Scottish Court of Session Decisions

An action was raised in the Sheriff Court of Lanarkshire by Messrs Shaw, Macfarlane, & Company, coal merchants, Glasgow, against Messrs Waddell amp; Son, coalmasters, Glasgow, concluding for payment of the sum of £138, 15s. as damages for breach of a contract to supply the pursuers with a cargo of coal for shipment in a particular steamer.

The pursuers averred, that in consequence of the failure of the defenders to implement the contract they had been obliged to supply a cargo of coal for the steamer at a loss of 3s. 9d. per ton, their total loss amounting to the sum sued for.

The defenders averred that the pursuers had failed to take timeous delivery of the coal, that in consequence all work had to be suspended at their colliery owing to the sidings having been blocked with waggons for the pursuers' contract, and that their business had been seriously dislocated thereby. They maintained that in these circumstances they were entitled to cancel the contract.

The following narrative of the facts is (with the exception of the two final paragraphs) taken from the opinion of the Lord President:—“It appears to be common ground, and both the Sheriffs have found, that in the beginning of April 1898 the pursuers entered into a contract with the defenders under which they agreed to purchase from the defenders 740 tons of their splint coal to be shipped at Grangemouth by the steamer ‘L'Avenir,’ the pursuers alleging, and the Sheriff-Substitute finding, that the probable days of loading were to be 12th to 16th April, and the defenders maintaining, and the Sheriff finding, that the agreement was more specific, viz., to load 12th to 16th April. The contract was made partly by verbal communications and partly by writing, the material letters being dated 4th and 5th April. Different quantities were mentioned in the earlier letters as the subjects of the purchase or purchases; but in a letter from the pursuers to the defenders, dated 4th April, they said—‘We have booked steamer, 740 tons, to load 12th to 16th as mentioned to Mr Hamilton on Friday, and will advise you when she is ready to load.’ In their reply of the same date, 4th April, the defenders sought to guard themselves both as to quantities and as to liability for demurrage and the consequences of a strike; and in answer to this communication the pursuers, still on 4th April, wrote, inter alia—‘We mentioned the size of the steamer, 740 tons, to your Mr Hamilton in our office on Friday, and gave him the probable date of loading, 12th to 16th, and he agreed to load her if we gave him plenty of time. We have now to advise you that

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the vessel will be ready to load on Wednesday 13th, and we will expect you to have the coal forward in good time.’ To this letter the defenders replied on 5th April, and in answer to their reply the pursuers on the same day wrote a letter in which they said, inter alia—‘Our object in asking Mr Hamilton to call at our office was to get him to undertake the loading of the full cargo, 740 tons, and this, after slight demur at the quantity, he agreed to, on condition that he would have reasonable notice and time to collect the coal;’ and they further said—‘the vessel must he loaded on the date indicated, and we shall hold you responsible for any loss we may sustain should you fail to supply the cargo as purchased.’ On the same day, 5th April, the defenders wrote to the pursuers, inter alia—‘We can do nothing more in the meantime than revert to the terms of our previous letters.’

It appears that on the morning of the 19th of April the defenders inquired at the agents of ‘L'Avenir’ and learned that nothing had been heard of her, and that Mr Hamilton telephoned to Mr Shaw cancelling the contract, but that later on the same day information was received that she had on that day sailed from Antwerp. This was communicated to Mr Hamilton, and he wrote to the pursuers the letter of 19th April mentioning that they had loaded ( i.e., on trucks), 740 tons splint coal, to be shipped per the ss. ‘L'Avenir’ at Grangemouth between the 12th and 16th of the month (April), that they were advised that ‘L'Avenir’ would not be ready to load the coal before Thursday (the 21st), and concluding—‘We have now to intimate that we have to-day been obliged to dispose of the coal otherwise, and that we cannot now undertake to supply any coal under this order.’

‘L'Avenir’ did not arrive at Grangemouth until the 22nd of April—she discharged her inward cargo on that day and night, and she was not ready to load outward cargo until the 23rd—ten days after the 13th, to which the pursuers had endeavoured to tie down the defenders as the day for loading, and seven days after the 16th mentioned by the pursuers as the second limit of the ‘probable days’ for loading.”

At the time the contract was entered into a strike of the miners in Wales was imminent, and the price of Scotch coal was rising rapidly.

On 18th April the whole of the 740 tons required to fulfil the pursuers' contract were ready loaded on trucks at and near the defenders' colliery, and in consequence the sidings at and near their colliery were blocked, with the result that the working of the colliery would have been seriously interfered with if the coal had not been disposed of otherwise. The trucks could not be forwarded to Grangemouth till traffic was opened by the railway company for a particular ship.

On 22nd February 1899 the Sheriff-Substitute ( Strachan) after a proof pronounced an interlocutor finding that the defenders were not justified in cancelling the contract, and that they were liable in damages to the pursuers, assessing the same at £138, 15s., and decerning for payment of that sum with expenses.

The defenders appealed to the Sheriff ( Berry), who on 26th July 1899 issued an interlocutor whereby he found that the defenders were justified in cancelling the contract, and therefore recalled the interlocutor appealed against and assoilzied the defenders with expenses.

The pursuers appealed to the Court of Session, and argued—Time was not of the essence of the contract. Section 37 of the Sale of Goods Act 1893 (56 and 57 Vict. c. 71) showed that this was a question depending on the terms of the contract. The correspondence showed clearly that the defenders had not regarded the contract in this light. But in any case it was their duty to tender delivery of the coal, which they had not done. Moreover, they had failed to show that they had any good reason for breaking the contract even if they had a right to do so.

Counsel for the respondents were not called upon.

At advising—