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Colonial Cases

Mullick v. De Souza, 1840

[contract of guarantee, opium - breach of contract, duress - contact, assessment of damages - opium, restrictions on sale]

Mullick v. De Souza

Supreme Court, Bombay, Calcutta
17 March 1840
Source: The Bombay Times, 1 April 1840[1]

 

SUPREME COURT, - TUESDAY, MARCH 17.

SECOND TERM OF 1840.

(Before Sir E. Ryan, Sir J. P. Grant, and Sir H. W. Seton.)

RAMSABUCK MULLICK v. DE SOUZA AND OTHERS.

   The plaint was in assumpsit, and set forth that certain Opium of the plaintiff of the value of Co.'s Rs. 80,000 was to be consigned to Messrs. Gemmell and Co., the agents of the defendants in China, to be there sold, and the proceeds remitted to the plaintiff in Sycee dollars, or Government bills, and that the defendants in consideration of 2 ½ per cent commission, to be paid out of the proceeds granted the safe returns of the proceeds of the said consignment.

   The plaint further stated, that the Opium arrived in China, and was received by Gemmell and Co., who disposed of it to one Charles Elliot, and that no returns of the proceeds had been made in Sycee dollars or bills, but that certain scrip had been remitted to the plaintiff which he refused to accept.

   The fourth plea to this plaint was an elaborate special plea, setting forth that Gemmell and Co. were British subjects in Canton, and that the said Charles Elliot was Superintendent of  the British trade there, and vested by Act of Parliament with certain extensive powers and authorities over British subjects in China, with reference to such trade - that the said Charles Elliot, in the exercise of his said powers, published a certain "Proclamation" (which was set out) demanding the surrender of all British-owned Opium at Canton, and that Gemmell & Co. accordingly surrendered the Opium in question, the same being at the time at Canton, and within the terms of the Proclamation, as they were bound to do, and that the defendants were thereby prevented from performing their contract to guarantee the returns of the proceeds in dollars or bills.

   Replication, that Gemmell and Co. were not bound to obey the said proclamation or to surrender the Opium.

   Special demurrer, shewing for cause that thr replication tendered no issue of fact but traversed matter of law, and that it moreover appeared on the face of the plea that Gemmell and Co. were bound to surrender the Opium.

    Mr. Leith and Mr. Morton for the demurrer - It is laid down in numerous authorities that matter of law cannot be traversed.  The question whether the defendants were bound to surrender is a mere question of law arising upon the face of the plea, and the replication is nothing more than an informal general demurrer.  If this issue had gone to the Jury, there would have been no question for them to try, for it is not their province to determine whether a legal inference is or is not correctly drawn from admitted facts. If any of the facts are disputed, the replication should have denied the facts themselves, not the alleged result.

   The Court were clear that the replication was bad, and directed the learned Counsel to argue the plea.

   Mr. Leith and Mr. Morton. - The plea shows, that Mr. Elliott had full powers to issue the proclamation, by virtue of the Act 5 and 6 Will. IV., and Gemmell and Co. were bound to obey as British subjects, as much as if it had been a proclamation by Her Majesty herself.  The general rule, no doubt, is that where a party has expressly and unconditionally bound himself to perform a certain act, it is no excuse that the act of a third party has prevented it or even rendered it physically impossible.  Mederos v. Hill, 8 Bingham, Gosling v. Higgins, 1 Campb. 451.

   If therefore, in the present case, the defence had been that the Chinese Government had seized and confiscated the opium, it might well have been doubted whether this would have furnished any excuse in law.  But of the performance of the contract be prevented b y an ac t of the British Government, the defendant stands excused.  In Hubbard v. Tonteng, 3 Bos. And Pull. [3]01, Lord Alvanley, C.J. says:

Where the policy of the state intervenes and prevents the performance of the contract the party will be excused.

And in Atkinson v. Ritchie, 10 East, 535, Lord Ellenborough thus lays down the law:

Neither can it be questioned, that if from a change in the political relations and circum stances of this country with reference to a contract lawful at the time of making, such contract becomes incapable of being carried into effect without derogating from the clear public duty which a British subject owes to the sovereign and the state of which he is a member, the non-performance is not only excusable but matter of peremptory duty and obligation.

