Wakilii

Gundle v Sunderji (Civil Appeal No; 19-39)

East African Court of Appeal · [1938] EACA 168 · 1938 Appeal Allowed AI-generated summary ↓ Download Pin to watchlist Add to matter
Jurisdiction
Uganda
Case Type
Civil appeal from Resident Magistrate's Court, Mombasa, dismissal of claim for money paid
Decision
Judgment entered for the appellant for Sh. 170/75 being the balance of money paid on behalf of the respondent

Observed later treatment

No later-treatment classification is recorded for this judgment.

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Holding

Held that where a principal appoints an agent to confirm an indent subject to manufacturer's acceptance with very urgent shipment, and the manufacturer supplies most but not all items, the agent is justified in exercising discretion to accept and pay for the goods supplied in the absence of fraud or negligence. The agent is entitled to indemnity under section 222 of the Indian Contract Act as the payment was a lawful act within the authority conferred by the indefinite instructions and commercial context.

Outcome

Judgment entered for the appellant for Sh. 170/75 being the balance of money paid on behalf of the respondent

Facts

In December 1937, respondent forwarded a pro forma indent through a local firm to John Palmer Ltd. for various goods valued at £10-15-6, shipment very urgent, to be confirmed by appellant I. Gundle & Co. of London. The indent was subject to acceptance by the manufacturer. Appellant was appointed confirming agent to take delivery and pay for the goods. On 14 February 1938, John Palmer shipped all goods except six items (beakers, egg-cups, plates, salt, pepper and mustard boxes) valued at Sh. 16, as they had ceased stocking bakelite items. Appellant paid for the goods shipped. On 24 February 1938, appellant notified respondent of the cancellation. Respondent refused delivery on the ground that the shipment was short. The goods were sold at auction. Appellant sued for the balance of the price paid on respondent's behalf. The magistrate dismissed the suit, finding appellant had no authority to accept partial delivery.

Issues

  1. Whether an agent appointed to confirm an indent and pay for goods had authority to accept and pay for a partial delivery when the manufacturer could not supply all items ordered.
  2. Whether the agent was entitled to indemnity from the principal under section 222 of the Indian Contract Act for payment made in exercise of discretion where the indent was subject to manufacturer's acceptance and shipment was very urgent.

Orders

  • Appeal allowed.
  • Judgment for the plaintiff as claimed.
  • Costs awarded to the appellant in the Court of Appeal and in the lower court.

Rules and key headnotes

Principal and Agent — Authority of Agent — Indefinite Instructions
Where a principal gives indefinite instructions to an agent and the agent fairly and honestly interprets those instructions and acts on that interpretation, the principal cannot repudiate the contract on the ground that he intended a different interpretation, as the error arose from his own indistinctness of expression.
Principal and Agent — Indemnity — Indian Contract Act Section 222
Under section 222 of the Indian Contract Act, an employer is bound to indemnify an agent against the consequences of all lawful acts done in exercise of the authority conferred upon him, and where an agent exercises discretion in the absence of fraud or negligence in circumstances of indefinite instructions, the agent is entitled to indemnity.
Confirming Agent — Authority — Partial Delivery
A confirming agent appointed to confirm an indent subject to manufacturer's acceptance and very urgent shipment has implied authority to accept and pay for goods as supplied where the manufacturer cannot supply all items, provided the discrepancy is slight and the agent acts without fraud or negligence.
Sale of Goods — Section 31(1) — Application Between Principal and Agent
Section 31(1) of the Sale of Goods Ordinance, which permits a buyer to reject goods delivered in lesser quantity than contracted, does not apply as between principal and agent but only as between seller and buyer.

Legislation cited (3)

  • Indian Contract Act s.222
  • Sale of Goods Ordinance s.31(1)
  • Sale of Goods Ordinance s.59(2)

Cases cited (7)

  • Johnston v Kershaw (1886) 2 Exch. 82
  • Service v Bain (1893) 9 T.L.R. 95
  • Ireland v Livingstone (1872) 5 Eng. & Ir. App. 395
  • Boden v French (1851) 138 E.R. 351
  • Cobridge S.S. Co. v Bucknall (1910) Comm. Cas. 138
  • Veigall and Co. v Runciman and Co. (1916) 85 L.J. K.B. 1187
  • Loring v Davis (1886) 32 Ch.D. 625

Full judgment

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Gundle v Sunderji (Civil Appeal No; 19-39) [1938] EACA 168 (1 January 1938)
Source: this page presents Wakilii’s issue analysis and metadata for a publicly reported Ugandan judgment. Any AI-generated summary is marked as such. Judgment text is sourced from the Uganda Legal Information Institute (ulii.org). Wakilii is not affiliated with ULII.