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Colonial Cases

Shobey v. Whittall 1884

[sale of goods, shipping]

Shobey v. Whittall

Supreme Court for China and Japan
Rennie CJ, 12 May 1884
Source: North China Herald, 16 May 1884

Shanghai, 12th May 1884
Before Sir Richard T. Rennie, Chief Justice, and R. A. Mowat, Esq., Assistant Judge.
YUKIOKE SHOBEY (Plaintiff and Respondent) v. EDWARD WHITTALL (Defendant and Appellant.)
  This is an appeal against a judgment given by N. J. Hannen, Esq., in H.B.M.'s Court for Japan.
  Mr. Wilkinson appeared for the defendant and appellant.
  The Plaintiff is a banker and merchant, residing at Tokio, Japan, and the defendant is a British merchant residing at Yokohama, Japan.  The Plaintiff alleges in his original petition that on the 27th August, 1883, the defendant agreed to sell to the plaintiff, and the plaintiff agreed to purchase, one steamship for $10,000, and 410 bales of cotton yarn and 2,200 pieces of grey shirtings for $38, 530.  The small steamship Jumbo was to be paid for in cash, and in the event of anyone putting in a claim for the steamer so that the plaintiff was unable to deliver it, he was to refund the $10,000 purchase money.  Of the $38,530 for cotton yarns and shirtings, $6,177 was to be paid in cash, and the balance in approved bills due in six months from date, say in all $32, 353, interest on this $32,353 to be paid at the rate of ten per cent.  The $6,177 payable in cash was duly paid, and a deposit note of the "Nito Ginko" Japanese bank, Tokio, for $32,353, was also delivered by the plaintiff to the defendant.  The petition went on to allege that the defendant appropriated the $10,000 for the steamer, but it had not been delivered on account of another claim on it which had been lodged at the Kanagawa Kencho by another person.  It further alleged that the defendant had appropriated the sum of $6,177, residue of the cash payment, and had received without objection and retained the deposit note for $32,350, but had delivered only the 2,200 pieces of grey shirtings.  The plaintiff therefore prayed that the defendant might be ordered to deliver the remaining goods or refund the money, and to pay the interest on the money and the damages sustained by the plaintiff in consequence of the non-delivery of the goofs, as well as the costs of the suit.
  The Defendant, in his answer, admitted that he appropriated the $10,000 for the steamer, but said the plaintiff had taken delivery of the steamer.  He also admitted that he had appropriated the sum of $6,177 cash payment made on account of the cotton yarn and grey shirtings, but he denied having received any deposit note or bill for the balance of the purchase money.  The only deposit note or bill which was offered to him by the plaintiff was one which was unnegotiable, which could not be discounted by the defendant, and which was disapproved by him.  Defendant made delivery of the grey shirtings because their value was less than the $6,177 already paid; but he refused, and would still refuse, to deliver the balance of the said goods against the bill or note offered, or against any other bill or note but a bill or note that could be negotiated in the usual course of business.
  In the course of the haring of the case it was admitted that the legal difficulties against the delivery of the steamer had been removed, and the steamer duly delivered to the plaintiff.  The part of the plaintiff's case relating to the steamer was therefore abandoned.
  His Honour, in giving judgment, said,
  The conclusion that I come to is that although the defendant might after having signed the contracts for the sale of the steamer and merchandise have said it is a condition precedent of my carrying out the contract that you should hand me approved bills for $32,000, he cannot after having taken what was a substantial part of the consideration, viz., $16,000, in cash, still insist upon this as condition precedent to the handing over the yarns.  He would be clearly entitled to his cross-action against the present plaintiff for alleged breach of the contract by non-delivery to him of approved bills. As, however, there is no cross-action, I cannot deal with this, and I must leave the parties to take such action as they may be advised.  There will therefore be judgment for the plaintiff on the second prayer of his petition, with costs, against which latter the defendant will be entitled to set off $300 as assessed costs of that portion of the petition which was abandoned during the course of the suit. There will also be an enquiry as to what damages the plaintiff has suffered by the wrongful detention of the yarn."
  The damages were subsequently assessed at $1,091.67 and the plaintiff's costs at $750.