   Per Curiam. - That is quite certain; - but a question arises how far the proclamation of Mr. Elliot, which appears to have been issued not voluntarily, but while he was in personal duress could have been binding.  Could his acts under such circumstances be deemed acts done by the authority which he possesses as superintendent, under the Statute referred to?

   Mr. Leith and Mr. Morton. - The duress could not have deprived him of the powers and authorities vested in him; nor does it appear that he ever afterwards repudiated what he had done.  There is no authority for such an application of the law of duress. It would indeed be a dangerous doctrine to hold that every man called upon to obey the mandate of a public functionary and representative of his own Government, was first to inquire whether such mandate was so far coerced by the acts of a foreign Government as to dispense with obedience!  Who is to be the arbiter of this?  The question might be raised in almost every instance, for every public order of a foreign ambassador or other such functionary, may have reference to some proceeding or other of a foreign Government, and thus the question  of moral coercion in  a greater or less degree may always be raised.  But the sole question id whether British subjects were not bound to obey such a proclamation, purporting to be under the authority given to Mr. Elliot, and whether they are not excused in such obedience.  There seems to be no sort of analogy between this case and the case of a private individual doing some act while under personal duress.

   The Advocate-General and Mr. Clarke contra. - The replication is good and the plea bad.  As to the replication, it does not traverse a mere matter of law, but a mixed question of law and fact.  Such a traverse is perfectly good according to the authorities.  Then the plea is clearly defective in substance for the reason pointed out by the Court.  The involuntary act of the Superintendent while in personal duress, was a nullity.  The Proclamation was in effect the act of the Chinese Government, and the defendants' guarantee extended to indemnify the plaintiff against acts of the Chinese, though not of the British Government.

   The learned Counsel were stopped by the Court.

   Mr. Leith was heard in reply.

   Sir E. RYAN,  C.J. - This is a special demurrer to a replication.  We are satisfied that the replication is bad, and that the demurrer to it must be allowed, because it clearly (denies no matter of fact, but traverses only what is matter of law arising on admitted facts.)  But were are of opinion that the plea is substantially defective and discloses no sufficient answer to the action.  Upon the face of the plea it appears, and it is so recited in the "Proclamation," that the Superintendent, Mr. Elliott, was acting while under personal duress, and we are of opinion that under such circumstances his act had no binding power. There must, therefore, be judgment for the plaintiff on this issue.

Demurrer allowed to replication, but judgment for plaintiff on the plea. - Ibid, March 10.

 

Source: The Bombay Times, 1 April 1840

   The decision of the Supreme Court on Tuesday in the case Ramsabuck Mullick v. L. DeSouza, is very important to the merchants of India, because in effect it determines that the indemnities given by Captain Elliot to the merchants who delivered to him Opium for confiscation by the Chinese Government are perfectly valueless.  We have had occasion lately to consider this subject more than once, and as the conclusion to which we have arrived is directly the reverse of that sustained by the decision of the Supreme Court, we consider it out duty to enter upon the subject at some length.

   It is unnecessary to detail the facts of the case further than that Messrs. De Souza guaranteed the plaintiff the safe return from their consignee of the proceeds of certain chests of opium, which chests were part of those delivered up to the Chinese and destroyed.  The plea set out the entire order in consequence of which the consignees delivered up the said Opium, and which order states that he, captain Elliot, was at the time of issuing it in prison, deprived of food, &c. and that he called upon the merchants to deliver up the Opium at the dictation of the Chinese High Commissioner Lin, acting as the representative of the Chinese Government.  Upon these facts the Supreme Court say that it is evident that Captain Elliot in issuing that order did not act as the representative of the British Government, but under constraint, (technically termed in duress) and that it was a mere dictate of the Chinese Government - or in other words, that his power as British Superintendent were suspended by his imprisonment; and that the merchants would have been quite justified in refusing to deliver up their Opium.

