Account-Payment designated by debtor for one account applied by creditor to
another

Civil Procedure=-Summons-s-Retie] sought ill judgement must be set out in sum-
mons

Contract-Breach-Appropriation of purchase price to antecedent debt-Re-
fusal to deliver goods

Damages-Sale of goods-Failure 10 deliver after payment-Reasonable behav-
ior of purchaser-s-Measure of damages

Judgemellt-Amolllll-Jlldgement may not exceed the amount claimed in the
summons

'sale 01 Goods-Payment-Appropriatio;1 of purchase price to antecedent debt

The plaintiffs wrote the defendant ordering 5 bales of khaki. They
were requested by the defendant to send £E.II0.000 m/rns. being the price
of the khaki and duty and local freight. Having received the sum, the
defendant deducted 'from it £E.85.000 mlms in settlement of an anteced-
ent debt due on another account, and refused to deliver the khaki without
additional payment.

Held: (i) A debtor has a right to appropriate any payment which he
makes to whatever account he may choose. The creditor may make such
choice only if the debtor does not specify the account to which payment is
to be applied.

(ii) The conduct of the plaintiff in purchasing khaki in the market in
Omdurman was reasonable, and defendant was liable for the difference in
price between what plaintiffs actually paid and the contract price.

(iii) The court may order relief only (0 the extent set out in the sum-
mons.

Revision

Advocates: Mr. Sorial . . . for applicant.

July 21, 1937. Creed c.J.: The facts of this case are plain.

The plaintiffs are a firm of merchants in Juba, Equatorial Province,
and the defendant is described as a general merchant of Port Sudan.

On August 20, 1935, the defendant sent a telegram to the plain-
tiffs in the following terms: "Khaki drill 16/2 quality guaranteed
exact sample wire shipment." The plaintiffs on the same day sent

~ Court: Creed C.J. and Bennett A.G.

a telegram ordering "one hundred pieces of the Khaki at 16/2 per
piece c.i.f. Port Sudan" and asking that the goods should be shipped
to Port Sudan as soon as possible. On the same day they sent a
letter confirming the order and giving all details. On December 7,
1935, the defendant wrote to the plaintiffs a letter informing them
that the kahki drill was expected shortly. The letter closes with the
following words:

"Please arrange the sum of £E.80.000 m/ms for docu-
ments of the Khaki, plus duty and local freight, which amount
in altogether will be approximately £E.110.000 m/ms. We
shall let you know by telegram as soon as the steamer will
arrive."

On December 16, 1935, the plaintiffs replied:

"We beg to enclose herein cheque No. E869312 drawn in
your favour on the National Bank of Egypt, Khartoum for the
sum of £E.110.000 m/ms against our order for 5 bales Khaki
drill, plus customs duty and freight from Port Sudan to Juba.
Please arrange to clear the goods and forward the same' to us
by first boat."

On December 24, 1935, the defendant replied as follows:

"We beg to acknowledge receipt of your letter together with i
a cheque for the sum of £E.110.000 m/ms. As there is a
debit balance in your account for the sum of £E.85.000 m/rns
as per our last invoice, and the same are still not settled by
you, we have therefore deducted this sum from your amount of
£ E.ll 0 for Khaki and thus there is a credit balance for
£E.25.000 m/rns in your account. Please remit ,the balance
for Khaki."

On December 30, 1935, the plaintiffs remitted the sum of £E.30
and stated that the balance of the account would be settled as soon
as possible. They also protested against the action of the defendant
in placing part of the £ E.ll 0 to the credit of his past account, and
asked for immediate delivery of the Khaki. On January 31, 1936,
the plaintiffs again wrote asking for immediate delivery of the Khaki
or, as an alternative, an immediate payment of £E.55.000 m/rns,
and threatened that, in default of the defendant taking such action,
they would "have no alternative but to take formal proceedings,"
and that they would "hold the defendant responsible for all costs

and consequences." refusing to comply offers of settlement.