.  .  .  
Mr. Wilkinson, in opening the case of the appellant today, said this was an appeal from Her Majesty's Court for Japan from a judgment of that Court in the case of Yukioke Shobey against Edward Whittall.  The judgment required the appellant to deliver certain goods or to pay their value.  He appeared for the appellant and he would proceed to show that the judgment was wrong - that the judgment of the Court below ought to have been for the defendant, now the appellant.  
  Mr. Wilkinson then read the original petition of the plaintiff.  He stated that the claim with regard to the steamer had been abandoned, the steamer having been delivered before the petition was filed.  In the course of the hearing the Counsel for the plaintiff admitted that such was the case, and said he did not know that the legal difficulties with regard to the delivery of the steamer had been removed.  Mr. Wilkinson then proceeded to read the defendant's answer to the petition, and the judgment of the Court.
  The Chief Justice asked if the judgment had been carried into execution.
  Mr. Wilkinson said he believed it had not.
  The Chief Justice said it seemed to him that the learned Judge in the Court below in point of fact argued that the defendant ought to have instituted a cross-action in the Court below, and even if his case was a good one he had put himself in a false position by not raising a cross-action.
  Mr. Wilkinson - What the defendant answers is this - "You ask me to deliver these goods.  I only promised to deliver them on receiving an approved bill, and you are not entitled to receive the goods until I receive the approved bill."
  The Chief Justice - It appears to me that the opinion of the learned Judge is this - You may have a good defence which you could have taken advantage of by cross-action.  That I do not know; I cannot deal with it now.  But at any rate since you have not taken that line to protect yourself you are out of Court now.
  Mr. Wilkinson said that appeared to be the view of the learned Judge, and it would only be necessary to point out very shortly that the learned judge was entirely mistaken in that view.  He proposed to show that the plaintiff was not entitled to a judgment for delivery, that he was not entitled to a judgment for the value of the goods, that he was not entitled to a judgment for the damages found by the learned judge, and that the defendant was entitled to a judgment in his favour, and that such a judgment ought to carry costs with it.  Mr. Wilkinson then proceeded to argue that the contract for the steamer and the contract for the cotton yarn and shirtings were two distinct and separate contracts.
  Shortly, what took place was this.  The plaintiff agreed with the defendant, "If you give me these goods I will give you six thousand dollars in cash and an approved bill fort thirty-two thousand." He paid the six thousand dollars in cash, and he gave the defendant a bill; but the defendant said "That is a bill I cannot take; I must have a proper bill." And the leaned judge said that because the plaintiff paid a thousand dollars in cash, therefore he was entitled to the goods although he never gave an approved bill.   That is to say, on paying a part of the purchase money he was to receive goods which it was expressly stated that he was not to receive until he had paid the whole in a particular way. He thought he had only to state the case in this way to show that there was something wrong in the judgment of the Court below.
     The Chief Justice - Let us assume the main facts to be correct - that it was agreed that so much was to be paid in cash, and for the balance an approved bill was to be given; then the defendant takes the agreed amount in cash and keeps it.  I take it that according to the terms of the contract he was to get the amount in cash and his approved bill together; and he was entitled to get the money and the bill before he parted with the goods.  Very well, then.
  The defendant was surely in this position: when he was tendered the six thousand dollars in cash, and a certain amount in bills, he could then have said, "I am not going to take the six thousand dollars and this bill." But if he takes and retains the cash, then he puts himself in the position of keeping the money and not giving the man his goods.  It may be quite true that he has a right to insist upon having an approved bill, and that the bill which was given him did not come up to the mark.  But had he any right to take the money and hang on to it and say, "Because you have not given me an approved bill I am not going to give you the goods?" I am simply putting this to you as the way I read the Judge's argument.  He says it does not follow from that that the defendant has no remedy.  But having elected to take that line it was his duty to hand over the goods, and if he did not choose to do that, the course open to him them was to institute a cross-action against the plaintiff in that Court to stay proceedings, and so protect himself.  But h had no right, as I understand the learned Judge, to blow hot and cold, and to say, "I have accepted he deposit, but because you have not given me an approved bill I will not deliver the goods."