   There is no doubt that if a private individual is imprisoned until he enters into a bond whilst in duress for the benefit of the person who imprisons him, or for the benefit of a third party, it is void (Coke's 2 Inst. 482, 3 Inst 92, 4 Inst. 97), but if he accepts a Bill of Exchange or makes a Promissory note whilst in such duress, and it is endorsed over to another for a valuable consideration, this third person, or indorsee, may recover upon it, and the plea that it was accepted under duress is of no avail ([Dinean] v. Scott, 1 Camp. 100.)  and much more would be the drawer of the promissory note be liable if it was drawn for his own benefit.

   It is quite clear then that as a private individual Capt. Elliot would have been liable for the promissory notes issued by him to obtain his liberty.  Let us next see whether these notes being issued in his capacity of Superintendent of the China Trade empowers him to give, as he did give, Promissory notes payable out of the English Treasury, and the only questions are whether the imprisonment suspended his powers, and, if they did, whether the merchants were bound to take cognizance of such suspension.

   We can not find a single authority, neither can we discern a satisfactory reason for maintaining that the imprisonment, or duress, suspended his representative character, or its incident powers.  The object for which he was appointed Superintendent had not ceased; he had not been driven from the country; he had not been recalled or dismissed by the Government which appointed him; nor was he obliged to depart by the Chinese authorities, and these, we believe, are the only occurrences which may extinguish the powers of a national representative - whether he be ambassador, consul, or superintendent.  Even if his Sovereign dies, and he must have fresh credentials from the successor, yet he continues as interim the representative of his country, and retains his rights and privileges.

   The mere act of imprisonment does not terminate ipso facto his official character, for more than one instance has occurred where even an ambassador has been imprisoned and yet continued to act without fresh credentials after his release.  So Captain  Elliot continues to act as Superintendent, and to maintain the doctrine that his powers as a public officer were suspended during his imprisonment, and revived upon his release, appears to us to be sustained by no authority, and introduces this inconvenience, that no one need regard the directions, or can rely upon the securities of an ambassador, consul, or superintendent, given quoad a pubic officer, before he is satisfied that at the time of giving them the functionary was legally in possession of all his power. - Calcutta Courier, March 19.

 

Source: The Bombay Times, 1 April 1840

Ramsabuck Mullick v. De Souza.

[IMPORTANT DECISION: OPIUM QUESTION.]

   As we have uniformly advocated the claims of those who surrendered opium to Capt. Elliot for indemnity from the British Government, we particularly direct the attention of our readers to a decision of the Supreme Court in Calcutta arising out of engagements connected with such opium.  We still entertain the same opinions we formerly expressed, and although this decision under the circumstances of the case nullified Capt. Elliot's [ledge, we are still satisfied the claimants have a good cause when the facts are fully known.

   In this particular action  the question rested on a point of law, and the Court decided merely on the premises advanced in the plea, but we are very sanguine, had evidence been gone into as to facts, the decision would have been one of a contrary nature.  One circumstance  of great importance is left out altogether, which is this, that Capt. Elliot was at Macao when all British subjects were placed under constraint by the Chinese authorities, and any one who reads Capt. Elliot's first notice dated in Macao of 23d March will at once see the course he had chalked out, and that his subsequent notice of 27th March in Canton was issued under personal circumstances which were equally the  same with other British subjects, with the situation of whom he was acquainted before he lefty Macao.  It is ridiculous, therefore, to say or argue that the British Superintendent dictated his order of 27th March in prison.

   He was in duress so far as such a term can be applied to the free and unconstrained use of the whole of the foreign factories, and all the Chinese did was to prevent parties from leaving Canton until the question of delivering over the opium was settled by the High Commissioner.  True, they ordered away the Chinese servants and threatened to stop provisions, and did so for a few days so far as the difficulties of getting them without native attendants went, but from all we have heard, so far as person al avocations went, there was less restraint, among the Prisoners so called, that in the   drudging times of weighing tea and indicting commercial epistles.

