the respondent, requesting for the machinery to be supplied latest by the middle of September, 1971 , and following were the subsequent replies of the respondent showi ng clearly the acknowledgment f the time span, as well as the stipulated deadline. Therefore, the respondent has committed breach of condition of warranty under Section 59 of the Sale of Goods Act, by not supplying the hot mix plant by the middle of September, 1971.The remedy for breach of warranty under the Sale of Goods Act is as follows: (I) Where there is a breach of warranty by the seller, or where the buyer elects or is compelled to treat any breach of a condition on the part of the seller as a breach of warranty, the buyer is not by reason only of such breach of warranty entitled to reject he goods; but he may- (a) set up against the seller the breach of warranty in diminution or extinction of the price, or (b) sue the seller for damages for breach of warranty. It) The fact that a buyer has set up a breach of warranty in diminution or extinction of the price does not prevent him from suing for the same breach of warranty if he has suffered further damage.As per the case made, under the Sale of Goods Act, â€Å"(I)Where there is a breach of warranty by the seller, or where the buyer elects or is compelled to treat any breach of a condition on the part of the seller as a breach of warranty, the buyer is not by season only of such breach of warranty entitled to reject the goods; but he may (a)set up against the seller the breach of warranty in diminution or extinction of the price†, the Counsel for the appellant further contended that the appellant is entitled to claim by way of damages a total sum of RSI. 2,496. Of time: As already stated, the respondent has indicated under Exhibit 8-9 that it will supply the plant in about 3 to 4 months time from the date of receipt of order subject to conditions beyond its control. The appellant placed the order or 31st July, 1971. Three month's time expired on 30th December, 1971.Even before the expiry of the period, the respondent wrote Exhibit A-6 the its associate company had advised that the plant will be re ady for delivery in the middle of November, and it has advised its associate company to pay special attention and expedite delivery of the plant. The respondent again wrote under Exhibit A-7 stating that in view of the go-slow policy adopted by the workers in the factory of its associate company, there was a delay in the manufacture of the plant and it would be supplied before 10th December, 1971.The plant was ultimately delivered to the appellant on 30th January, 1972. Having regard to the time stipulated by the respondent under Exhibit 8-9 and having regard to the difficulties faced by its associate company, the details of which are stated both in Exhibits A-6 and A-9, there is absolutely no difficulty in holding that the respondent has performed the contract within a reasonable time. On a careful perusal of the correspondence between the parties as referred to above, it is seen that no time was fixed for performance of the contract.There was stipulation by the respondent under Ex hibit 8-9 to deliver the plant in about three to four months' time room the date of receipt of order Subject to conditions beyond its control and a suggestion by the appellant under Exhibit A-2 that the point regarding delivery should be brought to the personal notice of Mr.. Cellular and arrangements may be made to supply the plant by the middle of September, 1971. Thus, it can be seen that there was no consensus ad idem regarding the period within which the plant has to be delivered to the appellant.Hence the term reasonable time would signify any which period of time by which the plant has been delivered provided there is no delay due to circumstances arising because of inefficiency of the respondent. . Whether the appellant is not entitled to claim full amount for damages The appellant wished to claim set off for the sum of RSI. 12,496, under the following counts: 3. 1 For the first count the appellant asked to claim RSI. 2,000 being the cost of 12 volt electrical starter equipm ent, complete with battery.The trial Court allowed a sum of RSI. 500 under this count, while referring to the Sale of Goods Act where if there is a breach of warranty by the seller, or where the buyer elects or is compelled to treat any breach of a condition on the part of the seller as a breach of warranty, he buyer is not by reason only of such breach of warranty entitled to reject the goods; but he may set up against the seller the breach of warranty in diminution or extinction of the price. 3. The other three claims made by the appellant were denied on the basis of the Contract Act, under Section 55, where if the appellant wants to claim compensation for any loss occasioned by the non-performance of the contract within the stipulated time and if the appellant accepts performance of the contract, he must issue notice to the respondent of his intention to claim damages. It is therefore clear that if the appellant wants to claim damages by resorting to Section 55 of the Contract Ac t he must issue a notice to the respondent of his intention to claim damages at the time when he accepts performance of the contract.In the instant case, the goods were delivered to the appellant only on 30th January, 1972. The appellant issued its writing to the respondent on 8th December, 1971, which was long prior to the date when the goods were supplied to it and the performance of the contract was accepted by the appellant. Since the issue was not made at the time when the appellant accepted