  There were two courses open to him.  Her could say, "I will not have your cash payment and your note;" or, if he took the deposit and retained it, he must be liable to hand over the goods, and his means of protecting himself was by instituting a cross-suit against the plaintiff for not having given him an approved bill.
  Mr. Wilkinson believed that was the view taken by the learned Judge, but he thought he could show that it was entirely erroneous.  There were two conditions to be fulfilled; one was that he should pay a certain amount of cash, and the other that he should give an approved bill.  He fulfilled one condition, and then it was argued, according to the theory of the learned judge, that because the defendant allowed one condition to be fulfilled -
  The Chief Justice - Therefore there comes upon him an obligation to deliver.  That I understand to be the argument.  I do not say I agree with it yet.
  Mr. Wilkinson - I hope you do not, my Lord; because it appears to me to amount to a simple statement that if a man is to fulfil two conditions in order to get something, he is entitled to get it on fulfilling only one condition. - Mr. Wilkinson then proceeded to argue, upon the evidence taken in Japan, that there was no evidence whatever that the defendant had waived the condition of the contract as to the delivery to him of an approved bill.  He explained that the defendant had delivered goods to the value of $14,000, including the steamboat for $10,000.  He said he would at once admit that an "approved" bill was not a bill which the seller approved, but a bill he ought to approve, and he quoted from the evidence to show that the bill given by the defendant to the plaintiff was a deposit note which could not be negotiated, and which was not an approved bill in any sense of the word.
  The Assistant Judge remarked that the respondent did not appear in his petition to contend that the bill was an approved bill.
  Mr. Wilkinson argued further that there had been no waiver on the part of the defendant of the condition as to an approved bill.
  The Chief Justice took it that the learned Judge's argument was that there had not been so much a waiver of the condition as to an approved bill as an execution, as it were, of the contract, by a part delivery and a retention of the deposit.
  Mr. Wilkinson proceeded to contend that whatever remedies the plaintiff had before the Judicature Act, he had no further remedy now.  He cited cases in support of this contention.
  The Chief Justice thought it was unnecessary for Mr. Wilkinson to enlarge on that point, because the Judicature Act had neither given any further power to this Court nor diminished its power.  The Judicature Act showed how the fusion of law and equity had been brought about in England but the fusion of law and equity was brought about in this Court in 1865.
  The Court then adjourned till the next morning at 10 'clock.
.  .  .  
13th May.
  The Court opened at 10 o'clock.
  Mr. Wilkinson, proceeding with his argument, contended that before the passing of the Judicature Act the plaintiff would have had no remedy either in law or in equity, and he therefore had no remedy now.  The judgment ordered the delivery of certain goods; but these goods were not specified in the petition, and when the Order of the Court came to be drawn up they were in no way identified.  The order was to deliver up a certain quantity of yarns of a certain sort; but as to the particular yarns to be delivered up there was no identification, so that it could not be said, "these are the yarns which are to be delivered up," or. "These are not the yarns which are to be delivered up."  In the argument on the part of the plaintiff it never was contended that they were specific goods. Mr. Wilkinson cited the case of Cuddy and Rutter, reported in White and Tudor's Leading Cases in Equity, vol. 1, page 704, to show that a decree for specific performance never would have been given in England.
  The Assistant Judge expressed his opinion that the order of the Court below was not an order for specific performance.
  Mr. Wilkinson then contended that if everything was to be taken against the defendant, the plaintiff was not entitled to the remedy that had been given.  He cited the case of Chinnery and Vial, 29 Law Journal Exchequer, 180, which, he argued, entitled only to recover the real damage he has sustained.  Under no form of action would specific performance have been decreed or would the plaintiff have been entitled to recover the full value of the goods.
  The Assistant Judge quoted from Benjamin on Sales, p. 648 to a similar effect.