   We conceive Capt. Elliot acted from a deep sense of duty, and it was the general impression we believe in Canton that he was in possession of Lord Palmerston's views in regard to a crisis in the opium Trade, and that he acted accordingly.  It was never contemplated that such a large quantity of opium would be surrendered, for we are satisfied one half, or even a fourth, would have accomplished the object in view equally  well, in proof of which he have heard the viceroy and others all looked upon the surrender as a farce which would never be realised.

   We consider, however, that Capt. Elliot's pledges on the part of the British Government are sacred, and the Judges do not appear to have considered his authority in a distinct light.  In other lands a public officer has no act of Parliament specially applicable to the power which he exercises; but in China British subjects had an act of the legislature staring them in the face, and when the authority vested with it tells them that for various weighty causes, the impressions of which originate with himself, for private individuals and responsible Agents were prepared to act for themselves, he calls upon all to surrender in the name of the Queen their Opium, we cannot understand the law of Duress laid down by the Calcutta bench.  All we should now wish to see is a legal examination of the facts, and we would suggest the trial of the question upon this ground, and the bringing before a Court of Justice the evidence of parties who were on the spot and could speak, on oath, to what really occurred, and not have a question of such immense importance decided as a dry matter of law and on a statement advanced on a legal document.

   We consider the principle involved as one of paramount importance, for if a Government can so easily throw off its responsibility, and a simple matter of law is made applicable to all cases without considering differences of circumstances, we shall at once thrown down from the pedestal it has so long occupied British honor and honesty, and substitute chicanery and evasion.

IMPORTANT DECISION.

OPIUM QUESTION.

   A case of great importance was yesterday determined in the Supreme court - Ramsabuck Mullock v. De Souza -  in which a grave question relating to the recent Opium proceedings in China, was for the first time directly raised.  This action was brought by the consignors of opium, against the defendants, upon a contract to guarantee the safe returns of the proceeds; and the defence set up was, that the opium in question had been surrendered to one Charles Elliot, the British Superintendent (whose powers were fully set firth in the plea) under and by virtue of a Proclamation, demanding the surrender, in the name of Her Majesty and the British Government.  The question was, whether the defence (the facts being admitted) constituted a valid and sufficient excuse in law for the non-performance of the express contract.

   The Court admitted, that if the Superintendent appeared distinctly to have been acting within the scope of the powers with which he was invested by Statue, an act of obedience on the part of a British subject, would have excused the performance of a prior contract with which that obedience would have been incompatible.  But the Court were of opinion, that as it appeared on the face of the pleadings, that the Commissioner was acting under the constraint of a foreign power (for the Proclamation itself was set out in the plea) he could not be considered to be acting in pursuance of the powers vested in him, and that obedience, therefore, was not compulsory, and furnished no defence.   The Proclamation was in effect (in the opinion of the Court) an act of the Chinese not of the British government, as the acts of the representative of the British Government, while in personal duress, could not be deemed the acts of the Government which he represented.

   We understand that there are other questions of fact to be tried in this case, and as the amount involved is considerable, there will probably be ultimately an appeal to the Privy Council.  We believe too, that there are several nearly similar cases, in which the parties have been "resting on their oars," until the decision in the present case should shew "how the land lies."

   If the same view should be taken by the British Government and the House of Commons, of the binding power and efficacy of Captain Elliot's "proclamations," what becomes of the claims of indemnity, put forth by the merchants who have surrendered their opium, and look to the Government to fulfil the engagements of their representative?  We shall take an early opportunity of considering this question of the applicability of the law of Duress. - Ben. Hurkaru, March 18.

 

Source: The Bombay Times, 25 July 1840

[This article very heavily inked and smudged.]

It will be seen from the subjoined, that the Judges of the Supreme Court of Calcutta have decided, in the case of Ram Sabuk Mullick versus De Souza and [Others] for non-fulfillment of the opium contract, in consequence of the delivery of the opium to Captain [Elliot], that the defendants are to pay damages for the [...................] at the rate it might be supposed to bear [.............] height of the troubles in Lintin, that is, at the [rate] of 400 Rupees a chest.  The Court it is stated [...............] a long time, and were apparently a good [.......] puzzled.

RAMSABUCK MULLICK v. DE SOUZA AND OTHERS.

