DWARKA PRASAD, J. - (1.) IN this appeal a short but interesting question of law arises as to what should be the measure of damages when an agent sells goods of the principal below the limit placed upon such goods by the principal and without being able to justify the sale in terms of the contract or otherwise ?
(2.) THE circumstances in which the aforesaid question arises may be briefly narrated. Hastimal, the original plaintiff, was doing his business as commission agent in the name of M/s Fatehchand Moolchand. Kesarimal, whose legal representatives are the defendants, was dealing in wool and did his business in the agency of the plaintiff 11 bales of wool belonging to Kesarimal were sent in the agency of Hastimal to Liverpool in England for sale. According to the plaintiff, the bales of wool were sold at the rate of 52-1/2 pence per pound and that the sale proceeds were duly accounted for in the mutual open and current account between the parties. On taking an account, a sum of Rs 1325/4/- was found outstanding against Kesarimal and as the same was not paid, Hastimal filed a suit for the recovery of the aforesaid amount along with interest, in all a sum of Rs. 1869/-against the legal representatives of Kesarimal. The defendants contested the suit and took the plea that Kesarimal, who was the owner of 11 bales of wool had instructed the agent Hastimal to sell the said bales at a price not below 62 pence per pound and that the plaintiff should account for the loss of 9-1/2 pence per pound, in respect of 11 bales of wool said to have been sold at the rate of 52-1/2 pence per pound at Liverpool. According to the defendants, if the price of 11 bales of wool, sold at Liverpool, was calculated at the rate of 62 pence per pound, then the amount payable to the defendants by the plaintiff would far exceed the claim of the plaintiff, and on this ground the suit of the plaintiff was liable to be dismissed. The trial court held that Kesarimal had placed a limit of 60 pence per pound for the sale of 11 bales of wool sent to Liverpool for sale. But relying upon the statement of Jhumar Lal (P. W. 4) the trial court came to the conclusion that the consent of Sire Kanwar, widow of Kesarimal was obtained for the sale of the goods in question at a lesser price, as after the death of Kesarimal his widow had instructed the agent that the goods in question were not desired to be retained any longer and should be disposed of at the best available prise. Having come to this conclusion, the trial court decreed the plaintiff's suit. However, the learned District Judge, Pali, allowed the defendants' first appeal and dismissed the plaintiff's suit, holding that the consent of Sire Kanwar for sale of the bales of wool at a lesser price was not proved to have been given. In this second appeal it was not disputed that the limit placed by Kesarimal in respect of sale of 11 bales of wool sent to Liverpool was 60 pence per pound and not 62 pence per pound, as alleged by the defendants. The document, Ex. 80 to Ex. 87 on record go to show that a limit of 60 pence per pound was placed by Kesarimal for the sale of the goods in question. Ex. 84 is the letter of M/s H. W. Hammand & Co. of Liverpool, in which they clearly admitted that they had taken notice of the limit of 60 pence per pound imposed on the consignment of 11 bales of wool, and they hoped that "we may get somewhere near it for cabling to you in case your reserve is not reached". The case of the plaintiff that after the death of Kesarimal his widow shrimati Sire Kanwar had agreed to sell the goods for a lesser price, is based on the solitary statement of P. W. 4. Jhumar Lal, who was the Munim of the plaintiff's firm M/s Fatehchand Mool Chand. The evidence of this witness has not been relied upon by the first appellate court and the learned District Judge has held that it was highly improbable that the consent of Smt. Sire Kanwar was obtained in the manner alleged by Jhumar Lal. It is not in dispute that Kesarimal died before March 7, 1958, and it has not been alleged that his consent was obtained. Smt. Sire Kanwar, who has appeared as D. W. 1, has categorically denied the story of alleged consent and has stated that her consent was never obtained. Thus there is oath against oath on this question and as the learned District Judge has placed reliance upon the statement of defendant Smt. Sire Kanwar in preference to the statement of PW 4 Jhumar Lal, Munim of the plaintiff, the question is purely one of appreciation of evidence. The finding of fact recorded by the first appellate court, after an appreciation of the evidence on record, is that the consent of Smt. Sire Kanwar widow of Kesarimal, or any other legal representative of Kesarimal was not obtained for selling the goods in question below the reserve price of 60 pence per pound, which was admittedly placed by Kesarimal during his life time on the sale of the consignment in question. Thus the conclusion that 11 bales of wool were sold at a price below the limit placed by Kesarimal, without the consent of the defendants, appears to be well founded and does not call for any interference. One more fact which appears to be significant in this respect is that in the letter Ex. 82 sent by the Bombay Firm M/s Moolchand Bastimal to M/s H. W. Hammand & Co. Liverpool, in reply to their cable regarding the bid of 52-1/2 pence per pound, it was stated that the price was low, yet they authorised the Liverpool Company to sell the lot according to their best discretion and in case they did not get a better price, they were authorised to sell the goods at the rate of 52| d. per pound. The letter Ex. 82 contains a definite authorisation on behalf of the plaintiff to the Liverpool Company, but it makes no mention at all as to whether the consent of the principal had been obtained for the sale of the goods at the rate of 52-1/2 d. per pound. Thus the only question which is now required to be considered relates to the quantum of damages which the defendants are entitled to obtain on account of the sale of goods in question below the limit placed by Kesarimal. The argument of Mr. Hastimal, learned counsel for the defendants, is that the defendants are entitled to the difference between the price at which the goods were sold and the limit price. According to the learned counsel Kesarimal had put his own valuation upon the goods, as he was entitled to do and if the plaintiff was unable to sell the goods upto the limit price then he should have returned the same to the defendants or should have sought fresh instructions from them. On the other hand, Mr. Sumerchand Bhandari, learned counsel for the plaintiff, submits that the measure of damages can only be the difference between the price which the goods were actually sold and the market price at the relevant date and as there was no evidence on the record about the market price of the goods within a reasonable time, the price fetched by the goods should be considered to be the proper price for such goods and the defendants were not entitled to any further amount by way of damages.
(3.) IN Manchubhai Navalchand vs. John H. Tod (1), a Similar question arose before their Lordships of the Bombay High Court, where the principal had placed a specified limit in respect of the price of a parcel of pearls sent for sale to London, but the same was sold by the London firm at a much lesser price. The limit which was placed by the principal on the parcel of pearls was -550, while the same was sold by the agents, the London firm, for - 270. It was held by the Bombay High Court in the aforesaid case that the measure of damages in a case where an agent had, in breach of his duty, sold the goods of his principal below the limit placed upon them the by principal, is the loss which the principal had sustained and if he had sustained no loss then the principal could ask only for nominal damages. In Chelapathi vs. Surayya (2) it was held that the sale made by an agent in contravention of the principal's direction is wrongful and the principal will be entitled to recover substantial damages if he succeeds in proving such damages and the measure of damages would be the amount as would place the principal in the position in which he would have been if the agent had not wrongfully sold the goods. Sir Charles Arnold White, delivering the judgment of the Madras High Court in the aforesaid case, observed that the measure of damages in such a case would be the difference between the price the goods fetched at the sale made by the agent and that which the goods would have fetched at the time when the principal might reasonably would have been willing to sell the same. In that case, the decision of the Bombay High Court in Manchubhai Navalcband's case (1) was relied upon. In Bowstead on Agency it has been observed that the measure of damages in an action by a principal against his agent for negligence or breach of duty by the agent in the course of an agency is the loss actually sustained by the principal. ;