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TMI Blog1963 (1) TMI 59X X X X Extracts X X X X X X X X Extracts X X X X ..... A-5) constitutes a special exemption exonerating the agent from all liabilities. 2. It is not necessary to proceed into all the particulars of the evidence. We may very briefly state that the order was in respect of cold rolled black steel sheets, designated by the code word Dolpa. The plaintiff agreed to purchase 50 tons of the said goods, and there was an offer and acceptance, the second defendant firm undoubtedly acting as the intermediary which actually effected the contract. An irrevocable letter of credit was issued by the plaintiff firm, in due course, for the c.i.f., value of 6000 dollars. In due course the goods arrived at Madras harbour, and were cleared in August 1956, but found, on inspection, not to answer to the description in the order or the indent. Upon objections taken by the plaintiff firm, the goods were surveyed by a qualified person, and they were ultimately rejected. The main question argued by learned counsel for the second defendant firm, the only party contesting the appeal, was whether, under the circumstances of the transaction between the parties, it could be contended on behalf of the 2nd defendant that they were only brokers, that the contract was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rightly rejected as not conforming to description. Normally, such a local agent of a foreign firm, particularly where the principal has been disclosed, cannot plead any exemption from liability, unless that flows from any of the special conditions of the contract, for under Section 230 a contract by which the agent is also bound would be presumed to exist in the instance where the contract is made by the agent for the sale or purchase of the goods for merchants residing abroad. The evolution of law in England with regard to this particular doctrine has been somewhat different, and principles of this development have been discussed, to a certain extent, in Mohanakrishnan v. Chimanlal Desai and Co., AIR1960Mad452 , a Bench decision of this Court to which one of us was a party. But, equally we have no doubt that, as far as the damages are concerned, the agent (second defendant) would be exonerated by virtue of the explicit terms of Cl. 26. Clause 26 of the conditions rune as follows: If the goods are delivered for any reason mentioned in para 22 or the goods happen to be other than the one ordered for or inferior in quality, for all the above deviations singly or all put together ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d. The facts here are not in dispute. The plaintiff firm paid substantial monies by unqualified letters of credit for these imports, and failed to get the goods ordered. The different goods actually sent were sold under orders of Court, and certain monies were realised. As far as the claim against the second defendant firm is concerned, it is limited to the difference between the monies paid by the plaintiff firm, and the monies realised by sale of the goods, namely, ₹ 4126 There can be no doubt that the 2nd defendant firm directed the plaintiff to dispatch the letter of credit to the foreign principal, and thereby undertook the responsibility for seeing that there was either a fulfilment of the contract, or a return of the monies. The contract was broken, and the monies are undoubtedly thus due from both the principal as well as the agent. The claim cannot be resisted with regard to a decree for ₹ 4126 against the second defendant firm, the liability limited to this extent, and not including any amount towards damages. We also disallow interest claimed on this amount from the date of sale or the interest claimed on ₹ 30,753-9-0 from the date of plaint to the date ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... field. In the present day world of quick and easy communications from one part of the globe to another, the notion or presumption that the inland agent of a foreign principal might be acting without authority should be discarded as primitive and utterly improbable. The question is really one of fact as to what the parties intended. There is, however, much to be said in favour of the view that the presumption helps to safeguard innocent persons acting in ignorance of the commercial and financial status of the foreign dealer. In Haisoury's Laws of England, 3rd Edn. Vol. 1, at page 218, the legal position is thus set out: Where a contract is made by an agent of a foreign principal, there is a presumption that it cannot be enforced by or against such principal; but the presumption may be rebutted by the express terms of the contract or by showing that at the time when the contract was made the agent had authority to establish privity of contract between such principal and the other party, and that privity of contract was in fact established between them. 8. But even as late as 1955, the English Court has stuck to the view that an agent of a foreign principle is presumed ..... X X X X Extracts X X X X X X X X Extracts X X X X
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