British and Beningtons, Ltd, v Mazdehee Tea Company, Ltd; British and Beningtons, Ltd, v North Western Cachar Tea Company, Ltd; British and Beningtons, Ltd, v Baintgoorie (Dooars) Tea Company, Ltd (Consolidated Appeals.)
| Jurisdiction | England & Wales |
| Judge | Lord Sumner,Lord Wrenbury,Lord Atkinson |
| Judgment Date | 31 March 1922 |
| Judgment citation (vLex) | [1922] UKHL J0331-2 |
| Date | 31 March 1922 |
| Court | House of Lords |
[1922] UKHL J0331-2
House of Lords
Lord Buckmaster.
Lord Atkinson.
Lord Sumner.
Lord Wrenbury.
My Lords,
Four points have been argued in this case; (1) that the three written contracts were discharged by frustration of the commercial purpose of the adventure; (2) that they were discharged by mutual consent, when the parol contract of 12th May 1920 was made; (3) that the sellers repudiated their obligations under the written contracts and that the buyers accepted that repudiation and so terminated them; and (4) that, if, in truth, the buyers repudiated their obligations under the written contracts and the sellers purported to accept such repudiation, the latter were not then ready and willing to perform their own obligations and, therefore, could not recover nominal or any damages for the buyers' breach.
(i) The arbitrator has found against frustration, so far as it is a matter of fact. It certainly is not a matter of abstract law, and as all this tea reached British ports without mishap and is not a particularly perishable commodity, any frustration of the commercial objects of the adventure must have been connected with markets and prices or other matters of fact, which were for the arbitrator. I, therefore, think that this point fails.
(ii) Morris v. Baron determines the second point, a case which we have only to appreciate and apply. The question is whether the common intention of the parties on 12th May 1920 was to "abrogate," "rescind," "supersede" or "extinguish" the old contracts by a "substitution" of a "completely new" and "self-contained" or "self-subsisting" agreement, "containing as an entirety the old terms, together with and as modified by the new terms incorporated."
In the present case the old contracts were three and three only. They are expressed in letters, though with a reference to the public sale conditions. In my opinion this reference is exclusively for the purpose of incorporating the arbitration clause, No. 9, and the other clauses, which relate to public auction sales of tea already landed, weighed and delivered out of bonded warehouse and offered for sale by auction in London, are not germane to or incorporated in the bargain now under discussion. In any case neither the letters of contract themselves nor the public sale conditions contain any term, such as one often finds, that "Each instalment is to be deemed to be a separate contract" or anything to that effect. It was, undoubtedly, inevitable that the tea, which was the subject-matter of each contract, viz., the unsold balance of the sellers' 1919-1920 crop, excluding dust, should come forward in several shipments and each shipment would then, for a variety of purposes, connected with carriage, discharge, weighing, payment, and so forth, be treated separately from the other shipments; but it seems clear that, for the purposes of the doctrine of Morris v. Baron, the original contract in the case of each seller is the entire contract for the sale of the entire unsold residue of the crop in question. Whether the remainder of the tea bought in each case was shipped and disposed of before or after the various shipments dealt with in these arbitrations, it is clear, on reducing maunds to pounds, that the shipments dealt with by the arbitrator constituted in each of the three cases a fraction only of the whole of the tea bought, ranging, roughly, from one-seventh to three-fifths and even so in no case was the tea, to which the unwritten agreement of 12th May 1920 applied, more than a fraction of the tea dealt with in each case by the arbitrator, though it was in each case over one half and in the Baintgoorie (Dooars) case it slightly exceeded two-thirds. Not only did that agreement deal only with a portion of the whole subject-matter of each of the original contracts, but it related only to the allowance to be paid for taking delivery at places in Scotland and not ex bonded warehouse in London. It did not include the cases where tea was at Plymouth or in an unbonded warehouse in London, to which the original contracts remained applicable, as they were applicable or had been applied to the large quantities of tea, about which we know nothing except that they were covered by the contracts.
Under these circumstances it is plain that the three original contracts were not made an end of on 12 May 1920, but were meant at most to be subjected to a variation or alteration as to the manner and measure of performance of the original terms. The change does not go to the very root of the original contracts nor is it inconsistent with them: it...
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