the reference of the contract, the appellant cannot resort to Section 55 of the Contract Act to sustain a claim for damages against the respondent.The next question for consideration is whether under Section 59 of the Sale of Goods Act, it is open to the appellant to treat any breach of a condition on the part of the respondent as breach of warranty and set up against the respondent the breach of warranty in diminution of the price. We have already held that time is not the essence of contr act and there is no breach of condition on the part of the respondent.Even granting for argument's sake that time was essence of the contract ND there was a breach of condition by the respondent, even then Section 59 of the Sale of Goods Act, cannot be attracted, as the definition of â€Å"condition and warranty† in Section 12 of the Sale of Goods Act is limited to stipulations in a contract of sale with reference to goods and stipulations with regard to time and other matters are outside the definition contained in Section 12 of Sale of Goods Act. Section 59 of the Sale of Goods Act states that – 12.Condition and warranty. – (1) A stipulation in a contract of sale with reference to goods which are the subject thereof may be a condition or a warranty. 2) A condition is a stipulation essential to the main purpose of the contract, the breach of which gives rise to a right to treat the contract as repudiated. (3) A warranty is a stipulation collateral to the main p urpose of the contract, the breach of which gives rise to a claim for damages but not to a right to reject the goods and treat the contract as repudiated. 4) Whether a stipulation in a contract of sale is a condition or a warranty depends in each case on the construction of the contract. A stipulation may be a condition, though called a warranty in the contract. It can be noted that section 59 is not applicable as this contract is not stipulated by time or any other such conditions except that it should be completed in reasonable time. Hence it falls outside of the definition of the act and there is no breach of CASE ANALYSIS The C. V.George and Company vs. Marshall Sons case, is one of appellate Jurisdiction in the High Court as a result of a previous case filed by Marshall Sons against C. V. George and Company. The trial court came to the conclusion that C. V. George and Company was entitled to receive a claim of only RSI. 500 as opposed to their former claim for RSI. 12,496. It r uled in favor of Marshall Sons by announcing a decree for a sum of RSI. 12,096 at 6% interest per annum, from 27th January till the date of plaint and proportionate costs. Aggrieved by this Judgment of the trial court, C. V George and Company filed an appeal in the Madras High Court.The learned counsel for the appellant relied major on the fact that time is of the essence in commercial contracts and that by failing to meet the deadline, Marshall Sons have breached an important condition of the contract and under Section 59 of the Sale of Goods Act, it is open to the appellant to treat a breach of condition as breach of warranty and set p against the respondent the breach of warranty in diminution of the price. The appellant also stated that this entitled it to claim damages under four counts and those amounts should go in diminution of the price claimed by the respondent for the supply of the hot mix plant.After careful consideration, it was clear to the court that there was no actu al consensus between the parties regarding the time of the delivery. C. V. George and Company expected to receive the plant by mid September whereas Marshall Sons spoke about supplying the plant within 3-4 months after the interact was signed ( 31st July, 1971). Marshall Sons later said that due to the ‘go slow policy adopted by the workers, they wouldn't be able to supply it earlier than what they had committed. No objections were raised by C. V George and Company.The plant was finally delivered on 30th January, 1972. We see that, due to the fact that there was no proper agreement about the time between the two parties, Marshall Sons have a stronger case as the court ruled that time was not of the essence for this contract. Keeping in mind all the obstacles faced by Marshall Sons in the delivery of his plant and the stipulated time of 3-4 months the court ruled that the plant was delivered within a reasonable time frame. The case for Marshall Sons Just gets stronger as the co ntractor isn't entitled to make a claim for damages.If the appellant wants to claim damages by resorting to Section 55 of the Contract Act he must issue a notice to the respondent of his intention to claim damages at the time when he accepts performance of the contract which was not done in this case. Further, under section 59 of the Sale of Goods Act, the appellant can treat any breach of a condition n the part of the respondent as a breach of warranty in diminution of the price but this cannot be used in the favor of the appellant in this case.It has already been established that time was not an essence of contract in this case. Section 12 of the Sale of Goods Act states that the condition of warranty is limited to stipulations in a contract of sale with reference to goods and stipulations with regard to time and other matters are outside the definition contained in that section. As a result, the High Court of Madras confirmed the trial and decree of the trial court. C. V. George ND Company had to make the payment they owed and would receive only RSI. 00 for one of their claims. Marshall Sons had a stronger case to present in both, the Trial Court as well as the High Court.