[The] Advocate General and Mr. Clarke shewed cause against the [.......... Regarding damages.  The criterion taken at the trial [being] original cost of the Opium in Calcutta.  This was the [prosecution: - nay, the Court might reasonably have given higher [damages] by adding the interest of the money and the shipping [cost}.  It was contended on the other side that the verdict ought [to be] [reduced] to nominal damages, because no district evidence has been given of the price of Opium obtainable in China at the time [the contract ought] to have been perfumed.  The consequence [would] be, that the party guilty of a breach of contract [........................] by his wrongful act.  He still had the "scrip" [..........] and he might sell this for some price at all events, [.................] claim the whole prime cost of the Opium.  No [..........................] damages for breach of contract could be [......................] must be ruled by its own peculiar circumstances.

   [........................................]The general rule is this: [.........................] the breach of contract is entitled to [............. Too heavily smudged. ........................................................]

   [..............................................................................] to indemnify the plaintiffs from any loss upon the whole speculation.  This is not the nature of the contract at all.  The agents would have fully performed their duty if they had sold the opium for the highest price obtainable at Linton; and even if this [...................................]. It was for the plaintiff to make out his whole case and if he has given vague and uncertain evidence of the selling price at Linton when the opium was delivered up, it is his own [.........]. In strictness he is only entitled to nominal damages, because the only evidence applicable is the evidence of Dwarkananth Tagore that prices then were "nominal."  The only other criteria which the court has to choose between are, the price to which opium fell in Calcutta when the china news arrived (200 to 300 rupees_) and the price of scrip (300 to 400).  At present the verdict stands at upwards of 800 per chest the cost price: - but this is clearly untenable.

   RYAN, C.J.  The rule of apportioning the damages has been correctly stated; the difficulty arises from the vagueness of the evidence.  Upon the whole we are disposed to take the highest price of the "scrip" (Rs. 400) as the measure of damages.  We do not allow interest, because we think that the freight and commission may be set off against it.   The rule will therefore be made absolute for reducing the verdict to Rs. 400 per chest.  Each party to pay their own cost of this motion.

   [This will reduce the whole damages to about Rs. 27,000.]

   Rule absolute accordingly.

 

Source: (1840) 32 (N.S.) Asiatic Journal and Monthly Register 190-191

April 3.

Ramsabuck Mullick v. T. De Souza and Co. - This is the opium case in which the most important of the pleas was tried upon demurrer last term. The issues of fact now come on for trial. The plaint was upon a guarantee of the safe returns of the consignment of opium. The defendants had pleaded - first , the general issue, denying the contract of guarantee; secondly, that there was no written agreement, within the Statute of Frauds, wherein the consideration was set forth; and thirdly, that a "reasonable time" had not elapsed at the time of commencing the action.

The Advocate-General, for the plaintiffs, stated, that the action was brought by the plaintiffs as the consignors of sixty-five chests of opium, valued at about Co.'s Rs. 58,000, consigned to Messrs. Gemmell and Co., the agents of the defendants at Canton, upon the guarantee of the defendants of the safe returns of the consignment in sycee dollars or government bills. The opium had been given up by Gemmell and Co., to Mr. Elliot, the Superintendent, and the only returns made consisted of certain scrip, which the plaintiff had refused to accept. The two first issues raised would be decided by the written contact of guarantee given by the defendants; and with respect to the "reasonable time," it would be shown that six months was considered a reasonable time, and, at all events, it was apprehended the defendants were estopped upon this point, as certain returns (such as they were) had been made before action brought. The measure of damages was to be regulated, it was conceived, by the price actually given for the opium in question.

A number of documents were put in and proved on the part of the plaintiffs. Among them were the invoice and bill of lading, a letter from plaintiff to defendants, dated the 11th of January, and a letter from the defendants to the plaintiff, dated the 16th of January, containing the guarantee. The latter was in these words:

"We have to acknowledge bill of lading for (the opium in question), which has, in compliance with your request, been consigned to our agents at China, Messrs. W. and T. Gemmell and Co., to be disposed of immediately on your account, and the proceeds remitted in sycee silver dollars or government bills, if in specie under insurance. Commission at 2½ per cent. will be charged on the whole transaction, as agreed upon; and we hereby guarantee the safe returns of the consignment."