  Mr. Wilkinson said in this case the learned Judge in the Court below appeared to have overlooked altogether the difference between a man suing for his own goods and a man suing for goods which he had not paid for and of which he had never entered into possession.  The goods never left the defendant's godown.  He cited the case of Gots v. Rose, referred to in Benjamin on Sales, p.272, which, he contended, was essentially similar to the present case, and which allowed that the vendee was not entitled to the remedy given in this case.  He cited other cases, which, he contended, went to show that even if the property had passed to the plaintiff, he was entitled only to damages.  The case of Gots v. Rose showed that the property had not passed to the plaintiff, and therefore he was not entitled even to damages.  He had not fulfilled the conditions upon which he was to get the goods, and therefore he never was entitled to obtain possession of them.
  The Assistant Judge said unless there as something in the cases cited by the Court below, and in the theory that part-payment made a difference, it seemed to be quite clear that the plaintiff was entitled at the most to damages.  The Bench therefore desired Mr. Wilkinson to confine himself to the judgment.
  Mr. Wilkinson did not see anything in the cases cited by the learned Judge of the Court below which went to support a decree for specific performance.  He thought he could show that those cases had been entirely misconceived.
  After some technical arguments as to the form of the pleadings,
  The Court adjourned till next morning.

Source: North China Herald, 30 May 1884

Shanghai, 27th May, 1884
Before Sir Richard Temple Rennie, Chief Justice.
27th May.
Before Sir Richard T. Rennie, Chief Justice, and R. A. MOWAT, Assistant Judge.
Between EDWARD WHITTALL, Defendant, and Appellant, and YUKIOKA SHOBEY, plaintiff and Respondent.
The appellant in this case seeks the reversal of an order of the Court below directing him to deliver to the respondent certain goods, or in default to pay to him the value thereof ($34,350), and further to pay to the respondent the sum of $1,091.67 as damages for their detention.  The goods in question are the portion still remaining in the appellant's possession of a quantity which he had sold to the respondent, but which he did not deliver because the respondent did not furnish an approved bill for $32,353 (the balance of the price), upon the performance of which condition alone, by the terms of the contract, was he respondent entitled to delivery.  
  The learned Judge of the Court below does not expressly find that the bill tendered by the respondent was not an approved bill - that point being, in his view of the law applicable to the case, immaterial - or that as a fact the appellant accepted it, but on the evidence we come to the conclusion that the bill was not, in the English acceptation of the term, an approved bill, nor one that the appellant ought to have accepted, and that he did not accept it.  Indeed in the written argument for the respondent which forms part of the record, it is no longer contended that the bill as an approved bill or that the appellant had accepted it, though these points were sought to be established on the part of the respondent at the hearing in the Court below.
  The questions of fact would thus appear to be virtually abandoned, and accordingly the position of the parties may be fairly stated in the way we have stated it; and as so stated, it is obvious that a conclusion adverse to the appellant ought not to be come to unless authority on the point is express and explicit, for he is seeking merely to retain possession of his goods until the purchaser has paid the balance of the price in the form in which he agreed to pay it against their delivery to him, while the respondent (the purchaser) is seeking to get the goods without paying the price.
  The principle of law which, in the opinion of the Judge in the Court below, gives the respondent the right to delivery of the goods is thus stated in the Judgment:-
  Where one party to a contract has had a substantial part of the consideration, he cannot set up e non-performance to a condition precedent as a defence," and the fact in the case in virtue of which that principle of law is held to become applicable is the payment by the respondent of $6, 177, part of the price.  By the contract $6,177 was to be paid in cash, and the remainder ($32,353) of the total price of the goods was to be paid by an approved bill for that amount; but as the respondent did not tender such a bill, the appellant refused to deliver more goods that he had already delivered.  He had delivered all the shirtings (to the value of $4,180) that he had sold, but the yarns (to the value of $34,350) he did not deliver for the reason stated.