The plaintiffs refused these offers of settlement and instituted
proceedings in the Juba Civil Court by petition dated February 18,
1936. (Judgement was given for the plaintiff, and the defendant has
applied for revision.)

I propose to deal first with the appropriation by the defendant
of part of the sum of £E.II0.000 m/ms sent by the plaintiffs in
payment for the Khaki cloth, to the settlement of a debt due from the
plaintiffs to the defendant on another account. It is an elementary
rule that a debtor has a right to appropriate any payment which
he makes to whatever account he may choose. It is only in default
of the debtor making such an appropriation that the creditor has a
right to appropriate the amount paid to whatever account he wishes.
In the present case the plaintiffs made a definite and explicit ap-
propriation of the payment which they made. Not only has the
defendant no legal right whatever to appropriate the sum of .tE.ll0
or any part thereof to any other account, but his act in doing so is
an act of sharp practice in which no reputable firm should indulge.
The sum of £ E.l1 0 was sent for settlement of the Khaki account
and the Khaki should at once have been despatched to Juba.

It is clear that the plaintiffs suffered damage from this breach
on the part of the defendant. In arder to meet their own commit-
ments they were compelled by the defendant's default to buy three
bales of Khaki from an Omdurman firm. Their actions throughout
this purchase from Omdurman were reasonable. Living as they do
at Juba, they telegraphed to a firm of, good standing in Omdurman
and accepted the offer which ~his firm made. The question whether
the respondents, could in fact have purchased khaki cloth of the same
quality as that which, should have been supplied by the defendant
at a slightly cheaper rate elsewhere by further enquiries or by
adoption some other method of purchase, (as the advocate for the
defendant suggests) does not concern this court, The plaintiffs acted
reasonably and the defendant will pay for the damage which the
plaintiffs suffered. The loss to the respondents was £E.0.250 m/ms
a piece.

As regards the other two bales which should have been delivered
by the defendant, it is clear that the plaintiffs have suffered loss.

It is agreed that there is a ready sale for khaki cloth in Juba. The
measure of damages, in the view of this court, is the difference
between the price of the goods under the contract with the defendant
and the price which they would have paid for exactly similar goods
if they had bought them in the market for immediate delivery.

This court has had the advantage of hearing two merchants of
repute as witnesses. One of these witnesses stated that as a result
of his experience he would estimate the loss normally resulting from
being compelled to buy khaki cloth in the Omdurman market owing
-to failure of delivery by a merchant of Port Sudan importing from
abroad, at 10-15 piastres a piece or at 10-12% of the purchase price.
Another merchant whose evidence was heard by this court estimates
the loss at 18% of the purchase price. Both these witnesses stated
that there would be no cheaper method of procuring immediate de-
livery than by buying in the market at Orndurman. The court
estimates the loss suffered by the plaintiffs owing to the defendant's
failure to deliver these two bales at £EO.l50 m/rns a piece.

The damage therefore which the plaintiffs have suffered from
the defendant's breach of contract through difference of price is
£E.21.000 m/rns.

But the matter does not close here. The defendant has received
£E.110 of the plaintiffs' money. The decision of the district judge
that the defendant should complete the delivery of the khaki cloth
cannot stand. The plaintiffs claimed £E.26.600 m/ms and paid fees
on that amount only. Moreover the summons to the defendant stated
that the plaintiffs claimed "£E.26.600 m/rns being difference in
price of 5 bales and interest for two months on £E.ll0 at the rate
of 6% per annum." The district judge cannot give judgement for
something not set out in the summons. Moreover a decree for specific
performance of a contract should not be given when damages would,
as in the present case, fully compensate the plaintiffs.

This court is in some difficulty as to what form It's decree ought
to take. After consideration it seems best that there should be a
declaration that the amount due to the plaintiffs on account of damages
arising from the defendant's breach of contract through difference in
price is the sum of £ E.21, and that an order should be made for
the payment of this sum. This decree will be given without prejudice
to the rights of the plaintiffs to claim the amount still due to them
on balance of account between themselves and the defendant. Such