Baboo Mutty Loll Seal proved, that five or six months was the usual period for the returns; but he said he spoke only of times when sales could be effected without difficulty, not of times when peculiar circumstances intervened to reduce the prices to a nominal quotation, or to interrupt the traffic altogether.

Mr. J. Crooke spoke to the same facts. Witness knew of returns made in August 1839, but this was not a regular sale, in the ordinary course of business, but in order to make up the quantity required by Commissioner Lin.

Mr. Charles Kemp Dove, Deputy Registrar of the Opium Board, proved the price given for the opium in question at the sales of January 1839. In cross-examination, witness said that, in the May and June following, the prices had fallen to about Rs. 200, from the 860 to 865, which had been commanded in the January sales.

Baboo Dwarkanauth Tagore deposed that in China, on the coast, 800 or 900 dollars had been obtained in certain adventures. In cross-examination, witness said that those were recent transactions, the barque Sir Edward Ryan, which arrived in January last, having been the first which brought intelligence of the high sales. For a long time subsequent to the stoppage of the trade, no sales had been effected at Lintin of Canton, and prices were merely nominal there. Without specific instructions, an agent at China would not be authorized to carry the opium from Lintin to the coast for sale. Up to the sailing of the Sir Edward Ryan, the general prices in Calcutta were not higher than from Rs. 200 to 300 to 400. It was bought on speculation as to its probable ultimate value.

Mr. Leith, for the defence, took several grounds. In the first place, there was a question whether the contract proved corresponded with the contract as laid in the plaint. He submitted that the letter written by the plaintiff, dated 11th of January, was not sufficiently connected with the letter of the defendants of the 16th, containing the guarantee, to form any part of the contract, or to bind the defendants in any way. It would be proved by the book-keeper of the defendants that there was a conference between the parties between the 11th and 16th, and that the 2½ per cent. was to be received by Gemmell and Co., not by the defendants. If so, there would be on consideration moving to the latter, and the agreement would be insufficient under the Statute of Frauds. Independently of this, it was submitted that the guarantee was only intended, and was so be construed, as a security against the insolvency or wilful default of the agents, and moreover that the guarantee liability was not to attach until after sale. It was clear that the defendants did not intend to guarantee the safe arrival of the goods in China, and it was equally clear that they had not guaranteed that any specific price should be obtained, or indeed that any sale should be effected at all, but merely that if a sale should be effected, the returns should be secured to the plaintiff. With respect to the time elapsed, - there had intervened but nine months between the shipping of the consignment and the filing of this plaint. This might have been more than a "reasonable time" for making the returns under ordinary circumstances, but it had not been shown to be a reasonable time with reference to the utter stoppage of the trade and other recent events in China. Returns might yet be made according to the strict letter of the contract. As to the amount of damages, if the Court should be of opinion that the plaintiff must recover something, - it seemed clear that the verdict must be confined to nominal damages only, or else to the minimum value of opium at Lintin and Canton about the period of the surrender. The price which the buyer may have given for his chest of opium in Calcutta had nothing whatever to do with the question. The criterion was, not what the opium had been got for, but what could be got for the opium.

A witness was called for the defendants, who stated that, between the 11th and 16th of January, it was verbally arranged between plaintiff and defendants, that the 2½ per cent. commission  was to be received by Gemmell and Co., and that no part of it was to be received by the defendants.

The Court were of opinion, that there must be a verdict for the plaintiff upon all the issues, and for the present they would take the estimate of damages according to the price proved to have been given for the opium, as being the most certain and definite criterion. The question of amount of damages was the most difficult question in the case. The defendant might move for a nonsuit, or a verdict upon the points of law raised, if advised, or else to reduce the damages to a smaller sum.

Note

[1] This case was also reported in (1840) 32 (N.S.) Asiatic Journal and Monthly Register 85-86.

Published by Centre for Comparative Law, History and Governance at Macquarie Law School