#6614 - Williams Brothers V. Agius - Commercial Remedies BCL

Williams Brothers v. Agius

Facts

The respondents (sellers) sold to the appellants (buyers) six cargoes of a certain coal to be shipped every two months in 1911. It is as to one of these cargoes, which was to be shipped in November, that the dispute arises. The price was to be 16s. 3d. per ton net, c.i.f., Genoa or Savona, or Spezzia, or Leghorn, orders to be given on signing bill of lading, or 17s., c.i.f., Venice, on certain terms. The point to be decided relates to the cargo in question, which the respondents failed to ship, and is, What damages are payable by the respondents to the appellants on the facts as stated by the umpire in his award in an arbitration? The umpire, having found the breach of contract, found further the following among other facts: That at the date of the breach the market price of the coal in question was 23s. 6d.; that about October 28, 1911, the appellants sold, through one Colonna, their agent at Genoa, a cargo of coal to one Ghiron on the terms of a sale note of that date, which I shall call the broker's note, at the price of 19s. per ton, and that the intention of the appellants was to resell to Ghiron the November cargo to be delivered to them by the respondents, and that they appropriated this cargo to their contract with Ghiron. That about October 31, 1911, the appellants sent to Ghiron a sold note dated October 28, 1911.

Contentions: The contention of the appellants before the umpire was that the true measure of damages was 7s. 3d. per ton, being the difference in price, between 16s. 3d. the contract price, and 23s. 6d., the market price at the date of the breach; 4500 tons at 7s. 3d. amounts to 1631l. 5s. The contention of the respondents was that the true measure of damages was 2s. 9d. per ton, being the difference between 16s. 3d., the contract price, and 19s., the price of the coals sold by the appellants to Ghiron; 4500 tons at 2s. 9d. amounts to 618l. 15s.

Holding

Viscount Haldane

My Lords, it was argued for the respondents that, even assuming the appellants to be entitled to claim full damages from the respondents without deduction, the principle laid-down by the Court of Appeal in Rodocanachi v. Milburn, which was accepted by the Courts below as binding them, was wrong. In that case it was held that in estimating the damages for non-delivery of goods under a contract the market value at the date of the breach was the decisive element. In the judgment delivered by Lord Esher he laid down that the law does not take into account in estimating the damages anything that is accidental as between the plaintiff and the defendant, as for instance a contract entered into by the plaintiff with a third party. He said that if the plaintiff had sold the goods before the breach for more than the market price at that date he could not recover on that footing, and that it would therefore be unjust if the market price did not govern when he had sold for less.

This decision is quite in harmony with what was recently said in this House in British Westinghouse Co. v. Underground Electric Railways Co., where it was pointed out that a subsequent transaction, if it is to be taken into account in mitigating damages, must be one which arises out of transactions naturally attributable to the consequence of the breach, and must not be of an independent character. I agree with the statement of the law in Rodocanachi v. Milburn, and with the view of this part of the present case taken by all the learned judges in the Courts below.

Impact of the Sale of Goods Act

I will only add on this point that I do not think that the law so laid down has been affected by s. 51 of the Sale of Goods Act, 1893. By sub-s. 3 of the section the general...