COUTURIER v HASTIE (1856)

Gustavus Couturier & Others. v Robert Hastie & Another (1856) 5 HLC 672

CITATION	(1856) 5 HLC 672
COURT	House of Lords
PLAINTIFF	Gustavus Couturier & Others
DEFENDANT	Robert Hastie & Another
BENCH	J. Baron Alderson, J. Wightman, J. Creswell and 6 others

INTRODUCTION-

Gustavus Couturier & Others. v Robert Hastie & Another is a case in which there was a contract for the sale of a cargo of Indian corn which was in transit. During the time of the contract, both the parties believed the existence of cargo. But in reality, the cargo which was in transit became overheated and thus was sold by the captain of the ship during transit itself. 

The present case is mainly about the customs practiced during trade and about the formation of contract.

The seller in present case is contending that the purchaser had gained the title while formation of contract and had accepted the risk of being damaged or lost and is now liable to pay for the same. So, the case highlights that there was a common mistake on part of both parties about the existence of subject matter and how it should be resolved. 

Each material point of this case are discussed below.

FACTS OF THE CASE-

• Plaintiffs- merchant at Smyrna.
• Defendants- cornfactors in London.
• This suit was filed in order to recover the price of a cargo of Indian corn.
• That cargo was shipped at Salonica, on a vessel (owned by plaintiffs) for a voyage to England.
• The said cargo was sold in London in error, upon a del credere commission.
• Purchaser repudiated the contract.
• January 1848– to transport 1180 quarters of corn to England, plaintiffs sent a vessel at Salonica.
• 23 February, 1848- ship commenced voyage.
• During the voyage, the ship overheated and fermented.
• And due to that, it became unfit to be carried further.
• 22 April- So, to avoid further destruction, in bona fide intention, the captain of the ship unloaded and sold the cargo. (neither party was aware about this at the time of formation of contract)
• The claimant said that the defendant had accepted the risk and now should pay for the corn. 

ISSUES RAISED-

1. Whether there was a valid contract between parties.
2. Whether subject-matter is crucial part of formation of contract. 

CONTENTIONS OF THE PLAINTIFF-

1. That the contract/purchase here was not of cargo exclusively but of the expectation of the arrival of the same which had several contingences and risks attached to it.
2. The purchaser had accepted the risk of damage or loss and so is bound to pay and perform their part of contract.
3. That during the journey or engagement the cargo was of average quality and the purchaser was also aware about the situation and the chances of deterioration of property, which he would have been indemnified as the cargo was of full insurance.

CONTENTIONS OF THE DEFENDANTS-

1. When the contract was entered between both parties, the cargo was on voyage.
2. That the plaintiffs sold the cargo to others and therefore the subject matter was non-existent.
3. As the plaintiffs had no property to sale, so the defendants repudiated the contract and refused to fulfill their part of contract i.e., to pay the price of the corn.
4. That the cargo was sold by the captain of the ship on behalf of the plaintiffs and hence the defendants repudiated the contract.

JUDGEMENT-

The contract was declared as void by the court. As there was no specific declaration about the common mistake, it was held that as the subject matter of contract didn’t exist at the time of formation of the contract then the contract itself didn’t exist either. 

It appears that both the parties believed that something was bought and something was sold but the subject matter or property was not in existence at the time of formation which makes no liability on part if the defendant, and if it would had been bought and sold in real sense the benefit of insurance would also had been transferred with it.

The fact that the cargo of corn was shipped free on board implies that it was completely at the risk of the shipper.

The court clearly directed the ruling in favor of the defendants. 

ANALYSIS-

1. Subject matter– The contract of about the sale/purchase of the corn which was in transit and neither of party was aware about the situation of the ship or the cargo. 

2. Common mistake-the mistake which usually occurs in the situation when each party is mislead about a key fact regarding the terms and conditions of the contract. 

CONCLUSION-

This case had set a legal precedent about the formation and interpretation of the contract. It implies that because the property about which the impugned contract was formed was not in existence, the question of paying for the same doesn’t arise.

The plaintiffs claimed the payment and performance on part of defendants when the latter repudiated the contract but it could not be done because the cargo in question was sold on behalf of plaintiffs themselves and that was the only reason that the contract was repudiated. 

In succinct, it can be mentioned that customary trade practices as well as the established principles of law play an important role in any decision or judgement to be given.  

REFERENCES-

1. wikipedia.com
2. casemine.com
3. ipsaloquitor.com
4. www.oxbridgenotes.co.uk

This Article is written by Devanshi Goyal, student of Faculty of law, JNVU, Jodhpur; Intern at Legal Vidhiya.

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