#6797 - Dies V. British Mineral And Financing Company - Restitution of Unjust Enrichment BCL

Dies v. British International Mineral and Finance Company

Facts

Mr. Quintana, the plaintiff, being minded to buy a large quantity of Mauser rifles and the appropriate ammunition, entered into a contract with the defendant corporation, the terms of which are set out in the two letters dated November 14, 1936. In substance, the contract provided for the sale by the defendant corporation to Mr. Quintana of a number of Mauser rifles and a quantity of ammunition at the price of 270,000l. The goods were stated in the contract to be destined for Turkey. Delivery was to be made by December 15, 1936, which date was extended by mutual agreement, and it appears for the mutual convenience of both of the contracting parties, to January 15, 1937. As regards the price, 100,000l. was paid on or about November 14, 1936, and the plaintiff, Mr. Quintana, was to provide for the balance of the purchase price by means of an irrevocable credit to be opened in favour of the defendant corporation with a bank in Prague.

Mr. Quintana paid to the corporation the sum of 100,000l. and no more, and it is this sum or part of this sum that the plaintiffs claim to be entitled to recover in this action.

Notwithstanding the fact that he had made this substantial payment, for reasons which have not been disclosed to me Mr. Quintana was unable to take delivery of any of the rifles or ammunition sold to him. It is admitted in the statement of claim that the contract was broken by Mr. Quintana in that he never paid the additional 100,000l. or opened the additional credit of 35,000l., and was never ready or willing to take delivery.

By a letter dated February 4, 1937, the defendant corporation, as they were lawfully entitled to do in view of the breach or breaches of contract by Mr. Quintana going to the root of the contract, elected to treat the contract as being at an end in the sense that it ceased to impose any obligation of further performance on either party.

The relevant forfeiture clause in the contract provided:

“If from any cause whatsoever independent of our volition (or will) and particularly a case of force majeure the performance of the present sales contract shall be rendered impossible we should have to refund to you the whole of the payments which you should have made to us with the exception of the sum of 6750l.” (now admittedly 13,500l. by reason of the enlargement of the contract)

Holding

The plaintiff has no contractual right to recover

In so far as the plaintiffs' action is based on an express term contained in that clause of the contract conferring on them, in the events which have happened, the right to recover the balance of the 100,000l. paid, in my judgment the action fails. Nor am I able to write into the contract, either in favour of the plaintiffs or of the defendant corporation, any implied term as to what, in the events which have happened, their mutual rights and obligations were to be.

Does the buyer have a general right to recover?

Citing Seventh Edition of Benjamin on Sale, at pp. 989, 994:

“In ordinary circumstances, unless the contract otherwise provides, the seller, on rescission following the buyer's default, becomes liable to repay the part of the price paid.”

If this passage accurately states the law as, in my judgment, it does where the language used in a contract is neutral, the general rule is that the law confers on the purchaser the right to recover his money, and that to enable the seller to keep it he must be able to point to some language in the contract from which the inference to be drawn is that the parties intended and agreed that he should.

Is this right negated by the buyer’s breach?

Buyer’s argument: Where there is a contract for the sale of goods, and a part payment for the goods is made, but no goods are delivered or tendered by reason of the default of the buyer, the seller's only remedy is to recover damages for the default, while the buyer, not-withstanding that it is by reason of his default that the contract has not been performed, is entitled to recover the purchase price that he has paid, subject possibly to the right of the seller to set off against that claim the damages to which he can establish his title.

Seller’s argument: The argument on behalf of...