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Colonial Cases

Maung Shwe Oh and another v. Maung Tuh Gyaw and another, 1904

[breach of contract] 

Maung Shwe Oh and another v. Maung Tuh Gyaw and another, 1904

Judicial Committee of the Privy Council
30 July 1904
Source: The Times, 1 August, 1904

LAW REPORT, July 30.
(Present - Lord Davey, Lord Robertson, and Air Arthur Wilson.)
  This was an appeal from a decree of the Chief Court of Lower Burma of January 4, 1901, varying a judgment of the District Judge at Moulmein.
  Mr. Jardine, K.C., and Mr. Leslie De Gruyther appeared for the appellants; Mr. Herbert Colwell for the respondents.
   Lord Davey, in delivering their Lordships' judgment this week, said the action was brought by the appellants against the respondents for recovery of Rs. 35,000 and interest, and (in substance) damages for breach of contract alleged to have been made with the appellants by the first respondent either on his own behalf or on behalf of himself and the second respondent. The Courts below had given the appellants judgment for the sum claimed with interest, but had held them not entitled to the other relief sought. The only question, therefore, was whether the appellants were so entitled to damages for breach of the alleged contract.  All the parties are engaged in the timber trade in Burma and Siam. The appellants are brothers and co-partners. The first respondent is an uncle of the appellants, and the second respondent is his son. For some time prior to July 2, 1897 (the date of the alleged contract), the first respondent had been in the habit of borrowing large sums of money from the appellant for the purpose of his business, and by a deed dated September 24, 1895, had mortgaged his stock of timber, the elephants employed by him in the forests, and other property to the first appellant for three lakhs of rupees. The first respondent resided and conducted his business at Moulmein, and the second respondent, under a power of attorney from him, was working certain timber forests in Siam as his agent.
  Previously to and in 1896 the appellants were working timber in a forest called Maungpai, in Siam, under a permit from the lessee, one Kamah.  But in the course of that year Kamah died, and his son and the appellants' rights in the forest thereupon determined. The appellants, on hearing of Kamah's death, immediately instructed one Maung Shwe Yin, his local agent at Zimmai, the capital of the State in which the forest was situate, to apply for six years' lease of it. The second respondent, who was in the country, also applied for the Maungpai forest, apparently through the same agent, and obtained a grant of it in his own name. In some way not very clearly explained, a sum of Rs. 16.000 belonging to the appellants, which was under Maung Shwe Yin's control, was advanced to the second respondent for the purpose of being used by him in part payment of the expenses of obtaining the grant at Maungpai.
  The second respondent informed his father that he had obtained the grant of the forest, and by a subsequent letter dated May 18, 1897, that he had to pay Rs. 70,000 for the expenses of obtaining it, which sum he requested his father to send him. It also appeared that the Burma Trading Corporation was anxious to obtain rights in the forest and opened negotiations with the second respondent for the purpose. The breach relied on was a subsequent agreement made by the second respondent with that company.
  In these circumstances the first respondent applied to the first appellant and one Payataga Ko Na Ouk to advance him Rs. 70,000 (including the RFs. 15,000 already advanced at Zimmai), which they agreed to do in equal shares on the terms of a letter of July 2, 1897, which was relied on by the appellants as the contract in suit. In that the first respondent said he would not allow his son to let out the Maungpai forest or permit any person to fell timber for six years, but he would make him, when he returned home, arrange with them in some way to go on working the forest for that period. If, in making the allotment of places for working, there was any disagreement, he and his son would repay the Rs. 70,000 with interest at 2 per cent. per month, and they two would hold themselves responsible for the sums advanced.
  The respondents said that the second respondent was the only person interested in the permit to work the Maungpai forest, and as he was not a party to the alleged contract, there was no effective agreement. In answer to that argument it was contended in the Courts below that the respondents were partners in the timber trade and the contract was in the course of the partnership business. Both the District Judge and the learned Judges in the Chief Court on appeal decided that issue in favour of the respondents, and it was not raised before their Lordships.
  It was then contended that the second respondent acted as the agent of the first respondent only in obtaining the permit to work the Maungpai forest, and that the latter was the only person entitled to the benefit of the permit. The evidence in support of that issue relied on by the appellants consisted mainly of the inferences to be drawn from the relation of the respondents to each other, the fact of the second respondent being a person without means and the funds required being obtained on the credit of the first respondent, the contents of certain letters written by the respondent, and the language of the document of July 2, 1897, itself.  On that issue there was also a concurrent finding in both Courts against the appellants, and their Lordships agreed with it.  Their Lordships were of opinion that it was not proved that the second respondent obtained the permit for the Maungpai forest as agent for the first respondent.
  But, quite independent of that question, they thought that the appeal failed on the ground that the terms of the proposed contract did not appear from the document, and that according to its true construction it contemplated only the making of a contract on the return home of the second respondent, and left all terms to be arranged. They thought that according to the true construction of the document the only bargain was that the appellants and Ko Na Ouk should be allowed to work the forest if they succeeded in making an arrangement to that effect with the second respondent, and if they failed to do so they were to get their money back with interest. That was how Ko Na Ouk said he understood it, and their Lordships thought he was right.
  Their Lordships would therefore humbly advise his Majesty that the appeal be dismissed, and the appellants would pay the costs of it.


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