  In the judgment of the Court below, the cash payment is treated as one of $16,000, but this is arrived at by including a cash payment of $10,000 for a steamer which was to be paid for wholly in cash, and which was so paid for.  Now the contract for this steamer was in our opinion a separate and distinct contract from that for the sale of the shirtings and yarns.  There were two separate written contracts, bearing different dates, and the mere circumstance that the exact sum to be paid in cash upon the shirting and yarn contract was evidently arrived at by taking one-third of the total amount to be paid under the two contracts, does not make the two contracts one.  Moreover, so much did the respondent himself treat the contract for the steamer as a separate contract that in his petition in the Court below he asked, in respect to it, for a different form of relief altogether; he asked that the price paid might be returned to him on the ground that he had not been able to obtain the use of the steamer.  This portion of his petition indeed was abandoned during the hearing, but he had made it good, and had he had judgment for the return of the price on the ground of failure of consideration, how could it have been alleged that as to the rest of the case he had made a part-payment of $16,000 in cash? But, while reducing the cash payment to what we conceive to be its proportion to the whole price, it is unnecessary to dwell on this point, for in our view of the law, whether $16,000 were paid and only $14,000 worth of goods delivered, or whether $6,000 were paid and only $4,000 worth delivered, the respondent would not be entitled to judgment.
  The cases which the learned judge of the court below relied upon in support of the proposition of law already quoted are -  Greene v. Legg (23 L.J. Ex. 228), Ellen v. Topp (20 L.J. Exc. 241), While v. Beeton (30 L.J. Ex. 373)., and Carter v. Scargill (L.R. 10 Q.B. 564).  
  Bur, as was pointed out by Mr. Wilkinson in the course of his exhaustive argument for the appellant, in none of those cases was the condition precedent unperformed the payment of money, but in each, on the contrary, it was one which it was no longer in the power of the person desiring to be relieved from the performance of it, to perform; and he contended that even if any case could be conceived where the condition unperformed was the payment of money and to which the rule did apply, it did not apply to the case of a sale of goods where the condition precedent unperformed was the payment of the price.
  It is unnecessary to set out the facts of the several cases cited by the learned |judge, for in our view there is no analogy between those cases and the present, and we find nothing in the judgments which require us to apply the principle on which they proceed to a case like the present.  The doctrine which in our opinion underlies this case and which must be looked to for its correct solution, is the familiar one of the unpaid vendor's lien on goods which are still in his own possession. If no part of the price had been paid, we apprehend that the learned Judge would have had no hesitation in holding that the appellant was entitled to retain the possession of his goods (although by the contract the property in them had passed to the respondent) on the simple ground that he had  a lien on them till the price was tendered; but the circumstances of a part-payment by the purchaser would seem to have misled him into thinking that the nature of the case had essentially changed, whereas the only difference - that between part-payment and no payment at all - is one merely of degree.
  The Case, then, turns upon the effect of part-payment on the vendor's lien; is such lien thereby lost? On principle, that question, is appears to us, must be answered in the negative.  Why should a purchaser for cash be entitle to succeed in an action for delivery of goods on payment of a portion of the price, while where no payment was made he could only succeed on proving his readiness and willingness to pay the whole price? (We leave out of consideration the point whether even in the latter case the true remedy is not merely damages for breach of contract,) Surely in the one case he is only doing a part of what he is bound to allege and prove he was prepared to do in the other, and on what principle can the performance of a part be treated as equivalent to a readiness and ability to perform the whole?  In the present case the respondent agreed to pay $6,000 but did not tender the approved bill.  Is he to have the goods delivered up to him in derogation of his own agreement and as if this contract had been for a sale on credit except as to $6,000? It is to be remembered that he is suing for the goods.  He did not seek to rescind, or give notice of an intention to rescind, the contract, and then sue, under any form of proceeding that might be open to him, for the repayment to him of such of the amount paid as was properly payable to him, but he is suing to get possession of the goods which by his own agreement he stipulated he should not get except on the performance of a condition which, as the fact is, he has not performed.
  But there is authority against the doctrine that a vendor loses his lien by receiving a portion of the price.  In dealing with a case of stoppage in transitu (as to which the point was expressly decided in Hodgson v. Loy, 7 T.R. 440), the Judges use language which is wide enough to cover that of a lien where the vendee is not insolvent.  Thus, in Edwards v. Erewer (2 M. & W. at p. 377), Baron Parke observes:-
  The effect [of the stoppage [in transitu] is the same as if the consignor had not delivered them [the goods] on board the ship.  Then, if so" - and there is no reason for confining the supposed case to that of a purchaser who should subsequently become bankrupt - "he [the consignor] has a right to retain them till payment of the whole price.  Notwithstanding part-payment, he has a lien on the whole of the goods for the rest of the price."
  So the decision in Bloxam v. Sunders (4 B. & C. 941), which was a case of insolvency and of no payment at all, is treated as governing Milgate v. Kebble (3 M. & G. 100), where there does not appear to have been insolvency, and where a large proportion of the price (as much as 33 Pounds out of 38 Pounds) had been paid.  In the latter case, Chief Justice Tindal says, - "The plaintiff was not entitled to remove the goods till the price had been paid," and Justice Coltman says, - "The defendant cannot be considered as having abandoned his right to hold the goods until the residue of the price was paid." Again, in Lord v. Price (L.R. 9 Ex. 7 6), where there certainly was no insolvency, we have the right expressly affirmed, Baron Bramwell saying:-
  That right [of possession] was in the vendor, who was entitled to retain possession of the goods until the balance of the purchase-money was paid."
  Finally, a confirmation of this view (if confirmation be needed) is furnished by a consideration of the provisions of Section 2 of the Mercantile Law Amendment Act, 1856.  By that section Coutts of Law are enabled to grant specific performance of contracts to deliver goods, but on what conditions is such a decree to be made?  "The jury shall if they find the plaintiff entitled to recover, find by their verdict what are the goods in respect of the non-delivery of which the plaintiff is entitled to recover and which remain undelivered; what (if any) is the sum the plaintiff would have been liable to pay for the delivery thereof; .  .  .  .   and thereupon, if judgment shall be given for a plaintiff, the Court .  .  .  .   on the application of the plaintiff, shall have power to order execution to issue for the delivery of the said goods - not on part-payment, but - "on payment of such sum (if any) as shall have been found to be payable by the plaintiff as aforesaid," for anything short of full payment would not be equity, and he who seeks equity must do equity.  It appears to us that the learned Judge has been misled by the cases he has cited into giving in effect the large relief of specific performance on conditions of his own, and has dispensed with the performance of the conditions which the statute has prescribed, i.e., payment in full in the form agreed upon by the parties.
  The learned Judge indeed, while finding that the appellant was bound to deliver the goods to the respondent, or pay him their value, was of opinion that the appellant "would be clearly entitled to his cross-action against the present plaintiff [the respondent] for alleged breach of contract by the non-delivery to him of approved bills,: but, he goes on to say, "as there is no cross-action I cannot deal with this."  But if part-payment by the plaintiff prevented the defendant setting up in answer to the original action, the breach by the plaintiff of the stipulation n as to the approved bill - as the learned Judge felt it did - it would seem that the same circumstance of part-payment ought to furnish an answer to a cross-action brought by the defendant, and therefore the cross-action to which the learned Judge remits the defendant for relief would give him no relief at all.  On the other hand, if part-payment could not furnish an answer to a cross-action by the defendant, but he would be entitled nevertheless in such an action to relief, then it is difficult to see why it should have prevailed against the defendant in the original action.
  On a review of the whole case, we find, on the one hand, that the respondent failed to comply with the condition of the contract as to the bill, and on the other, we cannot say that the appellant should have taken any other course than the one he took. When the cash payment was made and the bill tendered, he accepted the cash and set about making enquiries whether the bill (which was a Japanese document) was such a bill as he could accept. The result of his enquiries being unfavourable, "I," says the appellant in his evidence, "told the plaintiff the bill was not approved, and he must give me other securities.  I told him he could take away the bill as it was of no use to me.  He said he would try and get better security."  This was on the 29th August, and two days later the appellant delivered the shirtings upon the presentation of his delivery order thereof, he having, as he says, enough money for them.  After this nothing further would seem from the evidence to have taken place till a petition was filed against the appellant on the 12th November, praying (amongst other things) that he should be ordered to deliver the yarns and to pay damages for their detention.  We are of opinion that on the facts of the case the plaintiff below was not entitled in law to such a decree, but that judgment ought to have been entered for the defendant.  There will accordingly be judgment for the appellant with costs both below and here.  This judgment, it is hardly necessary to add, leaves the respondent at liberty to bring at the proper time such action as he may be advised for the recovery of such proportion of the payment he made to the appellant for which he has received no value.

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